Building Bigger Pockets with Real Estate Investing and Smart Money Moves with Mindy Jensen

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So I can't wait to talk to you about Real estate I've got a hundred questions Mindy and I want to die yeah you how Many answers do you have for that a Thousand okay there we go see that's why You have a highly rated like the it's Not just a highly rated podcast it's Like one of the biggest podcasts in the World isn't it I mean you're like second To Joe Rogan Joe calls me for advice all the time We're besties Mindy who should I have on The show but but seriously Bigger Pockets of money podcast for Bigger Pockets it's it's enormous and it's one Of the best podcasts there is you you Were early when was your first year in Podcasting My first year with the money podcast was 2018. Okay so year 2018 and how did they bring You it like how did they grab you into The fold I said I want to do a podcast the uh I Was the community manager for and I was in the Forums all day every day and I kept Seeing this question pop up how do I get Started investing in real estate with no Money and bad credit and my first Thought was you don't get investing in Real estate with no money and bad credit What a terrible way to start investing Let's fix your no money and bad credit

Situation first so that inspired the Money podcast let's get your money in Order let's get your financial house in Order so you can start investing in real Estate from a position of financial Strength you're providing housing for Somebody you need to be able to fix Things when they break and it's gonna Break spoiler alert real estate as soon As you close on the house something Breaks and I like to say the cost of That repair is inversely proportionate To how much money you have in the bank You have a big emergency fund you're You're gonna need like a new light Switch you have no emergency fund you Have no Reserve fund at all you're going To need a new roof a new furnace a new Air conditioner you're going to need a Lot so you need to be investing from a Position of financial strength so you Can provide housing to people that are Paying you money to provide them with a Roof over their head you're 100 right my First big home purchase really stretched Me on my down payment and I remember Putting having very little money after The closing and the with within the First couple weeks big the big my first Like nice fancy refrigerator Gone right so done how much is it was Like five at the time like five grand For a fridge this is a long time ago and Then the air conditioning went out and

All in the state all in the first month Yeah you're right inversely proportional To what I had left in my in my account So let us talk about real estate and Then I'd like to talk about the the real Estate market because it is there's so Much change that has happened in the Last year with rates mortgage rates what It costs to buy the which impacts Everything and maybe you agree with that I don't know maybe you don't And but let's start with I just want to Start with you've got your a your real Estate agent by trade and you've been The way you do this you'll buy a place Fix It Up live in it and then you'll Sell it or flip it just what is that Like because that's kind of been a dream Of mine if I ever if I did if I was Fully into real estate I would do I Would like to do it the way you've done It It is a lot of fun but sometimes my kids Can be embarrassed because we live in a Dump and they don't want to bring their Friends home to this crappy House mom Why do we have such a terrible house we Used to have a nice house and then we Moved Um so that part makes me sad because They don't realize that I'm making a lot Of money from this but you know they They don't see that money because I'm Doing the work it's my money I'm making

The money by the way how old are your Kids now they are 15 and 12. guys yeah That's the perfect time to be like Mom Like yes Um and it's really nobody in America Here's the other thing I mean nobody Nobody moves nobody ever wants to move To a lesser house I do Except for Mindy Yeah I always move to a lesser house and Then I make it gorgeous and then I sell It after two years the two years is very Important because why do I do this why Do I go from a beautiful house to a Garbage house because I make a lot of Money and I pay zero taxes on that money It is called the section 121 Exclusion and the IRS said hey Mindy Thanks so much for making this house Better up to five hundred thousand Dollars of your gain will be excluded From capital gains taxes that's our gift To you and I said well thank you IRS I Really appreciate that that's because I'm married if I was single it would Only be 250 000 so I'm actually hoping That I have to pay taxes on my flip that I'm in right now so you already look are You already looking for the next Property because if you already this Looks like a nice house if I can see From your background but so you've Already fixed this one up yes we have a Couple of projects left which should be

Done by the end of this school year and Then what's been the geography by the Way how how big of a circle or radius Are you are you looking at oh so we Started in Illinois and then we went up To Wisconsin and now we're in Colorado Wait so you will you'll have no prop so You're really looking at really for the Very very very best renovation type deal Or no when we were in Illinois we didn't Have kids so it was like whichever Suburb of Chicago we found a great deal In when we moved to Wisconsin we thought We really wanted to live in Wisconsin Wisconsin actually has high property Taxes and when we Finished renovating that house we're Like wow our property tax bill is like a Mortgage payment every month this is so Expensive they were 17 000 a year I'm Not sure what property taxes are where You are but my current mortgage payment Is my old monthly property tax payment And then I had mortgage on top of that It's that well we assume because you're You're the the big suburb and it's just Super expensive and now you're in where Where are you in Colorado I'm in Longmont Colorado and we have uh Surprisingly low property taxes on Residential real estate in Colorado Okay so kid I want to almost visualize I Would suspect over the years you've gone From lower priced houses and you've

