Real Estate Explained

Navigating Interest Rates, Market Trends, and Smart Real Estate Investments with Ian Ford

• Nick Bush • Season 3 • Episode 68

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In this episode of Real Estate Explained, host Nick Bush sits down with Ian Ford from Capital Bank to unpack the impact of interest rates on the real estate market over the past few years. Ian provides expert insight into how rising and falling rates have shaped buyer behavior, affordability, and overall market trends. He also shares valuable advice on what buyers should be considering in today’s housing market—whether it’s the right time to buy, how to strategize around rates, and what financing options can help buyers maximize their purchasing power.

Beyond lending, Ian gives us a behind-the-scenes look at his own real estate investment portfolio, offering key lessons and strategies that have helped him build long-term wealth. Whether you're an active buyer, a homeowner evaluating refinancing options, or an investor looking for smart ways to grow your portfolio, this episode is packed with data-driven insights and actionable takeaways to help you navigate the current real estate landscape.

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Speaker 1:

Do you listen to Joe Rogan?

Speaker 2:

Yeah, I don't know if I've seen a full podcast, but I've seen plenty of pieces of podcasts.

Speaker 1:

You're missing out, bro. If you're not listening to Joe Rogan, you don't really have a pulse on what's going on in the world Nice. That's where all the information lies. That's when I knew Trump would win. When he went on Rogan and Kamala didn't, I was like it's over, bro, it's, that was a big deal. Yeah, rogan's the guy. 100 million. I'm like halfway through the Zuckerberg interview right now.

Speaker 2:

I didn't like him before, but he's cool.

Speaker 1:

Yeah, he's pretty cool, yeah, Rogan. Yeah, Trump had I think he had 30 million in a week and then now it's up like over 100 million.

Speaker 1:

Is that Rogan's the most influential person on like, like in media. He's the most influential person in choose domestically on YouTube, like I just like on YouTube. I'm not sure it was domestic, so no one knows like what countries these are coming from. Bronson looking up he'll let us know. All right, but this is like what you number three on the podcast. You've been back. No way more, way more five. Wow, well, thanks bro, thanks for coming back.

Speaker 1:

Let's tell the people who you are, introduce yourself for the. For the people that didn't hear, this is the re-release, so you know who. Who are you?

Speaker 2:

Ian Bank loan officer and love being a loan officer, helping people buy homes, helping people finance homes, get to the right option for them and help them make the most educated decision.

Speaker 1:

You've been in the game. What like 10 years.

Speaker 2:

I am going to be wrapping up year number 12. Wow, this spring.

Speaker 1:

A thousand plus loans right.

Speaker 2:

I don't know if it's quite a thousand, but we're getting there.

Speaker 1:

You've done a few hundred va loans though, right, several, yeah, no, I mean we're. If I'm not at a thousand, I'm like really close. Of va, no, of just total. Yes, let's just start saying a thousand.

Speaker 2:

You know thousand loans over a thousand. Yeah, I've done over a thousand yeah, we got a market.

Speaker 1:

You got to market yourself. You know, saying like I'm near a thousand is not as cool as saying like I'm a thousand.

Speaker 1:

I'm sorry, I'm just uh, trying to be genuine and mcdonald's doesn't say about about anything, but they kind of do say about anything. You know well, welcome back man. Thank you, bro. You know, I uh obviously like we always need lenders to come on here and give commentary, and and I think, because people are like the most upset with the interest rates right now, I think that's the biggest thing in the country, but, um, what do you? So? So let's just dive into that. Like what's happening with with rates, you know, like nowadays, because I know it keeps fluctuating. Towards the end of the year we got optimistic about rate cuts. It happened. And then I feel like jerome powell was like just kidding, you know, and I think he does. It's like almost like he. He just like the last thing I heard about jerome powell, the last thing I read about jerome powell, he was like yeah, I just don't't think that Americans need like race to be cut. And I'm just like, does he have his? Does he have his pulse on America? You know?

Speaker 2:

So what do you? What do you think about it? Yeah, I mean, that's, that's one of the complaints throughout the industry and I think probably other areas as well as that. These, these fed members speak and I mean it's, it's just like they're super ivory tower, completely disconnected. But it's just like they're super ivory tower, completely disconnected. But yeah, I mean, they've basically like real estate's been dead for two years, you know, and nothing's been happening. And it's because rates have been strangled, you know.

Speaker 1:

So yeah, when you say real estate's been dead.

Speaker 2:

like what do you mean Dead? But like how many transactions? Question for you how many transactions are we at this past year versus two, three years ago?

Speaker 1:

I don't know the exact number, but we're down. I think it was around like Down. Bad right? Yeah, maybe like a few thousand, and I don't want to say dead but I was looking at.

Speaker 2:

The mortgage industry has 50% fewer loan officers than three years ago.

Speaker 1:

See, yeah, but I look at stats like that as just the cream is rising to the top right, Because in the yeah, everyone who was a tourist and like got in because their buddy was like hey.

