How to Buy your First House [Noob vs Pro] - $0 to Millionaire.

have you ever wanted to buy a home

because you've heard it's one of the

easiest and fastest ways to become a

millionaire after all somebody who is a

tenant tends to have a net worth of

around fifty five hundred dollars but

somebody's a homeowner tends to have a

net worth of around 170

000 now yes that's not millionaire yet

but what if you could start as a

homeowner and then over time become a

landlord and own multiple properties

we're not talking gentrifying areas

we're talking about building your wealth

by owning multiple properties over time

and giving people a place to live and

rent as they might want

now have you ever wondered well fine

Kevin maybe I do want to become a

millionaire landlord over time but let's

be real if the median price of a home in

America is just over four hundred

thousand dollars how am I ever going to

be able to afford that and when I do how

do I know that's actually going to be

the property that I want to live in what

if I want more now real estate may

obviously seem Out Of Reach if you're

comparing to now wants versus

potentially your ideal goal of becoming

a millionaire and so what if I told you

there were two ways of thinking about

real estate one was the noob way and one

was the pro way

for example a noob might think I gotta

have 20 25 to save for a down payment

before I can even get into real estate I

need to buy in an area with high cash

flow so that when I rent out the

property I've got lots of passive income

and I need to buy something that's a

fixed stop and inspect it so that way I

know the work has already been done and

ultimately I need it to serve my needs

as a family in the future so maybe it'd

be like a four or five bedroom house

maybe even with a pool that we'll start

with and of course no HOAs because who

wants HOAs and that way since I know I'm

not going to be in a position where I

can make those determinations yet and

actually have the money do that for

another five or ten years why would I

even be remotely interested in getting

started in real estate well that's the

way the noob speaks the noob takes what

they've learned from our school system

about real estate and finance and

nothing and Compares that to

miscellaneous bits of information

they've heard along the way whether it's

through the news media or social media

and they come to the conclusion that you

know what this is too overwhelming just

not ready to buy a home but the reality

is you can't blame anybody for thinking

that way after all that's what America's

taught we've been taught that wait until

you're ready and wait until you've got

your life figured out and wait until

you're stable and wait until you have a

spouse and wait until all the stars

align before you buy a home because

after all that's a lot of debt well the

pro has a different mindset the pro sees

real estate debt as good debt and

possibly one of the best risks you could

ever take in your life and really a risk

you can heavily mitigate given that

you're not just signing up for debt

you're signing up for Real Estate which

tends to be an appreciating asset over

time that is the value the property

tends to go up over time it tends to

have an appreciating rent over time

which increases the amount of potential

cash flow you could have out of that

property since your payment tends to

stay fixed and the pro looks and says

look sign me up for as much 30-year

fixed rate debt on assets like that

because the debt stays level or as your

payment stays level your debt actually

goes down over time your debt stays

level and your potential cash flow and

appreciated value goes up and so over

time the pro knows that's what I want to

take advantage of that wedge and value

that's created by paying off a loan over

time when the cash flow from that asset

actually goes up so now that's pretty

high level let's now talk about some

basics for how you might actually be

able to start and then once you get in

you tend to want to do it over and over

again because then your goal becomes how

many of those chart wedges can I grab

and take advantage of to maximize my

wealth over time first and this is a

pretty easy one pay your credit related

bills twice a month now I'm not saying

pay them off and when I say credit

related I mean anything that could

affect your credit score that could be

your phone bill credit card bills water

bill you name it anything that shows up

on your credit report if you haven't run

your credit report do so just Google or

go to Experian or go to Credit Karma and

run your credit make sure you know what

is on your credit report you can also go

to annualcreditreport.com and get a free

credit report hashtag not sponsored any

of these not sponsored now I'm not

saying pay off all your debt obviously

that is ideal but it's easier said than

done right now if you start making a

second payment on any credit related

account you have then you'll start

manipulating the algorithm dare I say to

train your credit score to believe that

you're on A New Path of financial

stability that can actually boost your

credit score with minimal change all

you're doing is making an extra small

payment again you don't have to pay it

off if you can pay it off great but make

an extra payment get in that habit of

paying your credit related bills twice a

month now at bare minimum it's almost

impossible to be late on anything if

you're making a payment twice a month

that will help you increase your credit

score and that's important when it comes

to buying real estate anything over 740

is typically considered top tier premium

rates is what you'll end up getting with

a 740 plus generally 740 is the cap

though some credit unions will take a

760 as a cap and anything over 600 to

640 is usually that threshold where you

want to be at minimum so there's a five

in front it's going to be a little bit

tougher but low 600s is possible to get

into real estate now remember the noob

is always looking for Perfection the

noob's like how can I get passive income

with an 850 credit score the pro

actually gets work done and realizes

it's better to act than act perfectly

because acting perfectly usually means

not acting and the earlier you learn

that the perfectionist is usually the

one who's most unproductive the bigger

you'll start actually getting things

done that's not saying don't try hard

but it is saying get things done and

right now the goal is pump that credit

score after that we look at your income

if it's less than forty thousand dollars

a year we need to get that up now easier

said than done we think but not

necessarily the average salary for a

starting level software engineer after a

coding boot camp is 66 000 and

oftentimes could be much more starting

salary for a registered nurse 75k for a

realtor even though that that's

commissioned and not salary based

usually around 83k series 65 starting

salary 74 licensed electrician 60. and

we're not even talking about potentially

running the business now whatever income

you have ask your lender that is pick up

the phone and call a local mortgage loan

originator somebody who's got great

reviews stay away from the big Banks you

want to go to smaller direct lenders or

Brokers and ask them hey I'm looking to