Gotten maybe spent more and more a as Prices have gone up what what is Where are you now are you at the most Expensive you've been housing wise or no No I actually have gone back down so the First house was it was a condo and it Was fifty thousand dollars and we made It up to a 500 000 lake house that we Sold for 750 or 775. we came back down to a Property that we bought for 175 000 Um you went from a 750 000 lake house to A hundred and seventy five thousand Dollar house two bedrooms one bathroom Total dump uh it was beautiful when we Sold it we sold it for uh almost six Hundred thousand dollars whoa yeah we Added a second story and just it was we Improved it greatly but also we bought In 2013 and then had all of that price Appreciation all of the market Appreciation Um we sold it in what year is it 2022 so We sold it in January of 21. okay and Then this is and then now you're in your New in this new place now I'm in this New place I purchased this for 365 000 We've put about a hundred thousand into It and this exact same model about six Houses down sold in the spring that Crazy spring selling season for eight Hundred and fifty thousand dollars so This may be putting your your ex your 121 capital gain exemption to the test I

Might have to pay taxes and I happily Will because I exempt I'm still exempt The five hundred thousand sure but then If I make more than 500 000 I'll have to Pay taxes on that you know what that's Okay I'm willing to pay my fair share of Taxes and I'm willing to not pay the Exempted amount yeah and then above that It's long-term capital gain so it's a It's a pretty low rate anyway exactly What about how do you find these houses So are you like and have you already Started looking for your next one or not Yet Like where are you going next are the Kids in school do you kind of have to Stay near Longmont Uh Boy this is there's so many special Circumstances Surrounding my particular situation so I'm gonna say if you are considering Doing this and you do have kids you Should look within the same school District if that's something that's Important to you Um if you don't have kids if that's not Important to you if your kids are Graduating and then it doesn't matter Then you know it doesn't matter but in Colorado we are a school of choice State or a school of choice we're Definitely a School of Choice City so I Don't have to be in any particular

District in order to send my kids to That District as long as there is space For them they can go and then every year They're just automatically in so they're Both so once they're in as long as There's room they can stay correct so You can be on the other side of the city And go to a school that is 20 miles away Normally you wouldn't be in the district And all of Colorado is like that I Didn't know that that's correct I Believe all of Colorado is like that the Front Range definitely is yeah on the Eastern side of the Rocky Mountains Um so you've got that flexibility that's Very that's interesting yeah so I have a Lot of flexibility I actually have found My next property and we purchased it in June because it happened to be An off-market deal so I am a real estate Agent I sold a house to friends in my Neighborhood and then they started Talking to the person who was living Next door to them she was a 94 year old Woman who was getting ready to move into Assisted living and she just had a house Full of things and her children were Spread out across the country and Couldn't come help her kind of sort Through all of her things and what stays And what goes so we made her an offer we Will take whatever you want to leave you Don't have to go through it you don't Have to donate to the Goodwill or

Anything you could just leave whatever You want in the house you can take Whatever you want and on the day of Closing we will just assume that all of This is ours to do with as we please And that made her like that that solved A problem for her that took a bit a a Big burden off of her shoulders so we Came to an agreement on price we closed On the house and we started Renovations A couple of weeks ago Um unfortunately it doesn't work for our Family currently so it's kind of a weird House it's just all one big room with Bedrooms right off of it Um instead of like down a hall or Upstairs so there's a lot of sound that Kind of travels in weird ways it would Be great for just my husband and I to Live in or my husband and I and one Child but two children and us and it Would just be a big loud mess so we have Decided to turn it into a medium-term Rental until we are ready to move into It it's a ranch so As we age we'll be able to live there And not have to worry about stairs the Current house that we're in is a split Level so there's just stairs all over The place Well so the other thing here is that I Know that you've done a lot of these Move Upgrade renovate sell move upgrade

Renovate cell which is the the live-in Flip but do you still have a bunch of Properties though right that you're Renting don't you've got what co-working Space don't you have like a caboose the Mobile home parked I mean don't you have A couple other things still where you're Getting rental income I did have a Mobile home park we actually ended up Selling that Um got the years run together with covid Yeah either in January of this year or January of last year we divested Ourselves of that Um right now we have these two Properties and we have Um several Syndications but we don't have a lot of Properties that we are renting out Currently but now being an agent though How much of your how much of your focus Is I'm an agent so that and I have a Bunch of clients or is it that's just Part of it and you're always looking for The next property or is it a lot of time Being in agent Being an agent is a lot of work yeah so I am and in the spring it was a lot more Work everybody wanted to get into Properties before the real estate before The interest rates went up they wanted To get in because everybody else was Doing it my phone was like ringing off The hook

