From Foreclosure to Landlord: How One Buyer Turned Childhood Trauma Into a Two-Property Portfolio - EP217

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If your family lost their home
to foreclosure when you were a

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teenager, would you ever want to
buy one?

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Well, Juan went through exactly
that.

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But today he's not only a
homeowner, but also a first time

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landlord.
We're going to talk to him today

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and he's going to break down how
he moved from that condo to a

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house without selling, the math
behind keeping his condo as a

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rental, why he put just 5% down
on the new home, and how he

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rented that condo in just two
weeks even with closing delays.

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Perfect.
Juan, appreciate you joining us

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today.
Let's start with our first

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conversation.
One of the most important things

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that you said to me is that your
family had a bad experience in

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2009 and ended up losing a home
through the great financial

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crisis.
Talk to us a little bit about

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that, how that impacted your
decision to buy earlier during

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COVID and how to approach your
move up experience here that we

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just got through?
Really, that experience really

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taught me a lot of things.
I was actually a teenager at

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that point in my life, and my
mom had just bought a house in

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2007, and then in 2009, she was
having a lot of financial issues

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and we ended up losing the home
my mom got.

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We got foreclosed on, so we had
to be temporarily displaced.

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So we went from being homeowners
to being renters and the

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experience after that wasn't too
good either.

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We actually rented a home and
someone rented us a home and we

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actually ended up having to move
from there too because the

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person that rented us the home
foreclosed.

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They ended up getting foreclosed
on that home.

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So within a span of less than
two years, we had to move twice,

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unfortunately.
So that experience kind of, you

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know, kind of taught me some
things and some things that I

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should look out for.
I think at that point, my mom,

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just just her payment, just what
happened is that she took out a,

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a variable, variable loan.
So her payment went up

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significantly and she wasn't
able to afford it.

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So initially she was able to
afford it.

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And then once the the interest
rate changed, she was no longer

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able to afford it,
unfortunately.

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So that's what that's what led
to us being foreclosed on,

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unfortunately.
And that wasn't uncommon in that

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time frame.
The the disclosure process now

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is very different than it was at
that time.

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So it was very possible for
either an ignorant or an

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unreputable lender to tell
someone, hey, this is going to

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be OK.
Many of those programs are no

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longer even available.
And if they are, there's some

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pretty tight guardrails around
it.

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So sorry that your mom went
through that.

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But from your perspective, it
did it made a, it made a really

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big impression on you.
And I believe it's almost set

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you up for success.
So hard time, you know, good,

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good things can come out of
adversity.

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That was a bad situation for you
and your family.

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But now you for your own family
here 15 years later are in a

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completely different position.
So looking back at your journey

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from that condo that you first
bought in 2021 to buying this,

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what would be your biggest piece
of advice to someone in the same

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situation, owning a home and
looking to move up?

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Or even just first time buyers?
You know, here at the Educated

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Home Buyer, most of our people
are just looking to get into

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their first home.
Now that you have the experience

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2 times through this process,
what is your best advice to

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those folks?
I think my best advice is don't

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like, I guess try not to time
the market.

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It's that's actually extremely
challenging to do.

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The prices that were available
back in 2010, 2012, which is

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pretty much the bottom of the
market.

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I know a lot of people are still
waiting for that extremely low

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prices, interest rates.
I don't know if that's ever

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going to happen again.
That was a Unicorn event, right?

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So really for me and my wife who
was buying when we had, we were

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in our best financial situation,
both savings, steady jobs and

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also when we bought the condo,
we told ourselves we were going

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to be in the condo for five
years.

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It was somewhat of a compromise
in 2021 because in 2021 there

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was this thing going on where
houses had multiple offers up to

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20, sometimes 30 offers.
So unfortunately about we put in

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about over a dozen offers, it
didn't get accepted and we

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finally were able to get the
condo and we're happy, we're

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happy in the condo for five
years and it was, it was a good

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compromise for us at the time.
And our decision to keep the

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condo was really to generate
some passive income and also

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generate a little bit of wealth
in the future, 5/10/15, maybe 20

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years from now.
So we decided to keep the condo

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and get the single family home.
And again, we went through the

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whole process in the 4 1/2 years
that we lived at the condo,

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beefing up the savings, making
sure that we're spending

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modestly, keeping our debt low.
The other thing that we really

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focus on is not buying the
biggest, nicest, most expensive

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house we can buy.
Even the home we bought, we're

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buying now is a very modest
sized home, but that's something

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that's comfortable for us
because in case of any financial

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emergencies, we could pay this
and we could figure things out

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in worst case scenario.
So I think our main focus and

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also what I learned from my mom
is not to overstretch myself and

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also live within my means
modestly, right?

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So it's OK if you don't have the
biggest and nicest home, as long

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as you're comfortable and you
have Peace of Mind.

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I think that's more important to
me and my wife is that we can

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afford the payment, that that's
the biggest thing for us.

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Yeah, and you know, we we did an
episode on some of what we

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consider to be bad advice from
Dave Ramsey, but on the Dave

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Ramsey Show, one of the things
he talks about, and I'm

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paraphrasing so I'll get it
wrong, but live like no other

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today so that in the future you
can live like no other.

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So you're living within your
means and and building up equity

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and building a better future for
you and your family.

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You put a roof over your heads
that you own for the last five

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years.
You took advantage of those low

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prices, you got the
appreciation, you had a low

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interest rate.
And thankfully, because you were

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able to save through that time,
you didn't have to sell that

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property to come back and buy
this one.

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And because of that, you, you're
going to be able to preserve

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that COVID era rate.
And now someone is going to pay

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market rents.
And we'll talk about that a

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little bit.
Someone's going to pay market

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rents and you're going to have
some positive cash flow every

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month because of that really low
interest rate.

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A lot of folks, you know, Jeb
talks about his story here on

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the show all the time.
He wanted to keep his home

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really bad when he bought the
new one because he got 3 boys,

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growing boys.
They had to move to a bigger

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home and he wasn't able to do
that.

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So by not pushing for your Max,
you put yourself and your family

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in a really, really good
position there.

