Real Estate Investing for Beginners + How to Buy a House the RIGHT Way! #Best Education Page #Online Earning

what does today we're gonna go over real

estate investing for beginners and what

you need to know as a first-time

homebuyer and some of these things might

surprise you what is them in just today

we have a very special guest um I've

been wanting to get into real estate so

you know when I enter a new niche I find

the person who's the best at it and then

I learned from them so grant Stefano

welcome to the channel a lot of you

probably heard about him he has a very

popular YouTube channel where you

discusses real estate amongst other

things so today we're going to teach you

how to get involved in real estate from

a beginner's perspective right because a

lot of people want to do real estate for

two reasons right they want to either

buy their own home or they want to buy

investment properties right and so we're

going to cater this video to those two

things because I think it makes up kind

of the vast majority of people out there

who are getting interested in real

estate so give us advice really we want

the real actionable tips right like we

want this stuff that you've learned over

years building a multi-million dollar

real estate portfolio somebody who's

buying their first home Yeah right what

do they need to know okay well the first

thing and the most important thing is

just to work on your credit score that

is the easiest thing to do and it's also

the thing that many people tend to

overlook because they don't think it's a

big deal right it's as simple as going

to your bank getting a secured credit

card and paying it off in full at the

time it's due and that's as easy as it

is and it's doing that consistently for

6 to 18 months before deliver before

doing anything number one is just

working on your credit score bike hard

so what we like is thinking about where

you gonna buy we're gonna get my credit

score right so what credit score are

people like Blount like what are they

what do they want what do you what's

like a minimum that people can I would

say the very minimum it's probably about

a seven forty a seven forty is going to

get you the best rates and whatever loan

you want and then once you get above a

760 is when you start getting what's

called lender credits where they'll

actually credit you back on some of your

closing costs they can give you

preferential treatment there's just a

mold

two great things that happen above 760

but 740 is usually the the rainy is the

the score you need to get to get the

best rate so in a simplest sense right

because I know there's a lot of

complexities and there's like different

types of loans right like for people out

there who don't know there's like arms

there's five years 15 years 20 years if

you could have any loan what's the best

one friend for a mortgage yeah it

depends on how long you're gonna be

holding the property for if you came to

me this and you said I want to buy this

home and I want to live in it for 10

years and then my planning of selling

and moving somewhere else I would say

you've best off getting a 7 to 10 year

arm which is an adjustable rate mortgage

this basically means that they give you

a lower interest rate upfront that then

resets 7 or 10 years later down the line

okay if you said I'm gonna keep this

property for everyone it makes your own

sense to do that unless you believe

interest rates are going to be lower in

the future right so what you end up

doing is you get the 30-year loan you

lock it in knowing that eventually rates

are going to be much higher in the

future than they are right now okay so

people who hear the word refinanced

right what does that mean this means

that you can this means that you could

basically pull out equity in the

property if you have any equity in the

property or you can refinance down to a

lower rate so let's say you have a 5%

interest rate and you see six years

later that rates have dropped to let's

say 3% you have the option to refinance

that loan it's basically you get another

bank that will pay off that first loan

and give you a second loan at a lower

rate okay or you can pull out equity in

that property if you have any equity in

the property pull that out as cash and

now you have a larger loan and money in

your pocket so when people say like you

know a mortgage right like in my mind I

think 20% down is that what people

should be doing when when I say 20% down

I mean if the house costs a thousand a

hundred thousand dollars your your PIN

twenty thousand out-of-pocket

when you 89 unpopular opinion is yes I

would aim for 20% down I think that's a

safe amount that if you could save up

20% you're in you're in the position

where if the market were to go down or

if you were to lose your job or

something what happens you have enough

in the property that it you're not going

to be underwater right or it's I think

it's a lot riskier if people are putting

5% down in ten percent time by all means

I think that if you can find the right

property at the right rate at 5% down

and you have the money and you're the

reserves near the job by all means good

I would say typically it's better for

most people to put down 20% even if that

means to save a little bit longer and

typically you can also avoid what's

called PMI which is private mortgage

insurance all right this is when you

don't have enough equity in the property

you're typically a higher risk to banks

so in order to compensate banks for that

extra risk you have to pay that PMI

which is just an extra cost could be if

you make less than 20% if you pay yes

okay sometimes now is less than 15 right

but previously it's been less than 20 so

to two-prong question what's a good rate

people should pay right because like

when I got my house I think I paid 4%

that's good and so what's what's a rate

people are looking for a and then Part B

where should people start when they're

looking for a mortgage like where should

I get it from so good rate is going to

change every six months two years ago a

good rate was three point three seven

five percent and that's what I got on a

30-year loan on my place on Culver City

three point three seven five percent

well the next one I got was for an

investment property and that was four

and a half percent and at the time that

was the very lowest was five percent but

