The Expert Podcast

Describe TV today We have two really good subjects. About personal finance One is how to plan for retirement There's some very controversial statements that were made by a very high profile. Conspicuous investment person that talks about what everybody's doing for retirement is going to fail and basically puts you in the poor house. We're also going to talk about how to find…a rental property. To live in, in a tight market If you live in a city where it's hard to find a rental and you're scrambling to find a place to live and there's not many options, there's some ways that you can find.

Rentals that maybe aren't advertised that you can get to the front of the line You don't have to wait. for 50 other applicants, to somebody to go through their application So let's first talk about retirement. At some point in your life, every person wants to stop working and retire. That's the goal That's the dream. And some people.

Save for retirement They have a 401k. they have, you know other types of.

financial instruments and help you retire. But take a look at this. article we have a a reference from a person. that. You'll see very commonly.

mentioned. That is grant Cardone or whatever you think of grant Cardone You know some people I…don't like him because he's outspoken and he, you know it was very I CA I guess bombastic. but what he says is quit saving your money for retirement. There's only one thing that will bring your true wealth. And that's not your job or being cheap…

Now what he's recommending obviously is invest in real estate which he has coincidentally thanks to invest in. the only thing that. We'll build. Build wealth. Is two.

Invest in real estate and he built a real estate empire on. he has opportunities for that but a couple of things in this center important to see. Quit saving your money. My parents did They saved money They didn't invest their money correctly They didn't take leverage and you're terrified of losing their money. Saving saving saving Won't bring your wealth.

Overspending Won't bring you wealth being scared Won't bring you well So let's forget about what he's saying as far as putting money in his real estate deals which maybe that's a good thing or a bad thing That's not the point. The point is saving for retirement Is that going to work well? It's not an opinion. You don't want to take somebody's opinion You don't want to…

Just go by a feeling or a thought let's do the math on saving for retirement. So what we're going to do is we're going to just do some basic math using a calculator Here's a calculator. Let's suppose you are. 30 years old. And you start saying.

for retirement Now granted some people say for retirement before they're 30 they started putting money away when they're 20 or 25. Some people don't start saving until they're 40, but let's say you're 30 best case scenario. And if you make $120,000 a year, when you're 30. that's you know an above average income decent income There's plenty of people that make more than that Some people like less, but let's say one 20 and you save. 10.

Percent of your income. That means you would save $12,000 per year of your income. Now 10%. He's a decent amount right And that's of your gross income. Look, if you make $120,000.

You're probably taking home. Maybe 90. After taxes maybe 85 depending on what state you live in. And you're going to have your housing your mortgage your. Cars your insurance your health

care all the other things come out your expenses, and maybe you can save 10%, right That'll be about a thousand bucks a month. So if you save $12,000 a year religiously. From the time you're 30. Until the time you're 65. Well that's 35 years.

All right. So let's take that $12,000. And multiply it times 35 years. That's $420,000. I bet you were thinking it was more money than that.

In 35 years. You'll have $420,000. So I know what some of you you're saying well I'll have more than that because it'll go up in value I'll have interest I'll have investments You probably will. And 35 years it's probably going to have a number in the account That's a million and a half maybe even 2 million But…

remember, we're going to talk about retirement where you're going to be spending that money. So let's talk about today's dollars because. 35 years from now, it's also likely that the things that you will be spending money on will also have gone up in value. Right? So…

The $420,000. We'll have the same buying power…

As $420,000 it's not going to have $2 million of buying power. In 35 years. So let's say now you're 65 years old and you want to retire. On that $420,000…

Well how long are you going to live for? You're going to live to be 80, 90, a hundred. Lots of people that live into their nineties. The problem now is there's a big divergence. There's some people live till 60 or 70 Some people live to 95 a hundred.