buy a house can you qualify me based on

my income from my job and borders income

and ask for the requirements for borders

income that will allow you to help

qualify for a house based on you renting

out one room or two rooms and now you

can leverage your job and that you're

renting out rooms to qualify for a home

to supplement what you can qualify for

now when it comes to non-housing debt

you really want to stay away from it

don't Finance the refrigerator or the

couch you don't Finance anything you

don't have to finance reason for that is

every one dollar of non-real estate debt

you have which the pro calls bad debt

the pro only likes good debt which is

generally real estate debt debt that

makes you money over time every one

dollar you have of monthly payments on

bad debt again refrigerators cars any

kind of monthly payments that show up on

your credit report robs you of about two

dollars and 34 cents of purchasing power

in payments for a house this is called

the rule of two three four so if you

have a thousand dollars of debt the

payments you can afford on a house Falls

by two thousand three hundred and forty

dollars that's more than twice the

amount of the payment you're making on

be it that car or whatever it is that in

together you're making payments on yeah

the same is true for many student loans

but talk to your lender about that now

not only are you losing that cash every

month to a depreciating asset to

something that is bad debt but it

destroys your ability to actually gain

wealth with good debt so you fall into a

black hole now the pro knows good debt

is real estate the kind of debt you

generally don't focus on paying off it's

actually the kind of debt that lets you

leverage in a relatively Safe Way

Building Wealth you can build wealth

with just cash but it takes a lot longer

and it's a lot slower now I teach

exactly how to do all of this in

substantial detail in detail that's

probably a hundred times as detailed as

this overview video in my programs I'm

building your wealth link down below pay

specific attention to that zero to

millionaire real estate investing course

but let's talk about why you want to

hold real estate and ideally hold it

forever and then let's talk about what

to buy so the reason you want to hold

real estate ideally forever is a avoid

those expensive selling fees of seven to

ten percent once you factor in repair

costs and the time it takes to actually

sell a property plus commissions and

escrow and title all that good stuff but

you also have to pay taxes and you

ideally want to avoid paying taxes

because then your wealth will be greater

now with real estate if you do sell you

can do a 1031 exchange which is a way of

deferring your taxes you're calling up

the IRS and saying hey I'll catch you

later but ultimately you'd still be

paying taxes if eventually you sell

right well not necessarily see the

beautiful thing about real estate is you

can build up your portfolio and then

when you need money access to Capital

you can refinance your real estate and

then buy potentially more real estate or

Finance whatever it is you might

necessarily need to finance and when you

take debt out of real estate you don't

pay any taxes and at some point in the

future when your time in this video game

simulation is up you could pass those

properties on to your children tax free

via the stepped up tax basis which is

phenomenal now what do you want to start

with well usually you want to do as the

pro does start with a basic three

bedroom two bath something that needs a

little bit of cosmetic fixing up but

isn't something that's completely

trashed and has expensive repairs needed

like a roof or a foundation you want

something in a great area that you can

easily do some paint wallpaper removal

and carpet work on that's it ideally

stay away from additions stay away from

high tension power lines and busy

streets focus on just some Cosmetics

that you have to do and follow the red

flags if you're your home inspector

identifies some red flags call the

appropriate contractor let your realtor

help guide you hey they saw this on the

report regarding electrical work meet

with a couple different electricians and

get their professional opinion on what

the actual cost of that potential issue

is then you can always have a discussion

with the seller as well now some noobs

might say well if you have to rent out

the home you better hope with cash flows

but remember that cash flowing real

estate while it's phenomenal generally

takes a down payment of between 20 to 35

percent in some areas cash flow more

than other areas now not only are you

going to have less cash flow if you put

down less money so if you put down three

or five percent you'll probably be

negative but the way to look at that is

kind of like DCA into real estate yeah

you'll have a slight negative but your

dollar cost averaging into real estate

to get up to that 20 25 30 down payment

where you would experience a cash flow

and you can get there over time and by

getting there with an appreciated home

value you can also eventually get rid of

more mortgage insurance usually people

do the math go I don't want mortgage

insurance off to pay that for 30 years

nobody pays mortgage insurance for 30

years most people apply to get rid of

mortgage insurance within two or three

years it's not a big deal but look into

the rules of what it would take to get

rid of mortgage insurance when you go

buy a property now with that said it's

absolutely important to remember you're

not flipping real estate here think

about it like slowly acquiring building

real estate your goal isn't passive

income tomorrow your goal is passive

income when you're 40 50 60 70. so if

you're starting when you're 20 you've

got a huge Head Start here it's okay to

have a slight negative as long as you're

confident in the stability of your job

or your ability to get another job so

leverage in now final rule of thumb Buy

in areas where you would feel safe doing

a Craigslist transaction at nine o'clock

at night if you are asked hey come meet

me down this particular Street at nine

o'clock and I'll give you cash for that

thing you're selling you probably don't

want to buy real estate there if your

first reaction is uh can we meet

somewhere more populated or live a safer

that's where you don't want to buy real

estate you want to buy real estate where

when somebody says hey want to meet up

in this area you're like that's like the

safest part of the city I don't even

think about safety in that area that's

usually where you want to buy you want

to buy where there are a lot of

homeowners and few renters that way you

can be surrounded to have your property

surrounded by a lot of homeowners so

what does the noob do the noob waits to

buy real estate the pro buys real estate

fixes it up and then Waits the pro Buys

in quality areas the noob gives all the

reasons why they can't they don't feel

like they have the down payment they

don't think they're ready they don't

have the spouse they don't have all of

the objections that they can give they

give a reason for why they shouldn't buy

real estate but you as a pro in the

making want to avoid all that so with

that said check out the programs linked

down below we'll see in the next new

verse Pro