Speaker 1:

The real estate industry is the same. I think there's 1.6 million agents in the country and the average agent last year did two deals. So you know the agent. So there's a bunch of people licensed and part of like, I guess, like the National Association of Realtors, but they're not doing any deals. And I think that we saw the spike in agents I think it was up around 2 million during COVID, which was, I think it was up around 2 million during COVID, which was interesting because I felt like it was harder to be an agent during COVID but everyone else felt like it was an easy time to get in.

Speaker 1:

But I didn't know that loan officers kind of follow that same trend of in out, in, out. You know when times get tough. I know a loan officer that was. I thought he was crushing and he had, like, this big TikTok following. He was dancing in all his videos, right, and I thought he was dancing in all his videos, right and I thought he was crushing, he was, he got licensed in like almost like 30 states and uh, he's, he's, you know, working for one of the big five. Now, you know, and maybe, so I don't know I was like, did that? Did that correlate to business, but even people that I thought were really good at yeah, I mean, I wouldn't be surprised and it's not like you know.

Speaker 2:

I feel like a loan officer has has a good set of skills that could transfer pretty well to something else as well.

Speaker 1:

Okay, so what do you think is going to happen with the rates, Like that's what everyone's like. When are we going to be at 5%? And I know you don't have a magic ball, so let's give a disclaimer that Ian cannot control the rates, right, but what's the nuance of everything that people need to understand?

Speaker 2:

It's hard to say. I mean, we've got this new administration coming in, new policies. You know we were talking about. You were talking about Jerome Powell and you know basically what happened is that you know the Fed cut rates twice within the past three months and each time the Fed cut rates, rates went up. So that's sort of what makes it so hard for anyone to say is because it's not, it's not like the Fed makes a decision and then things you know it's not like anyone has control over this.

Speaker 1:

Right.

Speaker 2:

It's a massive marketplace of billions and billions and billions of dollars moving around between different different investment marketplaces, right? So it's hard to say we think rates are going to go down, like Freddie Mac's latest projection had him closer to 5 percent towards the end of the year. That would be great, but two difficult Rates have been in a range between around six and a quarter to seven and a quarter for the last two years, right? So while we're still in that range, what I'll say is you know, anyone who's got the rate sort of at the top of that range, be ready, like, let's say, your rate's seven and a quarter. You know, have your eyes on refinancing when it's at six and a quarter until we get out of this range, right?

Speaker 1:

Okay, Explain. So I think when people hear Jerome Powell or the Fed cut rates, they think that that means they cut the interest rates right. So explain the difference. Like the Fed, cut rates doesn't necessarily mean that the interest rates went down right.

Speaker 2:

Yeah, so it's not like some direct correlation to mortgage rates, right?

Speaker 2:

Essentially, what they're trying to do is having a target for the rate at which banks can borrow from each other, and the mortgage bonds are still a marketplace that, just like any other marketplace, there's people trying to make money and trying to make strategic decisions about when they should be in that market and when not to be.

Speaker 2:

So people investing in mortgage bonds is good for interest rates and people pulling the money out is bad. So one of the things conceivably that could be going on here as rates went up in October Fed says hey, we're cutting rates is that concurrently, it started looking like Trump was going to win and the last time Trump was in office, he was good for the stock market. Well, if the stock market's doing really well, then people are going to be investing in the stock market and pulling their money away. That would conceivably pull money away from mortgage bonds, causing rates to go up. So they're trying to make predictions about what is policy going to look like and what are the markets going to be doing three, six, nine months from now and how do we adjust to that?

Speaker 1:

Yeah, I feel like the the ball keeps moving. What is it? The goalpost keeps moving. It's like interest rates are going to go down at the end of 2024. Then it's like, yeah, by mids, by summer, 2025. Now it's like end of year 2025. Like Americans have just been waiting for this for so long to like make a move.

Speaker 2:

Well, we have had a couple of little blips where, you know, for a short period, very short period, in the fall they got a little bit under six, but they've been in the low sixes a couple of times. Yeah, so it's, how ready are you, how ready are you going to be to be decisive when that happens?

Speaker 1:

Hopefully around like March, April. They were like five to nine, and I'm like Ian, send us the pre-approval, we're ready to go. You mentioned to me before that Trump's tariff talk was impacting the rates negatively also.

Speaker 2:

So can you kind of elaborate on that? Yeah, I mean it seems to be right and that I think that's another factor in Trump looking like he's going to win. Rates start going up because he talks this really tough game about tariffs and you know, who knows what's actually going to happen and what he's actually going to be able to enact, and I mean it seems he's being pretty serious about it and not just talking right. But the idea is that a tariff is basically a tax right. Taxes go up, right, prices go up. Prices going up is inflation right and inflation is why we're in this situation. Right, high inflation leads to high rates. So I think a lot of investors seeing the possibility of Trump winning, seeing him sit there talking about these tariffs, they try to be proactive and get ahead of that by not ending up in a position where they've got a bunch of loans out at a 5% rate and inflation is close to that right. Yeah.

Speaker 1:

It's really tough out here, man, when you're working with buyers and I know you look at the numbers, you're seeing the numbers, you're in charge of kind of putting together the numbers but when you see people that didn't buy I think 2017 was when I first heard the market's going to crash.

