547: Home Ownership: The Good, The Bad, and The Ugly

There’s a moment most high-income professionals remember clearly. It’s when the first real money finally starts coming in.

If you’re a doctor, it’s when you finish residency training. And almost immediately, the world starts whispering in your ear:

“It’s time to buy a house.”

Not just any house. The nicest house the bank says you can afford.

And that’s where people unknowingly sabotage one of the most powerful wealth-building windows of their entire lives…by becoming house poor.

You see, the bank is not qualifying you based on what will make you wealthy. They’re qualifying you based on what will maximize the size of your loan.

If I could go back and do it again, I would have done something other than buy the great big house that I did.

I would have bought a 3–4 unit property. I would have lived in one unit. And I would have let the other tenants pay for my life.

This is an incredible strategy that almost no one uses. Yet, the government actively encourages it. FHA loans allow you to buy up to a four-unit property with as little as 3.5% down—as long as you live in one of the units.

Think about how different that is from buying a single-family home.

Instead of writing a large check every month from your after-tax income to cover your mortgage, your tenants are covering most—or sometimes all—of it for you.

Your biggest expense disappears.

And when your biggest expense disappears, everything changes.

You can invest more. You can take more risks. You can acquire more assets. You can build wealth instead of feeding a liability.

And it gets even better.

Even if you live in one of the units, the rental portion of the property is depreciable.

In a four-unit building, roughly 75% of the structure qualifies. And with a cost segregation study, you can accelerate a huge portion of that depreciation into the first year using bonus depreciation.

That means you may be able to take massive deductions in the first year—deductions that can offset income and actually pay you back the down payment you made on the property in the first place.

Meanwhile, your tenants are paying down your loan every month.

You are living there.

And you are building equity in a cash-flowing asset.

It’s almost like having someone else buy your first investment property for you—while you live in it.

And it gets better.

When you’re ready to upgrade—to the nicer house, the one you actually want—you don’t sell this property.

You move out.

And suddenly, you own a fully stabilized rental property with favorable financing, built-in equity, and years of tax advantages ahead of it.

This is how real estate portfolios actually start. Not with some massive leap—but with a smart first step.

There’s also another version of this strategy that’s incredibly powerful. Buying a property that can function as a short-term rental. In the right markets, short-term rentals can generate significantly more income than traditional leases, while still providing depreciation benefits that improve your after-tax returns.

The core idea is simple.

Early in your career, your job isn’t to look rich.

It’s to build the machine that makes you rich.

And nothing slows that process down faster than becoming house poor.

Your primary residence, by itself, is not an investment. It’s a consumption item. It requires constant feeding—mortgage payments, taxes, insurance, maintenance, repairs.

But a small multifamily property flips that equation. It produces income. It produces tax advantages. It produces optionality.

Instead of draining your resources, it accelerates your financial progress.

Looking back, this is one of the highest-probability, lowest-risk wealth-building moves I could have made.

And for those early in their careers today, it remains one of the smartest first financial decisions you can make.

As for buying your dream home? You have the rest of your life for that. And there is a lot you need to think about before pulling the trigger.

This week’s Wealth Formula Podcast gets into the real data behind home ownership across the country: the trends, the psychology and the invisible costs.

Whether you own a home now or not, this is information you need to know.

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Transcript

Disclaimer: This transcript was generated by AI and may not be 100% accurate. If you notice any errors or corrections, please email us at [email protected].

Welcome everybody. This is Buck Joffrey with the Wealth Formula Podcast. Coming to you from Montecito, California. And, uh, today Before we begin, I wanna remind you that there is a website associated with this podcast. It’s wealthformula.com. That’s where you go. If you wanna sign up for our accredited investor club, AKA investor club, where you go, if you wanna see some private offerings that are not available publicly and um, you know, learn something along the way.

It’s not just a, basically you look at deals and you, you know, they send, we send you something and you. Sign up. It’s, uh, these are educational webinars. People find ’em very useful, whether or not they are, um, uh, interested in actually investing. So go ahead and sign up Investor Club, uh, at uh, wealthformula.com.