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So definitely congratulations to
you guys in terms of the the

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decision to say, hey, we got to
get out of here, this doesn't

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work for us.
Was it really, was it the square

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footage?
Was it the fact that you didn't

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have a yard for your kids?
What was the situation that led

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you to say, hey, we have a great
situation?

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We got low interest rate on a
condo we can easily afford, but

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what what was sort of the
driving factor in family needs

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for getting the new home?
The, the driving factor is

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really our family is expanding
and we do need a backyard for

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the kids and stuff like that.
And also too, when we got to

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condo, we told ourselves we
would be there probably five

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years, right?
We're thinking long term.

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We're it wasn't, we're going to
be here a year, six months and

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then we're going to get the
bigger home.

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It was a process to establish,
re establish ourselves to put

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ourselves in a good position.
So when we did find something

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that was within our budget, we
could jump on that opportunity,

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right.
So one of the things that me and

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my wife tell each other is luck
is when when luck is when

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opportunity finds someone that's
work prepared, right?

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So when you were prepared and
you find the opportunity, that's

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luck.
So for us, I guess we got lucky

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because we were well prepared
and we really wanted the house

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and we wanted the backyard and
and it ended up happening for

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us.
Well, let's talk a little bit of

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that preparation.
I think this is really

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important.
Every family is different, Every

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family is unique.
I have situations where where

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the wife takes the lead and I
don't really ever talk to the

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husband all that much.
I have this opposite situation

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where don't know the wife exists
other than seeing her on the

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application.
You guys were both pretty

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involved in this process.
So tell us for you and, and how

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your family operates, it sounds
like you guys have pretty open

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dialogue and you're on the same
page of here's where we are,

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here's where we want to be and
here's how we're going to to

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meet that.
Not that there's any wrong right

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or wrong way to do it, but for
you guys it seemed to work

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really well that you were both
on the same page and knew

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exactly what you wanted through
this process.

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Yes, I think what was key with
our our household, me and my

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wife is having the financial
transparency with each other and

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being accountable to each other
for not spending so much money,

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getting into debt and putting
ourselves in a bad position

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because we've spent the past 4
1/2 years preparing ourselves to

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buy this property, right.
So it took 4 1/2 years for us to

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get into this position and keep,
to keep the other property,

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right.
So it's all about, for us, it

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was really being on the same
page financially and kind of

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keeping tabs on each other to
make sure we're still meeting

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our our goals, which was to get
the house right.

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So it worked out for us.
I, I love it.

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Well, let's let's pivot into
this purchase and this home and,

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and how it all worked out here
and the decisions that we made.

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So in the first call that that
you and I had, we were kind of

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going, how do we structure this?
So we have some constraints

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here.
Even if it were the right loan,

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FHA probably wouldn't be
possible for you because they

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have something called the 100
mile rule where we can't use

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rents to offset the departing
residence unless we're moving

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100 miles away.
And you guys were moving pretty

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close.
You're not first time buyers and

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you're not underneath the home
possible home ready income

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limit.
So we couldn't do 3% down.

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So that led us to 5% from my
end.

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But you, I think you had a
pretty solid idea before we ever

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spoke that that was kind of what
you guys wanted to do.

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How did you arrive at that
number, besides the constraints

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that the mortgage put on us?
Really arriving at that number

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is trying to figure out where we
would be at our budget for the

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monthly payment that would we
would be comfortable with,

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right.
So I think really finding

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something that was comfortable
for us was key.

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And like I said, overstretching
ourselves would just, you know,

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put us put us in a more riskier
position holding both

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properties.
But it worked out because really

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we were able to be on the same
page and, and, you know, make

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those decisions and stick to
that, right?

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And not say, oh, let's let's
spend something above what we

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budgeted for because that would
actually throw everything off.

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I think being disciplined is
probably the hardest part

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because you see a nice house is
very emotional not to want it,

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right. 100% and and you have,
we've got multiple issues from a

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couple different sides there.
You're in LA County, but you're

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in one of the more affordable
areas there in the high desert.

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You could have gone closer back
into the city and a similar

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house, more expensive, you could
have stayed there in your area,

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a bigger house.
And, and it's a it's a big

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temptation to to look at that.
So it was, it was really

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instructive for me to watch as
you guys were sending properties

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over going, hey, they really
have a game plan and they have a

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budget and they're sticking to
this to make sure that works

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out.
So along those lines of the

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budget and putting it all
together, one of the things that

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you and I talked about in the
original process, you did have

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enough cash to pay off a car
that has a little more than

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$5000 left on it.
What was your thought process

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there?
And we eventually you made the

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decision, but we went through it
and thought, hey, we're better

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00:11:08,560 --> 00:11:10,480
off keeping the cash versus
paying it off.

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But from your perspective, what
went into making that decision?

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Oh, really, it's just me and my
wife just game planned of like

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you said, we'd rather have the
cash and pay off the car because

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the car is actually a very small
monthly payment and this very

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small amount that was owed on
the car, right?

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00:11:26,360 --> 00:11:29,200
So the car wasn't going to
really affect the loan that

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00:11:29,200 --> 00:11:31,840
we're going to get too much.
And also it wasn't such a huge

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00:11:31,840 --> 00:11:34,200
expense every month.
So I think having the cash

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00:11:34,200 --> 00:11:37,000
instead of paying off the loan
in full made more sense to us at

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00:11:37,000 --> 00:11:40,000
this point just to give us a
little bit more cushion, right,

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00:11:40,160 --> 00:11:42,360
at least at least for initially
the first year.

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And, and every situation is
unique.

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I've, I've had borrowers go the
other direction and make the

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decision to, to pay off the car.
In your situation, it would have

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raised the payment about $35 a
month, 5 or $6000 somewhere

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00:11:55,480 --> 00:11:58,680
about 30 to $35 a month, way
cheaper than the car payment.

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00:11:58,880 --> 00:12:01,160
But we're making that payment
for the next 30 years.

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00:12:01,160 --> 00:12:02,640
You guys are going to have that
car paid off.

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00:12:02,640 --> 00:12:05,000
What is about the next year that
car payment goes away entirely?

