[00:00:00] Speaker A: Welcome to Real Estate Profits. I'm Griselda and today we're taking your business from busy to brilliant. You're watching now Media Television.
Hello. Welcome to Real Estate Profits. I'm your host, Griselda. And today we're diving into the challenges and opportunities that come with buying your first home. So for many, the dream of home ownership feels so far away and so impossible. But our guest today is here to show you how it's not out of your reach. And it's exciting for me because my 23 year old is actually looking to buy her first home. So I'll definitely get something out of our guest today as well. Joining us is Kurt Joffe, a distinguished professional in real estate, in mortgage services, and also business consulting. With years of experience guiding families through the process of buying their first home, Kirk understands both the financial strategy and the emotional journey that it takes to get there. Kirk has helped countless individuals move from lifelong renting to confident home ownership. And today he's going to help us break down the myths and guide us with some strategies that are going to help any first time home buyer. So, Kirk, thank you for being here.
[00:01:17] Speaker B: Thanks, Griselda. It's a pleasure.
[00:01:20] Speaker A: Absolutely. And like I mentioned, I have a 23 year old daughter that's obviously going to watch the show as well and, and it's going to get a lot out of it. So thank you for sharing all of your insights.
Now, why do so many renters believe they'll never be able to buy a home? That's my 23 year old. Like mom, I know you have several homes, you and dad have bought them, but I'll never get there. But why do you think they believe that? And how can you make it and break it down a little bit simpler for them?
[00:01:45] Speaker B: Yeah, Griselda, I think a lot of home as renters, a lot of renters are kind of stuck in a little bit of a trap. Everything is taken care of for them at their rental property. Something breaks, you call the landlord. Right. And they usually get things fixed, hopefully.
But there's also a lot of rules that are put in. You live in an apartment building. There are a lot of rules that have to be followed. You know, keep your dog on a leash, don't make too much noise, all these different things. Right, right. So it becomes a pattern of a habit of, of how we exist as renters. I was a renter too at one time, you know, and, and I think the jump really becomes an accepting responsibility and wanting to take on that little bit of a different experience. And the faster people get to that, it becomes a natural jump to buying a home.
[00:02:37] Speaker A: Yeah, absolutely. And now let's talk about this a little bit further. When you're renting, there's a cost to that, obviously. Right. You have to pay rent. Now, obviously, within a mortgage, it's not always that much different. Right. It's about similar. I'll just call it that. You're the expert, so I'll just say similar. But can you tell us a little bit about that? How is, like, the fear of, like, I'm going to spend so much money in buying a home, but tell us a little bit more about how that's not always the case?
[00:03:01] Speaker B: Yeah. There's a couple important things that people should understand about buying a home. First of all, when you buy a home, your credit score will improve.
Credit is made up of different mixes of credit files. You have home mortgages, you have credit cards. You have insurance installment loans, like your car loan.
[00:03:19] Speaker A: Yeah.
[00:03:19] Speaker B: But the most powerful of those is the home mortgage.
So if your credit is in the 660 range, say, and you get a home mortgage and make 12 payments on your home mortgage, your credit will likely jump closer to 700 just because of the power and the strength of a mortgage compared to the other credit accounts. So that's important for people to consider. It's actually a way to create stability in your credit profile to own a home.
The second thing is homeownership.
When you pay your mortgage every month, yes, it can be expensive, you know, and so we need to budget, and you have to have good teams around you to help you keep things straight.
[00:03:55] Speaker A: Right.
[00:03:56] Speaker B: And that's part of what we do over here at Kirkjaf Enterprises and Tall Pines. We help people manage this. We'll talk more about that in a little bit.
But what people need to understand is every time you make a mortgage payment, you're acquiring a little more ownership of the home, of the value of the home. So if the home is worth $100,000 and you live there for three or four years and you pay it down to 90,000, say, okay, pay interest, and then you pay some on your principal to pay down the mortgage. So say you pay down $10,000 and then you sell the home, you get all your money back because you sold the home and you get your principal back. When you rent, you are never getting that money back.
[00:04:40] Speaker A: Nothing. Not a penny. Right.
[00:04:41] Speaker B: Not one pen.
And a lot of times you'll lose your security deposit, too, when they decide to clean the carpets and paint the walls and all that. Stuff too, that they charge for. Right, Absolutely.
[00:04:51] Speaker A: I've been there, done that.
[00:04:52] Speaker B: Yeah, of course. So we want to remember as first time home buyers that even though it feels expensive, you also get that benefit of getting your money back at the end.
The other thing is homes appreciate. So a home is a. Is a big dollar value. Right. It's a big item, $500,000. Some big number. Right.
I think the average price of a home right now is $426,000. In the United States, that would be the average. So if you buy a home and you use, say, a low down payment loan, so you put maybe 3% down on 500,000. So $15,000.
[00:05:30] Speaker A: Yeah.
[00:05:30] Speaker B: Now that home goes up in value. Over the last five years, homes have gone up almost 60% in value.
Right. So that 500,000 has now gone up 60%. You still only put in 15,000 of your own money.
