Tag Archives: podcast

Podcast, Real Estate

Insider Tips for Getting a Great Deal on Your Mortgage

Leave a comment

Are you thinking of buying a home soon? Get the inside scoop on what lenders are looking for so you can get a great deal on a mortgage!

How to Find the Best Rates for Your Mortgage

It's home buying season and depending on where you live, it could be a hot market. It’s certainly that here in Raleigh, NC.

As a buyer that can be additional pressure on finding the right place for you, but if you’re prepared and you snag a great deal on your mortgage, you’ll have a leg up.

This is why to have Wendy Dawson on the show today. She’s the Vice President of Mortgage Lending over at Coastal Credit Union. She’ll be sharing her expert insights on how to shop around and snag a great deal on your mortgage.

In this episode we’ll get into:

  • What lenders look for when assessing a potential borrower's financial position
  • potential down payment assistance programs for first-time homebuyers
  • how to stay level-headed during your house hunt your new place is a blessing and not a burden

We have a lot to cover, so let’s get started!

Resources on Buying a House

If you’re looking to buy, here are some resources to help you find an affordable place you love!

If you’d like to chat more your money system, please join us in our private and free Facebook group – Thriving Families. We’re families looking to support and help one another out.

Hope to see you there!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

If you're thinking of buying a home here in the Triangle, take a look at Coastal's mortgage options and rates!

How to Shop Around and Find the Best Mortgage Rates

Wendy Dawson: Most recently had an article that was given to me and it was being traumatized by buying a home. And I'm thinking, oh my gosh, traumatized. That's not the word we wanna use!

And they're going, yeah, they equated it to the emotional impact was almost equivalent to being fired.

I'm going, oh my goodness, we need to level set and course correct. We have really gotta, we've gotta do better. We have to do better than this. Okay. And we can do better. It's just about absolutely educating and knowledge is power.

Elle Martinez: I really appreciate this because like you said, knowledge can be so powerful, especially in a market like Raleigh, where it's very much a seller's market. It's a hot market. Yes.

Things move fast and as much as we hope to be that objective buyer, our emotions get into play. Yes. When we're trying to house hunt.

I love going over this that way, at least it's in the back of our minds to like keep the course, keep to the plan that we have when buying a home.

Last episode, we went into getting your finances in a good spot so you could start house hunting and buying a house- getting a budget that is realistic where you're still having a life and you're saving towards those goals, right?

Making sure that, your high interest debts are gone. Now we're getting to the, I want to buy a house. I gotta get a mortgage for that. I'd love to get your perspective.

First of all, when someone comes to, say Coastal Credit Union, they wanna get a mortgage. What are some numbers, what are some things you are looking at to see whether or not they're in a good financial position to buy a house?

Don't Settle for Less: How to Choose the Right Mortgage Lender for You

Wendy Dawson: The first thing I would recommend for especially a younger buyer or a first time home buyer is choose wisely, and that means partner yourself with a lender. That's gonna navigate this sensitive space for you, and choosing that that preferred provider.

That financial provider, is important because it may mean, especially as you mentioned, This is a very hot market, the area we live in. There's a very high propensity that the first contract they initiate on, they may not get it. They may lose, they may actually go through several contracts that they don't win the bid.

You wanna make sure that not only have you aligned yourself with a real estate agent, an exclusive buyer's agent is what I would recommend, especially for the younger buyer or the first time home buyer.

What Mortgage Lenders Are Looking for

Wendy Dawson: I think that just gives them a little more insulation. But also recognizing who that lender partner's gonna be for you, because that lender will be able to strategically align looking at your finances, your monthly income, your gross monthly. They do a simple calculation of like 43% of your gross monthly income of debt. It's debt to income.

They would like for it not to exceed 43% of your gross monthly income, and that's your overall debt. Not only your PITI, which is your:

  • principal,
  • interest,
  • taxes and,
  • insurance,

Your monthly reoccurring bills too- your car payments, your minimum credit card payments, your installment loans. All of that debt.

Debt combined shouldn't exceed more than 43% of your gross monthly income. That's the benchmark we use. So that loan officer's gonna navigate that and then they're gonna look at different options for you.

The Surprising Perks of Being a First-Time Homebuyer

Wendy Dawson: In the first time home buyer space, you wanna make sure that you're, you have partnered yourself with a very experienced loan officer that understands all the benefits out there.

For a first time home buyer, it would be a really big miss on that lender for them not to negotiate or be able to give them the knowledge of the down payment assistance programs that are out there, or the North Carolina Housing Finance Agency mortgage credit certificate. That's a tax credit that they get because they're a first time home buyer for the life of the loan as long as they live in that property as a primary residence.

There's a lot of incentives for first time home buyers that can be bundled so you wanna make sure that you have aligned yourself to a lender loan officer that is skilled and knowledgeable in all of those areas. Because you're only a first time home buyer once and so you don't wanna miss that.

And so that's a really important thing I wanna say upfront is choose wisely there.

How Your Credit Score Affects Your Mortgage: What You Need to Know

Wendy Dawson: That's one of the navigating points that they look at. They look at that gross monthly income, and they look at that 43% of debt to income. The other thing they're gonna look at is they're gonna pull their credit report and they're gonna help 'em navigate.

Hopefully, we've got a lot of savvy I say millennials right now, they understand about credit scores, but in the event they don't, then they wanna have that conversation with their lender.

They wanna have a tri merge pulled. What that simply means is we take the median score of all three repositories from Experian as far as Equifax, and as far as TransUnion.

We look at all three and we take that median score, and that's how typically the lenders price the loan. They actually look at what they call risk-based pricing So the higher the score, the better.

How Your Loan Officer Can Help You Find the Best Mortgage Rates

Wendy Dawson: You may have heard of a lot of commentary right now from F HFA. About the new, well they call it the mortgage tax where, or the Robinhood Effect, where there's a loan matrix that when we sell loans in the secondary market that higher scored. Buyers get a better pricing. Well, they still do.

But what FHFA has done is recognizing the first time home buyers been shut out of the market. They have lowered those loan adjustment prices for those first time home buyers that their scores now, they're not hit with so many fees.

One of the things the loan officer will do is help educate that, that buyer, about their credit scores and how that enables them to have a better price or better products.

They're gonna look at their income, they're gonna look at their credit report, and then they're gonna look at their bank statements. They're gonna look at their ability to save. And what does that cash to close mean?

They're gonna look at any kind of residual reserves that they have. So they'll do a loan estimate and it gives them a bottom line of cash to close for the transaction, depending on the sales price that they qualify for.

How to Keep Your Mortgage Affordable

Wendy Dawson: I would caution this, a really good loan officer will look at what they qualify for for the max. But that doesn't mean that's the highest they have to buy, and that information is exclusive and it's confidential between the lender and the buyer.

We don't share that information with the realtors because there's FRCA and that's the Fair Credit Act basically, that insulates and protects them and it should. So these are confidential conversations that they're having.

So just because you're qualified up to 500,000 or 600 doesn't mean you need to buy the top of your purse, which is, I call, you wanna pull back a little bit, and it all depends on your comfort level too.

The other thing that we would look at is what have you been paying in rent? We look at payment shock. What's your outgoing expenses? What are you comfortable with?