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00:12:05,240 --> 00:12:07,000
Yeah, within within a year, yes,
correct.

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OK.
So from your perspective, I

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think that was the best
decision.

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00:12:10,680 --> 00:12:13,080
It really follows in line with
you guys thought process of

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00:12:13,080 --> 00:12:15,800
taking the Longview, being
conservative, a little bit

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00:12:15,800 --> 00:12:17,760
higher payment in the short run,
but definitely going to put you

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00:12:17,760 --> 00:12:19,080
a better position in the long
run.

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00:12:19,360 --> 00:12:22,680
So a lot of folks in your
position would have just sold

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00:12:22,680 --> 00:12:25,040
the condo.
I don't remember exactly how

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00:12:25,040 --> 00:12:28,640
much you owed, but you could
have put 2530% down on the new

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00:12:28,640 --> 00:12:30,320
property if you had sold the
condo, right?

259
00:12:30,680 --> 00:12:33,080
So.
From, from that, from that

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00:12:33,080 --> 00:12:35,920
perspective, how did you guys go
through that knowing, hey, we

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00:12:35,920 --> 00:12:38,760
can put this big down payment,
get a much lower payment, maybe

262
00:12:38,760 --> 00:12:41,600
a bigger, nicer house with an
even lower payment and still be

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00:12:41,600 --> 00:12:43,480
conservative?
How did you guys go through

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00:12:43,480 --> 00:12:46,520
making that decision that we're
comfortable making the leap to

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00:12:46,520 --> 00:12:49,280
being landlords and preserving
that Covidera rate and helping

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00:12:49,280 --> 00:12:50,680
someone else build wealth for
us?

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00:12:51,720 --> 00:12:53,080
Yes.
Well, the decision was the

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00:12:53,080 --> 00:12:55,600
decision was really because the
payment that the payment we're

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00:12:55,600 --> 00:12:57,640
gonna get on this one to get on
this one for us.

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00:12:58,120 --> 00:13:01,280
And we decided we decondo
because the condo because real

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00:13:01,280 --> 00:13:03,080
estate thing.
Real estate thing is one year,

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00:13:03,320 --> 00:13:06,360
not one day, 2 years thing.
This is one day, one decade, 1

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00:13:06,360 --> 00:13:07,960
decade 2, right.
So, right.

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00:13:07,960 --> 00:13:11,040
So eventually, eventually we
benefits the benefits of that

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00:13:11,040 --> 00:13:15,720
and on the condo we want to
keep, we want to keep the equity

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00:13:15,720 --> 00:13:18,600
there for our future, for our
future, for the future.

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00:13:18,600 --> 00:13:21,240
We could have sold the condo,
sold the condo maybe maybe at

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00:13:21,240 --> 00:13:25,240
the low side of the low side we
have we have 20 percent, 20%

279
00:13:25,360 --> 00:13:28,200
situation situation, but then
that will tie that will tie up

280
00:13:29,160 --> 00:13:31,200
right.
We rather just rather just have

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00:13:31,200 --> 00:13:33,920
what we have now, have now
lifted to the home and then

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00:13:34,080 --> 00:13:36,000
there for there for the time,
another time.

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00:13:37,240 --> 00:13:40,560
And and looking, yeah and in
looking at your situation, you

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00:13:40,560 --> 00:13:43,400
have positive cash flow.
We don't mean we have to go back

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00:13:43,400 --> 00:13:45,840
into a, a look back in a year to
know exactly what all the

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00:13:45,840 --> 00:13:47,360
expenses are.
But condos fairly

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00:13:47,360 --> 00:13:49,560
self-contained, there shouldn't
be a lot of additional expenses.

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00:13:49,560 --> 00:13:52,320
So we have nice positive cash
flow that will give you a

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00:13:52,320 --> 00:13:54,480
cushion there to absorb some
expenses.

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00:13:55,120 --> 00:13:56,880
And that doesn't even account
for the fact that that's

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00:13:56,880 --> 00:13:58,640
including the principal and
interest payment.

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00:13:58,640 --> 00:14:01,600
So a chunk of that the principal
payment, someone else is now

293
00:14:01,600 --> 00:14:03,880
going to be putting money in
your pocket and also paying that

294
00:14:03,880 --> 00:14:05,800
mortgage down.
You're about five years into

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00:14:05,800 --> 00:14:08,920
that very low interest rate.
So a lot of that is going to

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00:14:08,920 --> 00:14:11,360
principal and it will only
accelerate over time.

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00:14:11,680 --> 00:14:14,120
So for your from from my
perspective, when I looked at

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00:14:14,120 --> 00:14:17,880
your plan, I'm like, I cosign
this is this is a great option

299
00:14:18,200 --> 00:14:21,280
for for doing that.
Now let's talk about a little

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00:14:21,280 --> 00:14:24,000
bit about the process and how
you put your team together.

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00:14:24,240 --> 00:14:26,640
Let's start with the easy part.
So we didn't get to help you

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00:14:26,640 --> 00:14:30,240
with that process in 2021.
We didn't start the podcast till

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00:14:30,240 --> 00:14:32,160
about 2022.
So it wouldn't have been super

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00:14:32,160 --> 00:14:34,760
easy to even find us at that
time.

305
00:14:35,160 --> 00:14:39,240
But how did you find the show?
And you reached out.

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00:14:39,240 --> 00:14:40,480
I went back and looked back
yesterday.

307
00:14:40,480 --> 00:14:42,920
You reached out on January 7th
was our first phone call.

308
00:14:42,920 --> 00:14:45,040
You shot me a text.
I think we talked the very next

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00:14:45,040 --> 00:14:48,960
day and what 90 days later here
you're you're in that home.

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00:14:48,960 --> 00:14:51,200
But tell us a little bit about
how you found us and how you

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00:14:51,200 --> 00:14:53,400
decided to reach out and work
with our mortgage team.

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00:14:54,560 --> 00:14:58,480
I've actually been a fan of the
show for about 3 years.

