Buying a home in todays market is quite an adventure. From still historically low interest rates to a crazy sellers market nationwide fellow real estate professional, Military To Millionaire Podcast host, and USMC veteran David Pere comes on the show to discuss real estate, credit and investing.

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Transcript from Episode 49 with David Pere:

Keith McKeever 0:03

Welcome to the battle buddy podcast with Keith McKeever. Welcome back to another episode of the battle buddy podcast. I have Dave furay. With me, we're going to talk about real estate. So if you are looking to buy home, sell a home anything in real estate, you know, this is the conversation that you want to tune into for sure. Got some questions before we get started, Dave, welcome to the show.

David Pere 0:26

Thanks for having me, Keith.

Keith McKeever 0:27

Hey, man, it's awesome to have you on here. I get excited anytime I could talk about real estate, because that's my career choice. And then between that and about 20 podcasts it this is like, this is awesome. This is the best of both worlds for me. So before before we get started, though, wants you to tell us like a little bit about yourself who was young Dave? And how'd you get in the military? Would you do? Share a little your backstory?

David Pere 0:49

Yeah, so the backstory, I was a homeschooled kind of sheltered kid and Arkansas, wanted to leave Arkansas. So you know, didn't have money for school didn't like schools trying to figure out what to do was like, oh, maybe I'll be a firefighter or a cop. Well, that doesn't get me out of Arkansas. And then one day, I ran into a Marine recruiter, and all the other recruiters but I was like, man, these guys look cool. And they've all traveled the world. That'll be a great way out, let's do it. And then the plan was for years and, you know, go to school, and then I got done with four years and was like, Man, I still don't want to go to school. And I had a lot of fun. Let's do this again. And then, you know, It progressively got less fun. And as I got promoted, more and more desks and less and less, you know, guns and whatever. But in 2015, I read that magical Rich Dad Poor Dad book got started in real estate. And I was able to exit the Marine Corps after 13 years active duty last October. And I, I mean, I guess if I ever take a W two again, it'll be because I felt like it. There's no need I'm, I'm able to do my own thing, run my own businesses, and it's been fun so far.

Keith McKeever 1:59

Absolutely. You know, when I feel the same way, it'd be really hard to go work for somebody else. When you work for yourself, you know, young people, you have to answer to all your clients. Point blank. Yeah. And yourself. But so why, you know, what was it about the book that that kind of spurred you to get into real estate?

David Pere 2:22

Yeah, that's a good question. I don't know that I've ever really thought about, like, specifically, if there was a piece that stuck out, it just Robert does a really good job of taking a pretty boring topic, money, and making it very understandable and very, kind of exciting, exciting enough that you're like, oh, maybe I'll go read another book and learn some more stuff, and then eventually becomes a hobby. And you're like, Wow, this is awesome. I'm gonna do more of this. But I think it was really just like the simplicity of the book. And you know, the idea that if you buy a rental that starts paying you, then you buy another rental, it starts paying you and then eventually you've got, you know, 1020 30 100 rentals, and they're paying you enough that cool, whatever, you know, whatever. I can just go and do this, or I can go and do that. Or, and yeah, I don't know, it just it seemed like a win win. I did some research, I ended up buying a duplex, and I was living in one half and renting the other. And I went from paying like 550 a month for a two bed one bath apartment to I think it was out of pocket like 185 A month or 150 a month or something like that to own a two bed one bath duplex. Then when I moved out the duplex started paying me. I was like, wow, this is this is cool. And then not a bad setup. Right? Yeah. And then from there, it just kept going. I mean, it was one thing after the next. I mean, it took a long time to I think it was two years before my second actual like investment property. So it's not like it was a quick start. But you know, it gains speed. Now we're, we're in March, and we've done completed six transactions for how for houses currently under renovation and another one under contract. So by the end of March, we'll have 12 purchases and or assignments done. So, you know, we're moving.