That's a decision that that buyer has to make, but the loan officer creates a very informed, as far as atmosphere there, a foundation for them to make a better decision. So those are some of the things that the loan officer will help navigate.

The other thing they will do, especially on our first time home buyers, like I said, Look at the different areas of down payment assistance that's out there.

There are a lot of agencies out there that they have money and a good loan loan officer, a knowledgeable loan officer, will know about those resources and also giving and bundling them.

You've got the city second program with Raleigh, you have DHIC. There's a lot of down payment assistance. There are some limitations to the income, but a good loan officer, a knowledgeable one will know about that. So choose wise, it's almost like absolutely interviewing your loan officer and your preferred provider. That's what I say.

Staying Level-Headed in a Hot Real Estate Market

Elle Martinez: You bring up a lot of good points, and I think first of all, a lot of first time home buyers don't shop around for lender. Yes. They don't even consider it. They're like, okay, this is, you know who I have my accounts with, or I see a TV commercial.

It really, it does pay to invest time just to look for the lender. I knew some of the benefits, but I didn't realize all of the benefits. Having someone that also is local to your area state and knows about these programs such an asset because you hit a really good point because in a hot market, if, it's a working class family, middle class family, right?

It's harder. I was buying or helping my mom house hunt a couple years ago during the pandemic and just like you said there were a couple houses that she missed the bid. But, we had a plan and we knew what her budget was, right? So it was important to don't get emotionally tied to it.

Wendy Dawson: There’s another house. I know it's hard cause when you start, this is the biggest, I think one of the biggest missteps is that, you look at a house before you talk to the lender, the finance. Now you've walked into that house and you have emotionally tagged yourself to that home because you've already started placing furniture.

In your mind, your behavior, emotional, you are, and that is, the strategy for some realtors. So unfortunately, so but the good realtors don't really want it, want that to happen. They want you to talk to your lender first because they don't want you to go into where you're buying at the top of your purse, I call it. And then you're basically house poor and you don't wanna be that

It's also about, where is your comfort level financially? When you're competing against that, and we talked about this briefly, but you need to be mindful of when you need to walk away from a transaction.

When those bidding wars start I really do say push the pause button and really think about do you really wanna overpay here because you need to understand the ramifications of what a lender will look like or look at the transaction in the event that property doesn't appraise for the sales price.

We're gonna look at the lesser of the two and the difference, the variance between those. That figure comes from the buyer. They have to make that.

Those are just some tidbits that you need to be aware of. I say just push the pause button before you get into that bidding war, and you've already tagged yourself emotionally into that house. There will be one for you. I promise.

Elle Martinez: I say the same thing, you know, being on the other side, it's don't fall in love with the house first. I have a different phrase. I say, I want your house to be a blessing and not a burden.

Wendy Dawson: Yes, absolutely. That's exactly. You have to go with those numbers. Yes. You want it to be your sanctuary.

What You Need to Have Ready for Your Mortgage Loan Officer

Elle Martinez: First of all, what documents should the home buyers bring when they are looking to apply for a mortgage?

Wendy Dawson: Typically the lender's gonna ask for the, as far as the they want document the ability to repay the loan. It's the ATR. They will look at your W2s, your most recent pay stubs, they're gonna look at also your most recent bank statements, okay?

They wanna see that you have, what kind of cash do you have readily available to go in for the transaction, but they're also looking for reserves.

It's one thing for us to get you into the household, but it's another thing for us to make sure we've done our due diligence and our fiduciary responsibility of keeping you there. That means that, we want them to be educated. There's so much more after the closing, you have deferred maintenance, you're no longer a renter.

So you don't have the luxury of calling a landlord, okay? When there's a plumbing issue or there are certain maintenance issues that happen within the house, depending on how old it's, if you've bought an aged property, there are a lot of little, you know, minefields you need to navigate. So we look at not only the cash needed for the transaction, but we look for reserves as well.

What do you have readily available for you for later? So those are some of the things that we look at.

One of the beauties of the digital platform today, the automation is a lot of lenders. We have, you know, access to the electronic data. So if you don't have your most recent pay stub of your w2, then we'll use electronic like account check or form free or the work number, and we can get into that with your approval and just see exactly what your employment and your income is.

So you may not need the paperwork, but it is as far as its best practice to bring it.

The True Costs of Homeownership

Elle Martinez: Absolutely. I'm glad you mentioned that too. I think for first time home buyers, you don't appreciate. There's a myth or saying, ‘Hey, if you can afford X amount of rent, you can afford that for the mortgage’. But there's an added cost to that.

Wendy Dawson: I can attest.

Elle Martinez: Yeah. A, a ranch, good bones. It's an older house and we just this year replaced the water heater cuz it was time to replace that. So, oh, you have to save up for it, but if you plan for it's not a hassle. But for someone who doesn't have experience or isn't aware of those home maintenance costs, yes, it can definitely shock your finances in your budget.

If we can talk about that a little bit more, those unexpected costs. Yeah. Besides the down payment, especially with closing. Yeah. Some expenses home buyers should be aware of that they need to have ready? Yes.

Wendy Dawson: One of the things we do on our first time home buyer is, and, and some lenders do this, but I think it really does, it has value in it.

They go through a as, it's basically, it's a certification, it's a webinar, it's a couple of hours. Sometimes it's called framework. And I think the one that we look at today is called something a little bit different, but it's similar to framework and it basically addresses all those deferred maintenance.

Especially as you mentioned, if they had bought an older property, and it's an as is, it's a fixer upper, so you need to be aware of what fixer upper means, and it could be where, yeah, the water heater, the roof has as far as an age, life of three months or one year. So be ready to be able to be hit with that financial charge, so we're gonna, you need to be aware of that.

Not only are you looking at the cash to close, which would include any kind of per diem interest. A one year policy paid up front of homeowner's insurance. But also any escrows for taxes and additional insurances. But you're looking at appraisal fees, you're looking at any lender fees, you're looking at attorney fees, title search fees, tax service fees.

Those are all broken down in a loan estimate. The loan officer will give you the fees you don't know about are like after closing when you have closed and you're the happy homeowner, and then all of a sudden, like you said, Elle, the water heater needs to be replaced.

That's about normal deferred maintenance, but it's a lot more complicated if you bought in more as far as, like you said, in good bones as far as a fixer upper, which is what we're finding a lot of right now, and I would caution the first time home buyer to make sure they understand what comes with that type of property. Mm-hmm.

It may not be the forever home right now, but they, their anticipation or their hope is to make it that, well, that takes time and it also takes resources, financial resources.

Elle Martinez: Yeah, absolutely. And again, if you budget for this? Yes. If you're buying a home within your budget, this is all possible. Absolutely. For this particular house, we actually went with Coastal, both for the mortgage and also for our agent with Daymark. And it was a very smooth transition.

We weren't first time home buyers, but still we had questions. Yes. This was. We had a new build the first time. This is an older home, and it was really good knowing at least a general idea of what to expect. Right? There's always a surprise. There's always, something maybe you didn't have in mind, but it didn't hit our budget as hard because we knew, okay, we saved up for this.

This is what we need to keep in our savings, kind of as a general house fund for the things that pop up plus the maintenance. So again, you know it, it still feels like a blessing seven years later.

