Zillow gets into iBuyer mode, Fannie and Freddie restructured? The future of the CFPB, and more.
Expected Air Date: 5/11/19
Zillow is changing direction and it could be HUGE. Plus the President has ordered a restructuring of Fannie Mae and Freddie Mac and renewed a huge debate. Do we need them? Can private companies fill the gap? What would mortgage lending look like without them? All that and MUCH more today as we do the news!
How to contact us
Twitter and Instagram @FlippingAmerica
Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question.
Email your questions to firstname.lastname@example.org. Please always tell us where you are from. We like to know where the show is being heard. And let us know how you found out about us if you don’t mind.
- Lunch with me every Wednesday. Baraonda
- My latest article in Forbes is out. bit.ly/findredeals.
- The FAN is here!
- Hey would you buy me lunch just so you could pick my brain? 32 cents per day. For less than the price of that lunch, just $9.67 per month, you can have a whole month’s worth of my brain pickings by joining the Premium membership. Just go to flippingamericanetwork.com and click on the FAN. On this show I keep a pretty narrow focus on real estate and small business development. But if you subscribe to my FAN premium blog you’ll find out what I think about a wide variety of topics. I will do my best to give you a $10 or $100 idea with every post and I WILL be talking about real estate, but I’m going to weigh in on some other topics as well. Which topics? Whatever interests me. And I have a wide range of interests.
- Would you like to invest in the Flipping America projects across the country? Coming soon you will be able to for as little as $100. That’s right, Flipping America is partnering with Ground Floor Funding to create a crowd-funded platform where you can invest in the deals we are doing here. The fund will pay out a 8% preferred rate of return and can go as high as 16%. You can make money with me, the Flipping America Guy.
- Flipping America App is in the app store. You can listen to the show, read the show notes, and the entire catalog of shows is now available to you. It’s a free download and there are no upsells or in-app purchases. Free to download, free to listen. Go ahead and give it a try and drop me a line and let me know what you think.
- Want a quick analytical tool to tell you how strong a potential fix and flip deal is? Download the Property Grade app. You answer 10 simple questions about the property and the app instantly tells you what you can expect to make, your return on investment, your return on cash, and then the program gives the project a letter grade using the proprietary Flipping America Investment Property Grade algorithm.
This is going to be huge. Buy 500 per month and provide lending on 3000 of them. https://www.housingwire.com/articles/48908-zillow-going-all-in-on-mortgage-lending
Great idea, but it has to get past the House of Representatives, so it won’t.
https://www.housingwire.com/articles/48980-republicans-move-to-abolish-cfpb?utm_campaign=Newsletter%20-%20HousingWire%20Breaking%20Alerts&utm_source=hs_email&utm_medium=email&utm_content=72440255&_hsenc=p2ANqtz–jekYL1bC-R3R0g_U350k9-yGQOv3mBcMeZgTG9T0TNOl1cVzQyJ__0U5x9D7wt6u2-jJJZLzTRqk2sofo8VGl7qPLO-uHVexKbSNwqkRswIKzg0s&_hsmi=72440255 Republicans move to abolish the Consumer Financial Protection Bureau.
To read the full text of the bill click here: https://www.housingwire.com/ext/resources/files/Editorial/Documents/20190506_Repeal-CFPB-Act-as-Introduced.pdf
Who will win the iBuyer race? https://www.attomdata.com/news/market-trends/the-ever-expanding-ibuyer-footprint/
What do you want to buy? Distressed properties. Here’s where you’re most like to find them: https://www.attomdata.com/news/market-trends/top-markets-with-highest-share-of-distressed-sales-in-q1-2019/
We are restructuring Fannie and Freddie. What’s your take?
What is the best DAY to sell your home?
Where are homeowners selling for maximum gain on their purchase price?
Your Questions: Send emails to email@example.com
- Tressa, PIttsburg, PA “I have a flip property on the market. We kinda ran out of money and some of the finishes in the project just don’t look that great. And people are noticing. We are getting lookers but no offers. The feedback is about the finishes. Altogether it would take about $10,000 to make everything beautiful, but I don’t have it. In the meantime, I’m running out of money to make the hard money loan payments. I’ve dropped the price to 580, which would mean I break even. What would you recommend?”
- Maxie, Port St. Lucie, FL, “I love your Property Grade app. What was the thinking behind it?”
- Anthony, Alexandria, VA, “Just came across your show. Really cool. Do you ever buy properties in other cities? I want rentals, but everything is too expensive here. What should I look for?”
Comment Line calls and Questions
Call 404-369-1018, press 1 and leave your message!
Motivational Thoughts for the day
- “Do not wait; the time will never be ‘just right.’Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along.” —George Herbert
Zillow has BIG news. Roger gets on his soapbox about Fannie Mae, Freddie Mac, the CFPB, and Individual Responsibility. This is a must-hear rant. Plus other RE news, your questions and more.
[0:17] Show that teaches you how to make money in real estate
wherever you are whatever your situation there is an opportunity for you flipping America is sponsored in part by American IRA
founded by investors for investors on the web at American Ira. Com.
And by Braswell Capital Solutions commercial lending made easy on the web at Braswell Capital Solutions. Com.
And now you’re sad flipping America guy Rodger Blankenship.
So glad you joined us today we’re going to talk about a lot of things that are happening in the world of real estate right now I’m going to bring you up-to-date this show today is going to be,
some news about real estate that you’re going to want to hear.