Um I did not I don't like bidding wars Personally I want to buy a property that Nobody else wants so that makes my offer A lot more attractive when your property Has been sitting there for a long time And nobody wants it and all of a sudden Here I come here I will give you money For this house that nobody wants to give You money for That in itself so you don't really fall In love with these houses you're you're It sounds like you're much more I would Say quantitative about this you're not Saying oh I love this place it's you're This is more formulaic for you When it comes to purchasing I mean as Soon as I walk into a house I love it Every single house I love Um because I just love real estate but Yeah I don't want to buy a house unless It makes Financial sense for me I'm Going to be making money off of this House I've heard a lot of people in the Personal finance World say your primary Residence is not an investment and maybe Yours isn't but mine sure is if I have To live I need a place to live and you Know that's great but I'm absolutely Gonna make money off of it too It really is here's the other thing that I think that You communicate so well uh better than Anyone I've ever talked to about we we Think about real estate we think oh well

We can do this formula and we'll do a Cap rate my rental divided by my price And this is a pretty good deal or we say My I'm going to buy it for this I'm Going to put this much much into it But there is what what you communicate So well Is to do real estate right And and I almost thinking this it's Going to be a rhetorical question about Rates because knowing how you do real Estate it almost doesn't really matter Because there's so much sacrifice when It comes to real estate you've got to be Will you have to be willing to go from This place all the way down to this Place you got to be willing to sacrifice And do all that work to get it up to Speed renovate it live through it and The the story about you buying that Other property you had to be willing to Take on a kind of this look you didn't Want a house full of furniture how do You get rid of it you keep taking on These things that maybe nobody else Wants to do and it takes its work is Really what the the theme Here is that You do work in real estate Yes it is work but it's not super hard Work I don't have to move all the Furniture I can hire somebody to do that Or I can have a hey let's everybody help Mindy move all the furniture out of her New house and by the way do you see

Something you like go ahead and take it Because I don't want it the now do you Have a group so you're you're always Seeing the market because you're in real Estate the I guess I would just say now For most people if you're a first time Home buyer and you're just looking for a Home to to buy forever right The numbers are pretty dramatically Different right if you if you did a Mortgage calculation in January And you've taken until now to buy It's a it's not a little difference it's Like a it's a whopping Payment difference for most Americans That are saying hey I'm just going to Finance this thing it's like a 60 Increase for a lot of people Yes Well how are you what do you think that Does to the the General market and what Are you gonna what do you think is going To happen just to real estate in general So my day job is at And we have a data anal a data analyst Who is absolutely brilliant and he has Done a lot of research into market Trends and Market information in general And he has shared with me that he Believes the inventory is 4 million Housing units short right now and the Economic law of supply and demand says That when Supply is low prices go up When demand is high prices go up we have

Both high demand and low Supply so Prices are going to go up just because Interest rates have gone up doesn't mean That demand is going to stop now demand Has fallen in a lot of places I'm in Colorado demand has fallen dramatically There is a lot more opportunity on the Market but there's still all Prices haven't collapsed this isn't 2008. all the people that are out there Saying oh it's 2008 all over again I'm Just going to wait until prices fall Again prices aren't going to collapse Like they did in 2008 that was a Different circumstance that was a Different Um Supply demand Dynamic right it was we Were over building for a little while There way over building extending credit To people who had no business having Credit and but then that's you know what You just hit the nail on the head we Were over building in 2008 we stopped Building 2008 2009 2010 2011 2012 2013 When did they start building in your Area 2014 maybe 2015 I mean what is that Like eight years of not building yeah Yeah yeah and it's cut and that again Has come back to Dramatically impact the housing market Right it was we under built for forever We're still maybe not even building as Much as we need to build because now the Sentiment of Builders they're getting

Nervous about higher rates so they're They're backing off Exactly if you look at all of these uh Building The Visions they are offering to buy Down your rate they're offering uh their People who are signing contracts are Being locked in they it says no matter What the rate is you can't cancel this Contract due to the rate Um or you can and you lose your earnest Money I mean there's always that option But Builders are pulling back on Building and yet we're still four Million housing units short so in the Spring just like last spring people were Signing contracts with Builders and Builders were saying oh okay now uh Supplies have gone up your contract is Now invalid It's going to cost me 30 000 more to Build this house if you'll pay me thirty Thousand dollars more I'll rewrite up The contract and you can still get in Otherwise I've got a line of people who Are waiting to pay 30 000 more for this House so what do you do Such an incredible Market but so really What we could see here then I guess Mindy is you could see The demand let's say for housing slow Less people buying less transactions but At the same time housing prices may stay Relatively stable maybe they fall a