Speaker 1:

We're in a bubble and we're almost 10 years from there, and there are still people that are waiting for the market to crash. And really what's happened is home prices have gone up significantly, hundreds of thousands of dollars, and rates have gone up 4%, and the best correction that they're going to get at least what we predict in the short term is the prices aren't going to go down, but you'll get, you know, maybe a 2% break on what the rates are now. And so what are you telling your? And we all kind of tell our buyers the same thing, so I can kind of already guess what you tell your people. But what do you tell your people that are on the fence, like that are like oh, you know, I'm waiting Like what are you? How are you giving them confidence to go out into the market and make something happen?

Speaker 2:

Yeah, I mean, can you find a home that you love at a price that you can afford? You know there's all kinds of sayings like have you ever heard of time in the market beats timing the market?

Speaker 1:

Yeah.

Speaker 2:

Right, just get invested, and real estate especially and most investing. It's a long-term game, right. And you know the people who have really seen a lot of wealth creation through real estate.

Speaker 2:

You know today these are baby boomers who've been holding onto the house for 20 years, right, just from the simple act of making the mortgage payment every month, right, and just waiting, right, they've seen the market go up. I mean, in a lot of cases the houses have doubled, tripled in value over that time span, right, at the same time they paid the mortgage down. So you know, I wouldn't necessarily say that you know you sit there waiting for the perfect time, right, because is there ever a perfect time for stuff? And even if the perfect time comes, are you going to know it's the perfect time, right? If the market starts going down, right, people are going to think, well, is the market going to keep going down, right? When is when is like, let's say, the market makes a V, like that, right, and before going back up, like, how many people are actually going to like say, all right, this is, this is the exact bottom of that V and the perfect time to buy my house and actually buy it at that point?

Speaker 2:

You know, I feel like the chances that you're going to be able to do that.

Speaker 1:

Yeah, I feel like that about Bitcoin because I was never like I thought I think Bitcoin is going to become a currency that we use on a day-to-day basis, especially because, like you know better than anyone, I don't go anywhere like with my wallet nowadays. I'm just like can I Apple Pay? Like I'm family, you know like, and I think Bitcoin will work in the same way, but every day and I have a little bit of Bitcoin, nothing significant that can make me like matter. But I look at the price of Bitcoin and I'm just like and I know it'll fluctuate I'm just like man. It's like 92,000 right now and it was like 30,000 a few months ago. And I'm like man, I should have like just been throwing all my money in there.

Speaker 2:

Because you've got hindsight now. Yeah.

Speaker 1:

Well, yeah, because I, but yeah, because I have hindsight. But also, like I think sometimes people and they choose like they think that you're like being on some fairy tale vibes, Right, so it's like rates are sub three percent today, right, when, when, when rates were sub three percent, for some reason it doesn't signal to people that like, hey, bro, like I should do whatever I got to do to, like, buy a house, because we know that rates are not going to be this low again and then it's going to appreciate.

Speaker 2:

But for some reason people are like, like, you know they're like more upset that rates went to seven and and and not upset that they missed the boat. You know, yeah, but at the same time, back when rates were sub three percent, you had people doing crazy stuff.

Speaker 2:

Yeah right, and they made their money back, though yeah, yeah, well, now we see that right, but uh, I mean, this is all going to say that like, okay, so what would you rather do? You know, you, you have your two and a half percent rate, but you gotta like throw an extra fifty thousand dollars cash at it and waive every contingency that you have yeah, and like, pray that like it's all smooth the, the seller goes with you over 15 other people, you know that is.

Speaker 2:

That is precisely because that's what that was and it's like, okay, back then like you know, I've been saying the same thing for years now it's like, back then it looks like, hey, that two and a half percent, oh man, should have done it because rates went to seven or rates went to eight. Actually, back then we didn't know that rates would go to eight and back then, you know, we didn't know that we'd be wishing for that two and a half percent rate. Right, we were looking at the oh man, extra fifty thousand dollars.

Speaker 2:

So it's, it's like you, you never know when the perfect time, or when it's just going to be like you know the stars align and it's just like yeah, today I should buy my house, just if you can afford it, you know, and, and you need to do it like do it I kind of just stole.

Speaker 1:

we just kind of talked about what you were going to talk about in your real estate take. So we're gonna going to have to think of a new real estate take. You should talk about the cats. You should talk about the mice. Oh my gosh dude, I have PTSD from that. Let's move on. So you mentioned investors a lot and I don't think people know that or at least people listening that you have a pretty solid little real estate investment portfolio. He is a very modest, humble guy, but you have some properties more than the average American. So let's talk about that a little bit. Let's talk about your investment portfolio.

Speaker 2:

right, how many homes do you own Three and a piece of a small hobby farm.

Speaker 1:

You do have the hobby farm, which is really cool. I tell people about that all the time, actually. So you have what and your property. You're in Baltimore, right, and you have what? Two row houses, and then you have the big house three row houses, the, the big house.

Speaker 1:

Oh, here's a row house too right, I call it a city mansion. That's why I'm not referring to it. And so what's the break? So what's the breakdown? So are they like so sorry, so you have the city mansion we'll talk about, but, like you have, I'm not at any point gonna ask you how much cash you're getting, so don't, so don't worry about, but like adam at the two row houses, is it? Are they like three bed, two and a half bath, two bed, like what's the kind of four bed, two bath and three?