Keith McKeever 4:16

That's awesome. And that, you know, the duplex way. I've said for for a while, that's a great way for veterans to go. Especially if you're young, young and single, Young. Maybe you don't have any kids. It's probably probably an ideal setup for that. If you're married, you got kids, you know, the spouse may put their foot down a little bit with people right next to us, but it's not a bad way to go for a year or two at least. And like I said, your out of pocket 100 and 150 180 bucks, like

David Pere 4:48

that's incredible. And, and when we say that people think immediately I can already hear the people listening to the show who are like, Well, that won't work in my market. It's too expensive. And so I'm just gonna stop that and just real quickly say that I've seen this work with duplexes triplexes. And for plexes, in Hawaii, San Diego, LA, we, I introduced a guy to my roommate at the time was VA lender. And I was like, Yo, this dude wants to do something crazy. Can you help him? And he I kid you not $1.93 million duplex active duty major zero down in Venice Beach like, right across the street from Muscle Beach, like beautiful location. And yeah, he's still paying out of pocket to live in that one. That one's a little extreme.

Keith McKeever 5:33

But it's gonna vary a little bit, but you can, you can offset a good portion of your mortgage.

David Pere 5:39

And he's not using all his BH, which I would consider a win. Because to live in, you know, near Santa Monica, like, he would have been out of pocket way more than this BH if he just rented let alone buy. And so, you know, and I've seen people do million dollar for plexes where they're cash flowing. But you're right, yeah, it's definitely an easier sell. If you've, if you're single, or if you've got a small family. You know, there's ways to do it. But the bigger you're, you know, my wife would never I don't think I think that would be a losing battle at this point in my life. Like, Hey, babe, let's move into a four Plex, you know, instead of the 10 acres we have right here.

Keith McKeever 6:19

I know. Without a doubt, I would get the same answer for my wife. No, hey, you know, even if I pitched his Oh, to do for a year or two, but you know, it's root beer, by the way. Oh, good. You sitting in your car.

David Pere 6:35

I walked out to my car because you know, we're doing the show here because the internet's out of my place. And my father in law's put the help and put siding up on the house. And he was like, Oh, is that a good one? Like the good stuff is like repair. He's like, Okay, I won't be mad at you for not bringing me one.

Keith McKeever 6:50

That is a good repair though. So what's so getting started in real estate? What what direction did you go? You know, after seeing that, you know, you can offset a lot of your mortgage. What area of real estate Did you focus your attention on?

David Pere 7:11

Yeah, you know, I'm kind of an oddball i i will tell people that I am a buy and hold investor and they usually follow that up with Oh, awesome, what niche and it's like, no, no, I didn't niche that down. I will hold long term rentals. I've got a short term rental. I've got a hotel I've got apartments I've got single families duplex four Plex don't have a triplex yet got to have that to look collection just sold a 10 unit apartment, I have a 23 and a 15. Currently in a 40 unit hotel, I'm also a partner on two big syndications, one of which we just closed last week, 670 doors, so that one's crazy. You know, but I mean, really, I'm just kind of a cash flow guy. So like, if I can find a way to buy something with not a ton of money out of pocket that's going to produce cash. I'm all for it,

Keith McKeever 8:05

as pretty much everybody should be here you should be looking at should be looking at every option, because you never know where that next deal is going to come from what's going to make sense. Because I know, on my side of things as a residential agent, sometimes you just saw that looks like a good deal. And then you dive into the numbers, you know, with your investor client, it's like, oh, it really doesn't make sense. It's not a good deal. Or what does it look like it is and then you find out well actually, they're charging higher rents than you expect or, or the condition of the property is better on the inside and now sudden your rehab budgets gone down, whatever. And so you got to take the whole thing into consideration for sure. But that's that's investments in same thing I guess with with buying, you know, single family home if that's what your your goal is to is to get out and use your VA loan. But what what do you use as your best practices for searching for homes for the investment side? Well,

David Pere 9:04

you know, there's two two ways to answer that, you know, before I started building my crazy company, it would have been you know, MLS, automatic notifications from agents and get on every other wholesalers list right like Go and search need to sell my house fast in your location and then click on every single one of the wholesalers websites and send them an email saying hey, add me to your buyers list. I'm interested or go to your local meetup and you know, because then you've got people bringing you deals now I actually do some wholesaling. I don't like wholesaling I just do a lot of off market marketing. And we can't take them all down, right like we've got four renovations going right now, which is great. But I you know, we've got two more under contract and I can't take them both down with my current crew. So they either sit or I wholesale them to someone else and find another deal. And so we do some wholesaling but I tried to do a lot To Burr and, and flipping. And so we are doing a ton of, you know, direct mail. Or we've got cold callers and some PPC, like Pay Per Click advertising on Google. And then word of mouth. You know, we've got some some homebuyers that we are home homeowners that we bought, like, there's this lady that we bought two properties from and she owns 12, more free and clear. And she has, you know, unfortunately she has, she has cancer. So she's slowly looking to liquidate, and, you know, get rid of her portfolio. And so we're like, alright, well, we made these first two transactions super easy. Hopefully, she comes back. And she actually called us last week, and we're going back and forth on whether we're gonna buy a duplex from her or not. So,