So there's really the average anymore Really Isn't. Accurate you're they're gonna…live till 65 or 70 or live till 95 or a hundred but let's just say we'll split the difference. You're going to live to be. 80 years old. 80 years old…

Well that's another 15 years. So take that $420,000. Divide it by 15 years. That means you have $28,000 a year to spend…

Let's just say for example that you save 20% of your money. So let's double your savings. So even if you double that now you're going to have $56,000 a year to live on. Well remember. You have been making $120,000 a year all your life And all of a sudden you're going to…live on half that…

Is that how you want to spend your retirement? And some people think well my expenses will go down because I won't be driving as much or. you know as many. Close at the dry cleaners but when you're retired you probably want to spend more because you'll be going out to eat going on vacation. So.

You can't save your way to retirement by itself You're going to need other things So grant Cardone is right about one thing. You can't save or cheap your way to retirement. Now that doesn't mean you just blow all your money. You want to have all the different types of…

Investments or options You'll see In the bottom of the screen we have 401k funds Do you want to have a 401k You want to have retirement You want to have all your different options available to you but…

You're not going to be able to live a standard of living just by saving for retirement I know that may sound like bad news and there's a lot of other things you can do to the math compound interest. Maybe you'll have more than four 20 saved up, but you'll also have higher expenses, right In 30 years do you think a gallon of gas is going to cost $4? Car's probably won't even run on gas in 30 years Right. But all of the expenses that you have are going to go up at least as much as your savings. is going to go up.

Right. And that's assuming you're only lived till 80. We only did 15 years. What if you live till 85 or 90 now that money gets stressed out even more. So you're going to need more than just what you save up.

What should that be Well…

Grant Cardone and his rant talks about putting money in real estate That's great That's one thing to do the most important thing you're going to need. Is some income. What if you have something. That in addition to the money you saved up, also threw off some income It doesn't have to be much what if it was a thousand or $2,000 a month? And that's going to come from.

Some enterprise that you have the time to create that enterprise is right now. Not when you're 64 and a half. It may take five or 10 years to build and create something that makes you a thousand or 2000 a month in income some side gig side hustle. That's better than saving money That's better than putting money into…a real estate investment. Because you don't know where that's going to go.

And if you start taking money out it reduces it If you have. It's kind of like the golden goose right. If you have money saved up that you are going to use in retirement you're now just eating away at that gold from the golden goose. If you build an enterprise that gives you income, you now have something that produces more gold every month. What that thing is, it's.

Different for every person and maybe related to your job and maybe a hobby and maybe just something you'd like to do. If you spend some time now putting effort into creating that enterprise. When you're 60 or 65 or maybe even earlier 58, 59, you might be able to step away from your everyday employment. Have this other income that comes to you either passively or semi passively, because you've created it. You're not going to scramble and put that thing together When you're 65 I'll tell you that much right now.

because in addition to not having as much time now the pressure is going to be on and you're going to have to scramble to make bad decisions. If you just. Piddle around with different things with different businesses When you're 35 or 40 or 45, you may spend five or 10 years. With that thing making no money, just being something you have to spend a few hours a week on, but at some point you'll find that niche you'll find that right Secret sauce combination of that little side business. And it doesn't have to be a million dollar business although it could be, it doesn't have to be something that is dramatic.

It could just be two or $3,000 a month from some little side hustle. And as long as that thing will continue after you retire. Now that makes up the difference. Now instead of. 18,000 or 56,000 a year.

You now have that from taking away your savings, plus another 3000 on top of that from your…

enterprise that you built upside business whatever you want to call it…

It may not be obvious to you right now what that is but that's going to be one avenue you have. Of having, not just being able to retire but being financial secure and comfortable. Another avenue could be you play lotto and win the lottery but what are the odds of that Right. The odds of you creating something that can make a couple of thousand are actually not that bad It actually could be. Pretty good.

So let's talk next We'll change gears here about…a rental property…

If you are a person who is currently renting maybe you want to buy a house someday Maybe you don't. Right It doesn't matter…

Your. Probably finding that it's difficult to locate a property to live in. On a regular basis If your lease is up or you want to move to a different area or you want to upgrade or downgrade. It's not like there's a million properties to rent and they're very competitive. Right.