[00:05:45] Speaker A: Yeah.
[00:05:46] Speaker B: But now you have all that extra belongs to you. So when you sell the home or refinance it, you can capture that money. And yes, there are fees associated. You have real estate fees and processing fees and things like that.
But this is part of having a good strategy and good team around you.
[00:06:02] Speaker A: Yeah, absolutely. And thank you for helping people who are buying their home. And actually, what you just described is the experience that we had, my family, my husband and I, moving here to Florida. Right. It's a beautiful home in a beautiful location. But it was right before COVID and it was under a million.
Now we look at it and I'm like, wow, how did this get 1.6 million? And I'm like, really? And that was, you know, five years ago. So. So it definitely happens. And. And it's under 3% too, which is unheard of. Right. Back then around Covid, I'm like, oh, yeah, lock in at two and a quarter, two. And I'm like, what?
But anyway, so a lot of. A lot of perks. Now, any other myths? Obviously, you've given us several already. Any other common my. That people believe about the requirements of homeownership?
[00:06:45] Speaker B: Yeah, well, the first one that came up in my mind, before we even get into that, is you said you moved to Florida. Your house has done well in terms of appreciation.
[00:06:55] Speaker A: Yes.
[00:06:55] Speaker B: You watch the news in Florida in particular, you'll hear that the world is falling. Right. Insurance is unobtainable and expensive and all these different problems. But despite that, you found a way to overcome it. And that's because you're comfortable as a homeowner and you know how to budget through those different changes. But isn't it worth picking up $600,000 of equity in your pocket? Really? Against a $20,000 insurance bill? Yes. There's cash flow we have to figure out.
[00:07:23] Speaker A: Absolutely, yeah. Yeah, absolutely. And so that's some of the things that people don't really realize. Right. Until you actually experience it. I'm like, wow, this is a pretty cool deal.
[00:07:31] Speaker B: Yeah, there are, there are a lot of myths. And I think I wrote this book and I'm sure you can get it on Amazon.
[00:07:36] Speaker A: Yeah. So let me, let's put up his book out there. So give us a title and what the book is about.
[00:07:41] Speaker B: Yeah, this is called Approved.
The other side is rejected. So we want the approved side. That's why it's on the front. But the secrets to getting your home loan approved in 21 days or less, guaranteed, you can get it on Amazon. But if anyone in the audience sends me an email to
[email protected] Happy to send them the book for free. That's my gift. And I'll explain more about the program there. But there are a lot of myths around home ownership and getting a home. For example, a lot of people think you need to have 20% down payment. Not true. There are lots of programs with zero down payment available today, or 3.5%, or 3% and 5%. So there are all kinds of different programs. We build the.
Another myth is we can't afford a home.
Well, the reality is if you can afford rent, you can probably afford a home somewhere if you're willing to make that shift right to an affordable place.
But also having a good budget, and I think a lot of consumers don't set up that budget on a long term plan. So having a great, a great mortgage advisor with you or picking up a book like this, this book was actually designed for people to get their own loan approved.
Meaning if you go through this book and you do everything that's in here, you will be able to get your loan approved anywhere. You can go straight to a bank yourself. You can come to me, you can go to another mortgage. It doesn't matter. You'll be ready and set up and the, the bank will love you if you follow the instructions in the book. So that's why we wrote it. I wanted people to be able to take control of their own destiny. And I think that's another myth. People think that, you know, buying a home is a big scary process and, and invasive and a lot of questions and it is, it is invasive. It's A lot of questions, but it's also a myth that the bank is against us. The bank is not against us. The bank has the set of written rules and they follow the rules. And if you know the rules, then you know how they answer the questions.
[00:09:42] Speaker A: Absolutely. And so I'm definitely getting that book for my daughter. Like I told you, she just moved to Dallas, Texas, the Dallas Fort Worth area, and is looking to buy her first home. So approved. Definitely going to get my hands on that.
So now let's talk a little bit about loan strategies since you mentioned that. So what role does choosing the right loan strategy play in making the dream of homeownership into a reality?
[00:10:04] Speaker B: Yeah, I think first of all, it's important to understand all the different products that are available.
And there are a lot of them. They're really not that many, but there are a lot. You know, there are short term, 1 year, 2 year, 5 year, 7 year, 10 year. These are all shorter term loans they call ARM loans, adjustable rate mortgages.
And they kind of got a bad rap back in 2008 with the foreclosure crisis and the.
[00:10:28] Speaker A: I know that.
[00:10:29] Speaker B: Right. But I'll tell you, everyone that I put into even a pay option arm, which was the most aggressive of the ARM loans, those people that did that right and had a strategy, never had to refinance and they just watched their rate drop and drop and drop and drop and drop and drop over a 10 year period. And eventually a lot of them got forgiveness because the government insisted that those loans be forgiven and repositioned into a different loan.
[00:10:54] Speaker A: They.
[00:10:55] Speaker B: So if it was managed correctly, it was a great, a great opportunity to use that product.
And that's what we're talking about. How do you plan and what do you, what does your family need?