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00:14:59,400 --> 00:15:02,280
So I've always been had interest
in learning more about being an,

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00:15:02,400 --> 00:15:05,080
like you guys say, an educated
home buyer and learning more

315
00:15:05,080 --> 00:15:06,600
about the process.
Because I think one of the

316
00:15:06,600 --> 00:15:10,200
things that I didn't know and my
wife didn't know is what

317
00:15:10,200 --> 00:15:12,920
everything that goes into this,
it's very multifaceted.

318
00:15:12,920 --> 00:15:16,120
It's very complex.
Buying a house is not something

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00:15:16,120 --> 00:15:19,000
you do everyday.
So having a little bit of

320
00:15:19,040 --> 00:15:23,520
knowledge and guidance with your
guys's videos, we were able to

321
00:15:23,520 --> 00:15:27,560
actually kind of game plan
ourselves of, OK, so should we

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00:15:27,560 --> 00:15:30,560
just go buy a house and go
approve ourselves this week and

323
00:15:30,560 --> 00:15:33,280
just go buy it the next week?
Or like, no, let's make a plan

324
00:15:33,280 --> 00:15:35,560
for a date because we're not
going to try to time the market.

325
00:15:35,760 --> 00:15:38,160
When are we going to be ready?
And we told ourselves we're

326
00:15:38,160 --> 00:15:40,520
going to be ready March 2020,
sixth.

327
00:15:40,720 --> 00:15:44,680
And we made that decision in
about maybe April 2025.

328
00:15:45,000 --> 00:15:47,800
And then in January, I called
you to get the ball rolling.

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00:15:48,080 --> 00:15:52,280
So it was time and preparation
and then calling you and getting

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00:15:52,280 --> 00:15:54,040
all the all the details that we
needed.

331
00:15:54,040 --> 00:15:57,640
And from January to February,
getting everything ready,

332
00:15:57,800 --> 00:16:00,120
uploading all the documents,
making sure everything was

333
00:16:00,960 --> 00:16:03,000
pretty much that we had all our
ducks in a row, right?

334
00:16:04,040 --> 00:16:06,280
So January might have been a
little early, but you know what?

335
00:16:06,280 --> 00:16:10,240
Better early than late.
Never say like you've heard us

336
00:16:10,240 --> 00:16:12,240
say on the show a million times.
It's never too early.

337
00:16:12,400 --> 00:16:15,000
I've got a guy right now you're
looking to buy in North Carolina

338
00:16:15,000 --> 00:16:16,880
next year and we're going to
have a conversation.

339
00:16:16,880 --> 00:16:19,840
It's probably a 15 minute
conversation, but just get your

340
00:16:19,840 --> 00:16:22,760
ducks in a row, get an outline
of what that's going to look

341
00:16:22,760 --> 00:16:24,800
like.
So January to me was perfect.

342
00:16:25,000 --> 00:16:28,480
The process was was very smooth
and straightforward from my end.

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00:16:28,680 --> 00:16:31,000
My favorite loans that we do, I
mean, I have a lot of realtor

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00:16:31,000 --> 00:16:32,360
partners.
They'll refer a client.

345
00:16:32,360 --> 00:16:34,520
They don't know me, they don't
know the process.

346
00:16:34,520 --> 00:16:37,600
Like you said, they're, they're
not dumb, they're just ignorant

347
00:16:37,640 --> 00:16:40,240
of the home buying process.
They haven't done it ever or

348
00:16:40,240 --> 00:16:43,120
they haven't done it often.
So we have to start that

349
00:16:43,120 --> 00:16:45,200
education process.
And every one of those phone

350
00:16:45,200 --> 00:16:46,960
calls is longer and more
detailed.

351
00:16:47,240 --> 00:16:49,920
All of our calls, you know,
10-15 minutes because you've

352
00:16:49,920 --> 00:16:52,720
already done your research and
brought you up to speed from

353
00:16:52,720 --> 00:16:54,400
three years of, of watching the
show.

354
00:16:54,720 --> 00:16:57,560
So that is awesome.
And that is one piece of it.

355
00:16:57,560 --> 00:16:59,600
Jeb and his team do not cover
the high desert.

356
00:16:59,600 --> 00:17:01,760
Even though you're not that far
away from us, it's far enough

357
00:17:01,760 --> 00:17:05,319
away.
We have an excellent realtor

358
00:17:05,319 --> 00:17:07,480
partner out there that's helped
four or five listeners from the

359
00:17:07,480 --> 00:17:10,920
show, but when we first spoke
said Nope, my sister-in-law is

360
00:17:10,920 --> 00:17:13,480
an excellent realtor and one of
the things we talked about in

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00:17:13,480 --> 00:17:16,960
the show is everyone, especially
in California, has a family

362
00:17:16,960 --> 00:17:19,680
member that's a realtor.
Everyone has a license, It's

363
00:17:19,680 --> 00:17:22,400
easy to get, you can make a
chunk of money and a lot of

364
00:17:22,400 --> 00:17:24,640
times it doesn't work out well
in your situation.

365
00:17:24,960 --> 00:17:28,280
Your sister-in-law did a great
job for you, guided us through

366
00:17:28,280 --> 00:17:30,160
the process.
There's a little choppy waters

367
00:17:30,160 --> 00:17:32,000
there at the end and she got us
through that.

368
00:17:32,280 --> 00:17:35,520
But from your end, how did you
know that she was going to be

369
00:17:35,520 --> 00:17:37,920
the right resource for you and
not the crazy uncle with the

370
00:17:37,920 --> 00:17:39,480
license that drops the ball on
you?

371
00:17:40,600 --> 00:17:43,840
Well, actually my sister-in-law
helped us with our original

372
00:17:43,840 --> 00:17:48,600
transaction back in 2021.
And in 2021 we were actually her

373
00:17:48,600 --> 00:17:53,960
second ever transaction.
So we, we, we've followed her

374
00:17:53,960 --> 00:17:56,640
career for the past four years
we've been where we told her

375
00:17:56,640 --> 00:18:00,920
we're going to use you and her
evolution from 2021 to now is

376
00:18:01,240 --> 00:18:03,680
night and day.
So the reason that we use her

377
00:18:03,680 --> 00:18:07,280
too is because she's grown
professionally so much and also

378
00:18:07,280 --> 00:18:09,320
we want to support our family
members, right.