Little bit but even though we might have Less transactions and less people moving It doesn't mean you're gonna have to see Huge price cuts when it comes to homes That are actually getting transacted I was speaking to another agent and she Said the way she phrases was so Interesting she said if you drew a line From January of 2021 to now It would be you know up and to the right But then you have this huge hump in the Spring of 2022 that kind of gets cut off By this we're still seeing this same Price trajectory we're just not seeing This giant hump from the spring sales so I think that that's pretty accurate Especially where I'm at right now I'm Not seeing prices falling back to January 2021 pricing When we're looking at so we talked about This it takes some effort maybe work is Maybe the the wrong word it's but you've Got to take some effort takes a lot of Energy to do what you've done what gets Me what are the sneaky expenses like the Refrigerators that that my story the AC But what are the sneaky expenses that a Lot of people just kind of they don't Think about they forget about Remember my story about my property tax Bill being equal to my mortgage payment Yeah property taxes I think are the Number one thing that people don't Consider when they're looking at houses

Oh the house costs three hundred Thousand dollars I will buy it they Don't realize that property taxes may be Going up they're probably going up They're most likely going to go up as Soon as you buy the house and the Property taxes that are being quoted in The MLS are last year's taxes based on The valuation from whenever it was sold And you know the mill Levy and yada yada All sorts of weird real estate terms but When it gets sold that's the new value So those go up you could have purchased From a senior citizen who has senior Citizen discounts or somebody who has Homestead exemptions there could be all Sorts of funky tax things going on and Then you buy this house especially as an Investor all of a sudden you're like why Are my taxes twice as much as I thought They were another thing is buying a Brand new house when that Builder buys That land it is considered unimproved And until that house sells that land is Taxed as unimproved property which is Like four dollars a year the tax rate Ultra low rate yeah it's ridiculously Low so you go into your purchase with This four dollar a year tax bill and Then it's instantly jacked up your Mortgage is absolutely going to go up Year two your mortgage company is going To call you and say there's an escrow Shortage because your property taxes are

Actually two thousand dollars a year or Eight thousand dollars a year or Whatever it is if you've got some weird Taxing district they could be even Higher so that's something that you need To ask your real estate agent about what Are my taxes going to go up to you know Take it upon yourself to do research Into this so you're not surprised Especially if you're like Wes and spent All your money on your house and your House poor with your first one yeah it's A scary place to be it's a scary place To be it really is you know you so I Know you do love what you're I know it Sounds like you you've loved this Process and how you've what you've done What how many of these has it been a Dozen yet how many houses I we just Bought the 11th okay so you're almost at A dozen almost a dozen all these years So I know it's kind of it sounds like It's mostly fun but has there been some Things that are rough like what's the is There been something that is not good I Mean it hasn't been all Sunshine Rainbows has it you're giving me heart Palpitations remembering this house oh Good okay so what I want to hear hard Palpitations I bought a house in Wisconsin that had a Brand new roof and then we ripped off That roof and added a second story and We did this on a Friday and the builders

Diligently put a tarp over the roof and Then they went home and this was in like 2007 this is 2007 because my baby had Just been born she was four months old And Saturday the rains came and they Were it didn't just rain it was a uh 500 Or thousand year flood And of course the winds came up first And shredded the tarps and then it Started pouring inside there was no roof It was just plywood and it started Raining inside my house and there was One place that I could put my brand new Infant baby in the middle of the bed That wasn't getting rained on but it was Raining through the light fish oh wait a Minute hold on hold on you were in the House I was it's a live-in flip you got To live there You were in the but but even when they Take the roof off Yeah it was like the summer we still had It wasn't you know it wasn't winter time In Wisconsin You know it's funny I think back at 07 It's almost like right before we had IPhones were prolific right so you Didn't like check the weather every 10 Minutes like here it's like hey there's A freeze warning coming tonight or it's Gonna be really nice tomorrow we didn't Quite do that like your roofers didn't Do that did they no they didn't did we Actually discovered this website called

Wonder ground Weather Underground yes I Use it every day still yeah well at that Time I don't know if you can still do it You could watch the waves come in and This one's red which means really heavy Rain here comes one that's purple which Means Ultra super really heavy Ultra Super really yeah it is and it's just You're like what am I gonna do we had Buckets and bowls and every all over the House and there was no sleeping that Night except the baby in the middle of The bed the one place that wasn't Getting wet and it was just Heartbreaking to go through this the Entire night and what do you do you Don't leave and go to a hotel because Then everything's ruined but You stay there and you're just Frustrated and sad and angry and They offered to replace all of the Insulation in the ceiling I'm like well Thanks What was the so again it so so the house So you have they took off the the tar Shingles and the rain just came right Through all the insulation did it ruin The house as well or did it not quite Ruin the house it didn't ruin the house We were able to dry it out Um we didn't have another fun process Let's just try this place out how long Did that how long did that take yeah we Did have a lot of buckets and bowls

