Episode Transcript
Speaker 0 00:00:00 Well, everything's going on in the real estate market right now. It's driving everybody crazy, like interest rates and price crash and all this other stuff that we keep hearing about on the news. But like, I guess the question that we're here to answer today is in the Philadelphia suburbs, in the Philadelphia region, Wilmington, et cetera, is it a good time to invest in real estate? That's what we want to talk about. We're joined by our special guest, Steve Seymour. Woo-hoo.
Speaker 1 00:00:25 Thanks for having me
Speaker 2 00:00:26 On <laugh>.
Speaker 0 00:00:27 Absolutely. Yeah. And we got Sean Connors here. Sean, tell us a little bit about why the hell we do this podcast and what the Philadelphia wealth project's about.
Speaker 2 00:00:35 It's all for fun, man.
Speaker 1 00:00:37 Oh,
Speaker 2 00:00:37 Yeah. We just do it for fun. I'm
Speaker 0 00:00:39 Not having any fun. <laugh>
Speaker 2 00:00:41 <laugh>. Uh, well, we, we have come to realize that a lot of people don't live their fullest life, right. Because they're constrained from finances. Um, I've heard that before a thousand times. Right. So we decided to start the Philadelphia Wealth Project, and we are group, a collaborative group of real estate agents, real estate investors, soon to be real estate investors that are looking to help each other build wealth in real estate. And we are focusing specifically on the suburbs of Philadelphia.
Speaker 0 00:01:14 That's
Speaker 2 00:01:15 Right. We love it. Right? Yeah.
Speaker 0 00:01:17 We do Philadelphia too. Like we're not,
Speaker 2 00:01:19 We don't like to push Philly too much.
Speaker 0 00:01:21 Yeah. We're all
Speaker 2 00:01:22 Scared because we're kind of in the suburbs
Speaker 0 00:01:24 <laugh>. Um, yeah.
Speaker 2 00:01:27 But yeah, that's what we're about. And, and we have a goal. Our mission is to help build a hundred million in wealth in the next five years.
Speaker 0 00:01:36 It's a big goal, you know, but you gotta have big goals.
Speaker 2 00:01:38 Right. Big goals, baby. I love it. Yeah. Awesome. So what are we gonna focus on today?
Speaker 0 00:01:43 I think we're talking about is it a good time to invest in real estate?
Speaker 2 00:01:46 That's right. You just said that.
Speaker 0 00:01:47 Yeah, I did. But it's okay. I'll repeat it because it's important people know what we're talking about. Right? <laugh>. So, um, yeah, I guess we'll start off. I mean, um, Steve, I mean, are you thinking it's a good time for yourself? Are you been investing?
Speaker 1 00:02:03 I have a philosophy that it's always a good time.
Speaker 2 00:02:08 I love it.
Speaker 1 00:02:08 Okay. Whether the market's going up, down, left, right, or sideways. If you find the right deal, if you're have the right strategy, it's, uh, it's always a good time. So yes, I am always looking to invest.
Speaker 0 00:02:23 Okay. Podcast over.
Speaker 2 00:02:24 Yeah, that's it. <laugh> answered question, answered podcast over
Speaker 0 00:02:29 <laugh>. No, we're gonna dig more deeply and talk about,
Speaker 2 00:02:32 Well, what do you think, Rob?
Speaker 0 00:02:33 Well, I just bought a house, uh, uh, like Tuesday and we just already gutted the thing, so, I mean, I'm putting my money where my mouth is, you know what I mean? Right. Um, I think it's a good time because it was like, I probably got over a hundred thousand off on that house because I think so many people are scared to invest right now. Or, and I think especially in what I invested in, because the other people that are investing in that are pulling back. Right. Um, which is a, a relatively expensive single family house. Right, right. That's a thing that like home buyers would normally buy. It's not normally like a flipper property where it's like, oh, it's 300,000 and, you know, I Yeah. It's, it's not normally like a flipper property. Right. Okay. So it's like, that would be it. It's like more of like a live and flip property, which is what I'm kind of doing with it, but I'm burying it. Okay.
Speaker 2 00:03:25 I'm burying it. Awesome.
Speaker 0 00:03:26 Yeah. So I like it. I mean, what about you Sean? What are you thinking?
Speaker 2 00:03:30 I am of the same mindset that it's always good time to invest and I think that you really just have to stick with what you know. Yeah. Instead of trying, like, I don't know if necessarily now is the best time to, if you're always buying long term investments and you're like, oh, I wanna get in short term rentals. I know we had a, a guest on the podcast and, and he was talking about wanting to buy in the Poconos and get on that short term rental train. He was saying that last week. Yeah. But he was also saying like, cuz he has a property management company and he hates that. Right. So, and, and short term rentals is all management and, and guest satisfaction, and it's a lot of hands on. Right. So I think if you stick with what you know, I do think it's a good time to buy right now.
