Chasing Financial Freedom
Chasing Financial Freedom
Corporate vs. Business: Strategies for Modern Success
Get ready for an exciting journey! I promise you'll not only get all the latest updates on the Bayard Park Project – yes, the first house is almost completed and we've got two families eagerly waiting to make it their home – but we'll also ride the thrilling roller coaster of changing interest rates and explore the options still open for potential buyers. But that's not all, we'll also delve into the crucial role that marketing plays in the business world, and discuss the challenges of crafting the right message to connect with your audience.
Now, picture this: you're trying to make it big in business by blindly following market 'gurus.' How's that working out for you? In the second half of this episode, we'll challenge this notion and emphasize on understanding your local market dynamics to carve out a successful business strategy. Instead of following others, we'll discuss creating our path to success. We'll discuss how to become a problem solver for your clients and how to adapt strategies according to our unique local market circumstances. All this and more, so tune in and let's embark on this journey towards financial freedom together.
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Hey guys, ryan Dement, I hope you guys are having a great day. It's Monday. We're starting a new week with Chasing Financial Freedom. You guys have me because I wanted to get some updates out there, but, better yet, share in some experiences that I'm going through, but then also some learnings that I'm getting from these experiences. So let's get right to it.
Speaker 1:So this week we have some updates on the Baird Park project. First house is just about done. We have final touches going in. We have two families that are interested. Maybe they'll live side by side, I'm not sure. One has submitted an application for credit through our mortgage side. Another is still looking. Then, once we can get them approved, we'll get an offer on the table and get that all through the process. The third house will get started here very shortly. The second is at drywall, or sorry, insulation in drywall, and once that's going we'll go full steam on the third house. So we'll be looking forward to getting that third house started here in the coming weeks.
Speaker 1:And market update To say the least, it's a roller coaster ride when it comes to interest rates. I know that you guys are all experiencing the same things. The beautiful thing is there's still options out there for buy downs, to where you can buy down an interest rate and have the seller pay for that, whether it's us, the builder or another seller. Whatever you need to have done, there's options out there for you to buy a home and, like I said in a prior podcast episode I think it's two or three weeks ago we're probably going to hit between 3.9 and 4.2 million homes this year, which is practically about where we were at in 2008. We all know what happened there. Is that a problem? Yes, but every single day there's closings happening. People are still buying and selling. It's just not at the pace we're used to and with the inventory where it's at, interest rates staying higher for longer from the Fed, I mean I don't see how prices can crash. They're going to come down because we're in that season, we're in the wintertime. Prices will come back down, of course, crashing wise, I don't know. I mean there's so many things that can come into play with all of this, but neither myself or anybody else out there that thinks they're a guru can actually predict it.
Speaker 1:And all this doom and gloom is depressing. I'll be honest, I get into it and I'm depressed. I have to turn it off and say, okay, I got to focus on what I need to get done and the last several weeks, about a week and a half or so, I've struggled with that just in general, and I know I've talked about this in the past. But now it's like really focused for me, because I want to make sure that I'm focused on the business, moving things forward, because in the market we're in, whether I do as little as I can or I do as much as I can, impacts the way our business runs, and sitting around and worrying about the market isn't going to change the business, nor is it going to bring families into these properties and buy them. So what do I have to do? I have to be out marketing. So that's the next step.
Speaker 1:Is marketing, is it a pain in the butt? Sure is. Is cold calling sucking? It sure is. Is putting out daily social media posts a challenge? It is. But guess what? Every single day I'm doing it. I'm posting four to six times a day across my social channels, making sure that I'm fighting through the noise, because how are you going to be seen or attract clients, customers, whatever the business you're in, unless you're out there sharing your story and people think that they're going to post one time and be a superstar, and it doesn't work that way. You have to be in front of the noise and making sure that you are sharing your message in what you're doing with your audience. Is it going to work overnight? No, it's going to take 60, 90, 120 days or even longer.
Speaker 1:This podcast has been around going on five years and we're just starting to hit our stride, and there's so much more that I need to do and I just don't have the bandwidth and I need help. So I have to figure that out. I have to find the who and not the how, because the how is just going to slow me down and it's going to cause more heartburn and headaches than I have today. For the marketing aspect, can I say that it's not difficult to put the message out there. It's difficult to get your message right and finding what you solve for and that's the other piece of marketing is understanding what problem do you solve for. And if you don't have that direction, how are you effectively going to serve your clients and be able to change their lives and have a solution for them if you don't know what you're solving for?
