Podcast

Ep. 37 – How One Listener Used The Podcast To Buy His First AND Second Home In 2020

HBH 37 | First Home Purchase

It’s totally understandable for you to think like, “Who is this guy who keeps telling me what to do when buying my first house?” David Sidoni gets it; you need to hear about it from someone like you who has been there and done it. Well, aren’t you lucky for tuning in? Hear firsthand how listener Kyle bought not only his first home with the help of the podcast, but his second home in a matter of a few months. His story will educate and inspire you to help you on your journey to buying your first home.

How One Listener Used The Podcast To Buy His First AND Second Home In 2020

Interview With Kyle, A Listener Who Hacked His Way To Buying His First AND Second Home

Are you ready for a great story? Kyle used the show to buy not just his first home in 2020, but he also closed on his second home on the very last day of 2020. He plans to buy more stuff in 2021. He’s doing it with low down payments. You’ve got to check this out.

I’m a realtor with eXp Realty here in Southern California and loyal readers know that in early 2019, after thirteen years in the real estate business, I had enough with first-timers being treated like garbage. I ended up changing my entire business and started the show. If you’re new to the show, subscribe. You can keep getting more information and it’s free. Go ahead and feel free to read this amazing story. Hopefully, that will inspire you. You’ll go back and read more information on the show. You can also go to our trailer episode. That’s the top of the bottom of the feed wherever you find your podcast. What that does is that episode gives you a guide. It tells you the basics of how the show answers the questions about this often confusing and gigantic life step. If you’re one of those people out there, whether you’re a frequent flyer who read all the time or it’s your first time, and you want inspiration, I’ve got some serious juice for you. This guy’s story is insane. He tuned in to the show, got the facts and the hacks, and he bought not one but two homes. Let’s get right to his story.

This is my favorite type of show, my success stories. Kyle did it all. Kyle, say hi to the world.

Hi, everybody.

This is exciting. It’s the 2nd of January 2021. You close on your property on December 30th or 31st of 2020. You snuck it in for tax time. Kyle, tell us a little bit about your story. What led you to wanting to purchase a home?

I’ve known for a little bit that I’ve needed to purchase a home. I had friends who were already homeowners and they told me, “You’re wasting a lot of money in renting. You’re throwing it away. It’s not going anywhere. It’s not landing in a home and equity. It is, but it’s someone else’s home, not your own.” That stuck in my head over the course of time. This was in 2020. I realized I got to set a deadline for myself. I re-up the lease for about 4 or 5 months and then I said, “At the end of that time, I need to have purchased a home.” That gave me a time period in which to start the hunt and start the process of learning.

You don’t need to know everything to buy your first home. You just need to know people who do know what they’re doing. Click To Tweet

I was starting from ground zero. The whole idea of owning a home seemed mysterious and scary. That’s why I reached out to your show first and it was called How To Buy A Home. I was like, “That’s perfect because I don’t know how, and I want to know how.” I started tuning in to your show and get an idea of how to go about the process from the instruction that you had on there. I was doing online research as well and decided that I should reach out to you because I needed to know where to start. I needed a realtor or a lender. I needed a starting spot. I sent you an email saying, “Do you know anyone in the Tucson, Arizona area? I’m looking for a realtor and a lender to start building my team as you recommended on your show.”

You connected me with a lender in the Phoenix area. He’s a real sharp guy. His name is Bryan Arvizu of NextGen Financial Services. He was able to get me connected with a realtor in Tucson. You connect me with the lender. He connected me with a realtor after having done a few interviews with different realtors in the Tucson area. That got me started there. I ended up getting deployed very soon after. I was deployed when I closed on the house. I’m on active duty in the military. My realtor was such a great realtor that she was able to help me close on the property despite being deployed at the time. I’m thankful to you in connecting me with a rock star lender. I’m thankful to my lender who got me connected with a rock star realtor. That’s been the beginning. I was able to close on that property. Now I closed on my second property. First, it was a duplex and now this is a three-unit place. I’m extremely excited.

There was so much awesome information in your little story. You bought two places. That’s incredible. First of all, you’re welcome. I’m happy and I’m glad. I didn’t do a lot. Once I talked to you and I think everyone out there needs to understand this, understanding your own place is important. You’re a savvy guy. You set a goal, four months, and not only are you doing one, but you’re closing on two. Different people have different needs and you can’t figure that out on the internet. That was a great thing. Once I started talking to you, I realized, you need to talk about the numbers and crunch all that stuff. Talk to us about this exciting thing that you and your lender went through. Your realtor is going to help you find and I understand that Victoria was helpful in finding you specific properties because of her insider information. Let’s go back to the beginning when you were trying to figure out what type of home because you’ve done my favorite house hack. You are buying multiple home properties. Talk about how that process went between you and your lender advisor.