Wendy Dawson: Well, that's good to hear. I'm glad to hear that. That's good. That is good.

Comparing Mortgage Rates Like a Pro

Wendy Dawson: One of the things I would too caution is that sometimes we are attracted to, of course, we always want the best deal, especially in finance. So we look for that rate, but don't get seduced by the number. Okay. That rate, they'll, a lot of lenders will publish this. They use the nine nine factor, and it's a behavior, I call it three ninety nine. Four ninety nine five ninety nine. That is 6%. 5 99 or 4 99 is 5%, and right now we're seeing like six and a half.

Okay, so don't get so seduced by that number. Look at the APR. That APR calculates into is all the cost into that rate, that initial rate over the life of the loan.

So somebody out there could quote you six and an eighth today, and you go, that's a great rate. Look at this other lender. They're at six and three so they're at six. Ask for the cash to close.

There is an, what they call an IFW. It's an itemized itemized fee worksheet. They have to give you that if you haven't identified a property, okay?

They'll give you an IFW. It's a summary of expenses a summary that what does this rate cost you? So ask for that breakdown so you can compare them and make a more informed decision because that 5 99 or that six and an eight. Once you see all the costs that are in, as far as that are associated with that rate, that six and three eights or that six and a half might look a lot better, okay?

Okay. So don't get seduced by the number. Look at the bottom line. The cash to close that tells the real story.

Elle Martinez: Oh, that's really helpful. And I'll be honest, like that was one of my frustrating things was, especially the first time when we were buying a house, just looking at these numbers, the APY APR. And I was like, I just want a straight apples to apples comparison.

Understanding Discount Points with Mortgage Rates

Elle Martinez: Another hangup at that time when I was buying a house was like, points an origination fee. ‘Yes, we'll give this, but you paid this amount of points’. For those that aren't familiar with those terms and maybe a little embarrassed to ask, can you clarify that?

Wendy Dawson: Yes. It's the funny thing the, as far as the terminology you use in lending land discount points, the first thing you think of is a discount. Okay. Oh, I'm getting a discount. It's a discount to the rate. By you paying fees points, okay? That's what that is.

So if somebody says, I'm gonna give you 5% and it has four discount points, okay? Well, I'm discounting the rate by charging you four points, okay? 4% of the loan amount. So that's why I say, Look at the actual cash to close the APR is important.

It's the annual percentage rate over the life of the loan. And so when you're looking at those cost to close, it should have, and they're regulated and there's a compliance grid, you know, was a really a, a good thing for first time home buyers or any buyer because it, I think it gave more transparency to the actual transaction and it.

Everybody has to conform to the same loan estimate, and so the format is exactly the same, which is a smart thing. So you can actually do what you've said, compare apples to apples. You may get three different fee worksheets, but they should all be in actually the same font and broken down very similar.

So you can look across to be able to make the best informed decision, cash to close, and what that monthly payment means. And there could be a situation to where, yeah, discount points. There's, you know, $10,000 in discount points. Here, does it make sense for me to pay that? Sometimes not. The lender, the smart lender, will look at the difference between the two types of rates and the fees associated and see where you maximize the return better.

And it's a simple transaction. They're just gonna look at the monthly savings of that lower rate and those higher fees and give you what the recoup time is. It may take you three or four years to recoup the fees that you paid up front. And then you have to make a decision of is that really smart? Is that the way to use, is that, is that using my money wisely?

As far as that return won't start actually until the fifth year. The only time that's different is if you have what they call a third party contribution, say the seller or the builders picking up a lot of those fees. Mm-hmm. Well then that changes the dynamics of the transaction. No. So the lender that you choose, you go back to making sure that they're knowledgeable and accessible to be able to go through this journey with you.

You wanna ask the right questions, but sometimes a first time home buyer or even the younger buyer, they don't know the questions to ask. So you wanna make sure that you're interviewing that lender and they are gonna be asking the right questions for you.

How a Skilled Loan Officer Can Help You Secure the Best Mortgage Rates

Elle Martinez: Absolutely. I think you hit so many points, but most importantly, I hope people take away the idea of you have the ability to walk away. That's very powerful. Whether that's, you know, when you're house hunting or you know, when you're shopping around for lenders, make sure you feel comfortable asking questions and they should not intimidate you. They should not make you feel bad asking questions.

Wendy Dawson: There's a trust level here. There's that saying, and I'm trying to think of who says that, but it's like, if they're nice to you as far as, that's great, but if you trust them, they'll do business with you. So that's that level.

I like to think that the loan officers at Coastal, I have to give a little plug here because I differentiate between originators and loan officers. Ok. And in the credit union space, you're gonna find loan officers simply because they take that responsibility very seriously, and they're accountable for that to make sure that those buyers.

And it doesn't have to be a first time home buyer or a younger buyer, but any of our members and buyers that we've navigated that journey and that they feel very comfortable and they've trusted in their financial provider all the way to the closing and after.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Join our coffee group ☕: Get access to exclusive behind the scenes videos, chats, and more!
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in four weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Photo by PNW Production

Podcast, Real Estate

How To Get Your Finances Ready to Buy a House

Leave a comment

Buying a house can be overwhelming. Learn how to get your finances ready for homeownership so your new home is a blessing and not a burden!

Preparing Your Finances to Buy a House

Buying a house is a huge personal and financial milestone for many families, but it can also be a stressful and complicated process.

One part of the stress is buying a house that’s affordable. You want to be financially prepared

There’s plenty of advice on buying a house and not all of it is good. Have you heard ‘buy as much house as you afford’? I mean sounds good on paper, but the reality is if someone is telling you that you’re probably pushing your house budget in a direction that could be a huge problem once you sign those papers.

Or how about the suggestion of building your credit by getting a credit card?

I don’t want you to fall into a trap where your finances are so tight that the house you buy makes your miserable.

Today we’re going over some key areas of where you needed to pay attention and prepare your finances so that when you a buy a house, it’s a blessing and not a burden.

Which is why I’m happy to have Steve Stewart on the show today.

In this episode we’re going to look at:

  • preparing your finances so you can comfortably buy a house
  • the role credit scores play and how to raise it
  • building credit without accumulating debt with alternative ways to report credit history to lenders

We have a lot to cover, so let’s get started!

Resources on Buying a House

If you’re looking to buy, here are some resources to help you find an affordable place you love!

If you’d like to chat more your money system, please join us in our private and free Facebook group – Thriving Families. We’re families looking to support and help one another out.

Hope to see you there!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

As a credit union, Coastal serves its members first including an annual loyalty bonus. We've been members for years and love their service and competitive rates on checking and savings accounts!

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Join our coffee group ☕: Get access to exclusive behind the scenes videos, chats, and more!
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in four weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Photos by Lukas Hartmann and Daniel Frank

Travel

How to Find Deals for Your Next Family Vacation

Are you looking to have a true vacation where you can relax and enjoy, but are afraid it’s going to break your budget? Learn how to score amazing deals and travel hack on your next trip!

Finding the Best Family Vacation Deals

During the last two episodes, we talk about building a better budget. We wanted to show how you can create a budget that allows you to pay the bills, but balances your future financial goals with some fun here and now.

We’ve found that you’re more likely to stick to your budget if you include room for things and experiences you enjoy.