Speaker 1 00:04:15 And let me, let me just say with, uh, it being always the right time to invest, let's use the analogy of if someone's investing in the market, and you'll hear a lot of advisors say, you're better off not trying to time the market. And it's always better to dollar cost average in. Yeah. Right. Well, real estate, you make wealth during real estate cycles and why there's so much doom gloom is we are in a cycle, and most people will say, well, you don't wanna buy at the top. It doesn't really matter because you can influence your deal. Ah. So what I mean by that is, if you try to buy a stock today, you can't buy it at a discounted price unless it's already discounted today. Right. But with and, and stocks, and, you know, the market moves so rapidly where real estate's not gonna swing 25, 30% in one day.
Speaker 2 00:05:11 Right. And, and the normal consumer doesn't really have an ability to affect the value of the stock. Right.
Speaker 1 00:05:17 Right. But Rob bought a house for a hundred thousand dollars less than what it's gonna be worth when he is done fixing it up. Right. At
Speaker 0 00:05:25 Least. Yeah. Probably like, yeah. Maybe 200, 2 50.
Speaker 1 00:05:28 So let's just say conservatively you just created a hundred grand in equity day one. Why is that? How does that refl relate to timing the market? It doesn't, unless, unless it's gonna swing down by that much, which in, in our Philadelphia suburbs, even during 2008, it didn't swing that hard. So, you know, you really, if you're gonna make wealth over a longer period of time, if you're gonna create wealth over a longer period of time, which is, you know, buy and hold, and you, you have this up and down wave. Right. It doesn't really matter because over time, time will heal all mistakes and as long as you buy Right, you're good.
Speaker 0 00:06:05 That's a good point. Yeah. And I mean, I, I think inflation is still moving. Right. And inflation is helping and it's always gonna be helping, uh, people in real estate. <laugh>, <laugh>, we got a s Slurper. Yeah, we
Speaker 1 00:06:18 Got a slurper
Speaker 0 00:06:18 Over here, guys. <laugh>. That's okay. We'll forgive him. <laugh>. Um, yeah. You know, it's like people will get so obsessed with timing the market mm-hmm. <affirmative>, right? Like, I'll just buy when it crashes. I'm like, when it crashes, you are gonna be terrified. Like you are not gonna do anything. Yeah. You probably won't be in a good position
Speaker 1 00:06:34 Even buy
Speaker 0 00:06:35 Right. You'll be in a bad position, your stocks are gonna be down. Yeah. You, you forget. Oh, like my stock mar portfolio where I parked all my cash is also down 50% and I gotta pull that out at a 50% loss to then go invested in real estate. Right. And people are having trouble renting. Like, I mean, I think during the financial crisis, like, you know, it was hard to find renters. People were distressed renters, they were getting evicted. Like people forget all these things, right. That they're just like, oh, the market was down. It was super easy to just buy anything. Right. And it's like, yeah. But there were other challenges at that time, especially around mindset. Right. You know, so, um, yeah, it's like if you're deciding to invest in the stock market, it's just like, yeah. You're kind of just dealing with the market, right. You're not like influencing this price of a stock. I can't go say how I, I bought, uh, IBM for 50 bucks less than the guy next to me. Right. It's like we're all paying the same price for IBM right now. You can identify values, like that's what Warren Buffet's doing. Right. Um, and people can do that in the, in the real estate market too, but it's, it's, it's just a different thing. Right. It's like you have control.
Speaker 1 00:07:37 Yeah. And it's not gonna swing 30% in a day. Um, I hope not.
Speaker 0 00:07:42 <laugh>, that'd be crazy. Be a bad day.
Speaker 1 00:07:44 <laugh>. Yeah. I mean, if you listen to the news, there's, there's tons of negativity out there about buying real estate. If you go back a year ago, there was negative news about buying real estate. Mm-hmm. <affirmative>, if you go back two years ago, it was negative news about buying real estate. Yeah. So it's all what you focus on. And really the wealth is created through equity, pay down and, and cycles with, with depreciation and all the other benefits like cash flow and deep depreciation. None of that's even affected by the cycles. Right? So you don't, you get depreciation. Depreciation either way you're gonna get cash flow either way. So it's more about how quickly can you get in, just like if you're gonna dollar cost average in the most important thing is getting started now. So yeah. I just wanna use that analogy because a lot of you guys are sitting on the sidelines waiting for things to get better, waiting for this perfect opportunity mm-hmm. <affirmative> and none of this is easy, but you have to force yourself to get off, off, off the couch, go evaluate deals, go make offers, you know, get with an agent, um, or you know, get brokerage, get, get, get with yourself. Yeah. Get yourself with the right people that are rowing in the right direction. Right. So you can get on that boat.
Speaker 2 00:08:56 So question, um, do you believe that Steve and Rob, do you guys believe that you can find a good deal in this market?
Speaker 1 00:09:04 A hundred percent. Yep.
Speaker 2 00:09:06 Okay. Just
Speaker 0 00:09:07 Did it
Speaker 2 00:09:08 <laugh>. Right. And you found yours on on the market. On market,
Speaker 0 00:09:11 Right? Yeah. And, um,
Speaker 2 00:09:13 In the MLS multiple offers, right?