If you're just transitioning and you want to get into the housing market and you're willing to move to a less expensive area for three years, say yeah, you don't need a 30 year fixed mortgage, you need a five year mortgage and fix it in and take the lower interest rate and maybe even pay interest only so that you can get used to the cash flow differences of renting versus owning. That's a strategy. And then you want to have somebody on your team like me or another mortgage professional.
[00:11:33] Speaker A: Yeah.
[00:11:34] Speaker B: That can help you track through how you're doing so that you don't get off track on that, on that budget and that experience.
[00:11:40] Speaker A: Absolutely. Well, thank you so much for sharing all that. Now I know you briefly mentioned, and obviously we know how to get your book. But how do people get a hold of you and where are you based out of?
[00:11:49] Speaker B: Yeah, I'm based out of Lake Tahoe, Nevada.
I moved there because I used to live in Los Angeles. And it got a little too busy and congested for me. So I decided to get clean water, clean air and do a lot of exercise and hiking. So I'm up here in Lake Tahoe. You can always get to me at my consulting company, which is tallpines.com or kirkjaffe consults.com and the phone number is up there as well. Anybody that wants to book, call the number, send an email. We're happy to send it to you, no cost. And also, homeowners should know that a new law just got signed on September 5, just a couple days ago, the Homeowner Privacy Protection Act. And basically what that law says is they're encouraging every consumer in America to have a debt manager. And so we're providing those services also free of charge. So if anybody wants to review their credit reports and understand the strategy and start to build for the future around home ownership, we'd love to help you with that.
[00:12:47] Speaker A: Well, thank you. Excellent. Thank you, Kirk. So we'll be right back. More about the mortgage process. And Kirk's going to help us simplify that process for you as well.
We'll be right back.
We'll be right back with more ways to optimize, scale and succeed. This is Real Estate Profits on NOW Media Television.
And we're back. I'm Griselda, and this is Real Estate Profits on NOW Media Television.
Let's keep building smarter together.
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And I'm here with real estate and mortgage expert Kirk Joffe. Now in this segment, we're tackling one of the biggest frustrations that people face when trying to buy a home, and that is the mortgage process. For most people, it feels like a confusing maze of paperwork and one wrong turn can feel like it'll cost them a fortune.
So Kirk Joffe is here to simplify that process for us. Right. It could be overwhelming, filled with jargon and all kinds of language that none of us understand.
Could be intimidating. But when you're working with someone like Kirk or his team, they definitely have a way of simplifying that step by step for you, so it's not so overwhelming. So, Kirk, why do you think the mortgage process feels so overwhelming for some people and confusing sometimes?
[00:14:55] Speaker B: Yeah. Thanks, Griselda. You know, I think people need to understand the history of mortgages, the underwriting guidelines, which is just a book of rules that they've developed over years and years and years based on their experience. You know, you go outside, you stub your toe. You remember, don't run that way, and you won't stub your toe again.
[00:15:13] Speaker A: Right.
[00:15:14] Speaker B: Same thing with mortgages. And then they add it into the book, and it grows and grows and grows. Right now, the book for Fannie Mae and Freddie Mac is about 900 pages of rules.
And so to. To demystify that, you want to do a couple things.
One, understand the history.
Mortgages are based on paper and to literally. Paper. Like paper.
Yeah. But today we don't really work off of paper anymore. Right. But they haven't updated these rules. So when you're thinking about getting a mortgage, the first thing to do is build a paper file or a digital file of paper documents.
[00:15:53] Speaker A: Okay.
[00:15:54] Speaker B: Full bank statements and full tax returns and all these different types of things. And the more organized we are, the easier the process becomes. So I tell people it's like a funnel. If you have a funnel, it goes this way versus upside down. Right. You want the wide end at the top and dump everything in and let your mortgage advisors start to sort and sift through it to make sure that it's organized so that a underwriter can read it properly. And then what comes out the bottom is a very detailed, specific answer to their questions before they even ask the questions. And that makes the process really simple. So I encourage people always the first step is get organized. Don't be afraid. Realize it's old rules, living in a new world.
[00:16:37] Speaker A: Yeah.
[00:16:37] Speaker B: So there's going to be some challenges around that. And just stay patient, and you'll get through it.
[00:16:42] Speaker A: Absolutely. And like you say, everything is digital now. Right. You can just docusign anywhere in the world, and. And off you go, closing, you know, a big deal in a few minutes.
[00:16:50] Speaker B: Just a lot of that is, you know, the DocuSign stuff is really convenient. And nice.
What's gotten complicated is we live in a, in a gig economy.
Right. Where people have more than one job. People have a day job and then they drive Uber at night for extra money.
[00:17:05] Speaker A: True.
[00:17:06] Speaker B: But they don't. But Uber doesn't give them proper documentation for a mortgage.
So it can be complicated to take those extra jobs. Or if you're working a side job, you're doing insurance processing or something else on the side.
[00:17:21] Speaker A: Yeah.