Now, uh, for today, uh, we’ve, we’re gonna talk a little bit about, uh, we report, uh, these guys that NerdWallet, um, put out. But before that, just in general, talking about the good, bad, the ugly, uh, of home ownership, you know. I just kind of thought it was important to, especially for those of you who are, uh, younger and, uh, maybe not, uh, made some big decisions about life yet.

You know, there’s a moment that most high income professionals remember clearly. It’s when the first real money finally starts coming in, and boy, things are different if you’re. If you’re a doctor, it’s probably when you finish residency. Uh, and then almost immediately the world starts whispering in your ear.

It’s time to buy a house, not just any house, because you’ve gotta catch up with those folks that have been out in the real world for a while and you’ve been looking at, uh. With a, a little bit of jealousy. As, as you know, you’ve been in residency making 50 grand a year, and these people who aren’t as smart as you are making, you know, uh, uh, six figures.

But what ends up happening is you end up looking at, well, what’s the nicest, biggest house I can afford? That’s where people and knowingly sabotage one of the most powerful wealth building windows, potentially, of their entire lives, uh, which is they become house poor very quickly. You see the bank when they’re qualifying you, they’re not really worrying about what’s gonna make you wealthy.

What they’re concerned about is, is how big of a loan they can give you. Because why don’t they make more money on that, right? So they wanna use these, uh, basic ideas. Well, how much can you afford? You know, uh, they’re not paying attention to how much can you invest Now, if I could go back and do it again, I, I think I would’ve done things, um, uh, some things differently than I did, which was to buy, you know, a big house.

And I, and I actually thought about this and I didn’t do this, and I really wish I had, you know, I would’ve bought a three or four unit property. I would’ve lived in one of the units, and I would’ve let the tenants pay for my life. Now, this is an incredible strategy that I’m actually amazed that almost no one uses, right?

Yet the government actively encourages it. For first time home buyers is using an FHA loan, which allows you to buy up to a. Four unit property with as little as 3.5% down. That is as long as you live in one of the units for at least a year. Now, think about how different that is from buying a single family home.

Instead of, you know, writing a large check every month, uh, from your after tax, uh, money to cover your mortgage, well, your tenants are covering most, sometimes all of that, that expense for you. I mean, your biggest expense, well outside of taxes, disappears. When your biggest expenses disappear, everything changes.

You can invest more, you can take more risks, you can acquire more assets. You can build wealth instead of feeding a liability, and it gets better. I mentioned taxes. Right now, if you live in one of those units, the rental property, uh, portion, um, you know, so if you have like a four unit building, 75% of that structure, uh, qualifies, uh, for depreciation.

So. Do a full cost segregation study, use bonus depreciation, and boom, you essentially have gotten back what you put down on that property in the form of tax savings or a refund, and that is huge, right? Meanwhile, your tenants continue to pay down your loan every month. Uh, you’re living there, you’re building equity in a cash flowing asset.

It’s almost like, again, having someone else buy your first investment property for you while you live in it, and then it gets even better. When you’re ready to upgrade to that nicer house, the one you actually want, you don’t sell the first property, you just move out and suddenly you own a fully stabilized rental property with favorable financing built in equity in years of tax advantages ahead of it.

This is a great way for a portfolio to start. You know, not with a massive leap, but smart first step. There’s also another version of this strategy that’s, you know, I think still incredibly powerful. I’ve mentioned it multiple times, of buying a property that can function as a short-term rental and the right markets, you know, short-term rentals can generate significantly more income, uh, than traditional leases will still providing, uh, depreciation benefits that improve your after tax returns effectively in this situation with short term rentals.

Even if you’re a W2 employee, as long as you meet the, uh, requirements of, of, you know, that are required by DIRS to meet this for short-term rentals, you effectively can be, uh, using some of the real estate professional, uh, advantages. In other words, you can do cost segregation analysis, bonus depreciation, offset against your W2 income.

It’s crazy, but it’s true. Anyway, uh, early in your, your career, basically, your job isn’t to look rich. It’s to build a machine that makes you rich and nothing slows that process down faster than becoming house poor primary residence by itself. Uh, it’s really not an investment, it’s a consumption item. I mean, Robert Kiyosaki talks about that all the time, right?