When you are connected with a solid lender and a solid realtor, they asked you, “What do you need? What are you looking for?” It’s not, “We’ll find you your dream home.” I wasn’t looking for my dream home. I was looking for a home that was going to make sense financially for me, a home that once I moved in there, it would cut my costs. In Tucson, Arizona, you could pay in rent anywhere from $800 to $1,500 a month, depending on what part of town you live in. My goal was to get into a property where I was essentially living for free because I was renting out the other units to other people who would then cover the mortgage, and therefore helped me to live farther below my means. That was my objective.

I was able to voice that to both Bryan and then later to Victoria here in Tucson. They both said, “No problem.” Victoria got on the search and was looking only for multifamily properties. She wasn’t sending me single-family properties, which I appreciated because multifamily is what I wanted. I know that some realtors will send you stuff that they think that you’re going to like, but she sent me stuff that I did like, ones that did financially make sense for me. What was cool was when I was able to purchase that duplex, I was living for almost free. Because of that, I had a lot of buffer room between my salary and income. My expense is that I eliminated the biggest expense that most people have, which is their household.

I’m sure people out there are thinking. If you’re new and you’re punching how to buy a home and you want me to explain what an escrow or closing is, this is a little bit further along than that. If you’re further along, you might be thinking, “That sounds great, but how the heck can you pull this off if you’re having to get a down payment for the property as well?” Talk to us a little bit about how much you had to put down and what systems you worked for that?

That was one of the things that scared me first when thinking about buying a home. I don’t know how down payments work. I don’t know what programs there are. Am I going to have to put 20% down? If you’re in that same spot, which I was, realize that you’re afraid of what you don’t know. What is out there is there are a lot of options, but not knowing those options is what’s scary about it. When I started doing research, I started asking my lender and realtor. I looked online at down payments in different government-backed primary residence loans like the VA loan for military that applied to me, or the FHA loan. It’s very similar but for non-military or military, if you choose to use that one instead.

To clarify, VA is zero down or you can do 50% down. You can do whatever you want. FHA is only 3.5% down. That’s what those programs are.

HBH 37 | First Home Purchase
First Home Purchase: You’re afraid of what you don’t know. You have to do your research to see what options are there for you.

That’s what’s required. In my first one, I bought the duplex using the VA loan. The VA loan is the Veterans Administration loan. It’s 0% down required. What you do is communicate to the lender that you’re going to use this as your primary residence. Being that it is your primary residence, that gives you skin in the game. You’re not going to want to default on your mortgage because you’re living there. You’ll be homeless at that point. It will negatively affect your credit score. Essentially, a way of looking at it is that the VA comes and they almost co-sign with you on that loan. They have this promise that they will come in to the lender’s aid, to the bank’s aid in the case of you forfeiting, or not being able to make the payments on the loan itself. That’s why they only require 0% down or in the case of the FHA loan, it’s 3.5% down. You do have to meet the requirement of living there as your primary residence.

That’s one of the great hacks about this multifamily stuff because if you’re living in one of the residences and you’ve got 2, 3 or 4 units, you can utilize these different loan programs, as opposed to if you’re buying it as an investor, you’re going to be looking at a much larger down payment.

If you do use it as your primary residence, you have to fulfill the requirement of living there for a specific amount of time. In theory, you could live there for a certain amount of time, and then in extenuating circumstances, you have to move or whatever the case is, you can then rent out that property. It’s not like the moment that you move from that property you have to somehow sell it or give it back to the bank or something like that. The key is the intent to live there as your primary residence. It’s an amazing opportunity because, for me, I was able to buy a duplex and essentially live for free in that duplex, but I used 0% down to do so.

That’s the equation that’s incredible. You were paying rent already. Without putting anything down, you continued paying what was essentially a rent payment, except now you own the place and you’re gaining equity. That is the great thing about the VA program. For anyone out there who is military, Kyle is correct in all the things. I’ve talked about this in the show before. One of the neat things is that if it is your primary residence but something happens to you, guess who understands more than anything about if someone gets deployed? That would be your VA loan and your VA lender people, they get it. They want to try to help you to keep that property. I want to go back to you didn’t know anything. You seem like a very put-together guy. When you and I have had our communication, it’s been very obvious to me that you know what you’re talking about. You’re a goal guy. You have a goal and you go get it. What were some of the fears that you overcame relatively quickly when you started doing your research?