[00:17:21] Speaker B: Really have to keep track of that information or build it so that someone can understand it because those are where people lose out on income opportunities on paper, and then it impacts how they can afford their home.
[00:17:34] Speaker A: Oh, wow. Well, thank you for that. Excellent tip. Tip. Now, what are some of the common mistakes that people make when shopping for a loan? Can you tell us about that?
[00:17:43] Speaker B: Yeah, I think the most common mistake people make when shopping for a loan is believing what they see online.
And so the federal government just, just signed a law, a bill into law called the Homebuyers Privacy Protection act, which helps to, to protect people around trigger leads. Meaning when you pull your credit report, you're not going to get a whole bunch of calls from people anymore as long as you set yourself up to follow the, the rules. And we help provide that to people as well over at kirkjaft Enterprises.
But, but one of the, the misguided steps I think is they go online and they see, oh, interest rates are 3%.
Well, they're not 3%. They're only 3% at the origination point. Meaning Fannie Mae charges 3%.
[00:18:28] Speaker A: Right.
[00:18:28] Speaker B: But by the time it goes to a broker or a bank or a secondary market person or whatever, the interest rate goes up. So what you are seeing on the advertisement is probably much lower than what is available in reality. And people need to be aware of that change because I think consumers get disappointed by that often.
[00:18:47] Speaker A: Absolutely. I mean, unless they're working with an expert like you or someone on your team, it's hard to be on top of all the details and all the changes that are happening. Right. So. So there are.
[00:18:56] Speaker B: Over a single mortgage has over 600 communication points between the lender, the borrower, the escrow, the appraiser, all these different things. It's, it's, it's quite a big file you would see if you printed out your paper file. A lot of them are generally, you know, a thousand pages or more by the time all the reporting is done.
[00:19:13] Speaker A: Yeah, so, so we're talking about loans. Can you share a story of a client who almost chose the wrong loan or Was going to go sideways somewhere, but was able to turn things around with your guidance or your team's guidance.
[00:19:24] Speaker B: Yeah. Well, I've done about 17,000 of these over the years, so there's a lot of stories. I have a lot of crazy stories. The one that came to mind when I saw this question was probably my own situation. I don't know if that's a great example or not, but.
And I'll tell you why I'm using it. So I bought a home that needed to be fully repaired, and I probably bought it at a time when people thought it was nuts. You know, interest rates were higher. We hadn't gone into covet quite yet, and I. And I overpaid. What people would say overpaid. But the second I got into the home and then Covid happened, the home started going up in value.
[00:20:03] Speaker A: Yeah.
[00:20:03] Speaker B: And yes, I had a more expensive mortgage, a higher interest rate, but I was able to afford it, so it didn't impact me in. In a stressful way.
We ended up rebuilding that house and selling it for about two and a half times what we paid for it within two years. So because we lived in the house and rehabbed it, we were able to get out of it, my family, and make a nice chunk of money and move on to the next project that we wanted to work on. But that's a good example of don't try and time the market. You know, do what you can afford, have a budget, have a plan. And if you have a plan and you work the plan, it'll work out.
Yeah, A lot of other stories, too, but, you know, it's always refreshing when I help people get to their first home and they call me, you know, five years later and say, best decision I ever made, even though I was so scared at the beginning. Thank you.
[00:20:54] Speaker A: Well, wonderful. Well, thank you for sharing that. Now, obviously, there's a danger in rushing into a loan without really understanding everything. And like you say, there's thousands of pages and so many regulations. It's hard for us as home buyers to understand every detail. But that's where you and your team come in. Can you tell us how you simplify that for people?
[00:21:12] Speaker B: Yeah. Again, it goes back to having a plan and really getting clear on what's important to our family and what our needs are. Don't try and time the market.
[00:21:19] Speaker A: It.
[00:21:20] Speaker B: It doesn't work. For example, a lot of the interest rates are a little higher right now than they were a few years ago. Right. More than double, I guess. A lot higher.
And people are saying Oh, I can't afford a home. I can't afford a home. But what they don't realize is you homeowners will do better to take the higher interest rate today and get into the home because of the tax benefits, because of the appreciation benefits, because of all the things we've been talking about.
But what ends up happening is when interest rates go down and they're going to start going down. If you watch the market, you'll see this happen.
When interest rates go down, the cost of homes is going to go up.
So people are waiting for a cheaper interest rate, which they might get, but they're going to pay 15% more for the property. And we talked earlier about how expensive homes are. $500,000 home going up 15% is another, you know, $65,000 that you have to pay or that you're going to have to leverage a mortgage and it's going to cost over time. So I always say, get in when your family's ready, when you're ready to have that stability of homeownership. That's the time to get in. Don't worry about the interest rate. Let's find a way to make it affordable in your budget. And when interest rates drop, and they always do, they go up, they go down. That's how interest rates go for the history of our country.
[00:22:39] Speaker A: Yeah.
[00:22:40] Speaker B: Then you capture the lower interest rate and you enjoy a lower monthly cost.
[00:22:44] Speaker A: Yeah, absolutely. Well, thank you so much for sharing all those tips and strategies. And I know you mentioned it, but once again, how do people get a hold of you? Kirk.