Put an application there's 50 other applications. you pay an application fee. And you're just in line with dozens of other people, at least maybe more than that. How can you. Be the only person.

Considered for property and find properties that aren't advertised to the masses Well there's two ways to do this. Let's take a look at what these hidden secret magic wastes are. That you might be able to find a property to live in. That you pick out the property, that property doesn't pick out You…

Number one is you can use Zillow So let's. Take a look at. An example of a property in Zillow. So here's a property that's currently for lease happens to be in Georgia it's properties renting for 2,500 a month. It was put on line at 6, 8 23 which is yesterday.

Listed for rent. Okay. Fair enough…

You're going to. See this ad, you're gonna scroll down You're going to find the name of the realtor or who's offering it. Schedule a tour Right? Next thing you know, You're going to be in line with dozens of other people. Oh here's the listing age right here.

You're going to contact that person and they're going to show you the property and they're going to also have shown it to dozens of other people and maybe you'll get it Maybe you won't. But…if you go through properties now this one's for currently for rent, but if you'd go through properties in this neighborhood and you just click on every house you can look at what's called the price history of that property. You notice this property was also listed. In 2018. For $1,780…

Right. It was also listed for rent. In 2018. For 1850. And they changed the price.

It was sold. In 2018 and the new buyer obviously rented it. Because right after they bought it pending sale, 3, 6, 18, they sold it in 3 28, 10 days later, they listed it for rent. All right.

So how does this help you Well, if you go through and look for properties that are not currently for rent, But we're listed for rent. At some point in the past. Right Here's listed for rent 2018…

You know that that's a rental property. If it hasn't been sold since. And if you look for dates that are around the same month that you're in right now, or maybe. A couple months after like this property was listed for rent in for April of 2018. If you go through Zillow listings, And find properties that were listed for rent a couple months later than the month you're in right now So right now it's June, maybe you go through and find ones that were listed in August or July of whatever year It doesn't matter what year I ideally would be a year or two before, but 2018 if you found one that was August, 2018, that lease is probably an annual lease It's renewed every year.

So what do you do if you send this property owner? A letter…

A month before they're about ready to renew the lease from their tenant and say, my name is Joe Schmo I'm looking to rent a property. I have good income I have good credit. I have good rental. references. I'd love to.

find a house in your neighborhood. if your property ever comes for rent please contact me…

Now. Their lease with their existing tenant might be coming to an end Maybe the tenants moving out. Right Maybe they've already told them we're leaving and they just haven't put it for right yet. Maybe the tenant hasn't told them to moving out however…

The. owner the landlord. Maybe they don't like that tenant Maybe they paid late Maybe they keep it dirty Maybe they cause problems. Maybe they're just a bad tenant. So maybe now that they have this proactive.

organized. Business like person contacting them with a nice professional typed up letter. With all your credentials, they might say Hmm wait a minute. Why stick with this problem tenant. When I could switch and go to this organized.

Professional upstanding citizen. As a tenant. Here's another advantage. If a…property owner landlord goes through…

Where's the guy. Goes through this broker. Right. Leming Zang I'm sure he's a great guy I'm sure he's a good real estate broker. But if this property owner of 11 to 20 Whitney Ridge goes through them they have to pay them a commission.

And that commission is usually 10% of the rent. And sometimes at 10%. Is every year that is renewed. Right. So instead of spending 10% of the rent which is a couple grand, why not rent it directly to you?

Based on your contact. Not only do you get a better tenant. But you can save some money. So what you want to do it's going to be a little tedious as you want to go in Zillow and start clicking on houses in neighborhoods that you like and finding ones that have a price history Look for that price history and look for dates. For rent, not for sale for rent.

That are maybe a month or two after the current month. So right now it's June find ones that begin with a seven. Or find one to begin with a, like this that's what happened here

this was rented in July of 2018. Now it's coming up again in June. Because that lease is probably ending…

You know the the the new lease is probably signed July 1st. That new lease is ending July 1st again So they put it for rent a little bit early to get people in. So there's one method you could use to find a rental property Now you have to be a little ahead of the game. You can't do this after get kicked out of where you live now Right You have to do this in advance, but if you were an organized, forward-thinking. Non procrastinating type person.

