An Update on Our New Home

hey everyone kevin here all right the

real estate market is nuts so many of

you know that we had a deal

if tesla hits 750 prior to

the end of april lauren would get the

green light

to go hunting for a new house for us

well here's the update on the latest

tesla as expected hit 750

and then also subsequently went to 650

oh and now it's back a little over 700

and this is just the insanity of the

stock market it's

uh classic the short-term entertainment

in the stock market is a

daily uh well either a daily source of

euphoria or a daily source of anxiety

it's pretty bad but anyway let's talk

about an update regarding this house

thing so a lauren identified about 15

properties that she

would love to live in and she has very

strict requirements in terms of which

city

uh what the characteristics of that

property are what the future potential

for that property is

uh and endless characteristics and this

unfortunately gives us a very

narrow list of properties to look at now

the issue

with these properties is none of them

are

for sale which means you're basically

resorting to knocking down the door

calling and emailing

the owners asking for uh

them to sell their home which anytime

you do that you kind of do

the you look you're doing the opposite

of a wedge deal right you're not

going in buying a property below market

value

and we realize that uh so i always like

to be very transparent about that

because i've never in my career bought a

property that was not under market value

and this is something i mean i'm we're

in escrow right now on a property that's

closing in

uh two weeks after that coupon code

linked down below expires

that property is a single family

fixer-upper getting it for 570 000

model match comps selling for six

actually it's a

model it's a similar model and uh it's

next to a busy street so it's not like a

perfect match but

model match closer to a busy street a

lot of traffic on that street for a park

so it's slow moving traffic but busy

traffic

but anyway that thing's selling for like

690. the place doesn't need more than

40k worth of work

so i feel pretty comfortable that i got

myself a 7 710 property and i'm up about

90 to 100 000

on that wedge deal that's why i'm buying

that deal and that's the mo

of a lot of the real estate investments

that i do and over the last year i've

bought

about 12 to 13 of these in socal now

what's different about this property

well like i said this property is not a

property where the seller needs me

when i buy a wedge deal the seller's

usually like oh my gosh somebody please

get this

this house out of my life i'm sick of

the tenants i'm sick of the hoarding

mess i'm sick of the problems

whatever the property's been mismanaged

it's had deferred maintenance it's been

crapped on

sometimes literally it's a problem lots

of issues with real estate

usually when the seller comes to you or

like that could be an off-market deal or

the seller comes to you

via them listing their property on the

market and they're like please somebody

buy this as

is i like to solve that problem by

offering

a non-contingent deal and not asking for

repairs what i can go in and make the

deal really stress free for the sellers

and the agents

and they want to bring you back deals in

the future so if anybody's got deals

like that

especially in ventura county or santa

barbara county hit me up i want your

deals

which to find more of those deals

because i am so ready to find more of

those deals

i am also partnering with deal machine

which you can learn more about by going

to mckevin.com

deals and so that way you can start a

campaign to get

mailers out to your targeted properties

i like to go around and target

multi-family deals and fixer-uppers at

least properties that look like

fixer-uppers from the outside

to uh target my campaigns to i'm gonna

go to medkevin.com

deals to learn more about that okay so

that now

out of the way that explained what's the

problem with this deal so

problem with this deal is obviously

we're going to have to overpay

i'm going to give you an example here

there's a property that we're interested

in a buying that's probably worth around

a million dollars there's another one

that's worth about

1.1 million dollars if they were on the

market

there's deferred maintenance there's

stuff that has to be done it's not our

style nothing about it

is what lauren really wants with the

exception of

location which you can't change yard

space

she can't change either and the shell of

the property which

is a pain in the butt to change trust me

i'm in three renovations where i'm

changing the shells of the property and

in california the last thing you want to

do is really get stuck working with

building and safety

because they make it extremely punitive

for you to try to

build in california don't freaking

wonder there's a housing shortage nobody

wants to build

it's a disaster okay now that you're

caught up

what's the update what's happening all

right so we've written probably about

nine offers on about the 15

i don't know sure if we've hit that many

maybe we've hit like six offers but