Everywhere so there wasn't just standing Water all over the floor and every towel Was used and you know we we were Diligent about running all over the Whole house all night long Um but yeah it was It was one of the worst nights of my Life So the and then what what did you end up Selling that house for though We sold that for about 750 7.75 So was that so that was a that was a Really good one That was That was an okay one we bought that House expecting to sell it for a million Dollars and we sold in 2012 when Nobody was buying houses and Um I'm sure it's now worth a million Dollars but just Leaving it and that was the house that I Brought my babies home in and that was The house where they took their first Steps and that was going to be really Awesome but it was also Easy to leave that house Um With the With the the memories God I'm getting Hot it does get emotional housing is so Emotional and so complex there's so much That has to do with your family relative To the home all right what's the best Give me a what upside surprise have you

Had in doing this labor of love We sold the house before the one that I'm in right now We bought it for a hundred and seventy Six thousand dollars we sold it for 598 000 six years later so it's a triple Yeah We well we put about a hundred into it Um it never rained in the house so that Was a good start Um A lot of good memories in that house it Was of course I mean there's a lot of Work involved in this we do oh did I Tell you we DIY most of the construction No okay so I thought you would I I Thought that you would hire all these People and you'd have like uh first of All I was like when when is your show When is your TV show gonna happen Because really they should just be Following you around with the camera Really I don't know you're doing this For real life Are they are you talking to the networks Right now or no not yet you paid 175 put In 100 sold it for almost 600. so what Was the did you add a bunch of space or Just make it look amazing uh both we Added a second story and that's Something I don't think we're ever gonna Do again that's just a lot of work and That part we do hire out we hired Somebody to build the structure to put

The roof and the siding on install the Windows that kind of thing and then we Finished off the inside the flooring the Um the painting The tiling the ins like The installation of the bathrooms so you And your husband though when you say You're diying this like you're actually Doing the floors you're doing The really anything that's not crazy Specialty right Um even a lot of stuff that is crazy Specialty we do uh my father my Husband's father was an electrician he Ran all of the electricity over there But my husband did all the plumbing for That house Um because Plumbing is not that hard Step number one turn off the water and Step number two test to make sure that The water is turned off and then you Know number three for me call a plumber Like I would call a plumber Um a lot of times it is difficult to Find a contractor who will answer their Phone Um when they do answer their phone They're not available until I don't know 2050 uh and so true it will Cost fifty thousand dollars you're like Well but it's 27 in parts and three Hours worth of work what do you mean It's fifty thousand dollars Um so many times it is easier to just Learn the skill than it is to find

Somebody who can who already knows this Skill I guess if you and to some extent I think you kind of answered this is if You're looking to buy a house really Just for life and not do a live and flip If if you think look big picture 4 Million homes under built Big Picture Sure rates are higher but prices should Stay relatively steady and still over The next several years probably go Higher you would still encourage someone Who's looking to buy a house to go ahead And do it now or would you would you Tell them to to wait a little bit and Rent I would say if you are looking to buy a House now is a great time to start Looking contact A lender talk to them About your options for Lending and a lot Of lenders aren't going to Know what it is that you want to know so Ask a ton of questions here's a word Called recast ask if your loan can be Recast and what that means is they take Your uh your essentially the amount that You owe and they just apply a different Interest rate to it typically lower You're not going to ask for a recast for A higher rate Um but if you have a property that you Find now that you love now get into it Now and then when rates come back down If your loan can be recast ask them to Recast it so you're paying less you're

Getting in right now when nobody's Looking at properties and then you have The option for the lower payment later Um ask about refinancing is there a rate And terms refinance that your loan is Eligible for I don't think that's Available on conventional loans but I'm Not a lender so definitely talk to your Lender and just let them know that You're concerned about rates you're not The first person that's going to be Asking them this you're not going to be The last person that's asking them this They probably have a lot of options Available At least a lot of suggestions also right Now and this has been the case for Several months the jumbo loan and the Conforming loan interest rates are Inverted usually a jumbo loan is a Higher interest rate than a conforming And this changes depending on what County you're in I'm in Boulder County Which is typically a more expensive County our jumbo rate is our jumbo loan Starts at like 647 000 so that means any loan that you're Taking out that's more than 647 thousand Dollars is eligible for the jumbo loan Rate and I have a client getting one Right now it's something like 1.7 Percent lower interest rate than a Conforming loan that's kind of Fascinating that's fascinating it's