This is a way you can get into a property maybe in advance What's another way. In other ways to look at tax records, I'm going to pull up a tax records for a property I don't know who this person is. It's just a random property pulled up. You're going to look at the tax records has happened to be Broward county Florida. The address of the property is 1901 Bermuda circle.

The mailing address for the tax bill. Is 3, 2 0 9. Ne eighth court. The mailing address is not the same as the property address What does that tell you tells you they don't live there. Because they're getting their tax bill mailed to where they live.

And this is the property So this is probably a rental. How do you find this Well you go into…

the tax records and you can search by. You can search by address So if you search by street it'll show all the ones on the street. And what you do is you click on. The tax records This one here. Well it's different The site address is 4743rd.

The mailing address is 4743rd So that's not a rental because they live there Their tax bill goes to the property. Yeah we'll click on a couple other random ones. 40 40 Northeast 40 40 Northeast That's not a rental. You're going to find that the vast majority of them are not rentals, but occasionally you'll come across one here's one right here. Seven four.

I'm sorry 7 5, 4 7 Northwest ninth avenue. The mailing address is 9 0 4 Gardner. Right. It could be a rental could be a second home. But you're not going to know until you try What you can do is you can mail a letter to their mailing address and say look I'm looking for a property.

rent in your area…

Organized and actually I didn't share the screen Let me share the right screen here

…

Here's the tax records Let me start over. What you do is you look at tax records and here's Broward county. the site address is shown here The mailing address is shown here…

If the addresses are different. If they're different. You are going to have a good possibility. This is a. Rental.

Because if it's a primary resident, Their tax records are going to be sent to the same address. Right. As an example we'll go back to the screen…

This is this all a different address Another one. Site address 6 1 1 5 Arthur street in Hollywood. Mailing address is 9 7 2 1 in Miramar. This could be a rental. Because their tax Bill's not going to the house and you can search this by street You can search it by neighborhood.

In this case, it's the same thing. Site address is 35, 24 mailing address 35 24 This is probably a primary residence So this is not one that you're likely going to have any luck contacting. But if you go through the tax records in the area where. You are looking to live. And you can.

Search by. Address subdivision So let's say there's a certain subdivision You like you type in the name of the subdivision. And. You see if there's any houses in there that the primary resident. Is not…

Having their tax bill mail to their address. Right. So those are two tricks you can use…

To find a rental property. That might be of interest. To you and has not hit the rental market yet. Right This is cruel…

If the rental market is not tight in your area then you probably don't need to do this, but in many highly desirable parts of the country. Rental properties are difficult to come by. And if you can get at the head of the line, For finding a property. Many times you can avoid being competitive with other people. We're going to take a quick break And when we come back we're going to talk about lumber prices and also how to get a contractor.

Too. Return your calls If you have work to do on a property if you want to build a structure, you want to do an addition and remodel, you might find that contractors are not calling you back. You might find that they are. Maybe not giving you good estimates. How can you get a good contractor in any part of the country?

To call you back and not…a low quality contractor. You want to get one that is a good builder. Sometimes the ones that call you back are the ones that can't get jobs because they have criminal records or they're bad at running their business or they just rip people off. So this is the way you can get a good quality contractor. About 40 seconds We back after the break…

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Expert guidance from real people…

All right We're back So let's talk next about. getting a contractor to call you back first. Here's a really good article there The contractors are out there right There's there's builders out there doing business. This is an I know where there's a home builder. That's going to build 600 houses in three months.

That's a very ambitious task and a very difficult process. apparently they've lined up all the, the laborers all the raw materials, and they are going to, be able to accomplish this goal of building 600 houses in three months. This should really be good for the real estate market in that area. And it just goes to show that there are organized and successful builders out there that are doing this well How do you find one? The most important thing for a builder.