Speaker 1:

bed three bath okay, four bed, two bath. Three bed, three bath. Yeah, and then are you renting those two out to like one person each, or do you have?

Speaker 2:

one's like a family. No, those are all just one person on the lease.

Speaker 1:

Okay, one's a guy yeah that I know, and one is a family and are those in like neighborhoods like west balt 60,000 bar cash section 810 there, and so what's yeah?

Speaker 2:

one's in Greektown I would live in Greektown, okay. And one is in in Milton Monford, it's. It's near the Johns Hopkins campus, okay, cool, cool.

Speaker 1:

Yeah. And then you have your city mansion. Yeah, and how many? What is the makeup of that? Like how many bedrooms, bathrooms, seven bed, six bath?

Speaker 2:

Yeah.

Speaker 1:

And then how big is that?

Speaker 2:

I don't know, like five to 6,000 square feet.

Speaker 1:

And you rent that one out by room. Yeah, okay, cool, that's so dope to know. I just like people that are winning, like Bronson pulled up today in the Tesla, and I'm just like it's just like a are winning. So, like you, you own a seven bed, six bath house, like you know, in in in baltimore, which, if baltimore ever comes back, you know you're gonna be sitting on like two million, like if you own the property. Like you know, like we, like if you own a big house in bloomingdale or logan circle now, if you owned in the 90s you probably could have bought it for 30 000 and now it's easily 1.8, you know. So really, yeah that's crazy, yeah because they're all four level.

Speaker 1:

You know six thousand, five thousand, six thousand square foot houses.

Speaker 2:

So I mean I was saying just like the thirty thousand dollar number, I mean maybe maybe seventy thousand, maybe a hundred and eighty thousand, right, like it wasn't.

Speaker 1:

You know that's 14th street, so you heard the stories about 14th street in the 90s. It was the red light district, so it was definitely not expensive to live there. Um, okay, so when you so when you were, you know out buying your first piece of real estate, was it like I'm going to invest? Like, which house was the first one? The big one, the big one? And so when you bought that, did you buy it with the intentions to live in this big ass house? I lived there for years, but like solely, or did you know? Like I'm buying this as an investment property? Also, like I'm going to move people in right away? Like, did you have a 60 day window where you, like enjoyed a dolo?

Speaker 2:

Uh, yeah, yeah, but you know, I also had it in my head that it's just like. You know, at the time I was like in my twenties living with my boys and I was just like, well, of course, I'm going to like rent some rooms out to some friends, you know? Okay, so Okay.

Speaker 1:

And do you feel like you've had like those have been successful, like real estate investments, yeah, yeah.

Speaker 2:

They have. I mean not without, like, not without let's call them learning experiences, right? But yeah, for sure, I think that's something that every investor is going to have to deal with. So, like you know, I'm not going to get up on the podcast and be like I'm some real estate mogul, right? Except that's what most real estate podcasts do?

Speaker 1:

I got a hundred dollars. You don't got to use your own money. Yeah, go find it. Yeah, exactly, I'd invest in real estate for free and get a thousand doors and scale your real estate portfolio to seven figures in 12 months. Right, like using none of your money, it's like the average. Okay, you didn't have, you didn't think that this was the real, the real way to do this, right?

Speaker 2:

no, I mean, but they never talk about, like the you know your learning experiences. Yeah, since I guess that's what we're calling them so what does that mean?

Speaker 1:

what kind of learning experience have you? Have you had?

Speaker 2:

a lot. I mean, you know, a lot of it just comes from especially owning like an older house, right. But you know there's the stuff that goes wrong with houses that you are going to have to to fix. You have renters, you know. Now you're relying on someone else to do what they're supposed to do, and not everyone does that Right. So you just have to be prepared, okay.

Speaker 1:

So and do you have a? Uh, I don't know if this violates for housing at all, but like, do you have? Like, like some people are, okay, I'm going to go section eight. Some people are like, I'm going to go nursing traveling nurses.

Speaker 2:

Some people like to rent a yeah, someone I feel like I can have a good relationship with, who's going to be reliable. That's like really it.

Speaker 1:

So do you like to be more of a like? Are you more of like a hands-on landlord Like you? Like you'd like to know the people?

Speaker 2:

So I no longer live in the big house and so basically I had a kid, my wife had a house, we moved there Right, and I am not really in Baltimore so much and it's it's, and I found it a lot harder to manage anything that I'm not nearby Right. So I've got a property manager just so that I can be a lot more hands off.

Speaker 1:

Yeah, speak on that, because you were self-managing before. Now you just went property management. Yeah, so speak on the decision. I mean, was it because of distance or what was the decision about that? I?

Speaker 2:

mean, honestly, it is, in my opinion, a part-time job, right. I think a lot of people, you know, maybe some people have figured out their system to the point where it's really hands-off but, like renter leaves, now you've got to be in there making sure that the house gets, you know everything, that all the wear and tear gets fixed Right and you're getting new people in there, right. So I've I mean I'm I'm with a property manager now. He's great, and I think finding a really good property manager is, you know, I recommend it and did you only get the property manager because distance?