anyway the point is out of the about 15

properties that

are like yeah you know these could work

we've probably written offers on

nearly half of them six to seven of them

eight of somewhere around

there and uh we've gotten responses from

many folks and we've replied

or the initial offer that we gave was

very clean

we would offer as is no termite no sewer

no repairs no commissions no closing

costs

literally nothing it's just literally

like here's your money and uh pay off

your debt if you have debt

and there you go like here's your money

it's that simple and uh you know we'd be

flexible too give like a 60 90 day

closing whatever they need to get out

but the problem we're running into is

literally pro in my opinion the problem

everybody's running into in the real

estate market right now

and it's a big problem the issue we're

running into is everybody in the real

estate market is like

um cool offer bro but

where are we going to move and we're

like um

not our problem do you want the money

and they're like well

it kind of is your problem because if we

don't have anywhere to move we don't

want to move

or you could just pay us even more money

hey you can afford it just pay us even

more

so yeah we've literally gotten two

styles of counter offers

one counter is just like no there's no

way we want to be buyers in this market

right now

so we're not moving thanks but no thanks

and the other offer is

okay sure but you're gonna have to not

only pay over market value

but you're gonna have to let us rip you

off

to get in and i'm i told lauren i go no

like there there is a level of

okay look we could pay a little bit over

market value i'll do a wedge deal or two

and make up for that no big deal if

that's what we want and that's going to

be perfect for our family for the next

20 30 years whatever i

don't know if we're gonna actually stay

there that long people always go into uh

their their house their dream home or

whatever with the plans of being there

20 30 years and

after five years you're moving again

that's a pretty classic america i mean

after all the average amount of time

people stay in a home is nine years

average amount of time people actually

have a loan is seven years that's

because of refinances

but anyway i'm like look i'm willing

to overpay a little bit you know 100k

200k on that it's like 10 15 somewhere

in that range

maybe 16 but some of the requests we're

getting

are from people asking us to overpay by

40 60 or 50

of the market value and i'm like yeah no

it's just not gonna happen

i'm not interested at all see you later

and so this is where in my opinion some

of these values these people are asking

are are such that if they put their

homes on the market first of all they

sell for way less than those

properties so i don't want to have a

house that's under market value or i

don't want to have a house that's

under water or rather that's that's

crappy it's not going to appraise that

high so i'd have to put more cash into

the property which is stupid

lauren's going to want to renovate it

which is is also another cash draw

i just don't want to spend money right

now it's uh it's a little bit of a

problem i'd rather find a good

investment deal

a big multi-family building if it's

going to be a big multi-family dealing

it's got to be new

newer construction some of you all have

reached out to me via email and you were

sending over some deals

that are built like in in the 60s and

50s and that's fine

but for multi-family i'm not looking for

a fixer-upper or cosmetic fix or

something that's been remodeled in the

80s or 90s if i'm going to buy new

construction it's got to be pretty dang

new

uh you know and i'm down it could be

austin florida

whatever california but it's got to be

pretty dang new

so uh i'd rather save my money for

something like that right now

then uh end up uh overpaying on on this

kind of property

when it's gotten to the point where

sellers are

so backed into a corner that they don't

they're so afraid of being buyers

that they're literally coming back with

insulting counter offers that's making

me go fine

we'll just we'll make this do like if i

need to

uh get three hours of sleep a night or

whatever and sleep on a couch like i'll

do that before we move because we have

to convert another bedroom in the house

no problem that's what i'm telling

lauren like i'm

first of all i'm not interested in

overpaying that much and our deal was

hey look we'll overpay by a certain

percentage to get it

if they say no oh well it ain't

happening but that was sort of the deal

uh that we made

we'll overpay a reasonable amount 10 15

something like that 20 i don't know

could we be convinced

maybe but uh this this 50

50 over market value is is insane and

some of the requests and some of the

asks are nutso

especially since we're also paying all

the closing costs which closing costs

alone on a million dollar property could

be like 60 to 90 000

it's it's insane the real estate market

is is uh is so broken

and that kind of leads me into what i

want to talk about regarding the real

estate market the real estate market's

freaking broken

there's there's absolutely no reason