For many families, travel falls into that category. It does for us. Actually we recently took a trip to Florida and had an incredible time relaxing and catching up with some loved ones in the area.

I know some families though are worried about the rising costs of trips. I just saw recently that rental cars have skyrocketed over 20%! Then you factor in service industry staff issues, it also almost seems like you’re getting less, but paying more.

However, with some planning you can take a wonderful vacation affordably.

I’d like to share a few of the highlights so you can see how you can snag some travel deals for your next vacation.

I’m also happy to have Zac Hood of our partner Travel Freely on the show. He’s going to share how travel hacking works and how to approach searching for the right rewards card for you.

We have a lot to cover so let’s get started!

Resources to Optimize Your Travel Rewards and More

Looking for ways to save on your next family getaway? Here are some fantastic resources to check out:

If you’d like to chat more your money system, please join us in our private and free Facebook group – Thriving Families. We’re families looking to support and help one another out.

Hope to see you there!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today.

As a credit union, Coastal serves its members first including an annual loyalty bonus. We've been members for years and love their service and competitive rates on checking and savings accounts!

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Join our coffee group ☕: Get access to exclusive behind the scenes videos, chats, and more!
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in four weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Photo by Pixabay and Julia Kuzenkov

Money

Nuts and Bolts of Creating a Budget That Works

Are you ready to start building a budget that works and you actually love? Learn the nuts and bolts on how to quickly and easily make a flexible family budget!

Creating a Budget That Actually Works for You

Last week I mentioned that one report found 73% of millennials are living paycheck to paycheck. When you’re in that situation you can be an added weight on shoulders because if one thing goes wrong – and it will- it can make a mess of your finances.

For this week, I want to go from the big picture view we took on the potentials with budgets and get into the nuts and bolts. How do you build a budget?

Which is why I’m happy to have Warren Murray on the show today. Warren works Financial Well Being Manager over at Coastal Credit Union where he and his team help members live better by managing their money more efficiently.

In this episode we’ll get into:

  • why having a financial snapshot your finances is important and how to do it
  • how building your budget around financial wellness is more efficient and sustainable
  • creative ways to include fun into your budget while still working towards your financial goals

Hope you enjoy!

Resources to Build Better Budgets

If you’re looking to start or revamp your budget so you can reach your family and financial goals faster, check out some of these resources below!

If you’d like to chat more your money system, please join us in our private and free Facebook group – Thriving Families. It’s a group Andy, Andrew from Family Money Plan, and myself run as a team.

We’re families looking to support and help one another out.

Hope to see you there!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! Come check out Coastal today if you’re living in the Raleigh Durham area and looking to bank better.

As a credit union, Coastal serves its members first and foremost including an annual loyalty bonus.

We've been members for years and love their service and competitive rates on checking and savings accounts!

Building a Budget That Works for You

Elle: Warren, thank you so much for joining me. I'm thrilled to have you on because we're talking about a topic that's near and dear to my heart, but I think people have a lot of fears and they believe a lot of myths, and that's budgets.

I wanted to talk to you, Warren, because of the work you do at Coastal about how you can budget for real life versus you see those crazy budgets that like no one wants to keep and do so I appreciate you making the time to chat with me.

Warren: Not a problem. Elle, thank you very much for having me. I look forward to educating your listeners on how easy it's to budget and how important it's to budget.

Financial Wellness: More Than Just Making Money

Elle Martinez: I noticed the work you do, it's falls under financial wellness, which for some people that's a new concept, do you mind kind of getting into that work that you do and what financial wellness means to you?

Warren Murray: So Elle there's this misconception out there when people talk about financial wellbeing or financial wellness, the first thing they want to think of is about how much money that you make.

Oh, if you make this much money, then you must be financially healthy. And what I bring to the forefront in letting our members know and other people know is that, Financial wellbeing, it has nothing to do with how much money you make, is realizing how much money you have coming in versus how much money you're going out.

Basically, we try to take the approach of helping people utilize their money more efficiently matter if you're making hundred thousand or $200,000 a year. Or if you're only making $50,000 a year, a lot of people can use their utilize their money more efficiently, and that's what we try to bring to the forefront.

Helping people or partnering with people. That's the word that I like to use with the people that I work with, is that we're gonna partner together to help them utilize their money more efficiently and also make them aware of what their financial habits are. Oftentimes when people hear the word habits, they associate habits with exercise habits or smoking habits, but we also have financial habits.

Some people have good financial habits. Some people have areas that they can improve in their financial habits, so that's one of the things that we work on with this financial wellbeing program.

How to Utilize Your Money More Efficiently

Elle Martinez: That's fantastic because I really do think that even before you make a budget, you have to have that foundation, which is defining your priorities, your values, what's important to you, and then of course the reality of where you are now.

And I love that you're talking about being efficient with your money, making your money work as hard as you do, because especially here in the triangle area, things are increasing. Every time I turn on the news, I see prices, not just at the grocery store, but housing. You have to be savvy with your money and making sure that it's really being effectively used towards your goals.

You have a unique perspective working with so many people, families in our community with their finances. Are there any Misconceptions or one of those mistakes that keep coming up that you see people make that you would love for them to avoid?

Warren Murray: The first thing that comes to their forefront and in general is that oftentimes when we're talking to people and you ask them how much money they make they can tell you within two to 3 cents, ‘my paycheck is such and such with 23 cents, and on the other week, it's such and such with 24 cents', which is good.

People need to be aware of what they make. But when we ask people how much money do they spend specifically in certain categories, the answer oftentimes comes back ‘a lot'.

Like, well, how much money do you spend eating out? ‘A lot.'

How much money do you spend drinking your Starbucks a month? ‘A lot.'

Although a lot can mean a lot of different things, but from a mathematical standpoint, I can't subtract how much money you make each month minus a lot.

What I try to focus on is just making people aware of what they have coming in, but most importantly, what they have going out.

Oftentimes Elle when we're doing our counseling sessions with our members what people think they spend and what they actually spend are two separate numbers, especially when it comes to the categories of eating out and also streaming services.

Those are the two things that I see that people could drastically improve on.

Elle Martinez: Yeah, absolutely. And one of the good things I love about Raleigh is also one of the things you have to watch out for is there are some incredible, food places out there. We always have some festivals going on and you do, you wanna make room in your budget for fun and to enjoy it, but it is very easy.

This has happened to us before, I kind of call them money leaks where. It's a little bit of spending here. You've planned for this spending, and then these little ones, $20 here, $20 here. It adds up really quick. So I love that.

The Importance of Prioritizing Financial Habits for a Sustainable Budget

Elle Martinez: Getting a financial snapshot, an accurate one of what's going in and what's coming out so when making a budget, , you have the numbers in front of you. What are some of the conversations you're having with those that you're counseling to create that budget?

Warren Murray: The first thing, Elle in common sense approach is that if we have a person who has $8,000 coming in a month and they have $8,400 going out on one. You don't have to be a mathematician to realize that if you're spending more than you're making that's a problem.

Whether you see the problem right now or in the future, there's gonna be a problem. So that's the first thing we wanna make people aware, like, okay, how much wiggle room do we have?

Or is there any wiggle room whatsoever? So that's the first thing why we start with. What's your make versus how much you have that's going out.