It requires constant feeding, mortgage payments, taxes, insurance, maintenance, repairs, a small multi, uh, family property. Flips that equation a little bit. It produces income, it produces tax advantages. It produces, produces optionality. So instead of draining your resources, it accelerates your financial progress.

Again, I think this is one of the highest probability, lowest risk wealth moves, uh, that could have made that I didn’t. And for those in their careers today, it remains, I think, one of the smartest financial decisions you could make. As for buying your dream home, you have the rest of your life for that.

And you know, there’s a lot you do need to think about before pulling that trigger as, uh, many of us homeowners know. Now, this week’s Wealth Formula podcast, we’re gonna talk to a guy over at NerdWallet and they, uh, put out a big report on home ownership with a lot of real data across the country. Trends, psychology, invisible costs, et cetera, and we’re gonna have that interview for you right after these messages.

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Welcome back to the show everyone.

Today my guest on Wild Formula Podcast, Ryan Sterling. He’s a a behavioral finance expert and strategic leader. At NerdWallet where he helps, uh, shape the company’s mission to democratize financial clarity with a background in investment strategy and personal finance education. He brings deep insight into how mindset and behavior influence long-term wealth outcomes.

Ryan, welcome to the show.

Yeah, thanks so much for having me. Appreciate it.

You know, Ryan, so, uh, one of the reasons, uh, you caught my eye is, uh, somebody you wanted to talk to was you, uh, you were involved with the NerdWallet’s new 2020. Six home buyer report. You wanna start maybe just giving us, uh, the high level takeaways?

I mean, like what surprised you the most when that that data came? That data came in?

Yeah, I think the, the thing that surprised us the most is the fact that, um, the, the demand is strong despite the fact that we have interest rates still remaining high compared to where we were, uh, you know, four or five years ago.

Um, and, and that we’re still seeing the supply constraints, um, under demand side. We’re seeing demand come back. Um. Mainly in the millennials and now the older Gen Z markets. Um, but right now what, you know, the data’s telling us is that one in seven Americans are in the market for a home right now. That doesn’t mean that they are gonna buy a home, but they’re in the market right now, which is an increase from what we’ve seen over the last couple of years.

Yeah. Walk us through how that report was structured. Okay. Like, so who, who was captured, what behaviors were you trying to capture and, you know, how, how listeners can potentially, uh, interpret those findings.

Yeah, I mean, nerd NerdWallet is a pretty wide audience. So this was a survey that was done capturing over, uh, 2000, uh, different, uh, uh, participants.

Um, and just trying to understand what their home buying journey looks like over the next couple of years. Um, so it was a scientific, um, uh, study, uh, survey. It’s consistent with what NerdWallet has done in the past. Uh, and, and again, I going back to kind of the biggest surprises, uh, compared to a couple years ago is that demand is definitely back in terms of, uh, home buyers.

Yeah. So one of the themes in the report centers around affordability, uh, and, and, and also follow through on purchase plans. I mean, you mentioned there’s one in seven in the market, but the, the follow through is to another issue. What’d you learn between the, uh, about the gap between intention? To buy and actually executing on that decision?

Yeah, it’s a great question. And that was one of the other findings here, and then that’s why I mentioned that one in seven are looking, and that doesn’t mean one in seven are going to buy. And you know, what we saw last year is about 30% of people from the year before who intended to buy actually went through and made the home purchase.

Um, so there is a gap between intent. Action. And you know, a lot of what we’re seeing in terms of, you know, why did those who said they were going to buy a home a year or so ago not go through with it? A lot of it did center around the home affordability because really what buyers are facing is this double whammy of, uh, prices have remained high or actually have gone up over the last couple of years.

In addition to that, we’ve seen, you know, interest rates stay elevated. So that combination of higher prices and elevated interest rates, you know, is making affordability more difficult. And, you know, along those lines, I mean, one, one of the things that we are also seeing that’s kind of consistent across these studies is that, um, a good percentage of people consider themselves house poor today.

Meaning that you know their house in terms of. A monthly budget is, is eating up a significant portion of that where that’s then compromising spending in other areas like traveling, eating out, et cetera. So I think again, that that buyer that has the intent but is not going through with it, I think what they’re seeing is they’re running the numbers and saying, um, Hey, I really wanna buy a home.