Keith McKeever 10:48

yeah. What about like landlord networks? I know, in my area, there's a few of them. You know, people kind of know each other, kind of know what's in each other's portfolio to some degree. And I think sometimes deals get put together like that, where they might know hey, you know what, I'm gonna sell XYZ property. And you know what, I think Dave might be interested. And just put put the deal right together.

David Pere 11:11

Yeah, we've I mean, there's a couple there's a there's a pine some properties meetup, there's a Ria, real estate investor Association, just in case somebody's listening doesn't doesn't know what's

Unknown Speaker 11:23

real estate. It's a Yeah.

David Pere 11:25

Yeah. And then, you know, I've got my own little Facebook group that I'm working on growing. And so we're just kind of trying to, yeah, trying to try to improve that get to the point where people look to us when they've got deals, but it's, uh, I don't know, I mean, I haven't had a whole lot of luck personally, from those kinds of markets, it seems like a lot of landlords, it's interesting, because landlords will be like, oh, man, I've got this great investment property, let me go sell it to an investor. But I want full retail, you know, plus, some, because it's an investment, it's like, So how this works, like, if you're gonna, if you want to sell to an investor, it's got to be a discount, it's got to be a win win. Otherwise, put it on the market, you know. And so it's, it's kind of an interesting, because it's like, the investor wants top dollar. But they'll they'll go and put it out in front of other investors who want to pay bottom dollar, it's like, losing

Unknown Speaker 12:23

a big gap in negotiations. Yeah, just listed on the market. Yeah,

Keith McKeever 12:27

you know, and it's, in this market is a little, little different. Maybe not for big multi door units. But, you know, if you've got a single, single family home, or a duplex or something like that, those are flying off the market quick. You know, but in other markets, like, two years ago, year and a half, two years ago, and before, you might have a property sit on the market for months, you know, it's just depends on what you got. And if you've got an investor and you can work out a deal, you can sell a lot faster. You know, so there's, there's, you gotta you gotta look at all angles. But before you know, that's some good stuff on on investing, and I highly encourage veterans to look at, into what they can do to invest. Invest in your area, look at other areas, I know there's, there's a lot of very affordable places across the country that you can look at. But the real power for veterans is using your VA loan. But before I want to get get into that, I want to say, you know, give, give a have a scroll at the bottom plug for your for your podcast, your your website, I know the podcast URL is just add podcast behind that. I'll be in the show notes for everybody. But what how did that come about?

David Pere 13:42

You know, in so in 2018 So I was and thank you for the plug. In 2018. I was looking to write I thought I was gonna write a book. And I haven't written this actual this book, ironically, yet. I wrote another book. But I when I was in Afghanistan, I kept like a Mission Log and a journal. And so I was like, Huh, you know, if I correlate these, you could see like, on this day, David drove overnight at, hey, here's how he was feeling that afternoon. And so I was like, Man, this would make for a decent little book, like, there's like 97 missions or something like that. And, you know, whatever. And I was like, man, all these seals, write books, you know, maybe maybe, who wants to hear let's read the story of like, what a normal marine went through a bunch of BS,

Keith McKeever 14:27

you know, a good point about seals, writing books, it's like the go to they once they leave service. So let's get right into it. Now.

David Pere 14:32

I'm telling you, and so I was like, you know, nobody's gonna listen to me because nobody knows who I am. So nobody's gonna read my book. Right? And I don't have some crazy war stories. So it's like, it would just be this thing that I wrote that I might as well have written for myself.

Keith McKeever 14:48

Which, you know what? There's power in that too.