The second thing that so many people have misconceptions about when it comes to budgeting I hear oftentimes, oh, well, I'm gonna stop eating out completely or I'm gonna give up my Starbucks completely.

I tell people, budgeting is not that. Basically everything in moderation. So what we try to look at when we're evaluating their budget is like, Hey, If you're spending $300 a month or you're spending $400 a month eating out, Hey, can we curtail that a little bit? Can we, instead of spending $400 a month, let's see if we can drop it down to $250 a month.

With that $250 a month, we empower people to make the decision like, Hey, if that means that you and your family are gonna go one extravagant dinner a month, you do that.

Or if you're gonna say, all right. If we have $200 a month, we can spend $50 a week. We can do that. But again, we just wanna make sure that you have everything in a budget or you are aware of how much money that you have to spend so that way you can make best decision.

Have member, she loved her Starbucks coffee. I tell people like, I'm not a coffee drinker myself, but when you go to Starbucks and a mocha latte here today, before we know it, we were evaluating and this person was spending almost $300 a month just at Starbucks and coffee alone.

I was like, Hey, if you're a coffee drinker, there's nothing wrong with that. But instead of spending $300 a month, you think we could curtail that back to $200 a month or can we curtail that back to 1 75 a month? So again, having people getting a plan. Mm-hmm. And one of the things I wanna emphasize here is that again, we partner with the members.

I can't tell you what to spend your money on, but what I try to do is like work with them. Like, okay, this is what your budget has or this is what your budget allows. You tell me what you wanna do with these funds. Yeah,

Elle Martinez: Absolutely. I love that. Like you said, partnering up and giving them that control cause I think when done right, a budget can give you so much control over your money.

When we were first married, we were in debt and I felt like it was a lot of reaction, you know, after the fact trying to get the finances in a good spot. But when you budget, it does empower you.

I think you've hit a couple really good points. It's not necessarily the expense, like if there's a measure of joy that you get going to Starbucks. Maybe that's your time to kind of relax and settle, then that's great, you know, you get value for that. But look at other places where maybe you're not getting as much value and, and own it. Like, this is what I want and why.

There's always a way to get creative. I believe, where you can have fun and you can still save a little bit of money. So I love that point.

I also love what you pointed out of just taking the time to prioritize. So, you know, yes, we have to pay the bills. I think we all have to acknowledge that, but we have to set something aside. We also have to enjoy.

I believe that a, a sustainable budget is a successful budget. Same reason why diets fail. If it's too strict, if it's too unrealistic for your situation, you're not gonna keep it.

You have a lot of great points with that. What tips do you have about creating that flexible budget where they aren't like cutting it to the bone, they don't have to be perfect every month. How do you build that kind of wiggle room in the budget?

Warren Murray: Basically when we're evaluating their budget, the first thing that I use is, is tell people that we have to be cognizant of what's happening right now. And you and I had talked earlier in terms of a lot of people are dealing with inflation. I mean like gas has gone up. The cost of groceries going up so it's always a need to reevaluate the budget that you have.

In terms of reevaluating that budget, just making sure that people are aware that you're staying in the confines of what you one of the things I point on is streaming services. I've had so many people tell me, oh, Warren, Cut. I've cut my cable.

I'm saving money that I'm saving $150 a month because I cut my cable. Well, when I evaluate their budgets, oftentimes people get a streaming services. They have Hulu, they have Amazon Prom, they have Disney, they have Netflix.

One of the things I tell people when, when you're evaluating is oftentimes when you have a streaming service, you get that subscription and because it's automatically debited on your account mm-hmm. You don't look at it again.

People aren't aware that what you paid for Hulu two years ago or what you're playing, what you paid for Netflix two years ago has gone up drastically. So I wanna make people aware, like, hey, when we're evaluating their budgets, You were okay paying $10 a month for Netflix. Are you still getting that same bang for your book now that Netflix is at 18 or $19? Or who, or you have seven streaming services? Are you watching all those channels? So again, just bringing the evaluation.

Now, when you said in terms of like, What changes do we make? Sometimes the things that are that, that you have no control over causes you to make changes.

Right? Now you've had several people that if they're renting at an apartment, their apartment rent has gone up 200 to $300. They're still in the same apartment, but because they're landlord has increased the rent just due to inflation. Now we need to take a look at your budget. Like, all right, before we had some wiggle room, now we have to allot for that two to $300 elsewhere.

Or when it comes to groceries, we like, ‘all right your grocery budget was $500 for no fall of your own. You're buying the same things and now your grocery bill is 600 or $650 a month'. Now that we know that what we're working with, where can we take from to make sure that we can keep you afloat in regard to that?

Elle Martinez: Absolutely. Oh, these are such great points and tips and yeah, this is the reality. We're based here in Raleigh, North Carolina, but a lot of people are dealing with inflation and then a lot of cities that have high growth. The trade-off is they're also seeing costs like housing increase drastically.

So definitely don't wait to see that go up, see if you can get proactive with your budget and start prioritizing where you're getting that value.

You mentioned streaming. I have a streaming service. I'm not gonna mention and I like it, but they recently did a merger and I just got the email while I was on vacation.

That's starting next month. It's gonna ‘be better', but it's gonna have a lot more services I don't need. And I was talking with my husband about that. I gotta set up to cancel. So when we done with this call, that's what I'm gonna do.

Warren Murray: Thank you. Yeah. I just wish we had more people. And again, I tell people, if you enjoy whatever you enjoy, like you said mm-hmm. That adds value to your life that you should do. But as long as you are aware, and oftentimes the people that I'm working with, they're not aware. They're like, oh, well I didn't know that I had $190. In streaming services.

I cut my cable cause I thought I was saving money, but now that 50 I was spending via cable, now I'm spending hundred 80. So again, my task, what I wanna make people is aware, like once you aware you can make the best decision for you and your family.

Elle Martinez: Absolutely. Yeah. And it's not necessarily what that expense is, but like you mentioned, like, are you getting the value?

And when the price increases, then that's, you gotta reassess that. I think that's the reality now nowadays with 2023 is when we're looking at the expenses, am I getting a value out of it? And then second, if the increase is there, if I wanna keep it, where do I trade that off?

A budget should be reviewed. I know personally we like to do like a money day, I would say like a monthly rhythm. See what's coming up. Are we going on vacation? Like when we went on vacation, the month before, we said, oh, okay, we're gonna eat at home more because when we go down to Florida, that's when I want to eat out and enjoy the, all the mom and pop spots and, and so forth.

It's finding that balance and, and putting your money where it matters most to you. Warren, you gave a lot of great tips. Is there any more that we, we forgot to mention or talk about?

Paying Yourself First: Starting Small for a Strong Financial Future

Warren Murray: Again, one of the things that I, I think when it comes to budgeting, people are so focused on paying down debt, or they're so focused on just being able to pay their bills that they neglect.

One of the things that I think is most important, which is paying yourself first. One of the things that we really focus on is like, hey, regardless if you can only pay yourself $10 every paycheck, or if you can pay yourself a hundred dollars every paycheck, the importance of paying yourself, those are funds that you're putting to the side.

Because we all know that life deals us. So many obstacles because when people focus on dis paying their bills and paying down their debt, which are good things, mm-hmm. But they neglect paying themselves.