And still very much, um, in that camp of wanting to buy a home, but they don’t wanna be a victim to what a lot of people have fallen victim of over the last couple of years. And that’s that house poor phenomenon.

Yeah. Speaking of that, I mean, you also explored financial experience of current homeowners.

Mm-hmm. What did those respondents tell you about the real cost of ownership versus what they expected they were getting into?

It’s a lot more than they anticipated, and that’s always the case. And I, you know, I should mention too, that in NerdWallet, you know, I run, uh, uh, uh, wholly owned Subsid. I run a wholly owned subsidiary of NerdWallet called NerdWallet Wealth Partners.

NerdWallet Wealth Partners is the wealth management arm of NerdWallet. So we have a pretty unique, uh, insight, um, within Nerd Wall because we’re working, like our clients are individuals, so we’re working with the end clients. I can tell you as we’re working and building financial plans for our clients, um, buying a home, because our core client is that high earning millennial buying a home is oftentimes top of the list in terms of, uh, wealth goals.

Um, now one of the things that we always have to kind of bring to their attention is it’s not just the purchase price. It’s not just the mortgage, it’s the. What do people do when they buy a home? They redo the bathroom. Uh, you know, they go from an 800 square foot apartment to a 2,500 square foot house.

You have to buy furniture, you know, you have to put a fence in the yard, you know, go down the list and, and these expenses are not hundreds of dollars. They are thousands of dollars. So working with a financial advisor like our, our advisors here at NAL Wealth Partners, we’re able to go through and say, Hey, you know.

The, the mortgage broker or the realtor is telling, this is what you can afford, but let’s actually explore what that is really going to look like because you, you don’t, it’s not the monthly payment, it’s everything on top of that that you also have to be mindful of.

Yeah. Um, you, you touch on buyer psychology, uh, there and see decision drivers.

So you know, what patterns showed up in the data that you think are most relevant to sort of long-term wealth outcomes?

I mean, think, I think it’s still, you know, buying a home is still a component of, uh, building wealth and it’s still a very important and a, and a, um, you know, an emotional connection to, um, to building wealth.

I think one of the things that we’re seeing with the home buyers though, is. Those that understand that it’s more than just a financial asset, that it is a liability. Um, but then also on top of that, see it as providing utility. It’s a place to call home. It’s a place to raise your kids. It’s provides stability.

There’s a lot of positive, um, uh, benefits from owning a home that aren’t strictly financial. As it relates to the work that we’re doing with our clients, that’s oftentimes what we have to remind people of. We’re, we’re pro home ownership here. And again, buying a home as part of a financial plan, um, you know, is beneficial to most people, just not in the way that they necessarily think.

And I do think that that is starting to resonate more. We’re starting to see that more in the survey data that people understand that, hey, this might actually not be the main driver. Of my wealth building plan, but it is important because of all of those other external benefits.

Yeah. So there were findings, uh, I think you kind of alluded this, but knowledge gaps, understanding financing, mechanics.

Talk a little bit about more about that, um, in terms of those financing mechanics, gaps in knowledge.

So, uh, one thing that’s interesting is that most people don’t realize that a 20% down payment is not the absolute minimum down payment. That there are options to explore, whether it’s, it’s FHA loans, VA loans, um, you know, some other type of lending that’s available where you can put down far less than 20%.

Um, now that doesn’t mean it’s the right thing to do. And I would actually caution, uh, a lot of people who are exploring those, um, types of mortgages where you are putting down 3.5% or 5% or 10%. There’s definitely, um, some concerns that come with that. However, you know, for someone where buying a home does make sense in putting down a down payment of under, uh, 20% is, is needed to make it work.

There are options available.

Right, right. So another interesting dimension you studied was, you know how buyers are determining affordability, right? So how are people sizing their purchases today, and what did the data reveal about how they lean on lender guidance versus independent analysis?

And that’s kinda what I was getting at before, is that there’s a big difference between what a mortgage broker is gonna tell you, what you can afford, what a realtor is gonna tell you, uh, what you can afford and what you can actually afford.