[00:22:52] Speaker B: Yeah, you can find me at
[email protected] or my website, Tall Pines P I N zE tall pines.com and of course, anybody wants a copy of the book.
Not that side of the book. We want the. The positive side of the book. Anyone that wants a copy of the book, if you email me or go onto the website or call the phone number there, would be happy to send you a free copy. You can also buy it on Amazon, but happy to make sure everyone gets the information.
[00:23:20] Speaker A: Well, great. Thank you. That's an awesome gift. And now in our next segment, we're going to shift gears into how obviously real estate is not just about buying a home. It's also one of the smartest ways of building wealth. So Kirk's going to give us some of those strategies and how you can build your own wealth with real estate. We'll be back.
We'll be right back with more ways to optimize, scale and succeed. This is Real Estate Profits on NOW Media Television.
And we're back. I'm Griselda and this is Real Estate Profits on NOW Media Television. Let's keep building smarter together.
Hello and welcome back to Real Estate Profits. I'm here with Kirk Joffe. And now we're looking into the bigger picture, wealth building through real estate. Many people are afraid of investing, thinking it's a little too risky. But the truth is real estate has been and continues to be one of the most powerful long term wealth building tools. And Kirk is here to tell us how, how that is possible for anyone. Now, the problems people fear is that real estate investing is too risky and they don't know all the rules and so they're missing out on long term wealth. Now, Kirk, why do you believe real estate is still the most powerful wealth building tool available today?
[00:24:43] Speaker B: Well, you have to know your history. This country was built on the concept of land ownership, real estate ownership. And how do you leverage those, those assets into better wealth building? That's what this country was built on from, from day one. Right. So carry on with the same thinking today. You can get into a piece of real estate I, I suggest for beginners, buy a home and live in it for a couple years and then rent it out and start with the next home.
Lots of reasons for that. You, you get to understand the property, it becomes easier to manage. You, you understand the neighborhood, it puts you in a position to really control the asset the right way.
And then you can go get another home by leveraging that home for the down payment for another home.
So there are lots of ways to build wealth and stacking real estate is a terrific way to do it.
One of my first mentors told me real estate is the best way to make money in this country if you can stomach it. And so there's. Right. There are a lot of problems, there are a lot of downsides to owning real estate, but all the rules are very clear also, for the most part, right around real estate itself, you get into tenants and things like that. The rules are a little shifty in this environment right now. But real estate is an asset. It's, it's a hard asset. You can touch it, feel it, you can't pick it up and move it too easily.
And everyone needs a place to live. So there's going to be always great demand for that. And we know because of inflation that property value and rental value is always going to go up over the long run because dollars are always going to be worth a little bit less Takes a little bit more to buy things, so that means we're going to make more money. And those are the really the long term reasons why real estate's a great place to invest.
[00:26:33] Speaker A: Excellent, excellent. Now, what are some of the biggest fears people have around real estate investing and why they sometimes choose not to do it and, and are missing out on tremendous opportunities?
[00:26:44] Speaker B: I think the biggest fear is the unknown or not understanding. You know, there are some terrific books out there. When I got into real estate investing over 20 something years ago, there was a wonderful man I learned from in Washington D.C. and he wrote a book. I can't remember the name of it, but it was all these practical tips around how to build a contract, how to manage your tenants correctly, how to make sure your property is taken care of. Very practical thinking. And I think if people build a plan with some practical thinking and some good guidance from people that have done what it is they want to do, mentors have mentors too, and we're all learning every day. I hope then real estate can actually become a very low risk situation.
[00:27:29] Speaker A: Yeah, absolutely. Now. So obviously a lot of people fear it and stay away. But how can someone, you know, they have some money to invest, how can they start small so they can learn their way through the process and like you say, you know, be in it for a couple years and then move on to bigger deals? How can people do that?
[00:27:45] Speaker B: Yeah, and that's one of the great things about this world that we live in in this digital world.
I believe Amazon has an, a real estate investment platform. For as little as $100 you can invest.
[00:27:56] Speaker A: True, yeah.
[00:27:57] Speaker B: Problem with something like that is you don't really learn about being an investor.
[00:28:00] Speaker A: Right.
[00:28:01] Speaker B: You can invest to get the, the interest earned, but you don't really learn how to be a real estate owner, investor, manager.
So I suggest finding people that will allow you to put in small amounts of money and invest in one of their projects. As long as they'll also give you the background and the insight to understand what they're doing. It's a great way to learn. There are tons of real estate investment clubs available all around the country.
Beware.
I see a lot of problems and I've helped a lot of these real estate clubs over the years. It's a lot of the blind leading the blind. So you be aware that you don't want to get into a real estate club where you're listening to people that don't really have a strong plan themselves and haven't really had success. Because I see a lot of early investors running into trouble because of that. So.
