Should first-time homebuyers focus on the price of the home or the monthly payments? Seems like a simple question, but David Sidoni, the How to Buy a Home guy, goes way beyond the simple concept of “think about the monthly, not the price.” Taking the financial breakdown for first-time homebuyers to a whole new level, this episode first explores how getting emotionally hung up and focused on the home price can paralyze would-be first-time homebuyers. David then gets deeper into the numbers to find the magic solution that could be just the crucial information long-time renters need to hear to help them see the value in making the change from renter to owner.
Should First Time Homebuyers Focus On The Price Of The Home, Or The Monthly Payments?
An In-Depth Look At Some Little Known Financial Planning That Could Change How You Look At Home Prices
Buying your first home, should you focus on the price of the home or on your monthly payment? The answer? It’s neither. You actually should focus on the one magic formula I’m about to give you.
What’s going on? Welcome to the show. You are here for answers. I’m happy to spill my guts and make sure you get them. If you’re new to the show, go ahead and smash your subscribe button. You can read all these questions answered. I’m going to drop these full educational episodes every Tuesday in 2021 and beyond. That’s my commitment I’m making to you guys. I’ve also added a brand new episode once a week. I’m going to do the question of the week episode every Friday. That is if it doesn’t kill me, trying to change the entire real estate industry and educate every single one of you out there. There are about two million first-time home buyers every single year that buy their first home, even though most of you guys out there do it without any clue and begging for anybody to help them through the confusion of this process. Let’s try to change that right here, right now.
Monthly Versus Home Price
The topic now seems super easy. Focus on your price or the monthly payment? I know you think I’m going to give you that cheesy car salesman pitch, “Try not to think about the price. Let’s get you focused on paying $400 a month, so you can ride around in this dope whip.” That’s what the car guys do. I’m going to start with that. I’ll start with the cringy, cheesy old financial breakdown, and then we’re going to get into some high-level stuff, into that magic stuff that I was talking about. It’s not the stuff that you’re going to hear when you’re on a car lot from some hair helmet guy in a bad suit.
Here’s how we start. Right now, I want you to picture the apartment that you rent. Picture your rental that you’re in right now. See that apartment and now see it as a monthly payment. What do you pay? $1,000 a month? $2,000 a month? If you’re at $2,000 a month, cool. Picture that same rental this way. With the interest rates now, that $2,000 a month is a $400,000 condo townhome or home. We all see your monthly number as a price and always see your purchase price as a monthly number. That’s not the answer to the question for the day. That’s easy stuff. That’s not earth-shattering, so let’s continue.
I was driving around with some podcast listeners, giving them a tour of our local Southern California area. They’re relocating down here. They wanted to get a feel of the homes, see what the homes were selling and what price they were. Of course, they start focusing on the price. It makes sense. That’s what you do when you’re buying a house. As we looked at the homes, we were looking at stuff in the $750,000 price range. It wasn’t quite getting them exactly what they wanted. Don’t freak out. I realized that there are people all over the country at all different price points. I know these numbers probably sound looney tunes to some of you guys. I’m going to address that in a little bit.
It’s the difference in their current rent that they were paying versus what they would be comfortable paying in a mortgage. We already had a Zoom discussion. We went over their finances for over an hour and came up with these numbers. How much they pay in rent now, how much they get stretched to, what they would be willing to do, and how much that would afford them in a home. They’re paying $2,750 a month, and they said they were willing to stretch to $3,500. That means that we’re looking at $725,000 to $750,000 homes. That was the price they wanted to stay at because they knew they were stretching and they didn’t want to go beyond that.
For those of you guys in different price brackets, I’m going to give you two other tiers that you can think about. They’re at $750,000, but we’ll do $375,000 and $250,000. You pick the one that you’re closest to. That $2,750 rent payment that they’re doing and then their stretch payment to $3,500, if you’re looking at the $375,000 house, what you’re going to do is make that original rent payment, $1,375, to stretch to a mortgage payment of $1,750. That’s going to get you a $375,000 purchase price. You got that if you’re at a $375,000 price point. When I talk about their $2,750 original rent and their $3,500 stretch for you, that’s going to be $1,375 or $1,750. If you’re looking at $250,000 homes, then you make it $917 on the original rent payment to a stretch mortgage payment of $1,167. Hold onto those numbers. Keep them in your head. Don’t get jumbled up because we’re going to be doing a lot. By the way, if you’re out there right now, and you’re like, “Dave, I got a home price of $312,000. What do I do?” Do you know what to do? Stop reading and do your math. Sorry, I got to press on.