379
00:18:09,320 --> 00:18:12,360
So that's us showing her the
most support is by giving us

380
00:18:12,520 --> 00:18:17,160
giving her our business and she
did great and we will use her

381
00:18:17,160 --> 00:18:20,800
for future transactions.
Absolutely.

382
00:18:20,800 --> 00:18:23,520
And I can, I can vouch for that.
She did a very good job for you.

383
00:18:23,520 --> 00:18:26,960
And as I said, there were some
difficulties that required some,

384
00:18:26,960 --> 00:18:29,080
some intervention.
A lot of times a, a transaction

385
00:18:29,080 --> 00:18:32,360
maybe 7-8 times out of 10 goes
super smooth and there's very

386
00:18:32,360 --> 00:18:36,800
little area for a realtor to, to
need to step in and, and she did

387
00:18:36,880 --> 00:18:39,400
got that taken care of.
For those of you watching at

388
00:18:39,400 --> 00:18:44,240
home, you know, Juan and, and
his wife gave her, her shot on

389
00:18:44,240 --> 00:18:47,200
her second deal.
I always caution that I feel

390
00:18:47,200 --> 00:18:49,800
like when when we're involved
and when we have the financing

391
00:18:50,000 --> 00:18:53,160
filed in, there's a little less
risk there and we can help and

392
00:18:53,160 --> 00:18:56,160
assist a newer realtor.
Everyone has to start somewhere.

393
00:18:56,160 --> 00:18:59,400
I like to tell the story.
In 1995, the very first

394
00:18:59,400 --> 00:19:03,280
transaction I did, Anaheim, CA,
it was a guy named Lance.

395
00:19:03,280 --> 00:19:08,080
He was buying a $30,000 condo
and we did an FHA loan on it and

396
00:19:08,080 --> 00:19:10,920
the Realtors knew that I had
never done a purchase on.

397
00:19:10,920 --> 00:19:12,160
I've done a couple of refunds
before.

398
00:19:12,160 --> 00:19:14,000
I had never done a purchase.
So everyone has to start

399
00:19:14,000 --> 00:19:16,440
somewhere.
Just make sure that if you're

400
00:19:16,440 --> 00:19:19,200
you're in that phase and you're
using someone new like she was

401
00:19:19,200 --> 00:19:21,880
then and not experienced and on
top of her game like she is now,

402
00:19:22,520 --> 00:19:24,960
put guardrails around it.
Make sure everyone knows hey if

403
00:19:24,960 --> 00:19:28,000
you need help raise a hand.
Generally your realtor has a

404
00:19:28,000 --> 00:19:30,880
broker or a team member, someone
that can help if you're dealing

405
00:19:30,880 --> 00:19:32,520
with someone new.
But hopefully you get someone

406
00:19:32,800 --> 00:19:36,960
like one was able to deal with
with Rocio and it is has four or

407
00:19:36,960 --> 00:19:39,240
five years of experience under
her belt and did a very, very

408
00:19:39,240 --> 00:19:41,520
good job.
If you're watching this and you

409
00:19:41,520 --> 00:19:43,760
don't have that, always go out
to the

410
00:19:43,760 --> 00:19:47,760
educatedhomebuyer.com/start.
We can get you connected with an

411
00:19:47,760 --> 00:19:49,320
agent no matter where you are in
the country.

412
00:19:49,320 --> 00:19:51,360
Jeb has an amazing network and
we can do that.

413
00:19:51,600 --> 00:19:54,560
If you don't have a family
member there that you trust. 1

414
00:19:54,560 --> 00:19:58,080
Something else unique about your
transaction was that the the

415
00:19:58,080 --> 00:20:01,240
seller wasn't a homeowner.
They had inherited the property

416
00:20:01,440 --> 00:20:03,480
and that kind of from your end
you you felt like.

417
00:20:03,560 --> 00:20:06,320
That changed the property the
the process a little bit from

418
00:20:06,320 --> 00:20:08,720
buying your condo from a
previous homeowner.

419
00:20:09,160 --> 00:20:11,320
What was different about that?
What did you like, what did you

420
00:20:11,320 --> 00:20:14,280
not like and what could someone
listening to the show learn

421
00:20:14,280 --> 00:20:17,960
about buying from an era?
As we head into the Silver

422
00:20:17,960 --> 00:20:20,520
Tsunami and we have more people
passing away and and people

423
00:20:20,520 --> 00:20:22,440
inheriting properties and
selling them, this will be more

424
00:20:22,440 --> 00:20:25,920
common going forward.
I think the challenging part

425
00:20:25,920 --> 00:20:29,240
about this transaction is that
the person that took the

426
00:20:29,240 --> 00:20:32,200
property was an error and
obviously they, they didn't know

427
00:20:32,200 --> 00:20:33,560
anything about the property,
right?

428
00:20:33,880 --> 00:20:36,520
So they really couldn't answer
any questions for us about the

429
00:20:36,520 --> 00:20:38,280
actual property cuz they didn't
live here.

430
00:20:39,000 --> 00:20:42,160
That was part of the challenge
also to the person wasn't like

431
00:20:42,160 --> 00:20:43,800
emotionally attached to the
property.

432
00:20:44,000 --> 00:20:46,400
So that could be good and bad in
certain situations, right?

433
00:20:47,560 --> 00:20:49,760
But I think the biggest
challenge is really that they

434
00:20:49,760 --> 00:20:51,560
didn't live here, so they didn't
really know much about the

435
00:20:51,560 --> 00:20:53,200
property.
So we really didn't have a

436
00:20:53,200 --> 00:20:55,320
resource for us to ask
questions.

437
00:20:56,240 --> 00:21:01,200
So I I think that that was very,
very challenging for us that it

438
00:21:01,200 --> 00:21:03,760
just makes it a little bit more
challenging in the fact that,

439
00:21:04,440 --> 00:21:06,920
that you're not going to know a
lot of things going into it.