But you know, find great mentors, read great books. There's a lot of information out there. I am always available to this audience. Anybody that wants to call me and find out more, ask me a question. I don't, you know, a lot of times I don't charge if it takes me five minutes to say, here's the risk, here's the benefit, here's your situation on this particular property. Because I've done, you know, I don't know, like 300,000 transactions across all these different areas of real estate over the years.
I can analyze things very quickly. So being able to analyze your opportunities is really important to your success as well. We make money when we buy, not when we sell.
[00:29:22] Speaker A: Absolutely. And obviously get yourself some expert help. Now, what role does leveraging financing play in multiplying wealth through property ownership?
[00:29:32] Speaker B: Yeah, leverage is an interesting thing. Sometimes it's appropriate, sometimes it's not.
[00:29:36] Speaker A: Okay.
[00:29:37] Speaker B: Right. But when we talked earlier on the different segment about if you have a $500,000 house and you put 3% down $15,000 and that house goes up 10%, well, you just made an additional 50,000 because the cost of the house is so expensive, not because how much money you put into it.
You get the appreciation whether you like it or not.
So that's where leverage really can help people, especially first time home buyers and first time investors. If you buy a house, you live in it for two years, is technically owned or occupied, you'd be completely legal in all ways and no risk because you live there.
After two years you can move out and then you still have that mortgage in place. So you've created appropriate leverage, legal leverage for somebody else to rent that property and they end up paying your mortgage for you. Their rent covers the cost of your mortgage.
That's how leverage could be used in a really great way.
[00:30:31] Speaker A: Absolutely. And there's a lot of tips that people just don't know because you know, they have nine to five jobs or they're doing something else and they're not into the details of learning about real estate investing. Right. But obviously when you have done thousands of transactions, you know that, you know bits and pieces across many states. Because it is different too. Right. Depending on what state you're in. You know, I know your team has expertise across multiple states and so it's easier to help them with all of those tips and strategies. Now back to stories. Can you, can you share a story where you really changed someone's financial future through real estate investing?
[00:31:08] Speaker B: Yeah.
Let me tell you about Nita. Nita is 70 years old and she's been in the real estate game for quite a long time. But she got herself locked into a condominium that had a bad HOA board.
And so the sales price was not equivalent to what she thought she wanted to get.
[00:31:28] Speaker A: Okay.
[00:31:29] Speaker B: But I was able to help her build a strategy and get into a situation where we were able to sell that property. She was able to move in with her sister for five months while the market adjusted, and she bought a replacement property and was able to carry forward her tax base here. She was in California, so she was allowed to carry forward her tax base, save a lot of money, get into a more stable environment. And already the new property she's only been in six for six months, has already gone up in value significantly compared to when she bought it. So she's on her path not only with the right mortgage and the right strategy, she's on the path to securing and further securing her retirement and her retirement funds. And down the road, when she's ready to move on to her next place, she'll be able to rent this place out and continue to enjoy that income.
[00:32:15] Speaker A: Fantastic story. And so like you say, it's never too late. Right. So she was in her 70s, I think you mentioned. Yeah, absolutely. And so obviously you. You help first time home buyers as well. Right. So anyone from their early 20s, maybe even teenagers, but like my daughter's 23, so helping that group all the way to 70 plus, it is never too late. Right. When it's real estate investing, it is never too late. And anybody can do it.
[00:32:41] Speaker B: Absolutely. And we work with everybody and we love helping. I love helping young people. I think one of the biggest pitfalls I see with younger folks is they believe too much of what they see on the Internet and they don't want to talk to a seasoned professional. You will get a lot more information. Speaking to somebody that's been around 25 years, has done hundreds of thousands of transactions and really understands the laws in all these different states, those are the types of people you want to work with. What you see on the Internet can be valuable and can certainly give you a direction to head down a path to investigate. But don't take it as gospel, because it probably isn't.
[00:33:16] Speaker A: Absolutely. Well, thank you for sharing that. People need to hear that now. Up next, Kirk's going to talk to us about timing the market and why waiting for the so called perfect moment can actually cost you almost everything.
So I'm excited to bring that Next segment to you and we'll be right back after a few commercial break.
We'll be right back with more ways to optimize, scale and succeed. This is Real Estate Profits on NOW Media Television.
And we're back. I'm Griselda and this is Real Estate Profits on NOW Media Television. Let's keep building smarter together.
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Now in this final segment with Kirk Joffe, we're talking about timing. That's timing the market.
Many people hesitate to act because they watching the perfect time to either buy or sell.
But as we'll discuss and as you'll hear from Kirk, our expert on the show today, waiting often costs you more than it saves you. People paralyze themselves waiting for the perfect timing in the real estate market, but that's not always the best solution. So Kirk, why do you think people get stuck waiting for the perfect time in real estate?
[00:35:23] Speaker B: Oh, it's so noisy out there, Griselda. Right. All the news programs and the media and it can make a person crazy. It certainly does to me at times. Right.
You know, it's about having a plan and it's about understanding how to analyze a property and the opportunity. It doesn't really matter what the property is. It could be, I mentioned to you earlier off, off camera, I'm building a six million dollar home that I'm going to sell for eight million dollars.