Were you confused already? Welcome to buying a house. If someone’s trying to tell to you it’s simple, run from them and go find a unicorn realtor and lender who knows that you’re not buying a new tablet on Amazon. This is a big deal. You got to make sure you understand all this. Back to my listeners who heard me on the podcast and said, “Dave, we’re coming to SoCal, can you help us out?” We went out and we looked at homes. As they looked at the $750,000 homes, they realized that there’s a big price difference. If they jumped from $750,000 to $850,000, there was a big difference in the homes that they were getting. It took them out of the tweener zone.
You’ve got to remember, these buyers are coming from Northern California, the Bay Area, San Francisco, San Jose, Silicon Valley. It’s driven the prices up there. For them, they’re used to seeing $900,000 condos. This is normal for them, different worlds, but the numbers are the numbers. No matter where you are out there, this all transfers and it translates. Remember those numbers I gave you earlier. I’m going to be talking about $750,000, but I gave you the equations if you’re a $375,000 buyer or a $250,000 buyer. If they could jump one price level up from $750,000 to $850,000, they could get into a better single-family, detached traditional homes. They’d be looking at not having to play that apples to oranges game, where you’re trying to compare condos and townhomes to houses sitting in that tweener zone. Lots of first-time buyers end up in that tweener zone. It’s tough trying to compare a condo to a house with a yard.
These buyers were getting a little frustrated. They are smart folks. They’ve done well so far getting ready to get to this point. They’d been saving and getting their lives together. They’re in a really fortunate position. They’re not young kids starting out in the world. They have young children. They’re a young family with young kids. To get there, they’ve already created and established their lives, and they’ve been renting for a long time. This is a big step for them that they are getting ready for in several different ways. Perhaps, you out there can relate to this, then this story is going to help you a lot. What if you’re a single person out there and you’ve been establishing who you are through your 20s and 30s while you’re renting and working your way up in the world?
That’s cool. It’s the same thing. This story is going to help you out. Maybe you’re a young couple doing the same thing, without kids, got married, trying to figure it out. It’s the same thing for you. Maybe you’re some weirdo reading this in your mom’s basement. You can use this too because if you didn’t end up spending all your money on PS5, extra game consoles, and Cheetos, then maybe you’ve done that and you’ve got some savings since mom is letting you live there rent-free as long as you shovel the walk in the winter. This might help you, too.
Who are you? How long have you been renting? Did you do the David-Sidoni-was-an-idiot-in-his-twenties math? Have you heard of that story that I’ve discussed on another episode and seeing how much rent I tossed away? One of the main reasons I started this whole show. For many of you, who knows, maybe you’re even ahead of these people, or ahead of me in my history in my twenties. As I said, these guys are not fresh out of college in their twenties buying a house right now. They’ve had a nice established life and have started a young family. Maybe you guys are out there in your early twenties, being smarter than I am and reading this.
I didn’t have podcasts in the early ’90s. The internet was a glimmer in Bill Gates’ eyes when I first moved out. The information I had to get came from encyclopedias, my dad, and my crazy uncle. They didn’t break things down like this for me. I guess my dad did, but I didn’t listen to him because I was too busy doing my own thing and, “I’d show him someday.” If you’re one of those people and you’re in your early twenties, hopefully, you’re getting stoked on buying a home in 2021. Myself and the readers, they’ve told you that for as little as 3.5% down, or zero down if you’re a veteran or military. Using that low down payment, combined with a super sick, low mortgage interest rates that are out there right now, you could buy that home with that little down payment or zero down if you’re a vet. Your monthly payment for that home that you own might be damn close, if not exactly the same as your rent.
We had one 25-year-old single hairdresser, a young woman who DMed me. She said the show helped her buy her first house. Her new payment, with everything included, was $100 less than her rent. If you’re one of those young folks in that position, that’s awesome. The revelation from this buyer story might not be as big a deal to some of you, early twenty-year-olds, who haven’t had an established life, but maybe not to all of you. You never know. To anyone who is out there and has been renting for a while, I have a huge revelation for you. Do not find your unicorn realtor. Work with them in a trusted lender, run all the numbers, establish the price that you can afford, and then get fixated on the price, not until you finish reading this.