What happens is, is that six months down the road, or 12 months down the road, or 18 months down the road, life happens to us and all of a sudden you have car repairs or your AC unit goes out.

Because you put all your focus on paying down that credit card bill and you haven't paid yourself. Guess what? That cycle starts back again.

All that work that you put toward paying down that credit card bills, because you haven't paid yourself, you don't have any wiggle room, now you have to put that expense back on the credit card.

What we do when we look at budgeting is like, Hey, we wanna pay your bills, but we also want to allot funds to the side for life. Like, Hey, like you mentioned, going on vacation, everybody knows that they typically try to take a vacation every, every year or every other year. So let's put money aside to work on that.

If that means we have to eat out less. $50 a month to eat out, less, to put those funds to the side for vacation. Let's do that. That's the one thing we try to focus on all of our members, and I tell people sometimes it's only $20, but the sense of pride that my members that I worked with when they realized like, wow, I never had any emergency funds, and now, although I may only have $250, that that sense of relief, like, Hey, I do know now if something unexpected that were to happen, as long as it's less than two $50, I can cover it without the credit card or without.

Knowing where I'm gonna get those funds from. That's one of the things or aspects that we take for people that I want them to be aware of, is like, Hey, it's okay to pay down debt.

It's okay to make sure that we have our bills paid, but we also want to make sure that we are also paying ourselves for one life deals us on unsuspected circumstances.

Elle Martinez: Yeah. If the past three years have taught us anything, it can happen. It can be much longer than we expect. Yeah, and it does.

There's of course the financial aspect, but there's a peace of mind knowing that at least I have X amount should something come up.

If you're a parent like us kids, unexpected expenses come up, school asks for money for field trips or whatever it is those are things to be prepared for.

You mentioned like the automatic deductions for streaming. I'm also a big fan of automatic transfers into savings for yourself.

Paying yourself, treat it like a bill. I know when we first started it was just like you mentioned, it was, we were recent college grads, so let's just say the amount was very small, but it was the habit of savings that we developed that allowed us to get used to that.

As the paychecks increase and switch jobs, we were able to put more towards saving. And it really is a help. If you're listening, start where you are now and you can always build up. Don't wait for those perfect moments. Start now to get that financial cushion, growing.

Warren Murray: And Elle I would add one other thing and, what you just stated, and that's one of the, the quotes that we use that a journey of a thousand miles begins with a single step.

The reason that we use that quote so much to target what you were just talking about is oftentimes if people make budgeting mistakes, they carry the burdens of the past with them.

When we're partnering with our members, I tell them I don't have a magic wand to erase mistakes or things that we wish we could have done differently a year ago or five years ago, but what we can focus on, if you're willing to work with me, if you're willing to partner with me, hey, can't change that.

But starting today, and that's the thing that I, I wanna emphasize starting today. Like, hey, everybody can budget it. It's like, okay, starting today, doesn't matter what we did last week. We're gonna start today to get a better grasp of what our finances are and just make people aware and help people utilize , their money more efficiently.

Elle Martinez: Yeah, absolutely. I love that. A lot of us carry some embarrassment because maybe we don't know about finances or we didn't grow up with good financial role models.

Maybe we're not starting off at the place we wanna be at this time, but you can always make better choices for the future and start showing especially as parents. Show your kids, Hey, I made some mistakes now, but I'm gonna build my finances for the family.

That's a lesson that they can take away and start building their own financial habits in a positive sense.

Warren Murray: That's why I'm so proud to be a employee of Coastal Credit Union is that we don't care about how much money you make. Our purpose is to help our members bank better, to live better and it gives me so much joy when we can help a member improve their financial situation.

That's what we're really focused on. We're really focusing our members, helping our members utilize their money more efficiently, but importantly, helping our members better to live better.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Join our coffee group ☕: Get access to exclusive behind the scenes videos, chats, and more!
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in four weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Photo by Karolina Grabowska

Money, Podcast

Creating a Fun and Flexible Family Budget

Budgets don't have to feel like deprivation. Learn how to create a flexible family budget that fits in what you love while hitting your financial goals!

Why Your Family Needs a Flexible Budget

Raise your hand if the first time you made your budget it was exactly what you needed and was a perfect for your situation.

Yeah, I don’t personally know anyone who got their budget right the first try and there’s a few reasons for that.

Chances are what you put down on paper doesn’t match real life. Either you have a money leak you’re not aware of or like what you just heard in the teaser, you get thrown for a loop.

It’s enough to make you just want to trash the ideas of budgeting, but that would be a mistake.

Right now more families are living paycheck to paycheck.

I was reading a recent report from Lending Tree which highlighted overall 60% of Americans are living paycheck to paycheck. Millennials, though, seem to be in worse shape as that number jumps to 73%.

That can be pretty scary. One hiccup or an emergency can totally throw off your finances.

If you ready to break the cycle then please listen in. Personal finance author and podcaster Allison Baggerly from Inspired Budget is not just sharing her story, but some fantastic tips on how to create a flexible budget that works for your family's unique needs and circumstances.

In this episode we’ll get into:

  • how shifting her mindset about budgets transformed her finances and life
  • why having a flexible budget is key to long-term success and financial stability
  • practical tips on how to get started if you hate budgets

We have a lot to cover, so let’s get started!

Resources to Build Better Budgets

If you’re looking to start or revamp your budget so you can reach your family and financial goals faster, check out some of these resources below!

If you’d like to chat more your money system, please join us in our private and free Facebook group – Thriving Families. It’s a group Andy, Andrew from Family Money Plan, and myself run as a team.

We’re families looking to support and help one another out.

Hope to see you there!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! Come check out Coastal today if you’re living in the Raleigh Durham area and looking to bank better.

As a credit union, Coastal serves its members first and foremost including an annual loyalty bonus.

We've been members for years and love their service and competitive rates on checking and savings accounts!

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Join our coffee group ☕: Get access to exclusive behind the scenes videos, chats, and more!
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in four weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!
Podcast, Real Estate

Exploring Your Investing Options in Real Estate

Are you interested in getting started in real estate investing but don't know where to begin? We’ll uncover some opportunities and niches out there that could be a good fit for you!

Adventures in Real Estate Investing

In our community we have families at different points in their financial journeys.

This year we have some who are focused on knocking out debts that have been weighing them down.

We also have families who building up their financial cushion or saving up for a huge goal including starting a family, maybe starting a business, or buying a house.

Then some, including us are in the CoastFI phase of things. That foundation is in place and we’re considering options that can give us more flexibility with our schedule while still producing income.

Real estate investing can be a great way to be a solid path towards that and financial freedom. By investing in a property, you can generate passive income through rent.

However there’s more to it than what you see on HGTV, Magnolia, or those real estate flip channels on YouTube.

Buying property takes money and finding good tenants and contractors takes time. You may also worry about being trapped with a money pit.

Which is why I’m happy to have Rachel Hernandez on the show. Rachel is an award-winning mobile home investor with over ten years of experience and author of several books about real estate including Adventures in Mobile Homes.

In this episode we’ll get into:

  • her journey into real estate investing and what made her choose to hone in with investing in mobile home
  • different options out there besides flipping and buying holding property
  • an honest look at the good and the bad with real estate so you have a clearer idea of what to expect

Hope you enjoy!