David Pere 14:51

Yeah, that's I mean, that's, you know, there's nothing wrong with that. But that was kind of the catalyst. I had a friend coming over to have dinner. And I was like, you know, if you were me what Would you do to, you know, work on growing this or whatever? And he was like, well just start a blog, like, yeah, I was like, Oh, he's like, you know, you'll learn how to write people will reach out to you, you know, you'll you'll grow an audience and then you'll have some some place for when you do launch your book. I was like, okay, cool. Well, what the heck do I write about? He's like, I don't know, write about real estate. Like, there's not a whole lot of like, military real estate investors just write about it. And so I started writing about just documenting my journey, what was I learned, and what was I buy? What was I doing? And lo and behold, there's actually quite a few people in the military interested in real estate. And so we now have the largest like military real estate investing community in the world, probably 200,000 followers across all platforms. And it's kind of crazy. So it's been, it's been cool. You know, we get to help service members and vets learn about building wealth through real estate, personal finance, entrepreneurship.

Keith McKeever 15:55

That's, that's what I love about it, because those are the same things that I'm into. That's, you know, personal, I don't know, I wouldn't consider myself an expert, but I kind of geek out on it. Like you said earlier, like, sometimes real estate, and personal finance is not the sexiest of topics in the world. But for some reason, some of us just really enjoy that stuff. We geek out on it. I wonder if there's a correlation to people catching on to that, to that culture in the military. I know, when I was in the Air Force, it was talked about pretty much from the beginning about, you know, the Thrift Savings Plans and investing your money taking care of your money. Not that there was a lot of great education out there for people, but it was talked about a lot, you know, seed got gets planted, I think a little bit, you know, for people 17 1819 years old, which, for our civilian counterparts, I don't know if we're when you know, that seed of investing your money gets talked about.

David Pere 16:52

And that must be an Airforce thing. I didn't know anything about for a long time. Yeah. I think so talk to me about this once, but I don't know anything about it. I'm putting money in it. But I don't know what that's gonna do.

Keith McKeever 17:04

Yeah, maybe it was just my unique situation. But I know, I had people around me that they couldn't articulate exactly why or what is going to do, or they were just like, Look, you got this Thrift Savings Plan, like you need to put money into it, put us back live within your means. You know, it was that kind of thing. So maybe it was just my particular situation, the Air Force. But I think, you know, for some people, they do get that kind of counseling, and they think about it, and I've met some people that, you know, they took it to the extreme and invested the max, whatever they could and, you know, live within their means lived in the dorms long, you know, longer than they needed to, or, you know, they could have moved out or whatnot. So there's sacrifices people can make. So, but yeah, that's, that's a lot of good stuff. So people really need to get over there. I mean, I consider myself, my website, a resource for things, but you got me beat on that. A lot of resources into personal finance and real estate stuff. So everybody needs to make sure you, you know, go follow Dave over there and see what you do and what he's doing and get the group and, and look at all that information. But I want to, for the rest of the questions here, kind of shift this to the single family to the veteran buying a home using their VA loan. What do you think veterans need to know about using their VA loan and use it as benefits?

David Pere 18:25

I think the first thing is that the VA loan is the most powerful mortgage product out there. And that if you're being told that somebody's not going to accept a VA loan, or that it's not useful, or that you shouldn't use it, your agent and lenders suck. So I hear all the time in my Facebook group. Well, that doesn't work in my market because it's hot. Oh, yeah. We we helped probably $40 million worth of homes get purchased last year, and the vast majority of those were in San Diego, the DC metro area. And Hawaii, actually, when you can't tell me that it's harder to buy a house in most places than it is in San Diego or Hawaii right now. So, you know, it's like, yeah, so it's like, man, if your agent's telling you no one's going to accept the offers because they don't know how to sell the VA loan. And if your lenders telling you that they're not going to be able to close then find another lender, because, you know, there are companies out there who, even in 2021 2022 are guaranteed, you know, able to guarantee like a 17 to 21 day closed. I mean, you know, cross country. In San Diego, there's a couple lenders who will guarantee a 17 day close and even stake like per diem behind it if they don't close on time. So it can be a very powerful product is just misunderstood. So I just caution that like when you start hearing these Inklings that like it's useless or you can't use it in this market or whatever, like it's probably that your agent and lender aren't as well. Well, first as you would like them to be in that specific product.