Magic Formula To Buying A Home
I’m not pulling that car salesman to your time to do fuzzy math on you to get you to overspend by leading you into that monthly number so that you can digest it easier. No, it’s not a trick, but what I am telling you, it’s magic. If you look at your home for the long-term and a home can be looked at as an investment for your future. It’s not a get-rich-quick plan. It’s not flip or flop or any of those HGTV shows trying to get super-fast equity and get a profit in your investment really quick. If you see your home purchase as a slow, boring, conservative investment that you happen to live in, keep on reading. This is for you. There’s a magic trick in there.
If you’re saving up and getting ready to buy a house, but you’ve also been investing while you’ve been renting in your future, whether it’s with a 401(k) from work or 403(b), stocks, mutual funds, a savings account, or any other type of monthly saving device that you use for your retirement, here’s the magic formula to help you stop focusing on the price of homes when you’re ready to buy. I’m not going to say, “Just focus on the monthly payment.” Here’s what you start to focus on. Focus on the difference between your current rent and new payment, the difference from rent to a mortgage.
If you’re looking at a $2,000 a month apartment, and you’re seeing it the way I told you is like a $400,000 home, but you think, “I want $450,000.” Don’t focus on $450,000. Stop focusing on that number and start focusing on the difference. The difference is going to be $500 a month. For $2,000 a month, you can buy a $400,000 home. For $2,500 a month, you can buy a $450,000 home. I’m going to say that one more time. Look at your $2,000 a month. If you see a $450,000 home, stop focusing on $450,000 and start focusing on the difference. It’s $500 more that you have to pay each month.
Let me explain their story to show you guys what I mean. This awesome couple had to decide on that price point of $725,000 to $750,000 on the border between the nice condo townhomes and the single-family detached traditional homes, the tweener zone. They like most numbers, ran the numbers, work backwards, and settle on that price. They figured that was going to fit their comfort level. They got laser focus and only started concentrating on the price. It’s the easiest way to comprehend value when you’re comparing homes. It also can be a detriment to focus on the price if you haven’t looked at your full monthly financial picture, especially if that price point disappoints you a little bit. You might get trapped. You might feel disheartened when you’re looking at those homes at whatever price point you got, $253,075 or $750,000. You’re like, “The market’s going up. I’m never going to get something that’s going to work.” If these guys were thinking they’re at the $750,000, they’re thinking, “$3,500 a month is a stretch number.” That’s the stretch number to get us to $750,000. These homes at $750,000 are not what I imagined.
Adjust those numbers. $1,750 a month for you, $375,000 buyers, and $1,167 a month for you, $250,000 buyers. That’s the stretch number. They got bummed out at what they could get for that price and only started peeking around a little bit at the homes that were priced at $850,000, outside of the tweener zone. They told themselves, “We can’t even think about that, because now we’re talking about going up to $4,000 a month, $500 over, our $3,500 number.” That stretch is way too much because $750,000 is one thing to stretch, but now we’re talking about stretching $1,250 a month. As I said, lots of math, hang with me.
I’m all for the monthly number that makes sense. Stretching $750 a month, that’s a big stretch. That’s a big change to your lifestyle. If you start peeking around at the other price points, the next tier up, and you’re taking on another $500 to that, $1250 a month is big and seems ludicrous. They didn’t want to do that. They didn’t want to get greedy because they maybe had an approval up to $850,000. I could hear them being disappointed by the rising prices, and they were pretty bummed out. They wished that they could get out of the tweener price zone and jump up a price tier.
We started talking about the monthly number, how they came up with it, and why they capped that stretch to that final price point. “David, it’s because we pay bills. At $750 a month, it’s not like we can get to that easy by cutting out Starbucks. It’s a big deal. We don’t want to be stretched too far. We’ve got food, car, kids, cable, phones, utilities, preschool, daycare, entertainment, maybe willing to go out some time, and got college funds, savings, retirement.” I said, “Stop right there, guys. What do you put in your retirement?”