that was for an investment property so

it really depends on the time I think

rates are going up so I think pretty

soon four point seven is gonna be normal

right

I didn't pretty soon maybe a year and a

half from now five percent is gonna be

gone the best way to get the best rate

is just shop around it's not to go to

one bank and be like okay chase sitting

you know says this it's to go to three

or four different banks and then price

match them against one another and you

can go to chase and say Wells Fargo

which who typically offers lower rates

I gave me this rate well you

match it or beat it and then they will

and then you take it back to Wells Fargo

and say bro chase did this and you're

able to negotiate down the best rate

some banks you learn are better than

others Wells Fargo offers the best rates

but they're the slowest to close same

with Bank of America they tease you in

at these low rates but they're packed

with fees and they typically take a long

time to close chase

you'll pay a little bit more but they

close on time and they're just better to

deal with so that's to shop shop around

for your line so last question that

we'll move on to investment properties I

think a lot of people are interested in

that to what our closing costs like what

are that what are the hidden fees that a

new home buyer needs to know about that

aren't like kind of publicly known right

I see the thing is publicly known like

to me all of these are just like

comments that's up but for most people

watching I guess you wouldn't think that

anytime you get alone there are

origination feeds right and sometimes

they could be as high as one percent of

whatever loan you get to if you're

taking it $300,000 loan sometimes that

can cost you $3,000 or whatever set

sometimes the last sometimes it's half a

percent sometimes there are no loan

origination fees depending on the bank

that is something to consider but more

so when you're buying a property you

have escrow fees that could typically be

I think it's like you know $2 per

thousand of the purchase price or $1 per

thousand you know it depends on the

escrow company in addition to that you

will have

appraisal fees anytime you get the home

of crazy could be anywhere from 450 to

800 dollars depending on the home yeah

in they charge you for credit reports

this is the one I get pissed off if they

charge you like a hundred bucks to run

your credit which is that's pure profit

for them like so many or their credit or

yeah exactly

and then that's pure profit for them so

there are little miscellaneous things

that add up I typically say that all of

your closing cost should be about one

percent of the purchase price okay if

you're buying a million dollar house on

average between inspections escrow

closing fees loan origination fees

should be about one percent it could be

a little bit less on average about that

I'd say is a pretty safe bet okay so I

like cuz I have one more question and

then we would today

so inspections right this is something

that's incredibly important what have

you learned in your like in your career

doing real estate that's important that

some people might overlook or things

like that inspect everything even if you

don't think it's gonna be an issue the

way I typically look at inspections from

both a investor standpoint and from a

real estate agent standpoint is that

usually you break even with your

inspections as a worst case scenario so

let's say you would spend $20,000 on

inspections chances are you're going to

find more than $2,000 worth of issues

that you're used to negotiate the price

of the property so everything you do

should have it's a very least break even

so there's no no harm in doing more

inspections for instance I had no

problem spending like three four or five

hundred bucks doing a sewer line

inspection the chance of something being

wrong with that is probably one in a

hundred but if it is it could be a 20 or

$30,000 repair

oh yeah so between Nance and doing a

general inspection which is just like a

dude who just goes through the entire

home very general stuff get a roof

inspection plumbing electrical

foundation all of these things termites

here in California chances are you'll be

able to negotiate with the seller to at

least get all your money back and you

have the benefit of knowing everything

that's wrong with that property so just

are are you using a real estate agent

like always or is there a better way to

do it I mean I am a real estate agent so

that's that's what I prefer a home for a

new buyer do you recommend that use a

real estate agent or is there a better

way I bet I 100 say use a real estate

agent I would never do a transaction

without a real estate agent from

choosing a real estate agent though

should be a pretty big decision because

there's a lot of real estate agents out

there that suck yeah I mean just are

terrible to work with and I mean I've

been in the business out of the real

estate agent for 10 years and I've seen

some great agents who are totally worth

their money and other agents that just

sit around and they just write the

contract and they get paid and they do a

terrible job at it man nothing it make

the transaction like more difficult and

they actually cost the buyer money in

the process

so actually absolutely work with the

real estate agent if you're

sophisticated enough and you know what

you're doing I don't think it's the

worst idea to work with the listing

agent if that gives you a better leg up

on getting the property in a competitive

okay so I keep a Keith line because now

I have another question yeah so so as

far as real estate agents go like how do

you find the good one right cuz you said

you have bad ones right so like yeah is

there a trick or like are you I would

say from my experience it's word of

mouth is usually you can find someone

who's been happy with it with an agent

that then refers you more business and

I'm a little biased but that's how I get

most of my business at this point it's

word of mouth as well that I would say

is like ninety nine percent of my

business at this point is all just

existing customers or their referrals so

I'm biased about that but if you don't

let's say you're starting out at your

brand new you don't know anything

two places one just go to open houses

and you will be able to meet so many