Speaker 0 00:09:15 Yeah. Yeah. Uh, I was not the highest bidder, but I gave the best terms. And I think, you know, I did a couple things relationally with the other agent and stuff. So I mean, it's just like they knew I was gonna close and I basically said I put 20 grand non-refundable down and just said I'm gonna close and, um, you know, if no ends or buts and uh, yeah. So that was attractive and it saved me like $30,000. Um, but yeah, I mean, uh, I just had a buyer, I think they got 400 I, they bought a 4 25, they're at 400. Um, I had another buyer was 600. Literally the person had just bought a new construction. They paid six 60 for it. Three months later they just, they got called back to the office and had just had decided they needed to move back closer to the office. And they're taking a hundred k bath <laugh>, they're selling it for five 60. Wow. Yeah. And then all not on top of all the other stuff they lost. Right. Right. So it's like, there's people that are motivated to sell, um, and they just need to do it. And if you're like, I love this time of year, actually, I love this time of year cuz everybody's sleeping. You know what I mean? Like,
Speaker 2 00:10:23 Everyone's relaxing, taking a break
Speaker 1 00:10:25 The year's over for most people, at least in this industry. That's interesting. Right. There's nothing else to do. It's not true. This is a great time. Yeah. You know, you gotta get out there and you gotta view properties, you gotta get familiar with your market. You have to get comfortable writing offers, and you have to be comfortable writing low offers.
Speaker 0 00:10:43 Yeah.
Speaker 2 00:10:43 That's the hard part. Right?
Speaker 0 00:10:45 Well, you know what, as an agent, when a client comes to me and they say, well, like, you're not gonna write this low offer or you're not gonna, like, how are you gonna deal with that? And I'm like, all right, well, I'm gonna have a conversation with the other agent first, and I'm just saying, Hey, like I'm, instead of like doing like miles of paperwork and then just to have it rejected, I'm gonna say, Hey, like, this is what I'm thinking about doing. You know, is it worth doing? Right. Like da da da da. And like, maybe I'll shoot, oh, well shoot me an email with terms. Okay. I'll shoot 'em in email terms. Okay. Run it by the seller. If they like it, then I'll write it up. So I'm like, so it's
Speaker 2 00:11:14 Like, yeah, you're kind of putting a feeler out there. Yeah, you can. So you don't have to waste all your time. Right,
Speaker 0 00:11:18 Exactly. So it's like, I can work with investors or, or do it for myself and just say, Hey, like this is what I'm thinking. And people can tell you no, you can still write the offer anyway just to see what happens if you feel it. Right. But like, I think just having those conversations and just be like, okay, hey, like this is what I'm thinking about doing, like makes sense to you. And Yeah. Like with that one that I got, um, 40,000 off, it was up for 600, I, I called her and I said, uh, I'm thinking about offering 500. And she was like, no. Like, you know, and I'm like, well, I was like, well what about like five 50? Well, I, I guess I could show 'em five 50. Like, okay. So like that's where her mind's at. Like she'll, you know, all right, I'll write it <laugh> nice. You know, pretty easy. Yeah. Just kind of feel, yeah. It's 50,000, like that's a $50,000 conversation. Right, right. Like, but yeah, some people are afraid to have those conversations. They'll appear rude or something. Or,
Speaker 1 00:12:15 And well the other thing you said is, you know, people look at price and terms, right? So that's what a seller's gonna look at in evaluating your offer. And that's how you should also think is the deal could be, you know, maybe that $50,000 difference makes that a better deal, but maybe if you had, you know, structured different terms, it could've made it even a better deal even if you paid 50,000 higher. Mm. So what I'm saying is yeah, you know, not all deals are equal just based on price. Because especially if you get in the creative finance world, which for those listeners out there, if you don't know what subject to subject two financing is, or seller financing mm-hmm. <affirmative>, um, installment sales lease options, these are all ways to get into deals with little to no money or potentially have the equity pay down a lot faster.
Speaker 1 00:13:06 It's just all, all the, the, the box of putting something in a good deal goes away when you get into creative financing because you can structure something that works. Uh, for example, maybe you're looking for equity pay down versus cash flow, and you could structure a seller finance deal where there's essentially every single payment is going directly towards the principle balance. And if you were to buy, say, a $200,000 house and you financed it, your first payment with a mortgage may only be paying it down, you know, $75 a month or whatever it is. Right. It's such a small amount versus you have a $2,000 per month payment, but it's going directly to the principle. Now you're paying down equity really fast, so depending on your investment strategy. Um,
Speaker 0 00:13:55 Right. So, so
Speaker 2 00:13:57 There are a lot of different opportunities out there, it seems like still even
Speaker 0 00:14:01 Yeah, I mean on market, off market, I mean, just solving
Speaker 2 00:14:05 Yeah. A little
Speaker 0 00:14:06 Closer. Solving other people's problems, you know, come on man. I'm sorry, I'm gonna move mic closer to me. <laugh>, um, <laugh>, no one ever accused me of being too quiet. Sean <laugh>
Speaker 2 00:14:16 First time for
Speaker 0 00:14:17 Everything <laugh>. Yeah. I mean, there's definitely opportunities, but I, you know, mindset is so important, right? Like, just thinking to yourself like, there always will be a wrong time to invest for some people. Right. And there will always be a right time to invest for people that are doing it right. But really it comes down to like fear probably and lack of knowledge, right? Like, it's like I'm not, but people don't wanna say, well, I'm scared and I don't know enough. They'll just say, oh, it's not a good time. Right. Right. So I think even myself, right? I have to ask myself those questions and get over my, we've, we did, did an episode on uh, our bs but like, um, it's like asking ourselves the right questions and then saying, okay, what's really holding me back? Right. You
Speaker 2 00:15:01 Know? Yeah. That's a good point. I had a conversation today with a new agent that just joined our brokerage and you know, the reason why she got into real estate is cuz wanted to get started investing. Um, and she's at a point now where she's like, I just don't know what to do. You know? And I had a, I had a conversation with her and you know, we went down a couple different paths, but at the end of the day it's like, you need to get out there evalu. I told her she needs to ev Eva start evaluating deals, seeing properties, and then get comfortable with making offers. Yeah. You know, and she was worried, which a lot of people are always worried about where am I gonna find money?