Here comes the magic trick. They had four retirement funds that they contributed to every month. Hubby put $1,700 a month into his retirement through his work. His employer matched that. Wifey put $1,200 a month into her work retirement, no match there, but still a 401(k). They put the third one, which was $500 a month into a separate retirement account. The fourth retirement fund that they contributed to every single month was, they each put $416 into their Roth IRAs. Per year, that was $5,000 a piece or $10,000 total. They did that so they can get the tax benefit to max it out. That means every month, they’re putting $836 per month towards that fourth retirement fund. I’m sure you weren’t doing the math as you went along, so I’ll do it for you. That’s a grand total of $4,232 a month.
I’ve already bombarded you guys with tons of math, so I’m going to call that $4,000. That’s for the sake of not confusing you and your ears and brain. As I said, I should be doing this on a whiteboard. I’m slamming you with all these numbers, but I thought that real-world numbers and an actual real-life story could be very helpful to you guys out there. These are not general concepts. I’m not throwing out what-ifs. These are real-world numbers, so strap in. If it gets too much, go back and read it again.
Adjust these numbers for yourself wherever you are. Not all of us are so lucky as them and have $4,000 a month that we can toss into our retirement. This magic trick can apply to you at any number, even if you’re putting in $200 or $400 a month. As long as you’re putting some money away into a 401(k), retirement, or savings account, I still have a magic trick for you. They put a little over $4,000 a month into retirement, and as we look at homes, all they’re seeing is the price. That’s the focus.
How much house can I get for this price? Every decision comes down to how much they can get for that $750,000 price. That price was decided by them based on the original formula, which was a stretch. They were thinking, “We pay $2,750 a month, stretch it to $3,500 a month. That equals to a $750,000 price. That’s where we’re staying. No more.” They told me, “David, we’re cool to tighten our belts, do that stretch, and pay the extra $750 a month to get that $750,000 price point because we know that we’re going to be in this home for a long time. We know it’s a solid investment.”
I said to them, “Do you mean that this home is going to be a solid investment that you believe in and that you’d like to contribute to monthly? Is it the same way that you contribute that massive $4,000 a month, that you sock away into four different retirement funds?” That insane number, that investment, that God bless you, I love you, I admire you, but I also want to punch you in the face, because I’m so jealous. You’ve made such a solid commitment to your future that you only live on a percentage of your salary. You’ve been doing it for a while because this is established, and the rest of that money, that percentage, that extra, you put it into your future. Your family has consistently done this $4,000 a month into four solid investments. You have done that to prepare for your future, and you’ve also managed to live a good life while you’re doing so. You’ve adjusted.
You also see this home that you’re looking to purchase as a solid investment into your future, that you’re willing to change your monthly habits even more. You’ve already made the change to do these retirement accounts and have that big fat number every month. Now, you’re saying, “This home is such a good investment. We’re willing to stretch even more.” You know that it’s going to be different at first, but you’re going to get used to it and it’s worth it because you want to enjoy this home. You’re going to be contributing to that home, which you know is a solid investment in your future. Is it clicking for you? Do you see the whiteboard in mind? Did you figure out magic? Not yet? Read again and see if you can figure it out.
Are you back with a light bulb over your head now? Did you get it? Did you figure out the magic? I can’t see yours, but when I was talking to them and we had that conversation, I saw theirs. Suddenly, the $750 a month that they had to pay extra for that $750,000 home didn’t seem like a stretch. They suddenly realized and saw that they contribute over $4,000 a month into their retirements. In those contributions, they already have the $750 a month for that stretch. What if they wanted to? They’ve even got $500 more that they could jump price tiers and get out of the tweener zone. How about we diversify your retirement from the four funds that you have into a fifth fund? Reduce your contributions into the four retirement vehicles that you have and diversify into a fifth vehicle, a fifth fund, your home? Magic time.