Fascinating I don't know why that is I'm Sure your lender can explain if you Really want to know about it I don't Really care why it's lower I just am Telling all of my clients who could Possibly qualify talk to your lender and Ask them if jumbo rates are inverted and If your loan can qualify he's going to End up putting 10 down instead of 20 Down so that he can qualify for the Jumbo loan interest very interesting Very very interesting the in that I it Makes sense from a consumer standpoint To do that what about when you're Telling if you go back over all the Years and think about the improvements That you've done to to homes And the changes in the updates what move What do you think moves the meter the Most Mindy the kitchen This is I actually really like this this Question because it's such an easy one To answer the kitchen sells the home Um and of course like updated in every Way is best but that doesn't mean that You have to do absolutely everything if You've got a house that you want to sell And you're looking at it you're like wow These old oak cabinets have been here For 20 years with those same brass Handles and that ugly laminate Countertop and those same old 30 year Old light fixtures you can switch out a Lot of things for a lot less than just a

Complete kitchen redo get a new Countertop I mean even in a new laminate Countertop that's in a granite pattern Looks better than the old 1987 laminate Countertops of our childhood new handles Can freshen up a look paint your Cabinets you could paint I've seen a lot Of oak cabinets that are painted that Cost a lot less than completely redoing All of the cabinets it still looks way Better to take these older Oak I mean Oak has fallen out of favor it used to Be like the most popular wood and now It's not so paint them white paint them Gray paint em green paint them whatever Color looks great in the home but having A fresh looking kitchen is going to sell Your house more so than old and outdated Will I think about looking back when I Was looking at houses you you go through And you say the Thought around I can Oh that kitchen's updated that's amazing And then you look at the bathroom and It's it's like from the 1970s like I can Deal with that I can deal with that but I can't deal with a terrible kitchen if You're unless again unless you're Mindy And you're willing to renovate and That's what you're going to be doing What about for retirees so again we're The retire sooner podcast we have people That are trying to either retire young Or even these are let's say folks that

Are in their 50s and 60s what if you're Going what about making a place more Livable if you're let's say If you're not a 35 year old retiree and You're in your 60s in your 70s do you Have any thoughts on if we go into Retirement to make a place more livable Or or for the long run if we're gonna if We're gonna age there over time So this is actually a really interesting Problem that I think we're going to be Facing with people who are in their late 50s early 60s as they start to retire Maybe they've lived in their home for 20 30 40 years uh yeah 20 30 40 years and Think Back 40 years ago how much were You paying for a house like twenty five Thousand dollars thirty thousand dollars You have had such price appreciation Which is awesome but you also now are Looking at uh paying taxes on your house When you sell it because and because You've hit that 500 000 if you're Married you probably have overshot the 250 if you're single Um and the 500 000 perhaps you're a Widow or a widower that only the 500 000 Carries over for two years after your Spouse passes and then so you lose that Exemption if your spouse passes away After two years yeah who's that Exemption and then you've got even more Taxes that you're owing which is again I Mean that's a great problem to have but

You're not going to be able to go buy Another house for forty thousand dollars You sell your house let's say you sell Your house for five hundred thousand Dollars You're buying a smaller house For what 450 I mean you're still going To be spending almost the same amount it Could not make sense to Buy another house it could make more Sense to just stay put stay okay but and This is happening to a woman in my Neighborhood she is Oh gosh he's probably in her 90s she's One of the original owners in this Neighborhood and she is not in great Shape she lives in a house just like Mine a split level and there's no Bedroom there's no bathroom on the main Level the bedrooms and bathrooms are Upstairs or there's a bathroom Downstairs and if you're not doing well With with stairs having to go down the Stairs to go to the bathroom all the Time is going to be difficult so you Know look at places you can add a place To sleep and a bathroom yeah try to find A master on the main level what about an Elevator it seems like super expensive Is that crazy is that crazy in this Particular layout I'm trying to think Where would you even put an elevator I Don't think it would work yeah Um but I mean I'm trying to think the

Laundry is in the basement we moved Hours up to the very top level because That's where all the bedrooms are so Where is your laundry and then if you Are considering retiring and you are Looking at houses look for a house that Has all one level living Or is easily changed to all one level Living Um so laundry kitchen bathroom bedroom You can have other things on other Levels but you need those things on the Main level where is the garage coming in Do you have to walk upstairs or Downstairs to get into the garage that Might not be the best layout for you to Retire in yeah think about a renovation Over the next decade it will be more and More and more of that it really will be There's no just demographically America Will need that and it's a lot easier to Spend thirty thousand dollars to get a Bedroom and bathroom installed on a main Living level than it is to move out pay The capital gains taxes buy a smaller House for the same amount of money Yeah I mean it there's going to be a lot Of that if you again if you can find a Contractor or it's or you're doing DIY Which hopefully you're doing this before While you're still young enough To DIY well what about so what if you Are you've been in this place forever You're tight on cash your income level