People might say that was extremely risky to do that project. But I built in some things into that plan that ensure my costs are going to be secure so that I have flexibility if the markets go up or go down. If they go up, great. I'll make more money. If they go down. I built in enough of a pad to ensure that I don't get hurt and my investors don't get hurt. So it's really about understanding the operating of the property and the future potential and also the management team, if there is one if you're buying a big apartment building, there's probably a management team if you're buying a single family home. But yeah, when people try and time the market, they usually miss. You know, I've, I've got some billionaire clients and they will tell you they would rather miss the bottom by 10% and catch the bounce.
[00:36:37] Speaker A: Yeah.
[00:36:38] Speaker B: Carry forward on upswing. Securely and safely executing their plan.
[00:36:43] Speaker A: Absolutely. And like you say, you have to have a plan, and I'm going to call it a conservative plan, but it's really like knowing what the risk is. Right. What's the. The delta, the plus or minus? Because it could be really, really good based on what you set up. But. But it could also just not be as great as you expected. But like you said, you have a pad and it's still a profitable opportunity for you.
[00:37:03] Speaker B: Yeah. People need to be at.
I think consumers should get very real about what they can and can't tolerate.
And so it's, again, that's not just about the property and the ability of the property to perform, but also if something goes wrong, do you have the wherewithal or the resources behind you to fix the problem and carry forward so it doesn't become a disaster? And I think that's part of not overreaching.
I had a client years ago that called me and he wanted to buy commercial property and second mortgages. It was a very complicated process he was trying to put together, but he didn't understand it, and I begged him, don't move forward with this, please. No, you don't understand. You're putting yourself at real risk. Well, three years later, after we had that conversation, sure enough, he was indicted for lender fraud and, and wire fraud. And he's now going to jail at age 32. And that's just tragic for somebody so young that's just starting out and has their whole world in front of them to overreach when they didn't need to.
[00:38:05] Speaker A: Absolutely. And it's so easy to reach out, pick up the phone, call Kirk or anyone like Kirk Joffe. But. But you know your stuff, right. We don't have all the answers and so many changes in the market that it's impossible for us to know everything. But that's what you do, right? That's what you've done for, you know, hundreds and thousands of deals. So, you know, every little ins and outs of the business now, what's the danger of waiting too long and missing out on opportunities that are available right now?
[00:38:31] Speaker B: Yeah.
You know, the danger in waiting too long, the Investors I know the best in my 20 plus year career, they say the property I regret selling is the property I sold.
And they can. Right. Because they always do appreciate things do turn around. There is always a way to leverage a piece of real estate. So waiting too long is really just delaying your own ability to grow your net worth and grow your own personal portfolio of wealth.
So we don't want to wait, we want to build that plan right away. Get comfortable. Now, it doesn't mean that you're going to go out and buy a property tomorrow, but you can immediately start thinking about, you know, what your resources are and what your tolerance levels are and building that plan and working with a company like mine and where we help people build those plans. So the likelihood of making a decision when the time comes is not so much about the market. It's about do I find a property that aligns with my thinking.
[00:39:27] Speaker A: Right.
[00:39:28] Speaker B: And then is the market in alignment too? Maybe it matters, maybe it doesn't.
[00:39:33] Speaker A: Right. So it's having making an informed decision. Right. With experts that can guide you every step of the way that makes a real difference, you know, keeps money in your pocket and like you mentioned a while ago, keeps you out of jail too sometimes for sure. So yeah, yeah.
[00:39:47] Speaker B: And don't, don't try and time interest rates in the market. It's it. Nobody knows. I don't care what anybody says, nobody actually knows what's going to happen. There are those of us that spend our life studying it and watching it like I do. I'm up at basically 3 o' clock every morning reviewing and looking at the new charts for the day and what's going to happen and looking at the broader pattern of what's going on in real estate. So there are ways to make informed decisions. As you said, Griselda, it's very important to do that.
But really it's about working your own plan more than trying to time what might happen in the marketplace when honestly we don't have any control over what's going to happen.
[00:40:22] Speaker A: Yeah, absolutely. No way. And then you say, you know something different out in the news every day. Now how can someone decide if it's the right time for them personally instead of following the headlines like, for example, I know I'm not up at 2 or 3 in the morning, you know, checking headlines and watching the news, but you or your team members are. So now how can someone decide if it's the right time for them?
[00:40:43] Speaker B: Yeah, I think it's a maturity standpoint, to be honest with you. I think you know, in our heart, in our mind, we know that it's right when we feel like we can absorb that information.
Going into real estate. Real estate is complicated. There's a lot of laws. The laws change in every single city and every county and every state is a little bit different everywhere.
Evaluating markets and finding out which markets are, you know, performing at a stable or an increasing level and which ones have risk and. And maybe even buying into markets that are risky because there's something in the future coming down the pike. I'll give you an example. Toledo, Ohio, is a market that I would consider very risky, but very interesting because as we're in this state of economic change here in America, we're trying to bring factories back to America. Yes, Toledo is a great factory town, one of the biggest in the country. So if any of those factories come back online, those homes that are now falling over and are dilapidated are going to go up in value, and people are going to need a place to live that are working in the factories. So that's a calculated risk.