Put Your Money Into Your Home
You’ve already decided to put your money into not 1, 2, or even 3 funds, you already contributed to four funds. Simply, think of your home as the fifth. It’s safe and it’s solid like your other conservative investments that you already contribute to. How safe is a home? Since World War I, a home will always be worth more in ten years, no matter when you bought it. That does have one exclusion. It’s the crash of 2008 to 2011, but that’s not happening again. There’s no bubble, but that’s a whole another episode. In general, what that means is, any year that you bought a home from 1920 to 2020, your home appreciated an average of 3% to 5% through the up in the down markets. Ten years later from that date that you bought it, you made a profit. It’s one of the most stable investments available. The difference is you can use this asset. These are not numbers on a piece of paper that you have to stick away and not be able to touch until you’re 62 or 65. You live in it. Try that with your gold bars, Bitcoin, or GameStop stock. As I’ve said a million times, you already pay a huge payment every month for your housing. Your rent is $1,000, $2000, $3,000. Your rent can be transferred into this incredible savings vehicle.
Let’s break this down and figure out how this works for them. You can reduce the numbers for yourself, not on the price point, but maybe on your contributions. Maybe you’re not a savvy-mix-psycho saver like these two guys, $4,000 a month. For them, I said, “Simply reduce and diversify your monthly contribution, which right now is over $4,000.” Hubby, number one, he pays $1,700 a month matched by the employer. That’s cool. Let’s keep that. The matching is good. Fund number two is $1,200 from the wifey, no match, but a good contribution. Fund number three, $500 into another account. Fund number four, $800 into those two Roth IRAs to get that $10,000 tax break. Their stretch is $750 to get this tweener condo townhome, entry-level home.
They said that they could budget hard and make that stretch, but I told them, “You guys don’t have to do that. You could keep contributing $1,700 a month to fund number one. That’s the matched 401(k). Keep funding that. Keep getting the full match. You could keep fund number four, the $800 into the Roth IRAs. Keep that going, too, because then you’ll still get the full tax benefit at the end of the year. All you have to do is reduce fund number two, that’s the non-matched 401(k) for wifey. Reduce that from $1200 to $700, and then reduce fund number three from $500 to $250. There’s your $750. There’s your stretch. You won’t feel any change in your monthly budget. No stretch. All you will have done is simply diversified from four retirement funds to five, five being your home. You guys said that you look at that as an investment. Not only that, it’s the investment that you get to live in.”
I started to see their eyes twinkle a little bit. It was exciting, and then we got to the real exciting part. “Bummed out at $750? You’re maxed out on your loan approval at $850, so what happens if we talk about going up a price point? All the cost is $500 with the low-interest rates now. This is not a reduction into your retirement to get that extra money. It’s diversification. You’re still going to be putting $4,232 a month into your retirement savings. Now, you’re going to be putting $2,982 into the original four funds. You’re going to take $1,250, and you’re going to put that into the fifth fund, the long-term investment of your home that you get to live in. Wait a minute. We’re not even done with the magic.” They figured out that they can diversify and not even feel that stretch they were so worried about it. How about this?
The original $2,750 rental that they paid every month, the wasted rent money that goes flying out the window, that’s going to be going into retirement investment number five. We haven’t even put that into these calculations. That goes into the home by diversifying from four retirement funds to five and then realizing that their rent becomes a part of number five. They’re upping their retirement contribution by 64% a month. I know this has been a lot of math, but even I can figure out right now, that’s more than doubling their long-term savings for their family by stopping, throwing that rent out the window with no financial advantage. When we did all the math and we figured out this “reduction” which was diversification, they moved up a price tier to get the home that they want but still keeping five well-funded, diversified, safe, and stable retirement funds.
That is so exciting. I am such a nerd, but this is so freaking off the charts amazing to me. They put themselves in a great situation, and they had a great opportunity to do something amazing in their future. I know this is not sexy, instant gratification stuff. This is not going to be something that I post on TikTok or Instagram and get anybody to follow me. Trust me, these buyers and their kids, they’re going to be ballers in twenty years. I know it’s not the hot, cool, sexy thing, but talk about setting yourself up for life. In the world now, this information is not going to get the likes, shares, retweets, but it should.
Stop Focusing On The Price
What about you? What if you can stretch like these guys? What if you can stretch above your rent payment? You stretch because you can budget a little tighter. You think that this is not your home, but it’s going to be an investment. Whether it’s a forever home or starter home that you’re going to build with, the home’s equities are eventually going to be a big part of your nest egg. Even if you roll it into a few other homes along the way, at some point, this equity and profit are going to be your estate and could be a potential inheritance for kids, family, or dogs. It’s something that you’re going to use later on in life.