And I think that’s why we’re seeing the increase of people who consider themselves house poor right now is because you might get a loan where you can borrow a million dollars, you know, which allows you to buy a $1.2 million house. But that doesn’t mean. That you should do it. And that doesn’t mean that actually is the amount that when we put it through our plan.

Uh, oftentimes it comes in less so that $1.2 million home that everyone else is telling you you can buy, um, it’s actually more like, I’m just bringing this up, 800,000 or 900,000 because you have to take into all those other expenses that I mentioned, the fact that you, you de furnish it. The fact that there’s property taxes, the fact that there’s, uh, sometimes association dues, um, you know, the fact that, uh, roofs need to get repaired.

You know, again, like a house is an asset, but it’s also a liability. Uh, we like to remind our clients that. You define assets and do positive cost of carry and negative cost of carry. A positive cost to carry asset is an asset that pays you a negative. Cost of carry asset is an asset that you have to pay it.

Owning a personal residence is a negative cost of carry. It is expensive to own. So that’s where, and this is to throw no shade at, at the realtors and mortgage brokers we work with. Many of ’em, they’re, they’re all great, but once, once the deal’s done. They’re, they’re out of it. So if’s if it’s six months into the future and you know your total all in housing costs are accounting for 60% of your budgets and you’re not able to do the other things that you like, that’s not their problem.

So that’s where, again, working with an independent financial advisor to say, this is what you were, um, uh, this is what you’re eligible for. It doesn’t mean that’s what you should do.

How did this data look across? Different parts of the country. I mean, I, you’re in New York City, I’m in, uh, you know, Southern California.

I don’t think there’s a lot of millennials even able to get close to buying here. So, so DD do you have a sense of like, the differences across the country?

I mean, you definitely are seeing people stretch in places like New York and California versus, versus the Midwest. I mean, a general rule of thumb that we typically see is that, um, the, the, the total cost of carrying the home should be no more than about 28, 30% of your gross.

Income, um, that’s pretty consistent, uh, across the po, you know, pockets of the Midwest and, and the south. Um, when you’re getting to places like California, New York, Seattle, et cetera, it is getting more into the, the 40% or beyond

well, which is kind of crazy if you think about like, you know, high, high income earners do, like, you know, my audience.

If they’re in New York or if they’re in California, they’re, they’re paying nearly percent, uh, 50% in taxes

easily.

Yeah. And then, so really what you’re talking about is, you know, of that remaining, uh, you know, 50% that you’ve got less, I mean, you’re, you’re talking about 70% of, of, of that going to. The cost of, of living.

It’s, it’s enormous.

You know, it’s interesting, I, there’s a case study that I have where, um, a married couple both make around $500,000 a year. So their combined income of a million dollars, um, they live in, in, in New York City. Um, they were, um. Keen on buying in New York and at a young family. And when we ran through the numbers, I mean their monthly carrying costs, when you take into mortgage taxes, associations use, et cetera, like $17,000 a month, and the rental equivalent for them was around $8,000 a month.

Yeah.

So we looked at this and said. I know this is, is crazy for you guys to hear, but you know, being in your late thirties, early forties, it actually makes more sense for you to rent. What they ended up doing is they bought a house, um, uh, in, in Hudson Valley, New York, that they’re able to use as kind of a vacation house, but they’re also, uh, getting Airbnb income now from it.

So that house is actually paying for itself. So what that was able to do is kind of scratch the itch of, we wanna own real estate, we feel like we’re missing out, not owning real estate or there’s that, there’s that. Does that anxiety, I think a lot of people get from their parents that, you know, you need, you need to own.

Um, so there are alternatives where you live in some of these high cost of living environments where, hey, if you really do feel like you need a home, there’s actually ways to do it that don’t necessarily, uh, require being your personal residence. And oftentimes when we, you know, in this case, when we under, when we, when we put their plan together.

It, it just, buying in New York City just did not make sense for them. Um, so they took down that path. They, they went down the path of renting an $8,000 a month apartment, which is still expensive. Um, but then being able to again, buy outside of the city and get some rental income that again, made them, uh, at peace with the decision.

It’s interesting when you look at, um, across, again, across the country. Is there a general theme in terms of costs of buying versus renting? Are there some markets or parts of the country where it clearly makes sense to buy versus clearly makes sense to rent?