Speaker 0 00:15:39 Yeah.
Speaker 1 00:15:40 And Rob, I would say the thing that, in my opinion, what stops people the most is that fear,
Speaker 0 00:15:45 Right?
Speaker 1 00:15:47 Because especially real estate agent, they should know at this point, if they buy real estate and pay it down over time with appreciation and all the benefits, they're gonna create wealth. Right? So it's not the lack of knowledge, it's, we overcomplicate things and we, we basically use information as something to avoid taking action and fears. So you're, you're gonna, you can find a reason why not to do anything, just like a statistic could be spent any which way or you could find a reason to do something. And I think it all comes down to commitment and what you're after. So you know, when you have a big enough why, you know, why are you doing this Rob? Well I'm sure it's for your family and kids, right. To live the life you want to live. Yeah. I love it. And you get clear on your why that will help you overcome your fear. And the best way you can prove this is because everyone knows how to lose weight. Right. Eat less, exercise more. Right. Why don't they do it? It's not lack of knowledge. Right? It's lack of commitment and having a big enough why they need a why. So that's something that we are always stressing is get clear on your goals, know why you're doing what you're doing, then start putting pieces of puzzle in place and then most importantly, surround yourself with the network of people that are helping you get there.
Speaker 2 00:17:04 Okay. That's, yeah, that's great.
Speaker 0 00:17:05 It's been cool to watch. I mean I've been, we've been tracking so many investor agents lately, right. You know, like we're like what, nearly half investor agents now? Yeah.
Speaker 2 00:17:13 Very close. I
Speaker 0 00:17:14 Was just talking to a guys coming over and he is like, man, I'm so excited to meet all these investors. And I'm like, yeah, cuz like it's going to be good for you <laugh>, right? Yeah.
Speaker 2 00:17:23 If you're putting yourself around the people that are doing what you want to do, right. You're gonna get peer pressured into doing it.
Speaker 0 00:17:29 I know. I just joined like a CEO club. I'm like, Ooh, I'm gonna have to be better at being a ceo. Right. <laugh>. Yeah.
Speaker 2 00:17:38 So what do we think about foreclosures and res, do you foresee any of them coming up in the future?
Speaker 1 00:17:44 I would say they'll, they'll probably tick up a little bit. You know, I don't think you're gonna see this massive wave of foreclosures in this area. Jobs are pretty stable right now. Mm-hmm. <affirmative>, most of the people I talk to cannot find the right amount of help. Uh, I know there's, I know there's a lot layoffs in other industries, but in our area locally, I don't know a ton of people that can, you know, they're laying a bunch of people off or, you know, there's not a huge unemployment. So I wouldn't see people missing their payments. If anything, I would say a lot of people will stay put because, because the fear of buying a new house, um, will, you know, at a 7% interest rate is gonna prevent people from buying. You'll soften the market. So you might have some people that wanted to sell that can't really get what they thought they could get because the market stopped going in such a parabolic. <laugh>. Yeah. You know, north star direction. Um, now we're, now we're kind of flat, we're kind of in a stagnant market and I think it's a perfect opportunity to have more negotiating power and leverage and buying a deal. Imagine if you buy a deal and it works at 7% and in two years from now you can refinance at five. And I'm not, don't hold me to that. Nope. You know, you
Speaker 0 00:18:55 Gonna get alone. Put it outta there. <laugh>, no crystal
Speaker 1 00:18:57 Ball here. But you know, if you look at where things tend to land, you know, the pendulum usually swings too far in any direction and finds its equilibrium once the ma market balances out. And right now this is intentional, um, raise in the interest rate to slow the economy.
Speaker 0 00:19:14 Yeah. You know, and it's interesting too, like asking about foreclosures, um, if they're coming or not. Right. Um, and I know they're like, if you look at the graphs of like foreclosure activity, it's at like record lows because obviously they stopped all foreclosure activity and then, I mean, there's so many programs to try to help people not go into foreclosure. Right. And again yeah. The unemployment rate is just super low. There's, there's tons of opportunities for anybody who's maybe not like mentally ill or on drugs or died or something. Right. Like to, to not go into foreclosure. The other thing I noticed as a realtor about approaching foreclosures, at least in this market is since there are rare, like everybody's looking at them Mm. As an investment opportunity, right. So they're like, oh, they're coming in and they're going, okay, like this is a foreclosure. Like this is what I should be buying. Right. Like, I should be buying a foreclosure.