And some answers to questions from some of our listeners and so I’m just going to tell you right off the bat if you’re listening right now and you have a question about real estate you can ask it one of two ways call
404-369-1018 extension 1 and leave a message
will get the message will answer your question will either answer it in person or on the show or you can send questions to questions at Roger Blankenship., look coming up today I’m going to tell you what jail is up to and
unless you’ve been reading the news you’re not going to believe this because Zillow is about to undergo a dramatic change and folks I think.
[1:44] They may be getting ready to take over the world and comes to real estate all right I’ll get to that in a few minutes
and I also big legislative news the abolishment of the Consumer Financial Protection Bureau and they’ll be talking about that
I’m going to talk about the I buy a race and how it’s taking off and and the foot
footprint for ibuyers is growing across the country and in terms of volume and you guys if you listen to the show you already know what I think about the eye virus.
But I’ll probably you know I probably can’t help myself I’ll get into that a little bit and where do you want to buy what do you want to buy you want to buy distress
where are the areas in the United States with the most distressed properties I’ll tell you that coming up and
did you know that the president has ordered a restructuring of Fannie Mae and Freddie Mac and there’s an intense debate as you can imagine about whether this should be done.
[2:36] And I have to tell you I’ve got some feelings on both sides of the fence but based out of principle but it’s also based out of practical history and I want to know what you think when we get to this
I and I talked about this I want to know what you think so be prepared to call in and leave a comment and tell me what you think
all right we’ll play some of your comments on the show if we get enough people calling in all right we all know that it’s probably we’re probably heading into the peak selling season if you’re trying to sell a house
but do you know which days are the best day I’m going to give you the five best days yeah that’s kind of a weird little thing that the atom data has put together but I thought I answered this thing enough we’re going to talk about it on the show
days are the best day all of this plus mother news and many of your questions coming up on the show today
and I want to tell you how to get in touch with somebody giving you the phone number in the email I sent it fast let me say it again 404-369-1018 call now no operators are standing by.
[3:43] You’ll just need to leave a message at extension one sorry about that.
You can call that number anytime day or night with your real estate question you can also send questions.
Questions at Roger Blankenship. Calm And for those who may not know there is no D anywhere in my name it’s r o g e r b l a n k e n
dot-com Roger Blankenship., that of course is the website you can find and follow this show on Twitter and Instagram at flipping America you can also find us on Facebook.
[4:23] Flipping America media.
Till Thursday night we held our first in what we think is going to be a really cool way to get Real Estate Investors that we’ve been doing monthly meetings here in the Atlanta area for 3 years now and our our meet up
and Atlanta has grown to almost 6,000 members
that we don’t have that many come out to the monthly meetings of course in fact a lot of most of our people can’t come out in the evenings which is why we started a lunchtime meeting as well so you know we meet every Wednesday at the veranda Italian restaurant and we’ve been meeting once a month on Thursdays but we just decided to go to a weekly Thursday meeting so
if you want to come eat great food Hangout.
Talk real estate at the evening meeting I will admit there are an adult beverage or two being passed around we don’t do much of the drinking during the day because unfortunately most of the people that come to the meeting have to go back to a job
right after the lunch and the many of them are driving
both of these locations are very close to where we live and work in the heart of Midtown and where the studio is located so it’s a nice little a two-block walk in any one in One Direction and one in the other for me.
And of course I scheduled a locations based on my food preferences and convenience for me sorry about that I’m leading the meeting of I’m there every single week I’m like a lot of you and so I wanted to make it easy for me to get.
[5:50] And I’m if you’re listening to this and you’re in the city of Atlanta please help us reach out to all of the Intown Atlanta folks people that work in town can come by after work on Thursday just drop in and we’re thinking about some different things to make the Thursday evening more fun in fact
we plan to from time to time and we’ve done this in the past load up our microphones in our Studio Gear.
And at least affordable stuff and take it with us and do.
On-location episode of the flipping America show with a live.
Audience not in the studio but this time in a restaurant and so will we will be doing some live shows there and.
[6:31] We also plan to be putting the show on Facebook live each month.
Arms are each week a little bit of starting at 7:30 Eastern will be on Facebook live for a few minutes maybe.
The entire length of a presentation I just reached out to a friend of mine it’s a little too early for me to reveal the details but a friend of mine who is the founder of a very influential.
Organization that provides a service for Real Estate Investors then just put it that way to see if he’ll come do a zoom call with us at the Thursday night meeting
it in every Thursday coming up I’ve also got Mark delfine he’s on the show recently he’s coming to town and is going to do a Thursday night event and so we’re loading up the Thursday nights with some pretty good stuff and the other thing that’s happening in his.
We’re actually beginning to talk to some people about doing some live music.
At the event you know we have a little music that takes us out and in from the commercials scene of the so-called Bumper Music.
And so we are looking for some young and upcoming aspiring bands to come and play and the play during the commercial breaks during the live presentation of the show but also.
Will use their music as our bumps for a week or three or four I guess it depends on how much I like their music because.
[7:53] Damn I’m the one that selects the bumper music right that’s that’s what comes along with being executive producer for the flipping America show.
[8:01] Okay so I told you how to get in touch with this I’ve given the announcements are giving you a little heads-up about what we’re going to talk about when we get back from his break we’re going to dive right into the news.
[8:31] Renew what’s around the corner
but you can be confident that you’ll be ready for whatever comes your way Legal Shield and ID shield look out for you so you can get back to living life
LegalShield is a prepaid legal service for individuals
businesses for a low monthly rates you get comprehensive legal coverage entire law firm of professionals they can help you with a variety of issues and provide advice whenever you need it.