Mm-hmm. Yeah, I mean, I had a case study, some clients who lived in, uh, orange County, California, two working professionals, young family.

And again, when we ran the numbers, it just did not make sense for them to buy in Orange County. They ended up moving to Minnesota and, uh, they live in suburban Minneapolis. And when you looked at, you know, the cost of buying versus renting, it actually was. Fairly equivalent to the point where it became a no-brainer to, to buy a place.

So we, we are seeing that where, again, people that are moving from some of these higher cost of living areas like New York and California, when they are moving to the Midwest or to the South, that’s where buying be makes a lot of sense for people. Um, but, but it will also caution too, that. That, that case study that I gave about the hiring earning couple, um, part of the reason they’re earning so much is because they live in New York City.

So you also have to say, Hey, if you were to move from New York to Milwaukee, sure the cost of living goes down. Um, but are you gonna be able to command the same income?

Yeah, totally. Um, let’s, let’s talk about like some of the, you know, these are the younger buyers. Um. Your report mentions, uh, growing use of AI tools mm-hmm.

In the home buying in, in that process. So what are people using those tools for and, and I guess how is that changing? Financial decision making?

Yeah, I mean, I think where we’re seeing it, uh, used the most right now is, um, number one is just, uh, kind of identifying what the right value for, for a home is.

So using it for valuation. Um. Uh, uh, using it as a valuation tool, uh, but then also using it as a tool to estimate, you know, what is the cost of furnishing the house going to be? So, using tools to visualize a room to say, okay, the example where you’re going from an 800 square foot apartment to a 3000 square foot house.

Okay, what does it look like in each room? And like, realistically, what is it gonna gonna cost two. Furnish a place like this. Um, you know, there, there are other ways too, which I wouldn’t necessarily advise. Like, you know, trying to figure out how to get through an inspection and, and all of that good stuff.

Like hire professionals where professionals need to come in. Uh, but, but I do think using tools to really help understand valuation, um, number one. But then number two, I do think it’s really smart to use AI to visualize spaces. ’cause that’s one cost that I oftentimes see people underestimating. That is the cost of furnishing a place.

I mean, it could be in the tens of thousands of dollars, depending on the size of a place.

Sure, sure. You know, when you look at this data, um, do you guys, I mean, this isn’t necessarily part of your report, what about future treads? What are you guys seeing? I mean, in the, in the world of ai, in the world of the way the, the macro picture is right now, what, what are you guys sort of looking at and saying, well, these are some of the trends that we’re probably gonna see in the future.

Yeah, I mean, I think, so in terms of rates, um, you know, we don’t think there’s gonna be a lot of movement in rates over the next couple of years. So for the people who, um, are kind of sitting on the sidelines waiting for rates to drop, um, I think they could drop a little bit, but I, you know, we’re not gonna see the 2020, you know, 20, 21 levels anytime soon.

So I think that’s number one. But I think number two is, I can tell you anecdotally with our client base, I’ve seen this over and over again, is that. You do have a fact pattern of a young family who bought a house in 2020 or 2021 with the intention of, um, you know, maybe it’s to start a home and they’re going to upgrade that in the next couple of years, and they’re sitting at a two and a half percent mortgage, um, which they don’t wanna give up, but.

They’re bursting at the seams. And I can tell you there’s a lot of pent up supply right now that I, that that is waiting to be unleashed on the markets. So again, you bought that starter home with the intention of being there for a couple of years. You’ve waited a little bit longer because you’re don’t wanna give up that two point half percent interest rate, but at the end of the day, you need more space.

So it becomes, you know what, we’re gonna bite the bullet. We’re gonna get a 5.5% mortgage. And there are a lot of those types of starter homes that I, I do think we’re gonna see, uh, supply unleashed in the next couple of years.

Do you think that’s just starter homes? I mean, I, I feel like in. People bought in arms, for example, you know, for sure mean seven year arms or whatever.

I mean, a lot of that stuff is, you know, that those, uh, you know, if you were locked in at whatever 3%, then seven years later, all of a sudden you’re paying literally twice as much and you’re gonna have to

move. That’s a great point. That’s a great point. Um, with our client base, we’re, we’re seeing it more with the starter homes, but I, I do think you’re spot on with that and that’s where, you know, the opinion that.

