Case Studies on Home Affordability Part 1 – Podcast
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by Garrett Welt
- May 5, 2021
- Business, Podcasts, Real Estate
- 0
Case Studies on Home Affordability Part 1 – Podcast
Transcript Intro
This podcast will include info we wish we knew a decade ago, to get the most out of our financial life, and will provide you with insight into wealth building activities and practices that can expand your net worth exponentially. Get insight from top professionals who will reveal how to build wealth the long way and work smarter, not harder, and identify your financial blind spots. With over 25 + years of experience as licensed real estate professionals, and a long track record of winning for their clients, Rob and Adrian will teach you what it takes to be an everyday real estate millionaire.
SPEAKERS
Rob & Adrian
Adrian
Hello, future millionaires! Thanks for joining us again on the Get Rich Slow podcast. This is Adrian Schermer here with my Co-Host, Robert Delavan.
Rob
Good morning.
Adrian
Today, we’re going to be talking a little bit more about house affordability. I do want to just mention up front here too, we’re also on a number of different platforms, including YouTube. So, if you want to take a look at us from the chest height up, we’re available and broadcasting there or even live if contacted. Subscribe to our Only Fans. Rob, how’s your morning going?
Rob
Good. I got to tell everybody a joke. My brother came across this and texted it to me this morning.
Joke
So, a police officer called the station on his radio and he said I have an interesting case here. An older lady shot her husband for stepping on the floor. She had just mopped. My response was, “Have you arrested the woman yet?” He goes, “No, not yet. The floor’s still wet.” Not that that applies to getting rich slowly at all. But hey, you got to keep a sense of humor and all this stuff. And the floor might get wet along the way.
Rob
So anyway, I wanted to start today with telling you a quick conversation I had with a client; and then we’re going to go into a scenario of some 20-something clients that Adrian and I are working with. We’re going to run through some different things and tie in the affordability and the process of all. And then, I want to end with a story about a family member and their wealth situation. This gentleman was seven in the 70s. So just to kick it off here, we won’t use names.
Rob
Another conversation I had recently with this 30-year-old was a common one. “How can I look at not renting but buying a home? What’s that look like?” She’s relatively new early in her career but doing reasonably well. She owns a small business and is just building that foundation. The thing that she told me, that has stuck with me, and has just been weighing on me the last couple of weeks was, “Of my social circle, half of my friends are partnering up or getting married, or starting to have kids, but about half of them are working in service industries or own businesses, and they’re trying to kind of find their own way.” I realized when she said that, that maybe it’s the less traditional route, but frankly, for many the more the norm. And then she said, “You know, they’re not making a ton of money, but they’re getting by. They’re all renting and 100% of them, that are in that position are saying, ‘I’ll just never own a home.’ That’s just not in the cards for me. I want to own my own home someday. How do I do it?”
Adrian
We are growing up in a world that we’ve become hyper aware of the problems that face us all today. It can make the world look like a really ugly place, like things are getting worse, but even though statistically speaking in a lot of metrics, the world is becoming a safer, cleaner, healthier, and a happier place. Looking at the larger picture is important to remember. People are living longer. In most countries, life expectancy is on the rise and crime is falling. Homeownership among younger groups, regardless of what the statistics are, is achievable. It’s absolutely not for everybody. We all have our own situations. I’m not gonna say every single person in the world can own a house in the United States but a lot of people who think they can’t can.
Rob
Right. I would even maybe challenge you on that. It may not be for everybody. What do they say? If you think you can, you will? And if you think you can’t? Well, you know, there’s no way in hell.
Adrian
If you’re already asking the question – you’re already proactive enough to potentially do it. There’s a very high likelihood in my mind, that if you’re asking that question, and you feel like you’re the type of person who can set goals for yourself, there’s a pathway to it.
Rob
Right?! And it’s intentional. And you have to focus on it. It’s not something you do overnight. It’s generally a one year to three year journey. Which is compounded upon the previous year to three years of getting that education, training, and experience which is often compounded with going to school and college; which you don’t have to do. And in another episode we’ve already planned out conversations on the becoming a blue collar millionaire too.
Adrian
Yep, absolutely. Which is frankly, way faster than going into a bunch of debt. This is one thing I want to touch on as well. Another client has a degree in child psychology and ended up working in biotech, being one of the highest paid professionals in her field. She went from providing services to developmentally challenged youth to working for a company that is literally making the vaccine right now.
Rob
So, with with all of this, there’s many areas that we can explore here. But getting back to that statement on “never being able to afford a home,” everyone in our audience, please look at our Affordability Index episode. Yeah, it is huge. But first, let’s unpack a specific example of somebody that’s a little farther along from the gal that was 30 and said, “Half of my friends won’t own a home and I don’t know that I will either.” Glad she’s asking the question. We may actually at some point have her on as a guest here and we can unpack that at a very personal level with her, if she’s willing, so you can get an idea of the the larger pictures and it’s factors.
Rob
Let’s move forward to our avatar people. This is actually based on a couple that we know and we’re currently working with. Let’s call them Alice and Fred and they’re 26 and 28 years old. They’re both professionals and have college degrees. They’re also living in the downtown area of Portland. I won’t say the exact neighborhood, but they are. They like the walkability. They like being able to be within five or six blocks have some great restaurants, bars, all that sort of thing. Of course, the pandemic doesn’t really allow them to access all right now but there are still open coffee shops and take-out. Essentially their backyard is downtown Portland – and they’ve enjoyed that. They’re also living in a one-bedroom and making well into six figures. Somewhere in the 75,000 range at the age of 26 and 28 and just don’t know how they could ever afford a home, but are already spending $2,600 a month in rent. Because they don’t feel like they can afford a whole lot more than $2,600 we’re searching for things that wouldn’t cost them more than about $3,000 a month. Based on current situation, interest rate, down payment, mortgage insurance let’s look at the home range that would be available for these clients and give them these options…