And we do consulting for builders all the time and we do consulting. for, For consumers looking at builders…

Builders have more inquiries and business than they can handle. You have to realize that you might think well I want to pay you money So why aren't you calling me back Well they already have people that they can call back. How do they pick the ones they want to call? It's not about the money It's about the ease of the job If there are two jobs that each one is going to be a $10,000 job…

Even if one of them. Is a smaller job. Maybe one job has 10,001 Job has only 5,000. If that 5,000 job dollar job it's going to be less headache less overhead. They'll probably take that one.

What makes a job less overhead Well, you gotta remember…

The biggest factor in how a job is going to go is project management, right? Building a house doing an addition doing a remodel. There's a lot of organization and moving parts. There's the scheduling. There's the.

the timing of all the trades people that come in after the fact. There's also the design and architecture. There's the permitting process. And if there's any hiccups in that it's going to throw the whole thing out of whack where look. A $10,000 job I can easily become a lost.

Profit endeavor. If there's something that makes it take six months where your equipment's tied up or you can't move on to another job. What makes that happen We'll usually it is client induced, right There are some builders that are disorganized that just can't. You know run a business, but many times it's a client that makes major changes halfway through the project or doesn't fund the project properly or. gets the interferes with the job…

Most of the time though It's because the client really doesn't even know what they want. They want well I want a dish. How big well I don't know. Where do you want it Well either over here or over here do you have plans Not yet. Right If you are a client that's not yet fully organized in what you want.

Then. That's going to be a red flag for the builder In addition. If you're a client that is willing to let the builder give you some suggestions. If you want to build a 1000 foot. Addition to your house.

Have plans have organization having the idea. But also first question is asked to build there. Is there anything you can suggest that will make this job easier? If your first question to the builder is I'm planning on doing an addition. I have plans I have architecture.

I started the permit process, but what I want to do is start a conversation with you…to get input from you that you can tell me what will make the job easier. Boom that build is probably going to drop everything and talk to you because you're not saying I want to hire you I want to pay you. Because that's more of a demand right If you say I want to pay you as soon as you pay the builder. Builder's know that at that point, You are going to…

assume that they are now your slave You're just going to have to. They're going to do whatever you tell them to do right I'm paying you You do how I want. That's great But the builder has a lot of responsibilities to do things by code, to do things…that are going to get approved. There to do things in a certain legal and also safe manner And if you're telling them to do things that make it harder to do that, It's not even worth the job. So the first thing to do is.

Identify your plans to be very clear what you want You want a 1000 square foot, you have the plans It's going to go on this footprint You know it's, it's going to be approved by the county. And then tell the builder. I want to start a conversation to get input from you so you can tell me…

How I can make this job. Easier. Even before you get into price. Don't even ask them for a bit. The other thing is you don't want to ask for a bid because as soon as a builder

hears a client saying, can you give me a bid? What does that imply? It means you're getting more than one bit. So even if you get three bids they only have a 30% chance of getting the job Why even bother, how long is it going to take them to do a bid? They're gonna have to come out to the property spend an hour or two there.

They're probably going to have to spend four hours with bid software putting it together. That's working for free If they don't get the job. Right. So why not talk to somebody who's not talking about bids? You're just asking them.

To give them suggestions on how to make the job easier. And you say the word easier. They here easier for me the builder…

That's what builders want They want easier jobs because every construction job has nightmare problems with it, every one of them. So if the first thing out of your mouth as a. Prospective client is how can I make this easier? Man now you are a dream client and they will bend over backwards. Not only to do good work for you but probably price it cheaper.

One the factors that goes into bid and quoting is. Hey how many problems do you think I'm going to have with this job Because you never know what the problems are going to be…in a construction project until you get into the job You're never going to know. So you have to factor in. A certain number of them. And if you just look at a job and your gut says you know, This job's going to have a lot of nightmares I can tell ratchet up the price.