[00:41:50] Speaker A: Yes.
[00:41:50] Speaker B: And I think it's important to really be able to work with companies like ours over at Kirkjafee Enterprises and Tall Pines to help identify where are those opportunities and how do we grade them? Not every opportunity is a 10 and, and not every six opportunity means you shouldn't do it.
[00:42:08] Speaker A: Yeah, yeah, absolutely. So just know. Know the details and partner with someone that knows, you know, that it's their expertise. Now, your expertise is brought not only in real estate investing, but also in corporate world. And you are a chief operating officer. Now let's talk about strategy. What role does strategy play in making money in any type of market, whether it's up or down?
[00:42:32] Speaker B: Yeah, it's hugely important. And my career as an executive has been one of the most fulfilling parts of my life. Not only did I get to do a lot of mortgages in my career, which really taught me how to read tax returns, how to evaluate companies, how to understand cash flows, how to create cash flows out of nothing on paper. Like, this is what I learned as a mortgage originator for all the years I did that and all those transactions. As a chief operating officer, responsible to build companies and then manage them, I learned a whole different set of skill sets. Like you said, strategic planning and internal planning and external planning and. And evaluating opportunities. I think it's about education. You know, right now, the biggest risk I see in the world is AI for investors, for people that want to own businesses, people that don't really have a strong strategy.
AI is a situation where there's a lot of information coming at us, but we don't know where the information is actually coming from.
And so if you look at the legal docket in California alone, there are 23 laws going through their legislative process right now that impact all areas of AI.
So, for example, if you're using a chatbot because you're trying to get a tenant, or you're trying to sell a property, or you're trying to use AI to improve something and you're in California in particular, you have to follow. You will have to. Coming up soon, the chatbot legal rules around how to use a chatbot correctly. These types of things are coming down. So it's really important as a strategic advisor to be able to keep in front of those things that are coming and be able to clearly explain them to my clients so that we're building it into their strategy and mitigating the risk. You know, strategy is a lot about mitigating risk. Everyone can make a mistake, but a disastrous mistake is really a problem.
[00:44:25] Speaker A: Oh, absolutely. Now tell us a story about someone who took action and let's say what they would perceive to be the wrong time, but still created success because they had a plan in place with, you know, probably a best case scenario, a low case scenario, and the most likely. Can you tell us an example of that?
[00:44:44] Speaker B: Yeah, I work with clients all the time around this. I recently worked with a restaurant group and to be honest, they were a little frustrated because they didn't want to make the tough decisions.
You know, so what I saw coming. And they're also in California. I do business all over the country. These stories just happen to be coming from California, probably because it's such a complicated state. They're always changing the rules and they're always trying to make it easier for consumers and more difficult on business owners. It's kind of just their philosophy, which is okay, it just is.
So this group, they really had to make some tough decisions. For example, they had 35 items on their menu and their cost for labor had tripled because of the laws in California on minimum wage for restaurant labor. And I said, well, you guys need to cut your menu to five items and you need to really get tight. And they refused to do it. And now they're frustrated because they didn't follow the plan. But if they had followed the plan, they would have gone from struggle to profitability very quickly. And then they also would have flexibility to add back in the things that they wanted to add back in based on profit margins. And a predictable cost structure.
So there's an example of someone that didn't take the advice that is struggling now.
And I don't mind saying not everyone wins, but everyone learns. And so even if we don't take the advice and we don't and we can't make that shift, hopefully we've learned from it and we can move forward as stronger, more intelligent investors. And I think it's important to understand that, too. You know, part of having a plan is also having a mental and emotional plan and being able to overcome those challenges and to be flexible and shift when something in the marketplace shifts that we can't control.
And those shifts happen quickly. You know, California increased the minimum wage to $20 an hour for restaurant workers.
That is not something a restaurant industry can absorb easily. And you see it's not happening all around the country.
[00:46:46] Speaker A: Yep. Absolutely. It's. It's happening. And, and like you say, it's hard to stay on top of all the different changes happening in the market. This has been incredibly valuable. Kirk, thank you so much. Where can people follow your work and, you know, carry on the conversation with some of the topics that you brought here today?
[00:47:02] Speaker B: Yeah. If you go on, if you're on Facebook, I have a blog, a blog or a group in there called Kirk Jaffe's U.S. housing and Mortgage News, where I post interesting concepts. You can also go to our websites, tall pines or kirkjaffe consults.com and also get information updates. We post a blog there just about every day about business strategy and how to grow your businesses. And anyone can reach out to me anytime with the phone number there at 775-618-5020. And be happy to connect with you, answer any questions you might have. And if it's a bigger transaction, of course, happy to work on consulting with you as well.
[00:47:39] Speaker A: Absolutely. Well, thank you so much for sharing your insights here on the show with our viewers. A lot to think about, from building wealth to home ownership. Thanks so much.
[00:47:48] Speaker B: Appreciate it.