Is not what it needs to be do you what Is what is your take on Reverse mortgages Well are you sponsored by a reverse Mortgage company no no good my opinion Of reverse mortgages is that they're a Huge scam benefiting no one and the Person who invented them should be drawn And quartered and the sales people who Are convincing elderly homeowners to Take them out should be shot oh okay Let's hear it so so you you see these Commercials with what who is it it's Like Magnum pis doing the commercials He's he's 65 now really oh come on Magnum what do you expect I mean but Tell me why we don't want to do one of These reverse mortgages I've never Advocated for it at all and I know They're super expensive and don't I Don't know a whole lot of folks that Have done that but what tell me your Experience and why they're so terrible So I don't personally have any Experience with with them this is just I Had somebody come in and give a Presentation about reverse mortgages and He keeps talking about them I'm like This sounds horrible this sounds Terrible oh you can get money from your House like well what happens When you pass oh well you could just pay It off or sell the house Okay I don't have money to pay off the

House or I wouldn't need to take out This reverse mortgage in the first place There's really high closing costs with With this uh type of loan if you let's Say you and I are married Wes and you Take out this loan and I'm not on this Loan if you pass away before I do I Could be evicted from the home because You're the one who has the mortgage not Me yeah there's so many weird loopholes To it too you're right and that's why There's a lot of disaster stories around It it's super expensive You're right and usually people that are Doing it they're already in kind of a Tough position and then they're Essentially well they're they are Mortgaging they're using leverage and it Just I can just see it going wrong very Very quickly and very very easily well You are You are Oh you're not nobody ever reads all of Those documents but like you just said There's a lot of loopholes and a lot of Really weird circumstances and none of That benefits you you don't sign an inch Thick of paperwork in something that Benefits you yes you're getting the Money but then you are signing away the Equity in your home you're signing away Like this could be the house that you Raised your kids in they could be Counting on this to raise their kids in

Or not even knowing that you're taking This out and then as soon as you pass Here comes the mortgage company okay get All your stuff out because now we own This house it just doesn't seem to be a Good Idea it's you you're preying on people Who don't understand what's going on There's a lot of like double speak and Salesmen Garbage and the people who sell these Make high commissions to push this on You and I just think that it is I think it should be illegal you know It's funny you don't you don't see the People these these nice old people with Silver hair getting evicted from their Homes and the commercials do you they Don't put that in the commercial all Right here's a fun topic and this is one Where I've never had a great answer for This but I have an answer but I don't Think it's the greatest answer and after Covet it's gotten even harder because Here we are in in every State's got Their vacation places in Georgia it's The mountains we don't have a whole lot Of Coastline we have a little we Actually have a little bit of Coastline But Those those houses are Ultra expensive We have we have a couple amazing Lakes Not big so not a whole lot to choose From so super expensive uh

The question I I will frequently get is About the second home hey I want we're Thinking about a second hour we're Thinking about a vacation probably and It's fun to think about but it's maybe Hard to execute number one number two do You think people was there a ton of Vacation home buying during covid I think that there was because so many People had money and no place to spend It They kept saving their money they Weren't going out to I mean I don't know How much people were spending beforehand But all of these people all of a sudden Were sitting on piles of cash Uh and there was a lot of purchasing Being done during covet even in Non-vacation rental areas Um I live in the Front Range of Colorado Our mountains are our uh vacation Destination and yes those prices went up But all along the Front Range they went Up as well people just wanted to buy a Different house a better house they Needed more space they were moving from A condo to an actual house they were Moving from Apartments to condos because They needed a place to call their own They needed more space because everybody Was working from home Um and just if we're all working from Home anyway why don't we go someplace That we enjoy why don't we get out of

The big city I know a lot of people in New York City fled the city for a long Time rents actually went down in New York City during covid because so many People left Um it was like the epicenter of covid For a while yeah so yeah so people went Instead of spending so much money on This 3 headed square foot apartment they Could spend half as much and get seven Times as much space if they went to Atlanta or you know other places so I do Think that there was a lot of buying Going on during covet and it's still I Mean even this this past spring it was Still going on I wonder if there's going to be an Opportunity in the second Home Market I Think time will tell but I do wonder if There was a little overbuying of the Second home does it get used as much as People think they were going to use it And I wonder maybe next summer or this Again I wonder over the next year if There'll be some softness in the second Home vacation Market or or maybe not Because that's a population that have Plenty of money to go by so I don't know I would I would think the second if you Have money to buy two properties if you Don't use the second property so much You're not going to be quick to just Dump it for the first offer that comes Along yeah you might sell it but you're