One of the things that I overcame right away is the fact that it was okay that I didn’t know what I was doing and that I didn’t need to. I needed to know people that did know what they were doing. I didn’t need to be able to give you a dictionary definition of escrow or of down payment or any of these big terms that are in a space that I’ve never been involved in before. I know the military and my job with the military. At that point, I don’t know anything about real estate investing or home buying. How would I? What exposure did I have to that world? I didn’t have any exposure. It’s all right if I don’t know all those things. I just need to be able to leverage the right people and to have the right people in my life who do know the answers to those questions, and then I’ll reach out to them early and often.

I don’t exactly know the first 1, 2, 3 steps of buying a home, but I have a strong realtor I trust that does know those 1st, 2nd, and 3rd step. They’re going to instruct and walk me through the process. Even though the road might seem long or scary, in some ways of looking at it, you don’t need to see the whole road. You just need someone there with you who is familiar with that area and can walk you through the process. It seemed like I would get an email from my realtor and she would say, “You need to fill out this documentation.” I get an email from my lender, “I need this specific information back from you.” All I did was follow the process.

When I got to the end of it, I was like, “Did I just buy a house?” It was a series of responding to emails and going through the process. Hundreds of thousands of people follow this process all the time. It’s not as scary as it looks. That was one of the biggest things that I overcame right away. I can take the pressure off myself. I don’t need to have every piece of information. I need to know where to be able to get the information and who to get it from.

I’ve said it before, I probably called this How to Plan to Buy a Home, but then I think How To Buy a Home, more people end up finding us and that’s great. Kyle hit the nail on the head. You’re not a doctor. If you’re one of those people that goes to WebMD, self-diagnose yourself, goes to the doctor, and tells them what’s wrong with you and what they should do to you, click off now and get another show. Not because you’re bad and I’m good, but because we don’t see eye to eye. The whole point of this is you hire professionals in your life, accountants, doctors, construction people.

Your first deal doesn’t have to be your best deal. Just go and do it! Click To Tweet

Trust me, I can already tell with Kyle and his vibe if you want someone to help you out of a ditch, call him, not me. That’s his thing. This is the guy who can tinker around the house and do stuff. I call people to do that. That’s okay. You said that eloquently, unlike me who started going all over the place now. You hit the nail on the head. This show can help you get the planning together and answer some of those initial questions. The biggest step isn’t don’t spend all your time on the internet, trying to figure out exactly what an appraisal is, what an inspector does, and how the lender looks at your underwriting.

Spend your time learning the process, interview and work with great pros, and let them do it. Hire the best surgeon, don’t cut yourself open. Hire the best lawyer. It’s that saying about someone who represents himself in court have a fool for a client. That is incredible. One of the things that was interesting when I was talking to Victoria and Bryan about you is you’ve got big goals. People don’t understand that you can use your personal residence as the beginning building block to having real estate be a part of your financial future. Is that your plan?

Absolutely. You can do that with a multifamily residence like I’m doing, or if that’s not your cup of tea, I helped my sister learn and buy her first property. She got herself into a single-family house. It’s a three-bedroom, two-bath house. She’s renting out one of the rooms to a long-term tenant, and then another one to an Airbnb. She’s setting up an Airbnb with their bedrooms and with the goal to do what I did, which was lower my cost of living so I could live farther below my means, and do it in several different ways as well.

I saw this thing on Shark Tank and I’m going to throw this out there to everybody. I watched it late at night. It was an old one. I don’t know what happened to the company, but there was a company that does specifically vacation stuff around football stadiums, eight times a year for college games. It’s a genius idea. If you live right next to Penn State, Ohio State, or Notre Dame, the eight home games a year, if you’re not going, get out of town, rent your house for quadruple what it’s worth and all those graduates and alumni travel. Wherever you are out there, think about what do you have that you might Airbnb in your town?

Is that an efficient town? Is there a festival once a year? Is it a hiking town, a motorcycle town? Find out when those times are and see how you can utilize that to supplement your income. We’re getting heavy into the investing stuff and that’s exciting. There are a lot of people out there that a lot of this stuff might be like, “I just want a house and live with me and my family.” In the process of buying a home in general, are there any warnings or anything that popped up to you that went, “I didn’t know about this?” If there wasn’t anything because you had a great team, that’s cool too, but I’ll just ask.