Speaker 1 00:20:01 But they're not all great deals.
Speaker 0 00:20:02 No, they're not all great deals. They got a shit ton of problems a lot of the time. Right. Like, you know, the owner didn't take care of it for many, many years. And then the other deals that are great deals are sitting right under people's nose, but it's not labeled great deal. Right. That's the thing.
Speaker 1 00:20:19 Or it doesn't look like a great deal cuz the asking price is too high and they didn't make the offer. Right. Right. What was this list? The building we're in? What was this listed at? I
Speaker 2 00:20:26 Think it originally started like 1.2 or 1.1 somewhere around
Speaker 1 00:20:30 There. And when we, when we bid on it, it was nine 50, right?
Speaker 2 00:20:33 Yeah. It was listened at nine 50
Speaker 1 00:20:35 And we got it for 600. Right. So it was at nine 50. It wasn't a good deal, but that was their asking price.
Speaker 0 00:20:41 I can't wait to see where you guys appraise on this. I think it's gonna be
Speaker 1 00:20:45 We'll do okay
Speaker 0 00:20:47 <laugh>.
Speaker 0 00:20:48 Um, yeah, I know. I should've, I should've got in on this action <laugh>. Um, yeah. You know what I mean though? It's like Yeah. You, you label something like, hey, great deal, everybody come look at this great deal. All in touching investors ring the bell. Right. Right. It's like, and then it's like, oh, I've got a single family house. It's got new windows, new roof, new HVAC in great condition, just, just like cosmetic rehab. Mm-hmm. <affirmative>. Okay. Mm-hmm. <affirmative> like no one's like, no one's ringing the bell. Right. Like, and then it's like, okay, I can identify value. Right. And then you go in and, and you like, yeah. Make the offer.
Speaker 2 00:21:21 It's cause you know what you're looking for now. Yeah. You trained yourself. Right. You, you put the work in and now you knew what, what you were looking for.
Speaker 0 00:21:30 You know, this also comes back to like herd mentality, right? Like, everybody wants to run the direction everybody else is running. It's like people are driving around and you're like, where are you going? Like, I don't know, I'm just following traffic. Right. <laugh> like, well that guy got off that exit, maybe I should get off that exit. It's like you have no idea where you're going or what you're doing. Right. <laugh>, like, I feel like a lot of people are driving around like that. Yeah.
Speaker 1 00:21:51 Yep. And what's everyone saying right now? Don't buy, don't buy don't don't buy. Don't buy, don't buy.
Speaker 0 00:21:56 Yep. Don't buy. Don't buy. Don't buy. Yeah. The, the hamsters are running off the cliff. Right. <laugh> just like when
Speaker 1 00:22:00 Things are running rampant, everyone's like, bye bye. Buy, buy. Bye <laugh>.
Speaker 0 00:22:03 Yeah, I know. It's so funny. It's like I can't wait for our market crash. And it's like, great. Well interest rates are 7% now and it's like, I don't want to do it.
Speaker 1 00:22:13 Yeah. What I love is the videos of the realtor that's like, now's the best time to buy, blah, blah, blah, blah. Oh, and it's the best time to sell blah, blah, blah
Speaker 0 00:22:21 <laugh>. And
Speaker 2 00:22:22 The which one is it? And
Speaker 1 00:22:23 Uh, the truth is it's always the best pi time to buy and it's never a good time to sell. Yeah, I know. Unless you need the money. Absolutely need it. And there's no other way to access it. You should buy, hold, buy, hold, buy and hold forever.
Speaker 0 00:22:38 That's it. I know. I'm looking at my stats for last year about how many buyer I was like 90% buyers <laugh> because I love buying. You know, it's like, wow.
Speaker 2 00:22:48 Yeah. That was 90, you worked with 90% buyers.
Speaker 0 00:22:50 Yeah, I worked with 90% buyers. Well, I guess like there's so many investors and stuff and I don't know, I just, maybe that's where how I'm geared
Speaker 2 00:22:59 Since the market has been changing. Have you guys noticed in our area, any, has any market actually stood out as being a good place for you to invest above the others? Have you noticed any change or we're just still on that same track with school
Speaker 0 00:23:18 Districts? Locationally. I didn't notice like, oh, like this particular area mm-hmm. <affirmative>. But I think a particular technique, which I think of the live and flip is like shining right now.
Speaker 2 00:23:32 Interesting.
Speaker 1 00:23:33 I only look for buying in the path of progress. So find an area that you believe in that there's development happening and the new construction or new apartment buildings or, or whatever the development is, is driving higher prices along with rents. So you can let someone else do the heavy lifting and change an area and you can get the benefit. So that's called, you know, forced appreciation. Uh, I mean it's, it's almost natural appreciation and maybe someone call it speculation, but uh, if you do it time and time again, it becomes almost routine to pick an area that's gonna Right. Progress over time.
Speaker 2 00:24:13 You're, you're talking about Wilmington, right? Yeah. You can plug it. Uh,
Speaker 1 00:24:17 I
Speaker 2 00:24:17 Do you love Wilmington?