Speaker 1:

like before, were you just self-managing like?

Speaker 2:

yeah, I I I was self-managing. But if I had found this guy even when I was self-managing I I in retrospect I would have done that.

Speaker 1:

Because you're actually pretty wary of people. You're not like you're not like. You're more. I don't want to call you like a pessimist, but you're more skeptical.

Speaker 2:

Being a landlord for eight years.

Speaker 1:

Yeah, I'm very much like oh yeah, like everybody because I know I'm going to most of you you should get a property manager. I do need a property manager For real, Like if that's your personality type.

Speaker 2:

I strongly recommend getting a property manager, oh because I'm going to get got, I think that. But like you've just got to be on, you got to like really be on people's case and I think you know going in with the expectation that you're an adult and I expect you to act like an adult is the wrong way to treat being a landlord.

Speaker 1:

Yeah, so no, we actually, um, you know our DC house long way to treat being a landlord, yeah, so no, we actually, you know our DC house, we rented that out and I mean you know, like even going through this so far so good so far, pretty good, like we.

Speaker 1:

So obviously we wanted to sell it at first and we decided we're going to keep it, rent it out. Just going through that section eight, like that voucher program, and trying to get that tenant in there was ridiculous. So I was like, man, I wish that I had somebody that knew this process to like speed this along. And then, luckily for us, like our landlord I mean our neighbor she Airbnbs her house, right. And so she's like hey, I want to sub lease your house and like, throw some Airbnb tenants in, if that's cool. And we're like cool, as long as you're paying our mortgage, like that's OK. But so that's that's what you're doing.

Speaker 1:

Yeah, so our neighbor, our next door neighbor she always had, you know, she has like a few rooms Airbnb at her house. And then she just approached Lauren and was like hey, is the house still available? We're like, yeah, she's like well, you know, I already Airbnb. Do you mind if I like rent this out and I use this as an Airbnb property? Also, how long has that been going on for her? She's been in there since November. She's been in there since November and it's been pretty smooth. She's like a pretty chill person chill tenant, but the HVAC did go out. Our HVAC went out and they just replaced the furnace today so that's solved. But that took like a month all to accomplish because it went out December 21st and I had the home warranty People go out and then the home warranty people told me it was a preexisting issue so they're not going to replace it. So it was. There was a lot going on.

Speaker 1:

So you had a learning experience, learning experience, yeah, and I had like over $4,700 repair that I wasn't anticipating. And then, and then our tenant like we, we like her, but she's like could be a, can be like a little nuisance of a nuisance sometime. So we are dealing with it. So she signed a six month lease and so we're trying to get into our house before that happens, so don't tell the underwriter. And then also I'm like, do you want to renew this lady? And we're like, yeah, let's just renew her for like another year and then we'll go property management the second time. So like she can't, like we don what we're doing to like solve the problem how is she?

Speaker 1:

a nuisance. Um, well, I don't talk to her directly, but like her and lauren chat, you know, like, like, for example, when the hvac went out, like in december, and we were trying to like solve the issue, like we have something in the lease that, like the tenant has to pay the first like x amount of the repair, you know. But like she wanted her people to go out there. Then they couldn't figure it out. Then we had to get our people out there and they couldn't figure it out, and then we called the home warranty.

Speaker 1:

But like january 1st, she's like I don't think I should pay, like I don't think I should have to pay my full rent because we didn't have heat from like the 21st to the 1st and I'm like, I'm like that's, that's kind of fair. But like you just said that on the first, and then also, um, since she's subleasing, she made a case like I can't get any people, I can't get anyone in there, like, because it's not livable, we, oh, we had to buy space heaters like that day. So we got a lot of space heaters and the space heaters it's because she had them on in five bedrooms they tripped the circuit. So then I didn't wait, she's. She's like we're like dealing with this, and then the rent thing.

Speaker 1:

And then, um, she's like, oh, I don't, you know, like I, uh, you know, I can't get this like rented out on airbnb. And so we ended up going there for some reason to like try to fix something. And, uh, they were like people in the house and we're just like, no, actually you are renting this out, like this is being rented. So it was just like little things like that, you know. So, so, uh, so I, I, you know, I could see the value. I definitely see the value of property.

Speaker 2:

Like how much, how much time did that take up on your end?

Speaker 1:

You know, I mean probably only a few hours. You know if I'm being realistic, but, like you know, would you rather not have dealt with it. Yeah, I'd rather not have dealt with it than pay somebody a couple hundred dollars to do it, you know. So what do you like about your property manager? Like, how can someone identify like a good property manager?

Speaker 2:

Yeah, no, that's that's a great question because I think that they come in a lot of. I mean they're, they're some are way better than others right, Just like overall professionalism. I think you know responsiveness he's been super responsive and I think, like, when someone's getting back to your calls texts really quickly or picking up you know as you call, that's a great sign. Talk to them about the process If he's, if it's just like well, we put photos on Craigslist, you know, then I mean my guy, he was able to detail his whole like every step of how he gets someone in there.