This is the crazy part. The way that these guys pay things off and the way that they’re thinking about staying in this one home forever, this $750,000 investment in 30 years, they pay it off with an average appreciation of 4% a year. It’s going to be paid off, free and clear, and worth $2.4 million. That’s what I call a good investment. The stretch difference that you’re willing to pay for something else, something like this, something that can be considered an investment, makes sense. Even before you understand all the math, you’re thinking, “I’ll tighten my belts and pay a little extra money a month because I believe in the long-term value of this asset, which I get to live in into use. Unlike your retirement accounts, which are great to have and smart to set up, but they sit there and grow, and you can’t touch or use them without some kind of penalty.”
I told them all this. I slowly watched the wheels turning in their heads, and then they said, “You’re right, David. We’ve been so focusing on the price. We capped there because we are conservative, sensible, and responsible people. We didn’t want to stretch beyond our means. When we looked at the numbers, we were thinking, ‘We can maybe handle $750 stretching every month, but no more.’ Even if that means that we have to stay in a price point that doesn’t quite meet everything that we’re looking for.” Looking around, they saw the difference between the two price points. I said to them, “Guys,” and then I got mad at myself for calling them guys. I hate that’s how I refer to two or more people. I’m working on getting rid of that. Sorry.
Regardless, I said, “This is a 30-year investment.” Even if you guys stay there for twenty years, you’re already paying $4,232 a month to your retirement in four different funds. If you drop that huge payment, $1,250 a month, you can jump up a tier level into the home that fits all your criteria. You can purchase it comfortably. It won’t even feel like a stretch. It’s a fifth retirement fund. Plus, that wasted $2,750 rent that you pay every month, it now goes into that fifth retirement fund. You’re giving it to yourself, your kids, your future. You’re not giving it to your landlord and his new mistress. You have so much room to work with. Let’s think about that. Let’s stop focusing on the price.
First, you look at the difference in the payment of your rent versus your mortgage. That’s what we talked about. Walk around your apartment, see how much you pay for that, and then figure out how much of the difference would be between your rent and mortgage payment for a house. Focus on that. Second, if you’ve got some retirement that you’re doing every month, that’s where the magic time happens. Look at diversifying your monthly retirement contributions by reducing some to pay the difference, so you don’t feel that and you avoid the stretch. Keep in mind that you’re simply going to be adding that “contribution reduction.” It’s not a reduction. You’re adding it into another retirement fund. On top of all that, the magic times two, you’re adding the wasted monthly payment of your rent right into your retirement fund.
Rate, review, subscribe to the show. Someone out there needs this information. Some of you out there want to blow your brains out because you had to read all this information. Eventually, it’ll sink in, and hopefully, it’ll help some folks. Reviewing that helps us. Please do that. Five-star review. Drop a sentence or two on Apple reviews if you’re getting anything out of my late-night ramblings or early morning, depending on however you want to look at it. If you want to find me, it’s DavidSidoni.com. That’s got the show, the YouTube page with a bunch of videos on first-time home buying. That’s not all the crazy deep stuff like this. There’s a whole lot for you folks in the beginning phases. It goes all the way through into complex topics like this.
I’m on Instagram. If you’ve got a specific question, I do try to get to answer all my DMs. Look for @DavidSidoni on Instagram, especially if you guys need a unicorn in your area. Coronation is growing strong. Buyers like you all over the country are getting the help that first-time buyers finally deserve. We’re building and growing. Even though there are still a bunch in the real estate industry that thinks that you’re a pain in the butt and you’re not worth a real expert, not me, not a unicorn nation, I believe in you. I believe in you enough to stay up late and pump your ears full of all these crazy numbers that probably make you want to reach through your headphones and punch me in the face. That’s cool. I’m fine. Remember, I’m here to tell you one more thing. You can do this.
This podcast was started for YOU, to demystify things for first time home buyers, and help crush the confusion. After helping first timers for over 13 years, I knew there wasn’t t a lot of clear, tangible, useable information out there on the internet, so I started this podcast. Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out. And if you’re not already a regular listener, subscribe and get constant updates on the market. If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts, or write a review on Spotify. Let’s change the way the real estate industry treats you first time buyers, one buyer at a time, starting with you – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused. Viva la Unicorn Revolution!