Speaker 1:And a lot of us go out there and just start marketing saying I'm going to throw spaghetti at the wall and I'm going to see what actually happens, and that doesn't work. It doesn't work at all, and when you are throwing spaghetti at the wall, you're truly not solving anyone's issues other than giving them some general direction. And so these last several weeks I've been focused on niching down, getting hyper focused on the problems we solve, whether it be on the true vest side for housing, on the mortgage side to those individual clients, and then also true community that we actually have approved through our nonprofit, and what services we're going to provide. I am still in the process of getting those done and working through them. Can you say that it's a pain in the butt? It is. It's also a challenge, because every time I think I have the solution or the outcome that I'm looking for, I run it by people that are so grateful to give me feedback and they poke holes in it. Is it going to ever be perfect? No, by no means am I looking for perfection, but I am also looking for something that I can work with on a daily basis that helps others, and I know that's very broad, but let me drill down into it a little bit further. I don't want to feel like I'm just trying to throw stuff all over the place and then pretend like I solve a problem for somebody. I just there's so many gurus out there that talk about that that just don't work for me, and by doing so I'm able to really go after my tribe and find those individuals that want our help that we have a solution for them. One that I'm looking at and I enjoy is helping people with a HELOC right now.
Speaker 1:I know you're talking about debt and we always say don't get in more debt. I got that, but right now, with credit card rates where they're at 21, 22, 23% and a HELOC is going to be between 9 and 11%. I don't know about you, but if I had four or five credit cards, I'm trying to pay off on a monthly basis and not getting anywhere and I have equity in my house. Why not take the money out of your house, put some of it away for a rainy day, pay off your credit card debt and only make two payments on a monthly basis your first mortgage and your HELOC. Cut up the credit cards and be done. Move on Then when rates go back down, in whatever time, that is 12 months, 18 months, 24 months, whatever.
Speaker 1:Then you refinance out at a lower rate and now you're back into where you need to be. Yes, your mortgage balance is going to be higher, but during that time you're paying the debt down. You're not accruing 22 and 23% interest, you're accruing 9, 10, or 11%. I don't understand why people don't get that concept. They rather continue to pay the minimum payments on their credit cards and stay in that trap forever than actually just getting the money out of an asset that they have. Pay it off, be done with it and never have to deal with it again and continue to pay off that HELOC.
Speaker 1:So when you do refinance out, you have some impact and of course, your home is going to appreciate. It fluctuates up and down, but in the end it will appreciate on you. So if you do tack on some dollars to it and you're paying it down, and now you bring it into a first and let's say right now you've got for round numbers, you have a 3% first mortgage and you have a 10% second mortgage, heloc 3 plus 10 is 13 divided by 2. 6.5% is what your paying as an effective rate versus 22 and 23% on a credit card. That's a huge difference. Put the math, put pin to paper to get that math going. I'm guessing that's going to save between, on a low end, $300 to a high end of maybe $700 or $800 a month, depending on your balances, maybe more, I don't know. Maybe I'll do a video on that, maybe we'll do a quick video on that outside of it, comparing the two and just walking through that and showing you guys how the short term fix is a HELOC Get your credit cards paid off, refinance out 18 to 24 months down the road and you're in a better spot financially, as long as and I caveat this guys as long as you are not out spending on credit card debt again and racking up those balances.
Speaker 1:If you do that, then this whole process is for nothing. You truly will just be putting yourself back in the same spot you were before. And lastly, on this piece, if you're living paycheck to paycheck and you have a house and you have equity, you need to sit down and look at how you can better yourself financially from your bills and start finding money in your bills and getting rid of the bills that you don't need. But if you do have credit cards, they need to be paid off One way or the other. Whether you use a HELOC or not, it needs to be paid off because at 22% interest, you're never going to get ahead unless you're putting $2,000 and $3,000 a month towards it and consistently snowballing it every single month to pay off the smallest balance first.
Speaker 1:But unfortunately, a lot of us are living on credit cards and that's hard. Been there, I know that feeling all too well. And until the market comes back around, none of us know exactly what's going to happen. So the only way I can tell you to help yourself in the long run is through a HELOC if you have credit card debt, if you're living paycheck to paycheck and you don't have credit card debt, you need to look at your spending habits because there's probably some things in there that could be removed and you can live without. And I know that's tough guys, but it's just one-on-one and we need to be there. Only is really the market and the overall shift that's going on right now with the market and how we're dealing with it. And when I say we as in true vest and myself, but we have to be cognizant of our local markets. All these gurus are talking about the market crashing everywhere, but the thing that I have going on for me is I'm in markets that are slower to rise when it's great and slower to fall when it's not. They stay even. And some of these markets that I'm in, even in the last downturn 2007, 2008, didn't really turn much further than 5% to the south. So, with that in mind, I have to be cognizant of that market or markets and where they're going, know your local market, understand what your local market is.