Protected for a number of legal issues and assistance with common legal needs just go to Rodger b helps. Com right now to sign up that’s Rodger V.
[9:12] Dot-com Legal Shield protection for every part of life I want to take a couple minutes and tell you about the ultimate
real estate investing course it’s my new course it’s available online and what it is is the compilation of everything that I’ve learned over the last 17 years of investing in real estate buying and selling houses
buying rental properties buying commercial buildings everything I know is condensed about it now is condensed into this course and,
the reason I can call it the ultimate real estate investing course is as I learn new things I will be continually adding to the course now this is the same content.
And I think in some ways better than people are going out there and pay him $30,000 for with the guru’s that come through town you can access this course are you ready for this $50 a month.
[10:07] That’s right for $50 a month.
You get access to the course all of the materials all of the spreadsheets the files the documents the contracts the papers everything
as long as you stay a subscriber you have access to all of those things once you downloaded the documents well they’re yours and you can just do with them what you want and of course
you know within reason and importing to the law but all of this is available for $50 a month now there is an Initiation fee
and Initiation fee is $750 that’s going to get you.
Access to the course and then it’s $50 a month for as long as you want to stay a member I really didn’t even want to do the $750 Initiation fee but the people that are on my team now believe that the information is so valuable.
They wanted me to charge you if you know 1500 up front and I agreed to split the difference with him.
And so it’s 750 but here’s what I’m going to do because I’m the boss and I can do this I am going to give you an opportunity.
To save $300 off that because you are listening to the show right now all you have to do is go to Roger Blankenship.com click on the resources Tab and then click on Ultimate real estate investing course.
Register for the course and at checkout use the coupon code save 300.
And you say $300 that’s the ultimate real estate investing course at Roger Blankenship. Com.
[11:47] There are hot real estate markets all over the country but
markets are beginning to cool all over the country however there are some some little pockets of my slave Pockets that are doing really well or read an article about how some exurbs outside of some of the major metropolitan areas are doing
that pretty well just a little bit beyond the normal suburbs because gas prices are low Millennials and retirees are moving to the exurbs just outside of a lot of the major cities.
To stay on track with that because it as Real Estate Investors
if you want to buy single-family homes you want to buy homes where people are buying and those are some of the areas you should be considering now let’s do the news.
I’ve got the story from Adam data ATT om the link will be in the show notes for those of you that listen on the app
so you’ll be able to access it or you can also always find the show notes in the posting at the website.
Now this is a little tricky trying to get confused but the website for the show now is flipping America. Us.
All right as you may know as you probably should know.
Flipping America network.com has become the fan the flipping America Network it is to buy and sell site for Real Estate Investors and I’ll say more about that in a little while.
[13:16] I got the story from Adam de the attom data and they’re talkin about the Market Square
they call it the top dollar games this is the biggest difference between the buying price in the selling price and.
This is not really an indication of where you should invest this is more just a curiosity where our appreciation where has appreciation been.
The most and the fortunate people that have live there and now have a reason to sell their home where it where are these places that are making most of the money are you ready for this.
Except for one in Honolulu Hawaii all of the rest are located in California and.
They are either in the area around San Francisco and San Jose or there around Los Angeles.
[14:11] There you have it folks now home sales as as a total volume were down in those areas by 17% year-over-year last time we checked but.
The people that are selling are realizing huge gains from the last several years of super hot inflation inflation well above the market.
[14:35] And when you look at these numbers on this report is crazy the average gain in San Jose Sunnyvale and Santa Clara California $479,500.
The average gain from the difference in price between what they bought it and what they sold it well that amount of money right there will buy you a really really nice house in most of the flyover country.
Okay I told you I was going to tell you the hottest days of the year the best days of the year to sell your house and
I know this is a this seems really detailed and and granular.
I applaud Adam data for the things that they do to bring us good quality information and so here you go the number one day to sell your house in a given year is May 24th.
[15:26] I don’t know why that is it’s maybe the weekend right before Memorial Day the number to day is June 20th
followed by the number three day June 21st number for is May 31st
and number five is June 28th what this tells me of course we have known for some time that selling peaks in the summertime but it looks like the now this is the day that it goes
under contract to sell so what this is saying is you need to have your home’s ready for Market if you want to
realize the maximum price you can get for if you need to have them ready by Nino mid-may at the latest and on the market.
For the last week or so of May and May and June’s going to be your best chance to get top dollar for the house.
[16:19] We in our business by distressed properties.
At least when we’re looking to maximize the amount of money that we would make on a,
Fix and Flip that’s not always true when you’re buying rentals but even when I’m buying rental properties I still want to buy properties that are in some distress you know I like to buy things at a discount we all like buying things at a discount right so.
If you want to buy properties that are in distress you need to go where the distressed properties are now the truth is there are distressed properties in every Market
and your challenges to find them but if you’re willing to go to other places or if you happen to be in one of these places I’m about to say just know that.
Let you know you have a relatively high percentage of properties that are in some level of distress now distress means properties that are in foreclosure or their bank-owned or the 3rd third-party foreclosure auction sales or short sales
this study statistics do not represent people who are distressed because of a transfer and a sudden need to move or because of a divorce.
That I don’t know how you would quantify those statistics pet.
[17:31] Distressed as defined previously so here we have number one is Atlantic City.