Speaker 1 00:24:18 Not all of Wilmington. <laugh> and Wilmington has its challenges. Uh, there's, there's a very specific section that I'd like, um, to buy in because of the development that's going around it.
Speaker 2 00:24:30 Right.
Speaker 0 00:24:31 Gotcha. Yeah. Wilmington is, uh, interesting. I went into a house in Wilmington the other day and, uh, I was talking to the tenants and I was like, Hey, what's wrong with this house? And they said, um, the, the landlord doesn't fix anything around here. And, uh, you see this drywall patch. Well, the last guy that was in here, he got shot <laugh>, the cops Wow. Shot him. And the bullets went through the wall and they didn't patch it very well. And I'm like, oh yeah, that's your complaint. Okay. <laugh>. I was like, all right, well we
Speaker 2 00:25:06 Might be able to, the stuff you hear, we might be able to the stuff you here when you ask. Right. Yeah, that's a good point. If you're looking at property that's tenant occupied and they're there Yeah. Ask 'em what's wrong with the property?
Speaker 0 00:25:14 Oh, absolutely. I do that every time I go into tenant occupied property. I get a lot of funny answers. <laugh>.
Speaker 1 00:25:19 Yeah. Here's my take on Wilmington. Yeah. Talk about an undervalued asset. Uh, there's a lot of crime, right? That's the, that's the big issue. Mm-hmm. <affirmative>. Um, if you look at any real estate on the 95 corridor from New York to dc, it's about the cheapest real estate you can get other than maybe Chester and, uh, Wilmington Ha. It, it has a ton of issues, just like ever, every city does. With that said, the the price that you can purchase at combined with the taxes and based upon the market rents, the numbers work along with there's, there's a decent amount of initiatives to, um, incentivize investors to purchase down there. One being opportunity zones, one being a D d D State grant. Uh, depending on the properties you could get historical, uh, tax credits as well. And some of these things you can stack together that make it almost, uh, a no-brainer to do a large renovation because it's almost, you know, getting paid back through subsidies and grants.
Speaker 0 00:26:28 Yeah. Some of the stuff you were telling me about with like all the subsidies and how that's working, I'm just like, Steve's a genius. <laugh>. I'm like, I'm like, I should be paying attention to this stuff too, you know? And, um, yeah, I mean I've seen Wilmington be a really great cash flow opportunity. I just had like a guy buy a triplex, I think it was like buck 84 at the end of the day and it cash flowed a thousand dollars a month. Like that's really good numbers. It was like a 12 cap, I mean, right. Um, so yeah, I, I can see that. Like, if you're in the right places there, I'd like really do believe in it too. I haven't started investing down there myself, but I like the idea. Maybe.
Speaker 1 00:27:06 I think, I think this is one of the challenges though. Everyone looks for the perfect market, the perfect timing, the perfect deal. Mm-hmm. <affirmative>. Yeah. The perfect financing. You know, it's like you gotta, you gotta pick your poison. There's gonna be good and bad that comes along with anything investing real estate. Right. Um, just know, you know, what your end goal is and then get support from people that have been there. So if you wanna do short term rentals, go talk to someone who's done short term rentals successfully and had it work. If you want to do low end cash flowing properties in a city like Wilmington, then surround yourself with a landlord who's done that successfully. If you want to buy higher end rentals in a neighborhood to get long-term appreciation and equity, pay paydown, create wealth, you know, talk to Rob. Right.
Speaker 0 00:27:51 <laugh>,
Speaker 1 00:27:51 I mean Rob kind of, Rob kinda actually has experience in all three of those.
Speaker 0 00:27:55 Yeah. Yeah. I got, I got a lot of different things going on. I'm, I'm like, man, this house, I'm like thinking about like, hmm. Yeah, my real estate coach the other day, he said to me, uh, my crystal ball is a mirror. Right? And I was like, oh, like if I wanna know my future, look back at yourself, right. And then figure out like what I like that you're gonna do. Right. And it's like I'm talking to people like, oh, I want to get this rent for this place. And everyone looks at me like I'm outta my mind and I'm thinking to myself like, I gotta just not stop. I just gotta stop telling people what I'm gonna do and just do it. Just do it. Yeah. And then I'm like, okay, what do I gotta do? Okay, I gotta get this rent. Like I gotta, if I'm creating this product, I'm creating something like I gotta get the designer in, I need to, puts the right touches on it, finish it in the right way, create the right environment that's going to then deliver the rent that I want to get. Because Yeah. Anyway, that's just a, a side note. But,
Speaker 1 00:28:49 Um, and, and this building's another perfect example that we had so much negativity, people telling us, don't buy office, it's dead. It's gonna sit for two years. Uh, don't, you know, don't think you're gonna get over X dollars per square foot. Mm-hmm. <affirmative> everything that they said you're not gonna get. We got Yeah. They were completely wrong. Very short period of time. Less than six months you created it. So the lesson here is what, what Rob's saying is, uh, once you get a clear plan of what you want to do and you know it, it's right for you. Don't let the naysayers, if someone's negative and they're telling you not to do it, use that as fuel to prove them wrong. Yeah. And, and find people that say, yeah, you can do this. You only need one or two people that believe in yourself larger than you. And it will transform your abilities and take you to the next level.