Speaker 2:

For example, you're asking them about what's the process for evicting someone. You're asking about, like, all right, how quickly return times from maintenance, who, like how'd you meet your maintenance guy? And what's the process for like maintenance requests right, um, but he's, he's just been great because of you know, I think. I think the responsiveness is the biggest thing. For example, you just dealt with this issue where it took a little while to get the HVAC fixed or replaced right, and now all of a sudden, you've got someone not wanting to pay rent, right, Because you know you are required by law to have the place heated Like is he going to be able to like?

Speaker 2:

does he have the network and you know the availability to make sure that the day that goes out or the next day he's there, or whoever his guy? Is is there fixing that issue?

Speaker 1:

And you have like kind of a list of questions in your head that you can shoot out to somebody to interview them.

Speaker 2:

I don't know if I've got like the specific list, but I mean there's definitely stuff that I want to know, like I. Just you know that I just mentioned.

Speaker 1:

So, when you chose to invest in these properties, one, why did you choose the Baltimore market? Why did you choose the real estate type you purchased instead of the West Baltimore 50, $60,000 tenant and like what's like your long-term investing strategy in real estate investment strategy?

Speaker 2:

Yeah, I don't know if I have like some specific strategy involved, other than I know it's good to own property, just in terms of why, where I, you know I like investing in places that I would want to live, I think it's, you know, partly exciting for me, right, and I like turning someplace into like a great place to live, because you're bullish on Baltimore.

Speaker 2:

Yeah, I mean I love the city, right, yeah, bullish as in, like, do I think like the economy is going to take off? I have no idea. Right, there's all these great ideas floating around out there, but the city always moves really slow, right, for example, there was plans to build this like shopping and residential center down the street for me when I bought my house in 2016. And like, I mean, it's all anyone would talk about, and as of now, all they've done is break ground. Yeah, you know, so this is nine years ago, right, so there is that City moves slow.

Speaker 2:

But no, I mean, I just think it's a great place to live and I believe that we need more good landlords, right, and when I say good landlord, look, I just I don't jack people's rent up all the time and I make sure stuff gets fixed when it needs to get fixed. Right, and I think there can be like a slumlord problem. I can't tell you the number of times that people have come to me saying, oh yeah, I've got some some horrible issue with my house and the landlord just never bothers fixing it. Or, you know, I moved out, did everything I was supposed to do. Keep calling them for my deposit, you know that's crazy.

Speaker 2:

So stuff like that, yeah, so yeah, no, I mean I, I love the city and I like being a part of it.

Speaker 1:

And then why buy like those properties in the neighborhood you have, instead of like the West Baltimore section eight Like?

Speaker 2:

yeah, I don't know. It's, I think, the section eight situation. It is harder to be a little more analytical about right. It's harder to find people to work on those properties because you know you park a car full of tools. Yeah, in, you know certain neighborhoods.

Speaker 1:

Yeah.

Speaker 2:

There are a lot of contractors who just don't want to do it, Just like yeah, your guy.

Speaker 1:

yeah, what happened to him?

Speaker 2:

Yeah, that was in DC. Actually, what happened to him? Yeah, that was in dc.

Speaker 1:

Actually, that was in dc, though. Yeah, that was in a nice neighborhood in dc.

Speaker 1:

Yeah, I mean a million dollar neighborhood, right, do you have like a number? So, like, for me, when I think about real estate investment and I have my like one investment property and you know, I I mentioned them all my lofty goals to you all the time that I think are realistic, but they're like big and that's based on like the lifestyle that I want to live. Like what? What I'm like, this is the lifestyle I want to live, it's like the retirement I want to have and this is like the amount of money I need, right, do you think about it in that way? Like, do you have like a number, cashflow wise, that you're trying to hit like consistently?

Speaker 2:

I mean, I think that's sort of dependent on what's going on around you, right? Because that cashflow number on interest rates, right, your cash flow number?

Speaker 2:

looked a lot better when you could get a rate of three or 4% down at 7%, right? So I think that comes down to more consistently doing your due diligence, and I think part of being a savvy investor is, like you know what you can get out of the market, right? And you're running numbers and before you buy a house, you've run numbers on many houses like it to see, all right, is this actually a good investment, where you're running your numbers in whatever market you're looking at and it's hard for me to tell you that, right?

Speaker 1:

So but you're not relying on. You're not like. You're not like building a real estate portfolio to rely on it for income later on. Like, what's like your, what's like the play you know, like you, just like I like Baltimore. I think people should have nice landlords, so I'm gonna buy some houses, or or is there like a play that you're, that you're running?

Speaker 2:

Okay, so from that sense, a few hundred bucks mortgage gets paid down and places where I want to live. In terms of places where I'd want to live, yeah, absolutely, I do see appreciation in those areas. You know, like, like you said, my house. If Baltimore keeps going right, I'll likely be getting some pretty solid rent off of it if I, if I, if I need to rely on it.

Speaker 1:

Yeah.

Speaker 2:

Like I said, I'm not necessarily in it to like squeeze every last dollar out of it that I can, but you know, over time, you know you, you expect your mortgage to stay the same and the rent to to go off Right. I've never raised rent on a on a like a renter who's living's living there, but like, say, someone moves out in a couple years, rents are probably going to be higher and I'm probably going to be able to get a little bit more out of it right, and you're a bird guy right.