New Jersey number 2 is Trenton New Jersey number three is Rockford Illinois
number 4 is Peoria Illinois number 5 is Shreveport Louisiana number 6
Columbus Georgia number 7 McAllen Texas number 8 Philadelphia and this stretches all the way through Camden New Jersey and Wilmington Delaware
What was that number 1 2 3 4 5 6 7 8 and number 9 is Toledo Ohio and number 10 is Baltimore Maryland
so you can look up down really this this stretch from Baltimore all the way up to Trenton New Jersey there’s quite a number of.
Distressed properties there and the interesting thing to me is there are quite a number of properties there I was in Philadelphia last weekend for my daughter’s wedding and
as we were wandering through the town doing a little sightseeing I took pictures of a lot of bandit signs so
if you folks in Philadelphia who are Real Estate Investors get a call from me next week don’t be surprised because I’m going to start calling and following up and just.
Talking with some of you let’s talk about the eye buyers for just a minute now if you live really north of the Mason-Dixon line or.
[18:56] East of the Mississippi.
[19:00] You’re not seeing a whole lot of eye by your activity they are mostly focused in Southern California Arizona Central Texas.
Mina from Dallas-Fort Worth all the way down to Austin and In Pockets in the south in pockets in North Carolina and in Georgia and some in Florida need a mainly in the Atlanta area but
most of the country hasn’t seen and I buyer yet and I did to get a few.
[19:28] Quizzical questions about the show we did on eye virus what are these people what are they doing
and so forth and so on but you can look them up for yourself then it all started with offerpad in 2014 followed pretty quickly I’m sorry it started with Open Door
my mistake I looked at it correctly I just read it wrong Open Door in 2014 followed by offer pad one of their competitors and then a lot of others have hit the the market including Redfin
which is huge and they’re buying service called Redfin now and Zillow through their instant offers.
There are a few others that are just in one or two markets not going to mention too many about them but their basic business model is you.
Access them online or you give them a call and they make an offer right then you know what folks
that’s not any different than anything we have done for the past 20 years and I didn’t invent it.
I learned it from someone else who had been doing it for a while okay so.
There’s nothing new about that what’s new about this is their offer is.
[20:39] Substantially higher than a number I would pay almost every time and,
it’s still a little lower than the retail price but it’s higher than I would pay
what they’re selling is convenience convenience for the homeowner so these homeowners don’t necessarily even have to be in distress if they’re just willing to take a little bit less money and they don’t have to pay a commission on when they sell the house will they they can afford to.
Take less money they’re what the ibuyers don’t tell you we’re first of all they don’t buy just anything they have a priest.
Ghetto narrow list of qualifications they won’t buy homes with acreage they will only buy in developed subdivisions they won’t buy
really old properties they will buy unique properties they it has to fit a model where they can do a desktop underwriting from cross the country really that’s what it amounts to and.
Even when they do agree to buy the house they’re going to be some fees associated with this from 6 to 16%.
[21:42] As we researched for the show we did on this and those fees are going to be charged based on the individual situation but a lot of times they run into about 13% then.
After you have accepted their offer which is subject to their inspection of the property they come out and inspect your property and we’ll tell you what you have to do to fix it up.
[22:08] It cracks me up that people fall for this but you know I guess it was PT Barnum that said there’s a sucker born every minute and so.
[22:17] Yeah people are being drawn into this some people actually like it but they don’t realize how it’s being stuck to him.
I did the numbers on the show when we talked about I buyers and not going to go see him again but basically by the time you get rid of the fees in the repairs their offer is about the same as an offer I would make.
[22:36] Okay Angel it.
Really makes me wonder if we should modify our offer because after all hey if you already have your own house at your own expense yeah I’ll come in and buy it for a little bit less and I can sell it for I’ll be glad to do that.
It’s kind of crazy but we deal with people who are not in position financially or don’t have the time or the interest or the inclination to do their own rehab in their house all right so here’s what’s happening.
The eye buyers are growing there,
in spite of the bad reviews on the web sites like Yelp until Yelp took down the reviews and of course then we found out that the CEO of Yelp is a big investor in open-door.
Yeah anyway in spite of the reviews and some of the unhappy
campers that they’re creating everywhere they go They’re continuing to spread their strategy is to go more Southern and Suburban markets with largely affordable housing inventory
alphabet just moved into Houston at the start of the year and also recently announced they’ll be launching in San Antonio and Austin.
[23:48] Open Door is already in those cities open door as expanded their presence in Southern California.
[23:54] To the Los Angeles area they’ve they’ve also been operating in the nearby Inland Empire region of Riverside San Bernardino since 2018 now.
I offer pad is available in more than 700 cities across the country.
And according to Courtney Reed director of communications and Outreach were excited too soon share more options for consumers to help them buy and sell the best way possible.
[24:19] Where’s all this going well it’s.
[24:24] It’s a little bit of a question mark now with Redfin and Zillow and entering the game I’m going to venture a prediction.
[24:32] Alright this is a pretty bold prediction because it’s early in this but remember you’re listening to the guy who predicted that cryptocurrency would be nothing more than a fad and would turn out to be one more way that people buy and sell things and.
Also it would eventually boil down to three to five currencies we haven’t gotten to that part yet but you know.
It’s out there and people do things with cryptocurrency but it’s not all the rage at it was it was just a fat and so here’s what I’m I guess you should listen to what I’m about to say.
[25:05] You ready Zillow is going to crush them I don’t see the first of all.
What I’ve been told and what I’ve seen is most of the eye buyers are not yet profitable and Zillow comes into this scene with a profitable company already and a lot of cash
[25:30] They’re coming in on the heels of a major acquisition that I’m going to get to right after this break because this major acquisition is changing up their business model and because of that Zillow is about to rule.