440
00:21:06,920 --> 00:21:09,760
You have to do really better
like inspections and due

441
00:21:09,760 --> 00:21:12,400
diligence.
So we had our inspector come in

442
00:21:12,400 --> 00:21:16,600
and did was a little bit more
thorough because obviously the

443
00:21:16,800 --> 00:21:18,320
the owner didn't live in the
property.

444
00:21:19,200 --> 00:21:22,360
And also we asked more questions
because, you know, we're, we

445
00:21:22,360 --> 00:21:25,880
don't have that extra knowledge.
If we would, we were buying it

446
00:21:25,880 --> 00:21:27,160
for someone that actually lived
there.

447
00:21:28,240 --> 00:21:30,080
So this person didn't know
anything about the property.

448
00:21:30,080 --> 00:21:33,200
So we we have to do our due
diligence a little bit more this

449
00:21:33,200 --> 00:21:35,880
time, just a little bit more
just because of that, right?

450
00:21:36,960 --> 00:21:39,160
Absolutely.
And that one of the things that

451
00:21:39,160 --> 00:21:42,680
we talked about on the show is
that the the seller, the seller

452
00:21:42,680 --> 00:21:45,240
is required to make some
disclosures to you through the

453
00:21:45,240 --> 00:21:47,320
process in California.
One of those is the transfer

454
00:21:47,320 --> 00:21:49,800
disclosure statement where they
have to go through the property

455
00:21:49,800 --> 00:21:52,600
and answer all these questions.
They know when the sellers never

456
00:21:52,600 --> 00:21:55,760
lived in the property, they get
to say, I don't know, I don't

457
00:21:55,760 --> 00:21:58,040
know, I don't know.
I mean, if if there's a giant

458
00:21:58,040 --> 00:22:00,800
stain on the roof, they do have
to answer, hey, that stain looks

459
00:22:00,800 --> 00:22:01,920
like this roof might have
leaked.

460
00:22:01,920 --> 00:22:04,080
But for the most part, they just
get to say, I don't know.

461
00:22:04,640 --> 00:22:07,400
In California, we have another
disclosure where both agents

462
00:22:07,400 --> 00:22:09,720
have to go through and do their
visual inspection.

463
00:22:10,520 --> 00:22:14,080
Neither of those are going to be
a replacement for a quality home

464
00:22:14,080 --> 00:22:15,760
inspection.
So you guys absolutely did the

465
00:22:15,760 --> 00:22:17,760
right thing.
We always advise no matter what

466
00:22:17,760 --> 00:22:19,800
you think you know about the
property you're buying from

467
00:22:19,800 --> 00:22:22,240
family you're buying new
construction, have that

468
00:22:22,240 --> 00:22:24,080
inspection.
But definitely in a situation

469
00:22:24,320 --> 00:22:26,480
where you're buying from an
estate from an error and they

470
00:22:26,480 --> 00:22:28,400
don't have that first hand
knowledge of the property, you

471
00:22:28,400 --> 00:22:30,400
want to make sure you go through
that.

472
00:22:30,800 --> 00:22:33,120
Now let's let's kind of get a
little bit closer to the close

473
00:22:33,120 --> 00:22:34,960
and kind of how that experience
went.

474
00:22:35,240 --> 00:22:39,040
You had some unique things here,
but you had to say, hey, we're

475
00:22:39,040 --> 00:22:42,360
getting out of here, but we also
have to rent the old property.

476
00:22:43,360 --> 00:22:46,400
So with that, you had a pretty
good experience, surprisingly

477
00:22:46,400 --> 00:22:49,840
smooth experience in renting out
your departing residence.

478
00:22:50,320 --> 00:22:53,360
What would be helpful to any
listener thinking of of renting

479
00:22:53,360 --> 00:22:54,720
out their home when they moved
to the new home?

480
00:22:54,960 --> 00:22:57,920
Any words of advice of how that
experience went for you that

481
00:22:57,920 --> 00:23:01,640
that they could use?
I would say plan for the worst

482
00:23:01,640 --> 00:23:05,280
and the best case scenario.
Well, this is the thing to me

483
00:23:05,280 --> 00:23:09,360
and my wife, you know, we were,
we put the condo up for rent.

484
00:23:09,360 --> 00:23:11,920
We got a property management
company and they, they put it up

485
00:23:11,920 --> 00:23:16,200
for rent and two weeks later
somebody wanted the condo.

486
00:23:16,200 --> 00:23:19,040
They put their down payment,
they gave their first, I mean,

487
00:23:19,040 --> 00:23:22,680
they put their deposit in the
first month's rent and they

488
00:23:22,680 --> 00:23:25,640
wanted it for April 1st.
And our close date was March

489
00:23:25,640 --> 00:23:28,440
27th.
So you could see where the

490
00:23:28,440 --> 00:23:30,720
constraint and the time
constraint is there, right?

491
00:23:32,280 --> 00:23:35,720
So we agreed and we signed and
they took their deposit and they

492
00:23:35,720 --> 00:23:39,400
were set for April 1st, right?
Gave us a little bit of a tight

493
00:23:39,400 --> 00:23:42,800
deadline and a little bit
difficult, but we told ourselves

494
00:23:42,800 --> 00:23:46,600
we can make it happen, right?
And when you, when you, when you

495
00:23:46,600 --> 00:23:48,360
said that, hey, we got it rented
for April 1.

496
00:23:48,360 --> 00:23:50,680
We're like, OK, that gives us a
few days to get this done, give

497
00:23:50,680 --> 00:23:52,160
you the weekend to get out of
the property.

498
00:23:52,840 --> 00:23:56,120
And that was where kind of that
the the rental wasn't a snag

499
00:23:56,120 --> 00:23:59,120
that went really well, but it
kind of unexpectedly well in

500
00:23:59,120 --> 00:24:00,720
that they needed to be in April
one.

501
00:24:01,000 --> 00:24:06,520
Well, LA County gave us the next
curveball in that when we went

502
00:24:06,520 --> 00:24:09,440
to record your deed of trust to
make you the home owner where

503
00:24:09,440 --> 00:24:13,320
you can get the keys.
We we had an issue with the

504
00:24:13,320 --> 00:24:15,320
recording.
So I'll give a little bit of

505
00:24:15,320 --> 00:24:18,400
that that detail.
LA County is somewhat famous for

506
00:24:18,400 --> 00:24:20,600
being finicky on on what they
will record.