Keith McKeever 20:04

And the thing I've noticed is because I would totally agree with that, there is a lot of misconceptions. And it's not that difficult. Like, there's it's not

David Pere 20:19

crap that, yeah, and

Keith McKeever 20:21

there's, it's not that different than going with a rural development or an FHA loan, you just have the extra benefits and no PMI is 100% down. If you're disabled, you know, no funding fee. Like, there's obviously things that are making way better than those other options. But in terms of closing window, inspections, you know, property condition, things like that. It's very competitive, very competitive.

David Pere 20:49

And dollar for dollar, the funding fee is nothing compared to MIP, or PMI. So if you're paying less than 20%, down, the funding fee is cheaper. And if you're paying 20% down, just to avoid the funding fee, I would call you a nincompoop. Because if you just took that 20% and stuck it in an index fund, and paid the funding fee, your ROI, 30 years from now on that 20% that you invested at 7% average annual return would just like below that, like you would have saved, you know, on the high end, what 3.6% For like a repeat use of the funding fee? You would you save a couple 1000 I think it's on the low end is like $2,300 for every 100k Borrowed on the high end, it's like $3,600 for every 100k borrowed. So okay, so let's say you're buying a $200,000 house. So at the worst case scenario, that's like $7,200 in this funding fee? Well, okay, if you had taken the 40k down and stuck it in an index fund, you probably earn that amount in like, one or two years. And so it's you know, it's, it's a numbers thing, like people don't like it, because it's a fee, but you know, every mortgage has an origination fee. And the other the other big one is appraisals, right? For some reason, people think that the VA appraisals come in low. And in my, I won't even say in my experience in the data that I have seen from national mortgage companies. That's wrong. And it's also the other major difference is if, and you're you're an agent, so you can you can vouch for this. But if, if you get a low appraisal with a conventional loan, and you say, That's crap, we want to fight it, you have to file with that appraiser, and send them other comps and say, Hey, we think you mess this up, and their egos gonna get in the way, because they're like, why is this guy think he's better than I am at this job that appraise becoming an appraiser is not easy, right? So those

Keith McKeever 22:55

are not easy conversations to have with an appraiser either when you're challenging their opinions, it almost never goes,

David Pere 23:01

well. Well, what's the VA appraisal system? If you want to combat that appraisal, it doesn't go to the appraiser, it goes to the VA. So some person who has nothing to do with the low or the appraisal is going to look at it and go, Yeah, okay. And they don't care, because there's no ego involved at all. And they can do a you can do I forget what it's called, like a special use, or a rushed or there's a way to, essentially, essentially like, be like, hey, jerks, this guy is not gonna have a house, if you don't say yes, that you can, like nudge. And I'm not necessarily saying that I recommend that because you shouldn't ever try to buy a house for more than it's actually worth. But if you think

Keith McKeever 23:42

that's it, it comes with a few risks.

David Pere 23:44

Yeah. So I mean, obviously, you know, don't don't dig yourself a hole. But I mean, it's just there's, you know, people think that the VA loans this terrible thing, and it's like, you've been lied to, or your or your agent lender doesn't understand it, and they're giving you the easy out, which is go conventional, I know how to do that.

Keith McKeever 24:03

Yeah, I think it's, it's, it's easier on them, you know, and there's some bad lenders out there that are just going to do whatever is easiest for them, because they care about the numbers. They don't care about the service. But the appraisal thing, in my experience, I've never seen it. I've never seen it come lower. Because the appraisers are there, they're bound ethically, and with licensed law to go out and appraise it for fair market value, it doesn't. The only thing I have to look at differently is does it fit all of the standards from the VA and the underwriting or overlays and stuff like that, but the actual value of the home is just based off comparables should have the same value whether it's conventional FHA rule development, VA doesn't matter. It should come back. If you had 10 appraisers go look at it, it should come back, roughly about the same for each one of them. Yeah, there should be no differences.