In real estate buying and selling will be back in the morning.
[26:09] Pay flipping America listeners have you ever walked into our property and said I have no idea what it will cost to repair this home,
those days are over with ultimate rehab estimator you now have the tool you need to calculate repair cost as if your contractor was in your pocket designed by Real Estate Investors,
for Real Estate Investors ultimate rehab estimator just needs to know their properties measurements and what you want to do it produces a statement of work
adult materials and includes a deal analyzer which helps you determine if the deal is really a deal and the Abba just for labor cost in sales taxes by your state
do you think the property Zip Code Ultimate rehab estimator is for all Real Estate Investors new and experience
just visit ultimate rehab estimator. Calm and click on plans and pricing we have for plans all designed to meet the needs of your real estate business ultimate rehab estimator works on every device you have and wherever your property is skepta
contractor in your pocket today at ultimate rehab estimator. Com.
[27:24] As we were going into the break I was telling you that I think Zillow is going to take over and here’s why,
first of all Zillow is a long-established company II lead their already profitable they make a lot of money now they’re taking a huge risk because they’re about to change their business model and this is something that you need to know my friends.
Last summer Zillow acquired mortgage lenders of America.
[27:49] And of course the industry speculated for a few weeks about what they were going to do with that and what it meant and then everybody kind of forgot.
Well we here flipping America didn’t forget and Zillow has just announced
that they are going all-in on mortgage lending and now this this is immediately going to create a little bit of consternation with some of the very people who
advertise on Zillow site and Zillow 96% of their current Revenue comes from advertising revenue and now Zillow is going to be in competition with the people that are advertising with them I’m very interested to see how this is going to play out but.
Here’s what I I know in spite of the zestimate which is something you should never really trust in spite of that Zillow is a well-run company with good leadership.
A stable income base and they’ve got cash they got a lot of cash and.
They plan in the next 2 to 3 years or dumps are the three to Five-Year Plan they plan to be
buying 5,000 houses a month and then.
Originating loans on 3,000 of those that they sell it’s brilliant.
[29:12] Yes they’re controlling the food chain now.
Your humble host had a vision of doing something similar to this course not on the scale but I wanted to do something similar to this years ago and I put together a model where we would buy or build the houses and then we would
on the mortgage company that would do the lending at least originated the loans on the properties
and we might even own The Brokerage that sold the properties you know just the way to.
Make a little bit of money through the entire food chain I got shut down.
By the Consumer Financial Protection Bureau because I was told I am not allowed to own the companies in all of those verticals and.
[30:02] That killed a business idea that I’ve been working on for a year.
Well it sounds to me you like Zillow is about to do it and so I’m rooting for him and that brings me to the next story I want to talk about which is the Consumer Financial Protection Bureau I’ve had a bone to pick with the sea.
Fpb for a long time because I have believed for a long time that they are.
Too powerful and a government agency that has no accountability to the American public no elected officials but still.
Can write rules and regulations which you know those are reserved regulations are reserved for the regulatory bodies the legislature the Senate and the House of Representatives
rule or it and you know you keep that they don’t call it a law but it has the full effect of law with penalties
including criminal penalties if you violate the rules laid down by the Consumer Financial Protection Bureau I don’t care.
[31:06] If the rules are good I don’t care if the intent is good I don’t
care because it is unconstitutional and there is no way to rid ourselves of this overbearing government
presence once we allow it into our lives it is one of the confounded things that happened during the Obama Administration so many things came about as a result of presidential edict and
give me the wrong.
Agencies and organizations just beginning to dominate and control Our Lives yeah got a little bit political there sorry about that but now there isn’t word out that up yet again.
[31:50] Senator Ted Cruz and a handful of Republicans have introduced a bill to eliminate the Consumer Financial Protection Bureau.
[32:00] Al-assir let’s let’s get some of the things they said this is the third attempt.
Okay Cruz introduced the bill in the Senate that would have eliminated cfpb calling it a runaway agency.
[32:12] These during the Obama Administration to cfpb grew in power and magnitude without any accountability to Congress and the people and I am encouraged by the actions of President Trump that has begun to.
To take to roll back the harmful impacts of an out-of-control bureaucracy.
He goes on to say there is never been a greater farce and waste of government resources then the Consumer Financial Protection Bureau and now is the time to eliminate it.
[32:38] Bill co-sponsor Ben Sasse went on to say America has three branches of government not for
protecting consumers is good but consolidating power in the hands of Washington Elites is harmful,
powerful and unaccountable Bureau is an affront to the principle that folks who write laws must be accountable to the people and I’m sitting over here saying amen.
Amen I can’t wait for this to become a reality but here’s the real news my friends.
[33:07] It’s not going to pass because in order for a bill to become law there’s a little Civics 101 for those of you who.
Got educated in American public school here lately.
The bill has to be it can be introduced in either house either the senate or the house of.
Representatives unless it’s a spending Bill than that has to come from the house but the bill.
Has to be approved by both houses and then signed by the president or
if the president doesn’t sign and just like to sit for 7 days it becomes law the president can veto the bill but if two-thirds of the
legislative branches vote for the bill they can override the president’s veto
it’s a good system with good checks and balances to make sure that no one controls too much and that’s my main beef with the cfpb as it’s currently structured
there are no checks and balances they can write whatever rule they please maybe they write some good ones maybe they write some bad ones but no one can stop them from doing whatever they want
and so it should not be it should not exist it’s a violation of everything that is American and because of our constitution so I will be glad for it to be gone but it’s not going to be gone this time either and I think senators
cruise and SAS know this but they are making a point and they’re making a good point and you know keep making the point and eventually it’ll come around and.