The first thing that I did wrong that I knew right away was a mistake was that I reached out to a lender online and I put in my email in requesting information. I’m one of those like, “If you would like to apply for a mortgage, give us your email. We will reach out to you.” The day I did that, I received maybe five different phone calls from various mortgage companies and lenders out there. They all introduced themselves as, “Hi Kyle, I’m your new lender, fill in the blank.” I’m like, “I don’t think so. On the one show that I tune into, it said that I should probably interview multiple lenders to find a good one that shares my same vision and goals. It’s going to educate me through the process. I don’t think you’re my lender.”

I was like, “I messed up here. I need to reach out to the guy in that show. Maybe he can connect me with someone he can vouch for.” That was when I reached out to you. I had already tried to make some steps on my own by putting my name out there. The moment it was out there online, I got bombarded. That was the first mistake. I don’t think I made any other crazy mistakes. I walked into the duplex. I could have looked at more homes, but I saw that when I said, “The numbers work in the part of the town I’m looking for. I’m going to make an offer on it.” I made a full price offer right then and there because the numbers seem to work.

I didn’t have a reason to try to negotiate lower. I didn’t have a reason to try to find a cheaper property because if the numbers work, then what’s the issue. I could have maybe gotten into an even sweeter deal, but I don’t have any regrets about that because the important thing for me on my first property was to do it, to pull the trigger, to get my first property, and to learn as much as I could from it. Whether that’s going to be the best screaming deal I’ll ever get in my life, probably not. At the same time, it opens up the doors for me to buy more properties at better rates now that I have more information. It doesn’t have to be the best deal out there. It needs to be your first deal.

HBH 37 | First Home Purchase
First Home Purchase: One of the most important things in purchasing your first property is to pull the trigger and learn as much as you could from it.

Our first closing with someone who was buying, it was their house. They were doing like your sister and they were house hacking. They were roommates, but it was still their house. Your takeaway is that investor takeaway. I know because you had a good team behind you. You didn’t overpay incredibly and you didn’t get maybe a screaming deal. Guess what happened? You got a fair deal. It’s a win-win. For what you were trying to do, you set the foundation and build the blocks. What Jacqueline and Christopher say, our very first sale from back in 2019, they said, “The house wasn’t turnkey, but we got a better deal and that’s what we needed to do.” It’s figuring that out that, “What is this?” If this is your forever home and you’re moving into the school district, you’re pregnant, and you’re going to be there for eighteen years, it’s a different story. You can’t change the location, but you can always change the house. You can’t change the size of a lot, but you can always change your landscaping. There are lots of different ways to look at it.

I want to jump back to the first thing that you said because I’m going to pull that out and make 50,000 commercials out of it about going to the online lender. There are many reasons why I can suck. One, it’s a pain in the butt. They contact you a million times. As you said, “I don’t think you’re my lender.” This is the biggest thing that is helpful for me. In your story, I want to make sure everyone out there understands, when you go online and you contact one of the national lending people or somebody online to try to get some information, which good for you, you should. When you do that, you are a number to them. When you found someone in Arizona, not even specifically in the city where you are but someone there, you become a relationship.

Your lender’s business doesn’t grow unless he takes care of you in a great way. His business doesn’t grow unless he’s savvy enough to understand your full and complete goals. There’s a long-term gain there. When you go on the internet and you are trying to find information, that’s great, find information. When you go on the internet and someone wants to immediately grab you in, understand that this is the way that they get clients. They get clients by going to the top of Google. That doesn’t work. That’s why I started this little grassroots show so we could find people all over the place. I get to have these incredible conversations with someone like Kyle who is not just talking to us about how to buy a home, but how to build a financial life. That’s exciting. What’s the next big step for you? You bought two houses in 2020, top that.

I’m working with a friend of mine named Bobby, a fellow investor a few years farther down the road than I am. He and I are going to enter into a partnership together. We’re looking at purchasing a 20 to 25 door apartment complex here in Tucson within 2021. We are doing our research on that, and I’m extremely excited. Buying these two homes within the year has given me the confidence to say, “The answers are out there. I can do whatever I set my mind to in this space. I need to have the people and the information available to myself.” I’m going to take that same mindset that your show has been able to learn and develop. I’m going to take that into a 25-unit apartment complex here in Tucson or in another city after we’ve thoroughly searched Tucson. They might want to adjust from there, but that’s the game plan now.

He and I are excited about it. We’re doing our research and reaching out to other sharp individuals who are farther down the road from us that we’ve been able to find through different avenues of networking and different forums, such as BiggerPockets Forum, which is a great real estate investing forum and other avenues like that. We’re finding people who are able to tutor us and bring us up to their speed. We’re excited about that and I’m excited to jump into it. It scares me. The idea of owning something that expensive with that many people is scary, so was the 3 or 2-unit. At the end of the day, if that’s the goal, then the fear doesn’t matter. It’s pushing through that fear and finding the solutions that you need to be able to get yourself to that place. That’s what’s next for me. Hopefully, within the year, I’ll be there. I’m excited to see how it turns out, and then I’ll know from there.