agents and you'll be able to tell I

think which agents are knowledgeable

based off you know the experience of in

that market or if you ask something you

say like hey so how this phone came on

the market down the street and they look

at you they're like what oh right yeah

yeah or secondly just look online and

you should be able to tell no decently

if people have been reviews especially

on Zillow or Yelp and I've been terrible

and I know happy so yes but you know

so you mentioned Zillow that's how

you're finding houses because I know

there's like the MLS oh okay so I am an

agent we had the MLS right what I use

even as an agent I hate to say it but

the realtor comm app yeah that's what it

is yeah in my opinion it's better than

the MLS that I paid for it's a better

layout it's easier to navigate all the

information is there yeah the only

information of missing is for income

property because they don't have the

breakdowns of like the you know all the

analysis of that but besides that for

everyone else the realtor.com app is the

best and funnest place to look ok ok

let's get into investments how does

someone who has always heard about how

real estates so amazing right but maybe

doesn't have like a ton of capital how

do they get started what are the best

things to look for how do they find the

kind of the best properties in your

experience yes I would say the first

thing is capital it's very hard to get

started in real estate investing or even

buying real estate without cash

so I would say number one would be to

make money preferably you know online

but you got to make money somehow and

for me that was working as a real estate

agent and I was able to save up money

from that to invest I'm not seeing

people invest with zero money down I'm

not saying people invest with 5% down my

experience has typically been 15 to

about 20% down okay that could be that

could differ from market to market your

20% might be 20 grand my 20% might be

200 grand yeah so really differs from

market to market okay but capital is

number one right second to that honestly

is just going online and learning and

when when I mean going online that like

look at the realtor.com map and just see

what properties are coming on the market

every single day and it's like this is

you should have fun when you do this

this should not seem like a chore that

you have to do it you should just go on

and have a great time looking at what's

coming in the market and then every

weekend Saturday Sunday there will be

open houses just drive around the areas

you think you want to invest in and

check out open houses in person you'll

be able to tell so much just by driving

around the area that you think you want

to live in because I've seen so many

times I look on Google Street View right

and it looks amazing and then you show

up what like this is nasty so you have

to see it in person get it get a feel

for the vibe so there's a couple types

of investing properties right like

there's a residential yes commercial are

there more types like what explain the

difference in what should people be

interested in yeah when it comes to

investing I mean there are many ways to

invest in real estate where one is

flipping if you buy a property that's

undervalued you fix it up and you sell

it obviously for a profit that's a very

active way of investing you need more

money to fix it up yes exactly

getting a loan for fixing up a property

usually is extremely difficult and most

flippers have just a ton of cash that

they use right to deploy into the

renovation just to be able to flip it

quick and you know profit but that that

is very active I would not consider that

passive I would consider that a lot of

these developers either do that

full-time or they're just like really

wealthy people who hire it out right and

they get really high-end projects yeah

so you could flip property the next way

you could invest in real estate is

through rental

which is what I do where you buy

something right the first time you

preferably renovated add value to it you

rent it out and then you just keep it

forever and then the third way I think a

lot of people think about real estate

investing is what's called wholesaling

which is basically you tie up a property

in escrow you get it under contract and

then you assign that contract to another

buyer for any of you and you make money

on the difference right a price between

what you got the property in contract

for and what you sign that contract to

someone else and what they're willing to

pay I don't do that that's not what I'm

into whatsoever but people do do that I

would hardly call that investing now

again that's a little more active so for

for people who are you know trying to

get started like what's what's the best

place to learn other than you know of

course Graham Stephan's uses yeah if I

can subscribe best place to learn that's

a great question I would say

BiggerPockets comm is a great place for

anything real estate and you have great

community of people there that all

really are into real estate they all

help each other out so that's a great

place to start

signe books I mean they're books about

just about anything and YouTube is a

great place and I'm not knocking me

YouTube whatsoever but when you get a

book I mean it's so condensed I thought

about it yeah and you know I the

difference really is like you know with

the YouTube video maybe these people

spent like a week preparing the video

even just imagine they spent a whole

month preparing a video about investing

in real estate we got to think with with

a book someone has maybe spent years of

their life planning this out perfectly

all that plus the experience and there's

just something there with a book that is

just it's it's lacking on YouTube in my

opinion yeah there are amazing books

whatever you want to invest in I

recommend going to that route first and

that's what I did I read this book

called buy it rent it to profit and that

was a first book that got me into rental

real estate I read that and just the

whole cost I've got me so hooked to the

point where I read that book like twice

and then you could go on YouTube or on

Google and like seek further information

we're going to see people like doing

what you want to do so people who you

know first of all buy or rent and then

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