Speaker 1:

Yeah, can you break that down for the, for the people? What is it by? By rehab? We have refinance refinance rent yeah, nick, break it down for the people. So explain your process because you're like you love the birth.

Speaker 2:

Yeah, I mean just because it's like I'm trying to like I love the idea that I can get an asset with not that much money out of my pocket or get as close to my original cash position as possible. Right, so you're trying like I'm definitely always on the lookout for a house that might be let's call it in disrepair I mean maybe not like completely falling apart, but might need some work right, where I can build value. And I think you know it's from the standpoint of, okay, I'm doing something good here, right, as in this house currently sucks and I'm gonna make it someplace nice for someone to live. Right, I think that's net positive, right, I hate the speculators who you know, find some some house or some piece of property for super cheap and then just like let it rot for 10 years and wait for the neighborhood to come back and then like sell it.

Speaker 1:

He has a crackdown on things like that.

Speaker 2:

Yeah, I mean it's just like you're. You are actually preventing the neighborhood from becoming something because there's this like eyesore sitting there, right. So from that perspective, but also because I can now add my value, refinance the house, get my money back out, and now I have a house with rent, possible appreciation and, you know, I might've gone back to net zero. I've had one house where I was able to be positive Right.

Speaker 1:

So I was able to take out more than I had so, even though you're not, you don't have the cash flow, but you have your money back. Yeah, well, I mean I do have cash flow on it too.

Speaker 2:

Yeah, right, okay, because you know I turned it into a nice house and now people want to rent it yeah right, yeah, no, I like, I like the birth strategy.

Speaker 1:

I think that you know you got to find the birth market. When I, when I hear about people utilizing the strategy, I hear about them doing that in like middle America, like Ohio, michigan, like Alabama, those areas too, and I think Baltimore is, like price point wise, matching those markets a lot, and so you still feel like there's a ton of like there's some BRRRR opportunities in Baltimore.

Speaker 2:

I would think so. I haven't been like super plugged into it lately.

Speaker 1:

Yeah.

Speaker 2:

Right, but I would think so just because I think that there's kind of a lot of just just from just from clicking around, it doesn't seem like there's a lot of nice real estate available for rent, and if you can pay an extra couple thousand dollars, I mean renovating a house, and renovating a house like nicely. Yeah, I don't think there's that big of a price difference, right.

Speaker 2:

A few extra thousand bucks and people, will you know, clamor to try and rent that place and stay there for a little while, too, has been so. I haven't bought a house recently. The last one I did was, like, in 2022. Yeah, but I have rented all my houses out. Okay, we rented all of them within the last year, yeah, right. So I do feel like I, you know the big house that's, I mean, that's, that's, that's almost 10 leases, right there, right, and I do think there's a premium for, like, a nice place to live yeah, for sure.

Speaker 1:

do you uh like from a financing aspect? So we like quickly cover bird. But for, like, the average investor let's say I'm trying to buy my first house like how am I, how should I? Am I, you know? Do I have to go 25% down DSCR? Like what's what? What's like how does it? And then the rates are higher, right, like your rest of the rates are not seven, they're like closer to eight or nine, right? So like, how does a, how does someone even like get their first property? Like, from a finance standpoint, what do they need?

Speaker 2:

I mean the first property is, and they don't own a home at all.

Speaker 1:

Um, I mean both part. We see houses where there's a lot of competition, but are there houses out there?

Speaker 2:

where you know it might be a little bit dated and you can get some good seller concessions and get a good deal on the house. I think that would be a great place to start because, like, part of what you're learning as an investor is how to manage the house itself right, and owning a home. I think that's a great first step. You, right, and owning a home? I think that's a great first step. You own a house and now you know how to like, over the next few years of you owning that house, you're going to be understanding, like, what it takes to to own a house, right you?

Speaker 2:

You mentioned vetting out property managers, right, well, let's say you've got a house, you can vet yourself and see if you like working on the house right, painting right, doing little fixes. See if you think that's the house right, painting right, doing little fixes. See if you think that's something that you could enjoy doing. But also, at like, let's say, you buy a fixer operator. I'm not talking about a place that's like a wreck, right, but a place that might, you know, over time you might want to update that bathroom right, or put a kitchen in.

Speaker 1:

Kind of like my house in DC that's a networking event.

Speaker 2:

That's how you vet out contractors right. You have a kitchen that needs to be redone.

Speaker 2:

Well, now you have a job and you can bring people in all day to look at that job and you can talk to contractors, see who's fast in giving you your estimate, talk to them about, ask them what their plan for this or that is right and see how they work with you, and I think that's a great way to meet people right and start building a team right. So if someone's thinking of getting into real estate investing and they don't have a house or they're not at least owning the house that they live in, I think that's a great way to do it Now growing a portfolio right. You bought that house as a primary residence with like a low down payment, right, without having to do that 20% down a couple of years from now. I mean, it's normal along the course of people's lives that at some point they now get another house right. Three, five, seven, I think what's the average length of home ownership.

Speaker 1:

It's like seven, seven or nine.