507
00:24:20,600 --> 00:24:23,000
So recording is done
electronically now.

508
00:24:23,000 --> 00:24:27,080
So the last step before the home
becomes yours is depending on

509
00:24:27,080 --> 00:24:29,040
where you are in the country,
the mortgage or the deed of

510
00:24:29,040 --> 00:24:32,120
trust and the grant deed that
deeds the property from the

511
00:24:32,120 --> 00:24:35,760
seller to you gets recorded.
Well, in this situation, LA

512
00:24:35,760 --> 00:24:41,400
County three times rejected the
the recording and nothing ever

513
00:24:41,400 --> 00:24:42,560
got changed.
Nothing.

514
00:24:42,560 --> 00:24:45,200
They kept saying this is wrong,
this is wrong, this is wrong.

515
00:24:45,200 --> 00:24:48,000
And title and escrow kept
pushing back saying nothing is

516
00:24:48,000 --> 00:24:52,120
wrong, you need to record this.
The fourth time on the third day

517
00:24:52,400 --> 00:24:54,960
they finally recorded it and you
were able to get your keys.

518
00:24:55,200 --> 00:24:57,920
Now that because you guys don't
deal with this every day was not

519
00:24:57,920 --> 00:25:01,200
100% transparent or clear what
was going on and who was doing

520
00:25:01,200 --> 00:25:03,160
what.
So how was that experience from

521
00:25:03,160 --> 00:25:06,000
your end navigating that knowing
you have this tightening window

522
00:25:06,000 --> 00:25:08,360
here of being need to be out of
your condo by April 1?

523
00:25:09,200 --> 00:25:11,400
Well, the window was getting
tighter and tighter, right?

524
00:25:12,080 --> 00:25:15,720
I think you know what, when we
got the, when we put the condo

525
00:25:15,720 --> 00:25:18,720
up for rent, we didn't realize
how strong the rental market was

526
00:25:18,720 --> 00:25:21,000
going to be.
We actually didn't think it was

527
00:25:21,000 --> 00:25:22,320
going to get rented until May
1st.

528
00:25:22,320 --> 00:25:25,840
But these tenants wanted it
April 1st and we weren't going

529
00:25:25,840 --> 00:25:30,080
to back out on them, right?
So we were kind of under, we're

530
00:25:30,080 --> 00:25:32,040
under the gun pretty much.
We had to move out rain or

531
00:25:32,040 --> 00:25:34,600
shine.
So it made it a little bit more

532
00:25:34,600 --> 00:25:38,000
challenging and we just had to
speed things up with all the

533
00:25:38,000 --> 00:25:40,080
recording issues.
We were actually able to get

534
00:25:40,080 --> 00:25:43,920
into the house with, you know,
my, you guys were able to work

535
00:25:43,920 --> 00:25:46,920
something out with my realtor
and the selling agent to be able

536
00:25:46,920 --> 00:25:49,240
to have some type of occupancy
for us, even though it hadn't

537
00:25:49,240 --> 00:25:51,280
recorded because everything had
funded.

538
00:25:51,440 --> 00:25:54,040
The only, the only thing holding
the property was the recording.

539
00:25:54,040 --> 00:25:58,040
So technically, you know,
everything was there for the

540
00:25:58,040 --> 00:26:00,400
seller except the recording.
So we did.

541
00:26:00,400 --> 00:26:04,960
We we were able to move into the
property not on the day of close

542
00:26:04,960 --> 00:26:07,440
which is March 27th, but we were
able to get out of the other

543
00:26:07,440 --> 00:26:10,640
property before April 1st.
So it it ended up working out,

544
00:26:10,640 --> 00:26:12,920
but it was a a very very tight
window.

545
00:26:14,160 --> 00:26:17,600
Added a little bit of
unnecessary stress and from my

546
00:26:17,600 --> 00:26:19,240
end, what I would say the most
important thing.

547
00:26:19,520 --> 00:26:21,320
Obviously there's no way to
avoid that stress.

548
00:26:21,320 --> 00:26:23,600
You guys are are going to be
amped up a little bit, but both

549
00:26:23,600 --> 00:26:26,240
Soledad, your wife and yourself
were super cool through the

550
00:26:26,240 --> 00:26:27,560
process.
Just saying, hey, what's going

551
00:26:27,560 --> 00:26:28,360
on?
What are we doing?

552
00:26:28,360 --> 00:26:31,400
How do we resolve this?
So when things get a little

553
00:26:31,400 --> 00:26:33,560
tight or a little hectic or
aren't making sense to you,

554
00:26:33,880 --> 00:26:36,560
reach out to your pros, say, I
don't understand, I don't do

555
00:26:36,560 --> 00:26:38,720
this every day.
Help me understand what's going

556
00:26:38,720 --> 00:26:40,400
on.
You guys did a great job with

557
00:26:40,400 --> 00:26:42,560
that.
And again, appreciate you taking

558
00:26:42,560 --> 00:26:46,080
the time with us today because I
think your situation, there's so

559
00:26:46,080 --> 00:26:48,440
many elements here that are
valuable to other listeners.

560
00:26:48,440 --> 00:26:51,640
And we can talk about it every
week, do this, do this, do this.

561
00:26:51,640 --> 00:26:55,360
But until it hits the, the, the
actual real world, you don't see

562
00:26:55,360 --> 00:26:57,200
exactly how it plays out.
So I think this is going to be a

563
00:26:57,200 --> 00:26:59,600
very valuable episode for other
listeners.

564
00:26:59,600 --> 00:27:03,520
So, so as we close it out, if
you could go back to 2021, the

565
00:27:03,520 --> 00:27:07,480
renter looking to buy his first
home, now a homeowner and a

566
00:27:07,480 --> 00:27:12,920
landlord five years later, what
one thing would you go back and

567
00:27:12,920 --> 00:27:15,440
tell yourself before you started
that process?