Get yourself a good management company. You’ll be able to handle it. I thought of a great business plan for you. When you do own a building and you have multiple people in the building, when people leave, you have a turnover and that becomes a bit of a cost problem. When they leave is when you can raise the rent. What you do is you get 25 people in a place and their first month in, you go and you introduce them to my show. In eleven months, they’ll figure out to buy a house, and then you get 25 more people in for $200 more a unit.

There are a thousand ways we can cut it.

This has been inspirational. We get people at many different levels that come to find us on the show. What is a huge takeaway here is even if you are someone who has big dreams and big goals in mind and doing like Kyle is and has pushed himself ahead, you still need to go back and start at the beginning, listen a little bit, have an open mind. You’re the guy that I could easily see saying, “I’ve got this. I understand it.” By building the team around you, you use the number one word that all successful people use, which is leverage. It’s using other people and that’s incredible. I’m excited. Thanks for taking the time to chat with everybody. That’s super awesome. We look forward to hearing about your successes in 2021. Thanks, Kyle.

Push through your fears and find the solutions that you need to be able to purchase your first home. Click To Tweet

Thank you so much.

That story is ridonculous. Kyle is savage. The dude is on his game and I hope that you weren’t overwhelmed as you read his words. He’s a smart guy. We all know that. One of the things that is cool is he is smart enough to know how to lean into his pro team. Do not try to do this all on your own. I know that you’ve got everything at your fingertips and think that you can. The reason I started the show and the mission here is I don’t even think that it’s a good idea for first-time homebuyers to plan to do this on their own. I don’t think you should plan 1 or 2 or 3 years out by yourself. You don’t have to. You are not a realtor. You are not a lender.

The tips that you get here can help you hire the best, and then they can help you from the beginning planning stages, all the way into writing offers, into getting the keys, and they’ll make this process easy. Kyle said that once his team was in place, he was signing documents, figuring things out, and suddenly it was, “You own a home.” That’s amazing. Let’s say you’re getting close to buying a house now and you’re reading Kyle’s story going, “It doesn’t feel that easy for me.” If you know more than your team because there are a lot of lame lenders and realtors out there, then fire them and start over. This could cost you thousands. If you have no clue, you’re starting and wondering, “How do I start?” Let the story inspire you.

First, there’s a vision, then a team, then a plan. He had a clear vision. He researched it, found the show, and then we helped him find his trusted team. He used the facts in the hacks and bought his first home, a great home hack, a multifamily home, where he was paying almost nothing for it because he was getting the rent from the other people. When that worked out, he bought another. One of the biggest takeaways of this whole thing is to remember what he said, “Don’t let friends start online and fill out a form with an online lender.” Please don’t do that. Start with a unicorn realtor and then get a lender, then you have your team. If you avoid these mistakes, you’re going to be a success story too.

If you need a unicorn agent in your area and you want to start your plan like Kyle, and it’s been crazy, you’ve all been hitting me up during Thanksgiving and Christmas break. It’s 62 people that we’ve hooked up with unicorns all across the country and they’re all starting their plan. If you are one of those people who hasn’t reached out yet, and you have questions, go ahead, we’ll hook you up. If you have any specific question like, “This is confusing.” This show is out there to take the confusion away. If you have specific stuff, ask me those too. Hit me up on Instagram, @DavidSidoni or you can join the @HowToBuyAHome Facebook group. Check out David Sidoni on YouTube. The simple way is to contact me directly through my website. I made it easy, all the same place, DavidSidoni.com.

You can explore the website. Kyle wanted me to tell you guys that he’s serious about this. If you have questions or you want to reach out and go to hear your story, that’s awesome. He’s on Instagram too. It’s @HighAltitudeREI. Thanks, guys. Feel free to subscribe to this show, share it with your friends, and maybe with a few tips, hacks and stories, you’ll find out what you need to know so you can become a success story like Kyle or don’t, and maybe then you can be a renter in one of his apartments that he owns. It’s your call. You’re here. You’ve got this. You can do this.

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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!

 

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I hope you are getting your questions answered about this crazy process. I know there’s not a lot of clear information out there on the internet, so that’s why I started this podcast. To demystify the whole thing and get you first timers the help you deserve!  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, please subscribe.  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. Let’s change the way the real estate industry treats you first time buyers one buyer at a time – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused.  Viva la Unicorn Revolution!

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