[34:35] Do you win all right folks will be back with more news and your questions just after this.
[35:06] Real Capital Solutions is the number one source for investor-friendly residential and commercial real estate loans across the u.s.
We offer a variety of loan programs designed to meet the unique needs of Real Estate Investors we provide fast reliable and Professional Services so that our clients clothes quickly in order to take advantage of great deals
beat the competition and get great rates and competitive terms without sacrificing service contact us today at 800-577-1959 and visit us on the web at Braswell Capital Solutions. Com.
[35:51] Hey as we were heading to that break I thought I’d covered all the news stories but I wanted to talk about this and so we’re going to do this before we get to the questions Fannie and Freddie Mac
they’re the heart of the US housing system they’re also the topic of intense debate.
The Trump Administration recently asked for plans to overhaul Fannie and Freddie it also installed a new officials to oversee the two companies he says he wants to,
put them on the road toward returning to private hands yet lawmakers are spent the last decade arguing about how big they should be and how much the government should be involved in their operations.
Some and said they shouldn’t exist at all so what’s the hang-up Fannie and Freddie make mortgage is ready
readily available and more affordable the 30-year fixed-rate mortgage essentially owes its existence of them this something that they don’t have around the world but some argue that the private Market could fulfill this role more efficiently.
[36:44] Right now
there isn’t much agreement on either side of the Isle how to change the government’s involvement in mortgages or what the market would look like without the two companies and you know what that means
that means nothing is really going to change in any substitute of way that requires legislation the legislation just isn’t going to happen.
If you can happen you know the true regulations or rules that are written within the Department’s than some things might change
the government created Fannie in response to the Great Depression to encourage Banks to make Home Loans Fannie and Freddie buy mortgages from the banks that alleviates the risk that lenders have to take on almost half of the loans made today or back
by Fannie and Freddie critics of the system say that the private sector not the government should be filling this role in the white house has said it wants more competition
private firms make up just a tiny portion of this market now those who support the current setup point out that private firms tend to exit whenever the market.
Turn sour that means credit can dry up at a time when the economy is already struggling making the downturn worse.
Supporters also say the government has a responsibility to keep housing affordable for many Americans home owning a home has been the most important way to build wealth.
You have to ask yourself this fundamental question does the government have a responsibility to keep housing affordable and I know it’s going to sound cruel but I.
Say no it does not the government doesn’t owe us anything except to protect us from foreign Invaders.
[38:22] That’s it I wish that they would stay out of everything.
Does this mean that the economy might go up and down a little bit more yeah and maybe a whole lot more I don’t want another great depression but this is the Great Depression is an example of the way greed is self-limiting.
Greed is the crossing the line of self-interest everyone
acts in business in terms of their own self-interest when it crosses the line and becomes greed then it becomes self-limiting because companies and individuals that get greedy alienate those around them who would do business with them or who are their customers and that affects their business so,
you can’t afford to be overly greedy
or act overly in your self-interest and I can give you a lot of examples of both companies and individuals but I’m not really here to name names I don’t believe that the
the government owes you anything except to protect you from foreign Invaders they don’t owe you a living they don’t owe you a job that because the government is really us.
If I came to you and said you owe me a living wage.
[39:40] And you say well what’s a living wage and I say well you know I actually need to make $70,000 a year just to afford my lifestyle.
[39:48] You can argue with me all you want to
but if that’s how I have decided to spend my money then that’s what I need is a living wage and without that I just can’t live so are you going to pay me $70,000 just because
I think you owe it to me you know you’re not going to do it so if you’re not going to do it individually why should you do it collectively.
[40:07] Why should you be forced to pay for my living wage.
[40:13] Now let’s turn around why should I be forced to pay for your living wage why should I be forced to pay for anyone’s living wage.
Folks all this does is discourage individual responsibility and
dependence on government is not what makes a people and a nation great.
[40:35] Dependence on government makes the people week and makes the country week.
[40:41] Individual responsibility and self-reliance makes people strong.
Presidential Contender Bernie Sanders came out last week and said that he believes that no one should have to struggle to make a living in this country
I could not more wholeheartedly disagree because
it is in the struggle we learn the skills to make our lives successful we learn how to become effective
and that doesn’t happen if everything is handed to us all the time we have to struggle college kids need to be broke
they don’t need to go into debt but they don’t need to go into the colleges that are going to charge him an arm and a leg there are so many other options for getting a degree these days.
I implore you not to use that as a way to pay for your college and the fault is not with
the people that are loaning the money and expect to be repaid the fault is with the people who didn’t say their money and plan for their college educations the fault is with the people who borrow the money with no ability to repay it the fault is with
the borrower not the lender.
Okay now I really got off on a rant there but I’m asking the question does the government have a responsibility to keep housing affordable no.
[42:01] Is the people’s responsibility to keep housing affordable on the other hand I do realize that the end game here is
after Fannie and Freddie buy the note or buy the paper from the mortgage originator they turn around and turn that into a security and sell it on the,
sick on the on secondary market and as packaged Securities investors are much more willing to buy them because they have the backing of the federal government what does that mean if a loan is.
By Fannie and Freddie and goes into foreclosure then
once the Foreclosure has taken place the Federal Government pays back the actual lending Source the amount of the loan,
it’s it in federally insured loan so the lender gets their money.