568
00:27:17,360 --> 00:27:22,640
Before that really is just stay,
continue to stay disciplined and

569
00:27:22,680 --> 00:27:27,640
and patient also too that, you
know, not everything's going to

570
00:27:27,640 --> 00:27:29,880
work out the way you want it.
Always expect different things,

571
00:27:29,880 --> 00:27:32,240
right?
Like me and my wife didn't

572
00:27:32,240 --> 00:27:35,720
expect to be in the condo, you
know, X amount of time, but

573
00:27:35,720 --> 00:27:38,200
things just happen, right?
We, we actually ended up liking

574
00:27:38,200 --> 00:27:39,720
being there, but then we wanted
the yard.

575
00:27:40,400 --> 00:27:43,400
So just remember that in life
things, the only thing that is

576
00:27:43,920 --> 00:27:46,560
that is constant is change in
life, right?

577
00:27:46,760 --> 00:27:49,280
So that's the only thing you
could really depend on is change

578
00:27:49,280 --> 00:27:52,400
that's always going to happen.
So just be ready for change and

579
00:27:52,400 --> 00:27:54,840
be ready to pivot.
Yeah, it's going to be a little

580
00:27:54,840 --> 00:27:57,680
stressful, but you know what?
At the end of the day, things

581
00:27:57,680 --> 00:27:59,960
that are difficult in life are
the things that are worth it the

582
00:27:59,960 --> 00:28:01,760
most, right?
That's something me and my wife

583
00:28:01,760 --> 00:28:03,480
tell each other.
This was very, very difficult

584
00:28:03,480 --> 00:28:05,480
for us, making this move and
keeping the condo.

585
00:28:06,120 --> 00:28:08,720
But we know 10-15 years from now
we're going to look back and

586
00:28:08,720 --> 00:28:12,600
say, man, we're glad we held on
to the condo, right?

587
00:28:13,240 --> 00:28:16,840
Thousand 1000% and and being
someone a little bit older than

588
00:28:16,840 --> 00:28:19,480
you, those 10 or 15 years are
going to go a lot faster than

589
00:28:19,480 --> 00:28:21,240
you think and you're going to
look back and go, we were just

590
00:28:21,240 --> 00:28:23,280
moving into this house.
What in the heck happened?

591
00:28:23,280 --> 00:28:27,760
So I, I, we have now have
probably 8 or 10 different

592
00:28:27,760 --> 00:28:30,880
stories similar to yours.
Everyone's different, everyone's

593
00:28:30,880 --> 00:28:33,240
journey is unique.
But people that I think are

594
00:28:33,240 --> 00:28:36,080
really, when we set out and
created the show 4 years ago,

595
00:28:36,320 --> 00:28:40,160
this was what we wanted for
folks who wanted a road map, a

596
00:28:40,160 --> 00:28:44,640
path to be able to get what they
want out of real estate, to have

597
00:28:44,640 --> 00:28:47,640
a place to educate themselves on
their time frame on their path

598
00:28:47,800 --> 00:28:49,360
and then reach out when it's
appropriate.

599
00:28:49,920 --> 00:28:52,640
And you did that three years and
really we talked three months

600
00:28:52,640 --> 00:28:56,400
ago and now here you are.
We we appreciate both being able

601
00:28:56,400 --> 00:29:00,240
to be a part of that journey
from the whole three years

602
00:29:00,240 --> 00:29:02,800
through and then in terms of
closing that loan for you.

603
00:29:03,040 --> 00:29:05,640
But most importantly, appreciate
you sharing the story here

604
00:29:05,640 --> 00:29:07,560
because I think this is really
valuable.

605
00:29:07,840 --> 00:29:09,560
So with that one, I know you're
a busy man.

606
00:29:09,560 --> 00:29:12,280
You've got work to get back to.
Appreciate you taking the time

607
00:29:12,360 --> 00:29:14,960
and being with us today.
And for those of you listening,

608
00:29:14,960 --> 00:29:17,400
if you're listening to this and
you've been through the process

609
00:29:17,400 --> 00:29:21,080
of like to interview with us
like this, please reach out at

610
00:29:21,080 --> 00:29:23,200
info at the educated home buyer.
We're going to make this at

611
00:29:23,200 --> 00:29:26,120
least a once a month, month
process where we can get good

612
00:29:26,120 --> 00:29:29,640
stories like this for listeners
like yourself to see how this

613
00:29:29,640 --> 00:29:31,320
actually works out in the real
world.

614
00:29:31,520 --> 00:29:33,640
So again, thank you, Juan.
I appreciate your time,

615
00:29:33,840 --> 00:29:36,360
appreciate you choosing us for
the loan, and appreciate you

616
00:29:36,360 --> 00:29:38,600
choosing the podcast to help
educate you to become the

617
00:29:38,600 --> 00:29:41,680
educated homebuyer.
Hey, all the thank you goes to

618
00:29:41,680 --> 00:29:44,040
you guys helping, educating
myself and my wife.

619
00:29:44,040 --> 00:29:48,240
And without that knowledge, to
be honest with you guys, I don't

620
00:29:48,240 --> 00:29:51,040
think we would have had the
courage to do this again for a

621
00:29:51,040 --> 00:29:53,160
second time within five years,
right?

622
00:29:53,160 --> 00:29:55,080
The first time was stressful.
This was also stressful.

623
00:29:55,080 --> 00:29:58,800
But like I said, you can't
control everything in life.

624
00:29:58,800 --> 00:30:02,600
But at the end, when the dust
settles it, it ended up working

625
00:30:02,640 --> 00:30:03,920
out.
So we're really happy.

626
00:30:05,760 --> 00:30:07,440
Awesome.
You guys did the hard work.

627
00:30:07,480 --> 00:30:09,680
We just got to be a guy there
along with Racil.

628
00:30:09,960 --> 00:30:12,680
So congratulations to you,
congratulations to your wife and

629
00:30:12,680 --> 00:30:14,760
your family, and thanks again.
Thank you.

630
00:30:15,160 --> 00:30:15,520
Thanks.