Resources to Stay on Top of Your Money

If you’re ready to achieve your family and financial goals and want to explore real estate, here are a few of my favorite resources, including what we covered in the podcast.

If you’d like to chat more your money system, please join us in our private and free Facebook group – Thriving Families.

We’re families looking to support and help one another out.

Hope to see you there!

Thank You to Our Sponsor Coastal!

Support for this podcast comes from Coastal Credit Union! Come check out Coastal today if you’re living in the Raleigh Durham area and looking to bank better.

As a credit union, Coastal serves its members first and foremost including an annual loyalty bonus.

We've been members for years and love their service and competitive rates on checking and savings accounts!

Exploring Options in Real Estate

In our discussion, Rachel discusses her experience with real estate investing, including her motivation for getting started and her transition to mobile home investing.

She emphasizes the importance of taking action and gaining experience, as well as finding a niche within the industry.

Rachel also offers advice for those interested in real estate investing and provides resources for learning more about mobile home investing.

Read the transcript below (edited for time and clarity) or watch our chat on YouTube!

Elle Martinez: You are seasoned with real estate investing. That's something my husband and I are in the early stages of talking about. We are thinking of having some cash flow for this next stage of financial freedom.

There's so many different ways to invest. We've done like index fund investing, which is really popular. But for you, what was your motivation getting started with real estate investing? What was that pull?

Rachel Hernandez: For you?

Sure. For me personally, I will make a disclaimer.

I hated viewing homes as a kid. I was with the family that moved every five to seven years because my mom wanted a bigger and better home, so we were in that rat race.

My parents were both professionals and so basically it's very surprising that I got into real estate because I hated riding in the car with the realtor, looking at homes as a kid every five to seven years.

Obviously as a kid you don't have any say. It's the parents deciding and I moved from so many different schools. I think that's why one of the reasons why I'm so outgoing, because I just had to make friends on my own because I'd be moving every five to seven years.

I will tell you, I was influenced by the book Rich Dad, poor Dad by Robert Kiosaki. You've probably heard about that, but what actually sparked my interest in real estate was the concept of passive income in that book.

I always knew I wanted to be an entrepreneur. As a kid, I did the lemonade stand, puppet show. Going into college as a young adult, I was supposed to be studying for my classes I was a humanities major, but on the side I had a resume business.

I got paid actually by my university to take notes, right? For classes. So I always had all these side hustles, you know?

Once I got influenced by that book, rich Dad, poor Dad by Robert Kiyosaki then the light bulb kind of set off, ‘oh, there's actually income that you can make passively and it doesn't require work from you to do it.'

I learned the difference between active income, which depends on you working at a job, you know, you get paid a certain amount to work that job. There's also this concept of passive income and it's more on the investing side.

You make your money work for you so that you don't have to work so hard. That's how I got into real estate investing.

I was a business to business corporate account executive, so I had the sales experience.

While I was learning, I actually started finding deals for other real estate investors. What I do, I'd go to my local real estate investor club and I'd meet these real estate investors who just didn't have the time to go out there and find these deal. They'd give me their criteria.

I did something called bird dogging, which is like, you go out and you find these deals, you get all the information, and then you bring the deal to the investor and then they talk things out with the seller, try to negotiate you to deal. If they do, then I get paid for that lead.

I did that for a while, and then after that I went into wholesaling, basically taking it one step further, getting all the information, but then putting it under contract and then assigning my interest in the deal to the investor buyer, like the end buyer, and then I get paid for that.

I did that for a while to build up cash. Eventually I started building up enough cash to buy and hold properties as a single family home landlord. I did that for a while. I built up our portfolio and I got burned out from that because every month. Guess who the first person who got paid? Was a mortgage company.

I was like, ‘why is all my cash flow going to the mortgage company or h o a or the insurance company, you know?'

I was the one that was paid last. , I'm like, ah, that doesn't sound right.' Yes. You know, where's all the, the, the, the passive income and cash flow that I was reading about.

Then I decide to, you know what? I'm just gonna sell my entire single family home portfolio. Wow. Which sounds crazy. Cashed out at a great time and then use that money to actually get into mobile home investing, which is what I do now.

I buy mobile homes for cash without a mortgage and then if I decide to rent it or sell it on payments and all that cash flow comes to me.

So that's pretty much what I do in

Elle Martinez: a nutshell. Yeah.

I love how you had this plan and you build up, I think. . I don't wanna say it's a myth, but to a degree a lot of entrepreneurs are put in this bucket where they're risk takers, they're doing this but then when I talk to entrepreneurs like you who've been doing this for years, there's like a calculated risk. There's some kind of numbers and analysis as you jump in.

And I didn't know about the different roles in real estate that you were just mentioning. I feel like I'm gonna have to put in the show notes of this dictionary for real estate.

Rachel Hernandez: Yeah, that'd be a good idea.

Elle Martinez: Yeah. But as you mentioned, there's different ways even to invest in real estate. Single family homes is what people imagine. They see H G T V, and these channels and think, oh yeah, this would be great. What made you pivot into mobile home investing?

Rachel Hernandez: Pretty much the mortgage company getting paid first. When I got that rent check. That money, a large portion of it went to the mortgage company, then the h o A association, then the insurance taxes, and then whatever was left over that's pretty much what I had.

To tell you the truth, I made more money wholesaling than I had with these cash flow properties in single family homes.

Oh, ok.

Yeah. Pretty much my first deal as a wholesaler, I made a whole year's salary. Which is crazy. Wow. Looking at that, I just kind of got burnt out and I even brought property managers to manage these properties for me, but they got their fee and I had to manage the managers so,

Yeah, it was crazy and I can't do this. And you hear all of these stories from these burnt out landlords, and I will tell you, it's true. It can be a nightmare, you know? So now, as a mobile home investor, I've learned how to balance that, but not having that mortgage and buying these mobile homes for cash, actually puts less strain on me financially.

When I have to evict a tenant, money's not coming in because this tenant's not paying. There are issues, with the home. I gotta do repairs.

It just kind of lessens the burden on me. I just can't imagine some of these real estate investors in California who have these crazy large mortgages on their home. You miss one payment. I mean, that's a whole paycheck to some people, you know?

Yeah. If you have to fill the home and it's empty and you don't have it filled with a tenant, so it's crazy. . Yeah.

Elle Martinez: Okay. So there's a couple things I'm trying to like order my questions . Sure. Cause we had a lot of good ones there.

First of all, let's talk about like buying a home because I know many are familiar. They bought their home that they're living in. Is there a different process or mindset when you go in and you're buying an investment for you, your process with that?

Rachel Hernandez: Yeah, absolutely. As a first time homeowner, if you're buying a home for yourself, it's completely different than buying an investment because as an investment, you are looking at how can this make me money?

To me, an investment is more of an asset because it puts money in your pocket. Whereas I know a lot of people are not gonna want to hear this. Your home is a liability. Because it's taking money out of your pocket.

Now we always hear, from the banks, like, no, your home is an asset. To me, it's not an asset. I learned this from Robert Kiosaki in his books. It's actually a liability because it's taking money out of your pocket. You gotta think about that.

When you're buying a home for yourself, you're looking at the home, you're looking at the location. Mm-hmm. , you're looking at, can I actually live here?