David Pere 24:58

I guess the only other Like there's, I mean, there's so many misconceptions, but probably the other two big ones are, well, I guess three, one, you can use the VA loan more than once. If someone's telling you that you can't, they're an idiot, my first property, I used an FHA loan, because my lender told me, you could only use the VA loan once don't waste it on this small property. So that was wrong, too. There's no limit for your first time purchase, as long as your debt to income and personal finances qualify, you can buy a multimillion dollar properties zero down with the first time use, and then three. And this is just more of a general thing. If a lender is telling you they can't do something. Make sure it's not an overlay. Right? So it very well may be a lender, like that specific lender can't do it. So Prime example, the VA doesn't have a minimum credit score. If a lender says the VA has minimum credit score of 700, well, no, that's the lenders minimum, like they don't want to go below that.

Keith McKeever 26:00

Three bank, that's that's their, their minimum, the bank down the street, there's gonna be 500 or five, 600, whatever,

David Pere 26:07

yeah, there's somebody who can do almost anything you want. And so another common one is, if you buy a four Plex, the benefit is you can qualify for a much higher mortgage, because you're going to use 75% of what the rent should be towards your debt to income. So you have higher incomes, and you can qualify for more property. And a lot of lenders will say, Oh, well, you don't have landlord experience, so we can't use that money. Well, that's not what the actual guidelines say the guidelines says that you have to have a reasonable chance of succeeding as a landlord, it doesn't say you have to have experience. So that's an overlay. So either you tell them, hey, well, I'm gonna hire a property manager. And that's usually okay for most lenders, or you just find another lender, because it's not a that's not actually a thing. So there's so many things that are

Keith McKeever 26:50

hire a property manager, I was just thinking that right before you said it, I'm like, that's always the easy answer, Well, I'm gonna, I'm gonna pay licensed property manager. Yeah,

David Pere 27:00

you got to have a good lender. Because if you don't have a good lender, they're not going to tell you how to make all this work. And then a really good lender will call the listing agent when your offer submitted, and walk them through like, I will close, I will close this fast, blah, blah, blah, blah, blah. And that's how you get your offer accepted.

Keith McKeever 27:20

That's, that's a good point, especially in this market, where things are, you know, just flying off the shelf faster, and you can put it on that. It's difficult for buyers in this market has been for about a year and a half. And you got to think outside the box a little bit. And if it helps, it helps. So that's, that's some good ones. And the only thing I can think of that, that I've heard of, I haven't seen it personally, is some institutions, charging people for them to get their certificate of eligibility. And it's like, well, you benefits login, you can find it in about 30 seconds, I will put together a guide, and I will link that guide in this show the show notes on this, it is so easy to get, and the lender should be getting it for you for free. And it really shouldn't become like all of 30 seconds to get that for you. I was

David Pere 28:15

gonna say I used to tell people, if your lender tells you that you have to go get it, then go find another lender because they're too lazy. Like, yeah, it's such an easy process that any lender who cares about customer service should be able to be like, hang on a sec to do to do here you go, like,

Keith McKeever 28:32

I'll be back on the phone in 30 to 45 seconds. It shouldn't shouldn't take that long. I know when I refinanced my house couple years ago, I pulled mine just because I was any benefits anyway. And I'm like, oh, cool, pull it out, boom, send it off to my lender of choice that I you know, but yeah, for sure. You definitely should not be charged for that. That's ridiculous. And like I said, I haven't seen it personally. But I've heard the horror stories. And it's like, like, you should this should be Red flag number one, if you don't have other red flags that have popped up with that lender by that point. But yeah,

David Pere 29:07

I think that's one of the reasons that a lot of these big box lenders are just not worth going through. Right. And I'm not going to talk smack about any of these major lenders specifically, but I'm going to at least give examples of ones that you know, I'm not a huge fan of like Navy fed Veterans United USA and I'm not a huge fan just because they've gotten so big that there's a lot of unnecessary fees or, or delays in closing or things like they can be great at times. But because there's so it's not just those ones, those are just like the common ones. I see people go for the like big big lenders, a lot of times it's like they don't have like they're they don't necessarily have specialists, they've probably got additional fees baked in because they're so big. And you know, they're all about the profit. And so it's like man, I'd like to find I don't know either somebody who specialized in the VA loan or like local lenders or brokers, a lot of times because, you know, it's kind of weird, like every mortgage company has a couple guys who are really awesome at the VA loan. But not every mortgage company has, like, there's no mortgage company where everybody's really good at the VA loan. So you just got to find those pockets of people who really took it on themselves to understand the VA loan.