Speaker 1:I live in Phoenix. I'm in markets outside of Phoenix, outside of Arizona. So Phoenix, I could tell you, is a roller coaster ride. It's doing ups and downs all over the place and to say that prices are high here is an understatement. There is a ton of inventory on the market. You're seeing many homes being price reduced, which that could be a whole another conversation, because roughly about 40% of mortgages out there are government loans FHA, va and USDA loans, which are all assumable, which would be the easiest route for the seller to go without reducing their price. Where comes in with either cash to make up the difference or gets a second on the property, pays that blended rate, moves on.
Speaker 1:But the unfortunate thing with all this is we have become so ingrained with lowering prices in markets like this to where it becomes so easy that there's a house that's three doors down for me that's up for sale originally $525,000. In a matter of two weeks they already reduced it by $26,000. And the person has a VA loan on it which can be assumed by any person that's active, military or retired that has VA benefits and if I remember right, the interest rate on it was sub three. It's like 2.65 or 2.7, something like that. It's sub three and that person can come in the home buyer could come in with a second, a HELOC of some sort. Pay the eight or nine 10%, let's call it that. You're at 6, 6.5% combined interest rate that you're paying average versus you go to the open market. Right now for a VA they're pushing 8%, so almost 2% points better in a payment. I don't know about you, but that makes dollars and cents for me and that's where I'm struggling with connecting with people and you guys can give me feedback and let me know is when I'm having that conversation. People can't visually see that they're going to pay more by getting the higher interest rate mortgage than assuming a mortgage and coming in with a second and working the math and showing people that it finally clicks after two or three times.
Speaker 1:Maybe I'm not explaining it right, maybe I need to have a different approach, I am not sure. But when it comes to the market, I'm going back to localization. I understand your local market. If your local market is expanding and going crazy, keep an eye on it, because there's things that are going to fluctuate in. Whether houses are selling or sitting on the market is going to be indicative of which direction your housing market goes. But know this we have seasonality coming up. We're coming into the winter months. Not many people are moving, not many people are buying and selling, so you're going to see a decrease in transactions. But also you're going to still see people that are forced to sell and to buy. It's just part of life and they'll always happen that way.
Speaker 1:But if you're not in tune with your local market and understand what's going on, how can you effectively run your business, be an expert in your marketplace and also help your customers or clients? And that's where I'm going to ramp this up or, sorry, drive this to the ramp and make an exit is this If we're out marketing, we have to be solution based, problem solving, and it can't be I solve everybody's problems, because that doesn't work and it's not going to work. But we're so in tuned with what's going on social media to where we want to be the know all be all and it just doesn't work. If you go, look at these gurus that are out there that are doing things they're pretty good about calling a whole overall market when really they don't have any insight when it comes to that. So take what you're seeing from these gurus and apply it to your market and drill down and understand exactly what your market is doing, because your market might be different than the overall market, it might be better or worse, whatever, but if you take exactly what these gurus are telling you over and over again, unfortunately it potentially becomes reality in your mind and I've struggled with that and I'm just telling you guys straight up.
Speaker 1:When I've sat there and listened to these gurus day in and day out and telling that the sky's falling, everything is horrible, it just puts me in a very bad place mentally and it doesn't do me any good to sit there and dwell on it on a daily basis and worry about it.
Speaker 1:All I can do is focus on the business and my local market If my local market is telling me that sales are slowing, prices are steady, not as many buyers I have to adjust to that. If it's telling me that there's more inventory on the market, there are some buyers, but many buyers are not coming unless you have some type of incentive and they're sitting on market a few days more or a little bit less, I adjust. But when somebody categorizes an overall market as one and saying everything is the same is not true. And that is the last piece I want to share with you guys is don't let the talking heads dictate what you do in your business. I'm struggling with this, I'm working through it, but find your path, find your market one, understand it and then go, solve the problems that are in your marketplace for your clients and you'll be successful in any market whatsoever. All right, guys, I hope we have a good one. Stay safe, stay healthy and I'll see you guys on the other side.