But you're not looking at it from an investment perspective. How can I make money off of this home unless you do that, but that's different philosophy. My own philosophy your home is not in an investment because it's just a place to live.

Whether you buy a home or you rent a home, it's both a place to live versus an investment.

You're figuring out, you've gotta have this extra strategy. How's this gonna make me money? Either I'm going to sell it to a retail buyer and fix it up. I'm gonna sell it to an investor, like what I did wholesaling or am I just gonna rent it out and become a landlord? So that is your exit strategy as an investor.

As an investor, you're thinking how generate a profit so you're looking at it from a business perspective versus buying your own home. It's just for you, but you're not looking at it as a business perspective. That's just my thoughts.

Elle Martinez: Gotcha. Yeah, I, I think it does take a mindset shift when you're looking at that. I was talking to some others about what they had noticed as a difference was when it's your home, even though you might do your own repairs and it's a fixer upper.

You're still like looking for I need this layout. It's you, you, you. But like you mentioned, you really, I mean, this is a business so you. Is this a place that functions for whoever I'm trying to rent out to? Is this gonna be feasible?

You mentioned, the realities. Again, I love that you're being transparent. You got good tenants, they pay, this is great. Things are flowing. And then you have bad tenant tenants.

I know there's no way to completely avoid bad tenants but for you through the years, what are like some processes or filters you put in place to make sure that you find first of all, like a good investment and then second, finding those tenants?

Rachel Hernandez: Yeah. The good investment it comes with experience. Honestly, what I can say to everyone listening on this podcast, there's only so much you can learn your education.

I do believe in education, reading books, listening to podcasts, watching videos, you know, in this case real estate investing, but there's gonna be a point where you actually have to take action and that is where you learn the most.

What I love about real estate is like you don't have to be the smartest person in the room. You don't have to have a lot of money. You don't have to have a PhD in real estate to do this.

It actually levels the playing field. So what you get from taking action is experience, and that experience is where you learn the most. From that, you obtain knowledge, what gives you confidence to do more deals and get out there. It really is having the courage to get out there and take action.

And I will be honest, I mean, I've been rejected a lot by a lot of sellers on the buying end. Like, no, I'm not gonna sell you this, but you just kind of have to brush it off. It's part of the business. If someone doesn't have that personality to be confrontational. They can always bring in a partner or work with someone.

Like what I did as a wholesaler. I have the experience because I was in sales. So I can take rejection, pretty much. On that end you just have to have the courage.

The only way people are gonna get that is by taking action and by taking action, you get to learn the market, you get to network, and you just get better.

There is no, educational university for real estate, despite what other people think with all these real estate gurus. You just gotta get out there and learn your market, figure out what you wanna do, and then just, keep learning as you go. I know that's very vague, but it's actually worked for me.

Elle Martinez: I understand. As an investor, are there some wins that you're super proud of or some hard, learned lessons that you picked up through your years of investing?

Rachel Hernandez: Sure. Probably my win that is the most memorable is my first mobile home deal. Yeah. And basically this deal came from, of all things, a flyer, I physically passed out in a mobile home park cuz I buy these homes in the parks most times.

This family called me, there was no for sale by owner sign on the home. Mm-hmm. , no one knew it was for sale, and the wife called me and said, ‘listen, we wanna move out of the park. We're looking to get into a regular home. Would you be interested in looking at our home and coming over to see if you would buy it?'

At that point I was like, ‘okay, sounds good.' And this was my first deal was completely new in mobile homes. I had the real estate investing experience in single family homes, but completely new to mobile homes.

Yeah.

I was like, okay, how much are you asking for the home? I mean, it's a natural question. And the wife paused and she said, ‘you know what? We don't wanna talk about that on the phone because we'd feel more comfortable if we kind of got to know you. And you came over for that.'

I was like, I've been told by many, many mentors and also these real estate groups spout out all day long. If they're not willing to give you a price, they're not a motivated seller.

Mm-hmm. I thought about that and I'll, but then I thought, you know, What have I got to lose? I haven't even done one mobile home deal if I passed this up. It could always be what if? What if? What if?

To make a long story short, I went over there. The reason why they didn't put a for sale by owner sign in their home is because they didn't want a bunch of people to go through the home and make it dirty, okay?

I went through the home. I negotiated. I got the home. It was, I believe it was a two bedroom, one bath. I think believe it was 1985, and I got that home for $3,600 cash. They even cleaned it. I filled that home in two weeks, sold it for 10,000, and with a nice starter family, they gave me a thousand dollars as a move-in fee, and then they paid me $250 a month for the next four and a half years.

Wow. So what did I learn from that lesson? You never know what's going through the seller's heads. So had I not gone over there and listened to what all these gurus are saying, or some MA mentors in the past, and they only tell me this because of their experience, but I could have a different personality than them.

You know? That's what I've learned. Then I may not be here on this podcast talking about mobile home investing. It may have never happened.

Elle Martinez: Wow. That's so fascinating. That's great that you were willing to take that risk. Again, it's like calculated risk. You had some experience already within real estate. I think that's fantastic.

For someone that is thinking about it, maybe it's on their radar getting started with real estate investing and they're also just curious about mobile home investing. How can people reach out to you?

Rachel Hernandez: Sure. Well, I do have a podcast. It's called Adventures and Mobile Homes. Really easy to remember and find on any podcast player.

I have a website, adventures in mobile homes.com. If anyone wants to learn about mobile home investing, I do offer a free class. If you are interested, check it out.

As for real estate investing, my advice is to pick a strategy and figure out where are you at this point in life.

Do you want to build up cash so that you can eventually buy and hold properties? Or can you buy properties now, but you want to have them for cash flow?

So do you wanna be a landlord? Or do you wanna be like, what I did BirdDog and a wholesaler, figure out what your strategy is. And I do have a book, it's called Real Estate Investing Sucks, how to Find Your Niche and Dominate.

Basically, from all my experience as a real estate investor, the most successful people are the ones that actually have a niche, and mine is mobile homes.

In terms of mobile home investing, my recommendation is to, pick a niche, stick with the niche and then learn it as much as you can.

It's funny cuz I did have a mentor when I first got started. She was local in my area. I met her at a real estate conference.

She had never done anything in real estate investing. She just picked mobile homes. She just read the, she just read up all the books on mobile homes started it. And she was a corporate executive too for a tech company. And we just had similar back.

She's like, you could teach me a lot because you have more experience than me.

I'm like, I have, I don't know anything about mobile homes. She's like, Rachel, it's not that different. You know, I was coming from single family homes. Yeah. That's one of the things I do and she just stuck with it all this time. That's all she did. She's done great for herself.

Basically stick with a niche. And if you wanna check out that book, I have a whole series of books. Real Estate Investing Sucks. Then if you are interested in learning about mobile home investing, I have a book, adventures and Mobile. How I got started in mobile home investing and how you can too as well too. So that's just my suggestions. And of course, listen to podcasts like this.

Support the Podcast!

Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.

  • Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
  • Join our coffee group ☕: Get access to exclusive behind the scenes videos, chats, and more!
  • Leave a review. Honest feedback and reviews make a big difference and gets the word out about the podcast. Leave your review on Apple or Stitcher.
  • Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in four weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!

Photo by Mikhail Nilov