Speaker 0 00:29:33 Yeah. That's one, one thing. It's like, again, around surrounding yourself with people, it's like, oh, I'm gonna buy a house in Florida. Like everybody besides like Steve <laugh> told me it was a bad idea, but Steve's running Airbnbs and done, you know, rental properties and like actually I was just like, okay, like he's not telling me it's a bad idea and he seems to know what he's doing. So it's like that's being in the right environment and just having, like you said, that one or two people that can encourage you and be like, no, like what you're doing makes sense, right? Like you should do that. Like why aren't you doing that? And then everyone else around you going like, oh, I don't know, what if the toilet breaks down there, what will you ever do? It's like, oh yeah, no other toilet in Florida ever broke and, and then everyone just is in the streets, you
Speaker 1 00:30:14 Know, on the back. Yeah. It's funny how it's usually the people that have not a lot of assets <laugh>. Right. They're giving all the financial advice.
Speaker 2 00:30:21 <laugh>. That's how it always works. Well I'm glad you mentioned crystal ball because just round out this podcast, if you broke your crystal ball out, where do you see the market going in 2023? Good, Steve?
Speaker 1 00:30:33 I think more of the same. I think relatively low inventory. I think the inventory will creep up a little bit. Um, but we are still, according to national statistics, short 5,000 units for housing. Now that doesn't just include single family homes, but not 5,005 million. That's more 5 million
Speaker 0 00:30:54 <laugh>
Speaker 2 00:30:55 Big jump
Speaker 1 00:30:56 Short. Yeah. So the reality is in this area there's a shortage of housing. Yeah. Big time in Philadelphia suburbs shortage of housing. I think you'll see an uptick in inventory in the city more than the suburbs and possibly some pull back in pricing. But it's not gonna be significant. It's not, it's not worth waiting for, let me say that. Right. Okay. Uh, and you're gonna probably, I mean it's pretty obvious they said rates are gonna go up more. So, you know, rates are gonna climb a little bit. When that happens again, there'll be a little more stagnation and fear in the market and that's probably gonna be your best window of buying opportunity that you'll see over the next say six to 12 months. And then, uh, I think towards the tail end of the year, you might see rates start to at least cool off and there'll be probably enough damage <laugh> done that they may pull things back a little bit faster than some people think. Yeah.
Speaker 2 00:31:53 Cool. What do you think, Rob?
Speaker 0 00:31:55 I'm a little more aggressive I guess, than Steve in that I think the Fed is gonna reverse interest rates soon. Um, I, I think, not that they're gonna drop, but they're, there's like a couple things. If you look at the, uh, last inflation report and you take out housing, it was actually a negative mm-hmm. <affirmative>. Um, and so there are some, you know, and the, and the housing is gonna have a big lag on the inflation report because of how they measure it with this like figure, you know, people ask people what they can rent their house for thing. That's what, how they do it anyway. But the Fed guy knows what he's doing. I think they could like basically just shock the market with these interest rates and um, and try to cool inflation off. I think it is happening. I don't think inflation's happening as hard outside of energy and food.
Speaker 0 00:32:39 Like food prices are crazy, crazy crazy. Yeah. I mean, which is not really dependent on interest rates. So I mean, they've obviously cooled down the housing market, right. They've achieved that goal. Um, and yeah, I kind of think like price stagnation is probably likely just because people are kind of coming outta this mania. Like, just like Steve said. Um, and I think again, it's, there'll be opportunities if you look at also again what's happening, the number of transactions is down 35%. So we are seeing like a, I would call that a stagnation. There's less people selling and there's less people buying. There's just less people transacting. I think that'll kind of continue. I, I mean I'm, I'm interested to see what this like February market is like. Cuz that's usually, that's like in the past two years it's been really hot, you know, people trying to get into like, uh, a house before like the, the spring market and all that kind of stuff. Right. That's been like the craziest time. So anyway, I'm really interested to see what that brings. But it's just like, yeah, people are just kind of confused I think. And
Speaker 1 00:33:39 They're kind the same. And one other thing just to question, let me ask you Rob, what do you think for all those buyers that couldn't find a home over the past two years? Yeah. These first time home buyers because the market was insane. Right? 2030 offers on a house that are now just sitting on their hands. Where did they go?
Speaker 0 00:33:59 I think they still alive. <laugh>, they're still there.
Speaker 2 00:34:02 They might be renting now.
Speaker 0 00:34:04 They're renting, they're living with their parents, they're doing all sorts of different things. Uh, you know,
Speaker 1 00:34:08 Do you think they might want to have, do you think they might still wanna buy at the right time when when the news says it's the right time?
Speaker 0 00:34:15 <laugh>, I'm just waiting for Don Lemon to tell me <laugh>. Um, yeah, I mean I, I think like there're, yeah, the demand is there. Like the fundamentals when you step back, like Steve's saying is like there's a huge demand for houses. They can't build a lot in the Philadelphia suburb. It's pretty crowded, right? So it's not like, like you gotta go
Speaker 1 00:34:35 Up, it's expensive to build.