we have to be repeating what feels like

a 2006 and seven

style of of panic where people are like

oh yo

please please tell me your house come on

i'll do anything anything what do you

want me to do

you get on one knee and propose to you

like like

this it's nuts it's bad it's bad and

this

every day in the real estate investing

course i'm talking almost every day

we're talking about real estate and

people like hey i can't you know

uh hey i found this wedge deal is this

good okay perfect great wedge deal hey i

found this wedge deals it's good hey

great this is awesome good wedge deal

sometimes i get people like hey i found

this one it's not really a wedge deal

but i can't find

anything else and so we analyze that and

we're like well wait a minute

first of all what comps are you using

sometimes they're like oh well we're

using comps from

june of last year i'm like well there

you go that's why you don't think it's a

wedge deal because you're using ancient

cubs

this market is so nuts if you're buying

a home right now you got to be using

april comps april like you're better off

picking up the phone and calling agents

with pending sales around the

neighborhood going yo

uh you know uh did you get any offers oh

yeah we got like 15

oh wait other phone oh yeah we got like

15 offers on this one oh my gosh did you

end up going over

x price or whatever oh we're way over

that well there you go that's how you

get

market data instantaneously you got to

get that to be competitive in this

market because the market's nuts

and it does really beg the question like

what happens if rates do go up well

i mean the people who bought in as long

as they fix their rates with 30-year

fixed

uh that's fine but if you're getting in

on like

flipper speculations because you're like

oh real estate can't go down i'm going

to go buy a new construction house and

i'm going to flip it next year

that's dangerous because if rates shift

up next year you can't afford that

payment

and you're sitting in that property

going oh yeah we'll just be able to flip

this next year for a big 200 grand

profit or whatever

that's when things start getting

dangerous and i'm starting to see

people do that which makes me a little

nervous uh and i'm trying to disconnect

myself as much as possible from that

because i understand like we have this

special

ask and this is why i'm making this

video where uh we want to overpay a

little bit

but for this one property for us but i

don't really want to i should say lauren

just wants to get in so we're willing to

sacrifice uh

you know not getting a wedge deal or

whatever on on that because it

well what we talked about but i'm very

concerned

that people are taking that same mindset

and then applying it to the short term

which is very dangerous like you should

not overpay for real estate

you should not think of real estate as a

one to two year bet

very very dangerous real estate is not a

momentum stock

real estate has such large selling fees

it's such a slow process

i would really caution against

short-term speculation in real estate

and i think there's a lot of short-term

speculation in in the stock market and

that can be fine

you make some pretty big uh chunks of

money or you lose big chunks of money

pretty quickly

uh whether it's through options

especially weekly or short-term options

those are dangerous

but uh golly i would highly highly

encourage if you're hunting right now

make sure you're doing everything you

can to get a property under market value

understand what the current market comps

are

and if for some reason you're like oh my

gosh you know this is my dream home i

really just gotta get into this thing

and i gotta

make the seller move you know with the

make me move pricing kind of stuff

well i mean and those circumstances you

you better be ready to hold you know

hold that thing for the long term and

then it'll kind of amortize out

to uh very little of an overpayment but

uh

yeah these are these are big things

these are big considerations wanted to

give you all an update on kind of what's

going on

in my opinion the bottom line is it's a

complete disaster

and it's making me a little bit nervous

about the real estate market in general

because this it's just

it's uh borderline uh starting to feel a

little greedy

out there and that that gets me nervous

because remember what warren buffett

says

be fearful when people are greedy guess

where people are fearful right

now people are fearful in specs

and tesla and end face

and pinterest and amazon and

apple and i'm like man these are the

stupidest things

to be fearful about i'm fearful about

this greed in the real estate market

not about those stocks sold off over the

last two weeks now my arms hurt because

i'm holding a bag man shut up

what did you buy the stock for if you

bought it for a swing trade you suck at

swing trading

if you bought it for the long term and

you're whining about a movement in the

next two weeks after you bought it

you're nothing better than a little

weenie baby

all right folks thank you so much for

watching check out the courses a link

down below and folks

we'll see in the next video thanks bye