Keith McKeever 30:21

Absolutely, I think that there's pros and cons at all different levels, you know, your local small town bank, will you probably gonna be able to get that person on the phone, you call, they'll probably answer. But they may not be an expert, they may not do a ton of volume in that they may have a good field and may not do the big banks, you might have more communication issues with them, you really have to check the fees, I know where I'm at, I'm a couple hours south of Chicago, I've had some people not necessarily the loan over the years, but different loan types go through, you know, large institutions that like to advertise on television. And you really have to watch those fees, you know, if closing costs are 1500 to 2000, in my area, it's quite a shock to somebody when they get quoted like six or 7000 in closing costs. And it's like, well, I don't know what they are there. But that's not how we roll around here, like, and I don't know about you, but I'd be pissed if I lost $5 on the street, definitely, they'll charge me five or 6000 More for some closing costs, like, I'm not going to be a happy camper, you know, so you got to you got to call around. In. Also tell people, a lot of times the rates, and a lot of the terms aren't going to vary, though they will vary, but they won't vary drastically, you really need to find the bank that has the expert that you need. And somebody that you can communicate with, in the way that works for you and that you connect with. Because let's just face it, there's some people in this world, you're just not going to like from day one for whatever reason, you're not going to connect with them, you're going to think of them as, as an asshole, or they're just going to be rude to you, whatever, you know, like, that's, that's important to go through this process, you want someone who's going to treat you, right, communicate with you, and be able to get it done. So, so that's an important stuff. But there's a yes, a lot of misconceptions, but there's also a lot of a lot of issues that affect people. You know, credit is one with so it's probably the biggest one I see. Any advice for people on on the credit side of things and how they can overcome credit issues?

David Pere 32:34

Yeah, I mean, it really depends on on your history, right? If it's because of non payment and stuff, you know, you're gonna have to go and dispute some things, and you're probably better off actually talking to like a credit repair company. If it's just that, you know, like, it could be a lot of things like it could be credit utilization, it could be, you know, whatever. And so if it's credit utilization, you know, and you've got, let's say, you've got a credit card with $3,000 limit that you owe $2,000 on it. Like, you could say, as long as you aren't going to just go blow the money, you could simply double or triple your limit. And then now your utilization looks a lot better. And that'll bounce your cost of your score up. So it's really just all about, you know, how much money you're actually spending on those credit cards. And then if you're making your payments on time, I mean, it's unfortunately, credit is kind of a slow game, it seems to, to

Keith McKeever 33:30

ruin it.

David Pere 33:32

It's basketball, ruin it Yeah, I just, I took 110 Point hit two months ago, because I and I'm refund are getting it disputed, it'll be gone probably in the next month or two. But I had a credit card company that I had paid the balance off. And I guess they gave they had charged like an insufficient fund fee or something, something went through the $29 fee that they added to the bill. And I didn't know I don't use that credit card ever. I mean, I hadn't used it in six months. And I had moved from where I had lived in California. And I had told them and I changed all my billing addresses. Well, I don't know, they were sending the $29 notice to my old address in California. And so this whatever the stupid fee was that they had for 29 bucks, went delinquent for like three months, because I had no idea until my credit plummets and I'm like what in the world and I go and look and sure enough, it's just like 100 And you know, they the fee had like quadrupled over the last three or four months, but it's like, whatever. So I called them like what do I need to do to this? They're like, Oh, you gotta do blah, blah, blah. I got a company disputing it basically saying like, hey, knuckleheads, like, you never contacted me via phone, and you sent letters to an address I haven't lived in and since I got out of the Marine Corps in October, but I actually haven't lived there since May. And I changed the billing address. It shows it here. Like Talking to the other, right? Yeah. And so it definitely can can drop real quick. Which is frustrating because I'm like, now you know, my credit card and because of that my credit card limits shrunk down a little bit. So now my utilization looks high, which makes my score go down even more. So I'm like, oh, all this stuff will self correct. As soon as these knuckleheads take this, you know, delinquency off my record, that's the first time I've ever been hit with delinquency. And I'm like, over 29 bucks. Thanks, guys.