Speaker 0 00:34:36 It's like very expensive to build the land's expensive. I mean the economics are just tight on it. And yeah, if you're gonna build a single family house, that's one of the reasons I love buying single family houses. It's like you can't build my house, right? You're not gonna take a half acre lot and put a $500,000 house on or 700,000, you're gonna put a 1.2 million house on it. Right. Because that's where the economics are, right? So it's like when you look at those kinds of things cost to a replace and this and that, you know, they build a ton of townhouses for example. But like I, so I, that's why I like single family, right? Townhouses are still economical and they're still outrageously expensive. <laugh> some of the new ones. But anyway, I'm just saying like, I think again it's gonna be just sort of this like mush of a market is what I think. And even the interest rates come back down, people are just gonna be uncertain and um, that's gonna create opportunity for investors. Yeah. I know what they're
Speaker 1 00:35:24 Doing. What do you think Sean, as a managing broker with a bunch of agents,
Speaker 0 00:35:28 <laugh>
Speaker 1 00:35:29 Getting to see what, what they're
Speaker 2 00:35:30 Doing? It's funny. I I just made a video about it. Okay. Yeah. I, I I was, I was cons contemplating today what I think think is gonna happen in the market. Yeah. And in inventory nowhere, I don't think it's gonna go anywhere. It actually went down. Um, cuz you hear nationally that oh, inventory's going up. It's going up. Not here. Not at all. Yeah. And it went down from what I was saying. Really? Yeah. And, and, and it's just like, I don't, I think people are just going to be stuck in their house and I think that a lot of the older generation, the baby boomers are going to modify their home to age in their home rather than sell it and then move into assisted living or senior care. Yeah.
Speaker 1 00:36:15 An apartment that's half the size or a quarter of the size and cost twice as
Speaker 2 00:36:19 Much. Right. I think interest rates will go up a little bit. I don't think I, I don't believe that they're gonna get an 8% range, but you never really know. I guess you can't really say for sure if it's gonna get that high. I know right now it's at like six and a half, which is pretty good cuz it was at seven a couple weeks ago. Um, but I do think there's gonna be a lot of opportunities for investors. I do because there's go, there's always someone that needs to sell and buy every single day. For the most part, someone's selling and someone's buying. Right. So there's going to be a lot of opportunity if you're a real estate agent, if you're an investor to help a seller and help a buyer.
Speaker 0 00:36:58 Yeah. I like the high interest rates, uh, in a, in a sense. And then
Speaker 1 00:37:02 The buyer, you mean the normal interest rates.
Speaker 0 00:37:04 Oh, normal <laugh>. Yeah. I know everybody gives a speech about historically this and that, right? Yeah. But I think the thing, the delta was so fast, right? You going for three to seven in like
Speaker 1 00:37:13 Accelerating three
Speaker 0 00:37:14 Days? Yeah,
Speaker 2 00:37:14 It was crazy.
Speaker 0 00:37:16 But you know, the thing is too, it's like I got a lower interest rate on the house I bought because of the way I structure my financing too. So it's like everybody else is staring at high interest rates and then again make an excuse as why they can't move forward. And it's like, well I did an adjustable rate mortgage and I got 2% off the interest rate, which is huge and didn't pay any points, right? So it's like, well that deal wouldn't work for somebody else who was just fixed mindset and not thinking like, oh, how do I make this happen? Right. So interest rates are an interesting play. I think unsophisticated players are gonna be discouraged by them and sophisticated players who maybe investors or buyers that have the right representation will find a way to then, you know, move forward.
Speaker 2 00:37:55 Cool. Well thanks Steve. We appreciate your time.
Speaker 1 00:37:59 Thank you
Speaker 2 00:37:59 Guys. Any closing remarks before we end it?
Speaker 0 00:38:03 I think we need to slurp
Speaker 2 00:38:04 Buy more <laugh>.
Speaker 1 00:38:05 I would, I would just have to reiterate as a the broker of record, I always say I sound like a broken record. Um, this is a lot of information. So if you're not, you know, in the real estate game and maybe we said some jargon you didn't understand, and yeah, you wanna research where rates going, what's happened in this market, uh, all that's gonna keep you from taking action. And you don't need to be the expert. Surround yourself with an expert. Uh, I've been in this 17 years, we have a lot of really experienced agents who work with investors. So why take your time and energy to try to learn this, surround yourself with someone that's doing it successfully. Reach out, leverage other people and let us help guide you to wealth and creating that dream for yourself so that you can actually, you know, have your finances not be a constraint. You can live your day, your day in and day out the way you want to live it. No one else telling you what to do.
Speaker 0 00:39:02 Love it, love it, love it. Jinx. Buy me a beer. <laugh>. All right guys, also December 10th, we're kicking out the Philadelphia Wealth Project. Check out the Facebook page and sign up for the event. It is free. We're all gonna be talking also Ed Fordice, and it's gonna be awesome. So do that because come on out. Yeah, take action. Take take action. Thanks guys.
Speaker 1 00:39:24 Thank you.
Speaker 0 00:39:25 Take care.
Speaker 1 00:39:27 All right, good. I
Speaker 0 00:39:29 Gotta run. Tiffany's coming to my house. Oh,
Speaker 1 00:39:31 Is she? Yeah. Do you wanna design stuff.