[42:54] And that means that the investor in the security that’s backing that loan gets their money so you have the full
force of the federal government and that makes it a pretty safe investment may not be the greatest returns but it’s a safe investment
so this is a money game boxing you need to take some time to understand how the money game works but the money game works because the federal government is involved
so it’s going to sound almost contradictory to what I said before,
but I see how the federal government’s involvement in this process makes it easier to sell the notes
that keeps the cash flowing and makes them able to loan more on more properties where the private companies are at a disadvantage here is
they make the mortgage loans and they may follow the same lending guidelines that the Federal
agencies require Fannie and Freddie they may follow the same lending guidelines but those loans are not backed by the federal government those loans are backed by the strength of the lending institution and whatever there
Financial reserves are sources might be so if those loans default there is a little bit less security.
That the investors in the Securities behind those are actually going to come out with their money that makes that paper harder to sell are harder to securitize.
[44:20] I hope I haven’t confused you with all of this but what I’m trying to say is although I reject the notion that the government owes us anything other than to protect us I see the possibility here that the government’s involvement in this process can.
[44:35] Streamline The Lending process to a point now I guess where I take issue with this is.
There is this belief that home ownership is the American dream it’s the American ideal and they even pointed out that this is the way that most Americans build wealth well.
All right we need a better education about how to build wealth because you know you can
build an equity if you stay in one place long enough to get a mortgage paid off you can build some Equity over a 30-year or a 15-year. Of time and sadly this is the way most Americans build wealth.
[45:15] But it’s not the best way to build wealth okay it just a way basically most Americans are doing
in their mind is something that’s a little bit better than paying rent because one day if they keep on doing that they will get their house paid for on the other hand a lot of people move around so much and get new loans and if they get raises they spend their lifestyle they end up with the you know they’re they’re in their late fifties and they take out a 30-year loan and
that won’t be paid off till they’re in their eighties so.
Really they might have been better off when their twenties just renting something putting money aside and then maybe pay cash for a small house and.
Own it and live there and save all that money.
That your you would be making in those payments and put it into some sort of investment fund maybe investment real estate or maybe invest in
an index stock market but I don’t know if you can invest it almost anything and it’s going to make more than you would realize by owning the house and just relying on the rate of appreciation
cheap there better ways to build wealth we just don’t think about it and no one is really teaching it.
[46:28] Except for a few of us all right
I want to hear what you have to say about this I really wish that some of you would either call or write call 404-369-1018 press 1 and leave a comment with your thoughts about Fannie Mae and Freddie Mac should they be.
And if they should be,
how should they be what what what does chiggers look like do we need to continue to have the FHA Loans that are a 3% down payment do you think that’s beneficial or harmful personally.
I think it’s horrible because I believe that the more money people put down
the more discipline that they have had to use in their life to prepare for the responsibilities of home ownership and I see a lot of lot of properties folks and I see a lot of properties who are owned by people who have no business owning a property they have no idea how to take care of a property and they’re not interested in learning
and they don’t have the sense of responsibility or time management or
even the ability to avoid procrastination to just move around the house and get things done because you know,
houses are like everything in nature they tend to deteriorate if you don’t look after them and we see it all the time how many of you as investors.
Have walked into a property and said to yourself under your breath how could anyone live this way I’ve been in so many of those.
[47:56] And many of those are people who put 3% down or nothing down or who bought into a property that was provided by a charity or had a charity that provided down payment assistance
these people have no business owning a home.
But it’s the American dream you say okay we’ll keep on dreaming and keep on struggling until you have gotten your life to a place where you can accept and fulfill the responsibilities that homeownership entails.
Please get a better Financial education about how to build wealth in your life okay I’m going to get off my soapbox now I hope that you’ll call her right let me know what you think.
[48:54] If you’re a real estate investor you owe it to yourself to get a profile on the fan.
The flipping America Network it’s a flipping America network.com the profile is free if you’re a buyer a landlord a rehabber.
You enter what you’re looking for.
Particularly the ZIP codes of interest you can put up to 10 but we’ve already we’re working now to expand at 2:25.
You don’t have to sit on the app you don’t have to sit on the on the website.
All you have to do is tell us what you’re looking for your profile includes your cell phone number which will verify at the time you register and when a property is posted in the zip code you’re interested in your going to get a text message that says.
Look what just hit the fan.
Everyone should register all 43,000 ZIP codes in the United States are included and you could be finding your next property.
Just by listening for your text tone we call it snap click sold because if you are a seller.
[50:00] You can download the app will anyone can download the app and in the App Store it’s called flipping America Network all one word no spaces you download the app flipping America Network and.
[50:12] If your course has a buyer you can search for properties using the app that as a seller you could be at the property negotiating a deal with someone that you want to wholesale you could take a few pictures of the property and that’s the snap.
Then you can click to upload this property to the fan put a little information about the property there and.
Immediately that property will get texted to 5:10 dozen hundred I don’t know
however many investors have expressed an interest in that zip code you no longer need to manage a mailing list you don’t have to go out and put together your flyers in your brochures or create
ads for Craigslist or other sites just posted in the fan dozens of people will see it it may be sold by the time you get back to the office that’s why we’re calling it snap.
Click sold www.dot flipping America Network. Com register now.
[51:22] Okay we’ve got some questions and some people have been waiting for a little bit to get the answers so here we go dress up.
Pittsburgh Pennsylvania I have a flip property on the market we kind of ran out of money and some of the finishes in the project just don’t look that great and people are noticing we’re getting Lookers but no offers.