Keith McKeever 35:30

Yes, they don't care. Even if it was a penny, they come right after you. There. They don't discriminate when it comes to that, like they're going after everybody. But the credit stuff, I mean, I see people all over the place with credit issues, you know, and I see some people like, well, I pay cash for everything, I don't have a credit score like, well, as it's easier to, you know, sometimes to go from zero to something than it is to go from ruined and bad track record to fixing your credit. But utilization, you know, another thing you can do, like you mentioned, if you 3000, and you got, you know, 2000 on it, if you got 500 bucks laying around that you can spend the drop the 500 bucks on it dropped 567 100 bucks on it, and get that below 50% I think the magic number is closer to 30%. But, you know, every 10% or so you drop it, it should see some sort of an impact, but it's slow. If you paid it today, and they don't report for another three weeks, you might be another three weeks, at least, if not a month and a half before you see any kind of, of increase just on simple, simple little tweaks. So, you know, I know if it's, I've seen people like that. It's like, Yeah, well, I'm getting there, slowly pay this off. I paid that off. And then I fix this and then disputed that. And it's, you know, it's like, oh, now we're to 500. Now we're 510 Three months later, 520. You know, and it's like, it's, it's it's a slow, painful process. It really is. And sometimes those things like you said, you're $29 fee, it's not your fault. It's their screw up. And if you know ruined, thanks for people. So yeah, it's

David Pere 37:10

definitely frustrating. It's almost comical, too, because it's like, bro, I got like, almost $5 million in mortgages. And you could you can tank my credit over 29 bucks, like, what gives?

Keith McKeever 37:24

Well, I did hear the the other day, I don't know if you've heard this. The credit reporting agencies are going to make some changes in June, I believe this year, where if you've got I think it's a medical collection on your credit history that you've paid off, then they will wipe some of the like that out, or it'll be taken off of your credit instead of showing for six months or a year or whatever it is, or what however long it's on there. I'm not a credit expert, but I do know that wiping stuff off of credit reports when it comes to collections will help people will help a lot of people, especially medical collections. And I think there was a couple of other things in there. So those people who who do have some some issues with their credit, really need to take a look at this and see if it's something that might affect them. You never know you might see your you know, 500 Credit Score jumped to 550 because of it or 600 or that who knows. So, you know, if especially if you're out there on the fence about buying a maybe maybe a credit is not good enough. Who knows the summer might change for you might change drastically. So any any other thoughts on the on the VA loan? That the people should? No,

David Pere 38:40

no. I would I would just say that. I think the one thing I caution people people are always scared if you go zero down that there's a lot of risk with the mortgage, I would rather go zero down and keep 20% in my bank account for emergencies then go 20% down and have nothing in my bank account for emergencies. So don't get so wrapped up around the fact that you're gonna be 100% leveraged, it's more about how much money you have in reserve in case something goes wrong.

Keith McKeever 39:07

And even if you've got somebody sitting in reserve, you could still take that 20% and or 10% or whatever that can be new new flooring, paint. Some things you can do that give build you some instant equity in the property. Because you know if you buy right sometimes you can buy some properties that you can get some some pretty much instant equity out of you know if you buy something that needs a little bit of work. This day and age not everybody is willing to do that though. Some people want move in ready I call it the HGTV curse. Everybody wants to see what's what you got on TV. Some people are willing to take on those those houses that are still stuck in the 70s with the shag carpet and the paint on the walls and we'll do something about

David Pere 39:50

it. I'll take that any day over some of the crap that I buy.

Keith McKeever 39:56

You know what as what I actually I would love to buy something still stuck in it. 50s Yeah, you know, have some modern fridge and all that stuff but you know, some of the some of the characteristics you get and some of those things so, but Dave, I appreciate you coming on here and and dropping some knowledge on what you do and your thoughts and opinions. So I would love talking to real estate. For all the listeners and viewers. Make sure you go check out his website, check out the podcast. Like, subscribe, follow both of us. That's that's important to share what we do, so I appreciate you being here.

David Pere 40:30

Oh, Keith, I appreciate you. Thanks for having me, brother.

Keith McKeever 40:32

Yep, no problem. Now you can get back to work.

David Pere 40:36

Right? We got Yeah. But 75 80% of the siding done today. So Well,

Keith McKeever 40:42

I certainly hope that I'll just say the last 20 percents for you.

David Pere 40:47

We'll see. All right, ready? Take it easy for you to