Rates are coming down. At least that’s what it appears. The Fed has dropped rates over the last year or so. That’s the trend that’s going that hey, that’s going to translate into mortgage rates again. That’s where it’s a bit, um, misguided in. That’s, um, yes, the Fed does have an influence, but not as much as, uh, I think people think.

So that dynamic of. Rates not necessarily coming down as much as people expect with an increase in supply that’s gonna come out. And also keep in mind too, like yes, there’s the arms. Yes, there’s the starter homes. It’s also, look, people move because of jobs. People get divorced, people pass away. You know, there is this pent up supply that, uh, is gonna get unleashed to the market.

So what does that mean for real estate prices? Then that means kind of a stagnating real estate market for the next couple of years. Which isn’t a bad thing, by the way.

No. And, and, and it seems to me that there is, you know, this sort of correction period. I mean, well, I agree with you. We’re not going back to, you know, 2019 interest rates.

Uh, chances are we probably are gonna get to the point where you might be able to get a 5% mortgage and, um, you know, that, that’s probably historically pretty, you know, pretty average, right? Uh, and, and when you do that, and then you have life. Continues and people need to move. And people already realizing that, okay, that seven year that I got 3%, now I’m paying twice as much.

I gotta get outta here.

Yeah.

Um, there’s, there’s a whole confluence of things there. And as you, you mentioned, uh, uh, supply issues, uh, you know, it should be very, very interesting to see what happens.

I think you’re right. I would also say though, too is, you know, one thing that we, you tell our clients all the time is, yeah.

When is the right time to buy? It’s when it’s when you’re ready and it’s when you need it. So don’t try to get too cute with timing it, you know, could we see prices down across the board a year from now, two years from now? Sure. But if it’s a place that you see being for five or ideally over 10 years, it’s a place to raise your family.

It’s a place that you wanna establish roots, and we’ve gone through the numbers. It works within your financial plan. Buying a home right now is a, it’s a perfectly fine time to do it. You just need to be aware of all of the costs involved and you need to have the right motivations behind it. I, I think where, where, where I kind of start to flash the caution light is when I hear people say, I really wanna build wealth, so I feel like I need to buy a home.

It’s like, well, okay, if that’s your main objective, if that’s your main pain point. There are a lot of other more effective ways to, to be building wealth right now. It’s certainly a, a tool and certainly something that we can explore, but that shouldn’t be The reason to buy real estate is you wanna buy it because in a couple of years you wanna be able to sell it at a profit.

That’s probably the worst reason to get into real estate right now.

Yeah. Tell us a little bit about what you do and if, if people are interested, what they can, uh, you know, reach out to you, how you can reach

out to you. Yeah, so we are, um, nerd DeWalt Wealth Partners. Um, we are a comprehensive wealth management firm.

Uh, so we specialize in working with people. We’re the wealth building stage of their life. We like to call them emerging high net worth. Um, the engagement with us is really three parts. It’s comprehensive financial planning, doing a diagnostic of where you are and building that roadmap from where you are to where you need to get to.

Financially. Financial coaching coaching’s, holding clients accountable to the plan, but then it’s also helping a coach do one-off decisions that are being made, buying a home, buying a rental property, exploring job opportunities. Anytime a financial decision can be made, we should be involved. Then the last piece is the investing where we build and manage investment portfolios that are in alignment with clients’ goals and objectives.

Um, you can find [email protected]. We also have a a YouTube channel, nerd wal wealth partners.com.

Brian th thanks so much for being on the show. Uh, interesting report. Uh, keep up the good work.

Yeah, I really appreciate it. Thanks, Bach.

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Welcome back to the show everyone. Hope you enjoyed it again. Be aware of buying houses, right? Again. Uh, it’s kind of funny hearing that from somebody who really likes real estate, but boy, you don’t wanna be house poor. That’s the worst. So don’t fall into that trap.

You know, have a little bit of deferring of your desires into the future. You know, put that more into investments and, uh, remember that little trick I told you about with the multi-unit multiunit? Uh, FHA strategy. Anyway, that’s it for me this week on Well Formula Podcast. This is Buck Joffey signing up.

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