But if you know from the first statement that that. Homeowner that project client. Is already saying how can I make this easier? There's still going to be some problems. Don't get me wrong, but at least now the builder can factor in the.

lower. Risk speculative element that there's going to be nightmares with this job. There will be some but there probably be less. So think of it from the builder standpoint. It's not that you have to pay more money You're not it's not that you're going to get ripped off.

It's more, you're trying to help the builder make their life easier. And it's not a…adversarial. Process it's a cooperative process. Sure You want to make sure the builder's good and that, you know he does things to your satisfaction and he follows the plans and you know the contract is the way you want it to, but this is a very collaborative product process. And the builder knows that you're going to be involved with it You're going to be looking at things and looking over their shoulder.

And so you want to make sure that you're not having them create a mental image of that in their mind of this job site with you nitpicking every little last thing, right? If you believe that builder is a good. Quality. Contractor business partner, then you're gonna let them do their thing Give them some input. Maybe you tell them upfront Look, I don't want to get into your business and micromanage what you're doing.

Maybe you and I have a meeting once every two weeks. And you can show me you show me what's going on with the project. And get input from me. Right.

maybe you suck. that that's a whole different world and experience for that builder than a property owner That's everyday how high why is this nail over here How come this is like this? That's going to be something that builder doesn't want to do because it's going to get in the way of their time. And if if you believe that they're expert and professional let them do their job. If you think they need micromanaging you're hiring the wrong builder.

Don't hire somebody If you think that you need to second guess everything they do. Sure You want input as a property owner That's not what I'm saying. You should have very clear specs What color. The paint's going to be what brand of paint it's going to be, how many coats of paint it's going to be You can micromanage every detail of that project, but you need to do that before you start. Don't start adding those things on afterwards, because that's going to.

Create an adversarial relationship, make the, the scope and scale of the project Very very clear from the get-go. And then let the builder do their thing Meet with them on a regular basis. In a controlled expected environs. So the builder knows what they're going to deal with and you'll get a much better work product than if you just constantly are beating them up because here's the thing. If the builder has to incur extra expense.

Because of…

Things that happen after the fact that they didn't count on you putting a change in well we need to change this beam and put it over here Cause I don't like the way that window is. Well that wasn't in the plan but you need to do it. Okay They're going to do that If that costs them more money. They're going to take that from somewhere else, maybe some higher quality materials they were going to use They're going to shortcut that right. You want to make it a cooperative process Don't think that that builder it's you against them.

Because if you go into it thinking that it means that you haven't picked out a builder you're comfortable with. Spend the time to be comfortable with them first. Right. Maybe you look at building permits in the county to see what builders are active. You don't want to hire somebody that does one project a year.

You want to hire a builder That's active. You may be can look at ones that. The permits and the approvals inspections were issued very quickly. Look at a typical job for that builder. Look at the inspection dates to see if an inspection have to be redone four times, let's say there's a framing inspection you can see in the permit dates.

If that framing inspection was approved the first time or if you had to come back a week later a week later a week later to get it done. That's going to tell you it's a quality builder. Right. You can also look at civil court records to see if there's any lawsuits or…

even if there's mechanics liens where they're slow payment, slow payment could mean that. The client didn't want to pay the builder because they did a bad job. Every single part of picking out a great builder. Can be determined. From public records.

And you can use those to your advantage. To find a good builder that way If you find somebody who's quality, you can be comfortable and just turning it over to them and let them deal with it. Right That's the whole reason you're hiring a builder You want an expert to take care of this for you? You don't want to be the one that has to deal with all the headache, right? So let them do their job but pick a good one in the first place.

So you're comfortable doing that. Oh…

glad to see you On another episode of described TV we'll be back in tomorrow We're going to talk about a mediation We may even talk about. telemedicine and telehealth and how you can take advantage of. Technology to get a lot of. medical. issues.

handled. And also we talked today about getting a builder to call you back tomorrow We'll talk about how to get an attorney to call you back If you have a legal matter. That you need to take care of. How can you get a good quality attorney? On your side…

Talk again then put your comments below so we know what to discuss on the next episode, and we're glad to hear your feedback.