Speaker 2:

Yeah, Seven to 10 years right. So at some point that house becomes a rental right.

Speaker 1:

And then you buy your second one. Yeah, that's what we're doing. We have the one, now we're going to buy another primary, but I'm going ham sandwich on the real estate investment. I'm like always, you know, when I talk to real estate investors, like the guy I met in Richmond, the question I always ask is like what's the point of entry, what's the cost of entry to the market? So, is that like a hundred thousand dollars? I could play ball Like what's the? What's the entry point? What did he say? He said like 50,000, and usually I can. You said 50,000 in in Baltimore and and I think most people say like 50,000 is kind of like where you need to be to be able to like do something. This guy follow in Ohio. I'm gonna find him an interview. I'm here at some point. He's like doing I mean, he has like 150, and I talk about this guy all the time he has like 150 properties in like Ohio and, uh, he's doing crazy when he's doing like yeah, he's doing like DSCR.

Speaker 1:

No, he makes 150 K a month from his properties and he has over a hundred.

Speaker 2:

And he's doing like he's making a thousand dollars in rental profit.

Speaker 1:

His house is so his he's at like 500 to 800 is his like on everything and he talks about like the 700 number, a lot you know. So whatever the math breaks down, breaks down.

Speaker 2:

Is that off the bat Like he? He buys the property and immediately he's got $700 in cashflow.

Speaker 1:

Yeah, he's like getting a lot of cashflow and he's property management. So he's like totally hands off and he's doing like he's. He said he's putting like 15 to 20% down, but he's buying properties that are like 70,. He said he's putting like 15% to 20% down, but he's buying properties that are like $70,000, $80,000. So he's bringing like $10,000, $15,000. He's not even bringing $20,000. So that's kind of what I want to do to get my first few and then get to a certain number, maybe like $10,000, $15,000 net cash flow.

Speaker 2:

Is he burying them?

Speaker 1:

Is he burying them? Yeah, not that I I'm going to get you out of here on this. The $1, all right. So you're like a great guy and you like believe in people, right, and like things can change and like people just don't have opportunities, right. Baltimore, not that you know a ton about this, like you know, I don't know how much you read up on this, but Baltimore has the $1 house program, right, and recently I say like yeah, that's cool if you could buy a house for a dollar, but if you don't know what to do, then it's not beneficial to the neighborhood. And the example I give is like if you, me, kim Russ and, let's say, dan, right, were able to buy a house for a dollar, the block would look different in six months, right, and like maybe the neighborhood would look different in six months. I don't know if someone in that already lives in a neighborhood can, you know, benefit from. I can do that, right. So what do you think about that program, programs like that and the mission to revitalize the neighborhood with those?

Speaker 2:

So it did revitalize a bunch of neighborhoods. Okay, like Fells Point, butchers Hill, I think they did it, and I know someone who's who's dad back in the nineties bought the house for a dollar and then worked on it. I feel like people were a lot handier back in the day. Yeah, less computer screens and more like fixing stuff. Yeah, you know.

Speaker 1:

Because if you didn't know what wrench you were getting, your dad was hitting you with that. Bring me the screwdriver Boom. If you didn't know what it was, you had to get beat. You know the scene on TV where it's like bring me the Allen wrench and you bring something else and the dad's like are you stupid? You don't know what the Allen wrench is. So they were handier bro, because you would have had to catch those hands.

Speaker 2:

As I digress. I mean it worked great. Yeah, I think usually with the programs now, like Vacants to Values and stuff like that, there's like a requirement that you start working on the house. I mean, back then it was like you had to buy the house as a primary residence, I'm pretty sure, and you have to be living in it or commit to that. But I think the idea is like, hey look, if the requirement is that someone has to start fixing up the house I think the last I read of it it was like 18 months, but I would say even sooner than that like get to work, right, if we're going to give you a house for a dollar, yeah, I think it can be a great idea, right? So, yeah, we've seen it happen.

Speaker 1:

All right, All right. Well, where do we?

Speaker 2:

if we, if we get people really invested in the neighborhood Right.

Speaker 1:

Do you feel like the requirement should be that it's a primary residence?

Speaker 2:

Sure, yeah, I think part of the problem, though, is some of these houses can be in pretty rough shape. Problem, though is some of these houses can be in pretty rough shape and then now you're sort of being keeping it exclusive to people who have a bunch of money, yeah, to fix up the house.

Speaker 1:

Yeah, or understand the financing aspect of it Right.

Speaker 2:

I do know that vacants to values was sort of investor targeted Okay. You had to show that you had the ability to fix this house and you had to get to work on the house Right away. Right, so I like that.

Speaker 1:

Yeah Right, all right, we're going to get you out of here. My boy Cool, thanks for joining. Any last words for the people Buy a house, buy a house. And where can they find you? How can they hit you up?

Speaker 2:

You can find me online Instagram Ian underscore Ford underscore mortgage.

Speaker 1:

Yeah, bank Instagram Ian underscore Ford underscore mortgage. You can also hit me up. Ian's my go-to lender, so if you're looking to buy a house like, hit me up, I'll connect you with Ian. He's better than everybody and thanks for joining me, my man.

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Nick Bush

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