Not going to do so in a way that that Makes you lose a lot of money You know I want to ask you about uh two More questions I want to ask you about Lenders you know I've been seeing I Don't know if it was some sort of One of these stadiums is a maybe it's a Rocket mortgage Stadium I don't know if It's like Monday Night Football or Something but I've started to see Mortgage company ads get a little more Creative around if your raid drops then We'll call you to refinance or thank you Or just I was with some mortgage folks The other day and I was asking hey do You have any of the old mortgages did You save any of the three percenters any Of those left in the drawer I'd like one Of those what did what do we do how do You find the right lender I think that too many people focus on The rate and they don't focus on the Service or the ability to close Even more so in the past in the spring But definitely going forward you need a Lender who does what they say they're Going to do and can close on time and The first person you want to ask about a Lender is your real estate agent I'm out There closing deals at one point I was Closing one or two a month and I had two People that I would send you to talk to This person talk to that person I think you should talk to both I think

You should run their numbers I have had Great experiences with both of them I Don't love the online lenders The experiences that I have had is that The uh the sales person or the the Mortgage broker or the service person That you are working with is frequently Not there at the end of your deal They there's a lot of turnover and then You have to explain the situation again To somebody else you have to go through All of this again it could it can be Difficult to get a deal to close now I Have heard from people who have had Great experiences I'm glad that they Have I prefer a more local lender and I Have got I have a guy he's at a credit Union locally he can close I was talking To him this morning he can close my my Guy that I'm writing an offer for today He can close in 10 days like wow that's Awesome he's already Pre-underwritten my client is like super Qualified which is awesome yeah um There's he got him all the information That he needed but yeah absolutely ask Your your real estate agent ask your Friends too who did you use when you Bought your house oh I use Bob over at Bob's mortgages he was awesome great Call him up but then when you are ready To sit down and get quotes for a loan Call everybody on the same day mortgage Rates are changing like even intraday

Changing so you want if I call you today And I call somebody else next week and I Call somebody at the end of the month I'm not going to get the same quote Oh Bob's the best well maybe Bob's not the Best he's just had the best price on the Day that you called so I think it's Really important to call all of the People that you're going to call on one Day Get their rates get their quotes compare Them all in a spreadsheet so you can Compare apples to apples and then choose Based on the rate the closing costs how You like that person and who recommended Them Yeah how good they are to work with is a Big deal because it gets complicated the And I guess the other the other thought Here would be when you say local you're Talking about someone in your city at a Credit union at a bank that you could Actually walk into or a mortgage company Versus when you say like an online Lender What like what's is that like a rocket Mortgage is that an online lender rocket Mortgage is an online lender I'm trying To think of uh who are these other Online lenders I don't want to name Names and like but that's good so an Example like a rocket mortgage is a big National Online lender as opposed to Your local credit union that's a huge

Difference between the two yes and uh my Other lender was Um their license in all 50 states they Do have physical locations you can go Into I was actually working with Somebody who was located in California But since the company is licensed in all 50 states they can write loans in my State as well and they were amazing for A VA loan they could close in 17 days on A VA loan which is unheard of Um it's so cool yeah it is cool yeah They usually take like 45 days plus and You know then they're calling up for an Extension Um they were really really great to work With yeah so so the takeaway though here Is spend some time to find a lender Before you're out shopping for a house Even Yeah okay uh and then so final thoughts I feel like I'm ready to go live it and Flip It Go do live and flip even though I'm not very handy I used to be and I Kind of just gotten worse over the years You don't have to be handy to be a Live-in flipper you can hire out jobs You can do the jobs you like and hire Out jobs you don't like Um do your research and be honest with Yourself how much money do you have to Put into something how much time do you Have to put into something can you live In a construction zone I mean I'm living

In a construction zone there's drywall And nails and tools everywhere and every Once in a while it's like you know what We're going out to dinner tonight Because I cannot handle making dinner in All this mess today and you know how Much can you handle it's kind of like Second nature to me now but it can be Kind of stressful to live in flip it Doesn't have to be you know the worst Thing in the world always keep a room Where you can close the door and just Get away from it all an untouched room And that can change as you're you know Touching rooms but always keep an Untouched room so you can just relax but Yeah real estate is an excellent Investment class It really is it takes a little a little It takes some effort takes some effort Yeah what kind of money can you make With no effort yeah it's on it's it Doesn't happen not in not in America not Anywhere if it could if it could happen To be in America but not anywhere Mindy thank you so much Mindy Jensen you Are the host or the co-host of one of The the coolest biggest podcasts Bigger Pockets money uh the BiggerPockets money Podcast and it sounds like you have a Really like fun life you get to do Podcasts you're the community manager of Bigger Pockets your real estate agent You're renovating places all the time it

Sounds fun if it sounds like that sounds Awesome to me my life doesn't suck it is A lot of fun Um awesome all right Mindy thank you so Much for being here Wes thank you for Having me this was One of my most favorite episodes ever oh You probably say that to all the hosts I Don't okay

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