The feedback is about the finishes all together it would take about $10,000 to make everything beautiful but I don’t have it.
In the meantime I’m running out of money to make the hard money loan payments I’ve dropped the price to 580,000 which would mean a break even
what would you recommend homeboy dress that I understand the stress and you know I’ve been there and I’ve watched people go through this
you really have only two options fine $10,000 and fix the house but then you know.
Do you need me might need to take it off the market depending on what it is you have to do I have to take it off the market for a week or so and I’ll come back to that in a second but the other option is to.
Dump it now.
[52:24] You’ve got I guess if you got a hard money loan you get it and you’re selling it for five ATM figure your must be you must have a loan of at least 450 475000 which means.
Got quite a bit of your own cash put into this deal and if you’re out of money is sometimes,
you just have to take a loss here’s the thing you have to treat this like inventory its inventory that’s getting stale and it’s costing you to sit there and so sometimes you take a loss now to keep the loss from being bigger later on and I hate to even say that because one of the rules in this business is never lose money
if you are persuaded that $10,000 would really do it.
[53:09] Please just start talking to people that you know and like and trust in people who know like and trust you and see if you can find someone and are and who can put up the $10,000 as a.
A personal loan.
I don’t know if you can secure a lot of hard money lenders don’t like you putting anything in second position but if you can do that fine but I offered him a very attractive interest rate I would start at 15%,
because you know you you’re only going to need the money for.
[53:41] Maybe hopefully no more than three or four months you could have sold as we approach summer time now and
have you three four months if you offer 15% APR on $10,000 then that’s $1,500 over a year and that breaks down to a little over $100 a month
do you want to make the interest payment to them in a lump sum that’s why you’re offering 15% when the property sells.
Okay the other thing you can do is you can offer them a small portion of the profits from thing to sweeten the deal a little bit if
Aveeno you can reject what your profits are and offer them a little bit of that that’s a better way to go I think if you got a friend that,
can look at the project and trust that you really are going to make the money on it
okay there’s risk involved in all of this because when you borrow money from friends and family members you run the risk of things going bad and then that’s that’s a problem.
Okay so as you evaluated you have to not so easy choices in front of you I’m sorry dress up that’s the way it goes in business and in life sometimes.
Maxi Port St Lucie Florida I love your property grade app what was the thinking behind it thank you Maxi appreciate that we get that alot
the property great app for those of you that don’t know is a free app in both app stores you can download it and if you answer.
10 simple questions just look up flipping America property grade make maybe if you just search property grade that’s all we call it nothing fancy.
[55:09] You answer 10 simple questions about the property you kind of have to know your numbers but if you do the app instantly gives you a projected profit.
Return on investment return on cash and
the letter grade and end of flipping America investment property letter grade based on an algorithm that I wrote years ago
when we first started branching out here’s the thinking behind it Maxi when we first started branching out and buying other areas we found that it wasn’t always comparing apples with apples we can make a lot more money on that project over there but yeah it’s 70 miles from
our office and it’s more difficult rehab over here we got a couple of light rehabs between the two of them they.
Can make well they don’t make quite as much money as that one over there would make which one do we do and as we started having those conversations and we agonize with only so much money to go around and Deals everywhere we had to.
What’s the basic curb appeal of the house.
[56:27] How far away is it those are the things that we would ask and.
We did some of the things too because we were buying at foreclosure auctions one of the things we consider was the bidding competition You Know How likely are we to win the bid at this particular Courthouse I didn’t include that in the app because that doesn’t affect most buyers of investment properties.
I took those things and over the years we learned how to grade
the property based on the relative importance of each of those things we combine that with how much money you’re going to make course that’s a factor but not just the bottom line dollar but also the return on investment
internet expressed as a percentage but not just the return on investment because do we want to spend all of our time and effort
I’m getting a 50% return on investment when the initial investment was $20,000 and we’re going to end up you know
making 10 when we put all this time and effort and drive 50 miles to.
[57:27] Find that property in to buy that property in the rear that property and we put all this work into it and we end up making 10 that doesn’t feel like a great day and so that doesn’t get a as good a grade as
maybe a lesser Roi property that has more of the.
Cash profit is he so all of it has its own weight and it’s all,
kind of mushed up together to create a raw score for a property which is basically meaningless so you know if you had a number 1300 versus number 1200 you know 1300 is better but how much better
and if you just looking at the number 700 is that a deal if we want to do or not so after scoring hundreds of properties that we actually did.
I used a range feature in Excel to set a letter grade and we built that into the algorithm.
[58:18] Ultimately became the flipping America apt tested and developed on hundreds of properties over many years and now it’s completely free in the App Store.
Thank you for asking the question give me the opportunity to share Anthony will get to you next time and all of the rest of you that’s all the time we have for today we’ll see you soon.
[58:49] I love this quote from George Herbert do not wait the time will never be just right.
Start where you stand and work with whatever tools you may have at your command and better tools will be found as you go along.
[59:04] This thought is brought to you today by the foundation for Renewal working together with communities to provide lasting life change an impact find them on the web at renewal fund. Net and is always your gift in any amount is a.
[59:31] You’ve been listening to flipping America real estate investing for everyone if you have any questions about real estate send them two questions at flipping America network.com.
Listen three times a week on stations across the country or on the flipping America app free in the App Store.
Be sure to like us on Facebook find and follow us on Twitter and Instagram and keep your eyes open opportunities are everywhere.