Real Estate Episode
“Good ones will make the deal before the contract is written so you're not writing your offer blindly.” -Abhishek Sharma
What is a good price when you're placing an offer? A lot of people find real-estate perplexing. But before you take a risk on something, here are 3 strategies to help you win the best deals! Tune in and comment on what real-estate topics you want to be included in this series.
Highlights:
01:34 3 Real Estate Strategies
08:22 Real Estate Models
Quotes:
02:43 “You will pay more for your home than you buy an investment property because it improves your quality of life.” -Abhishek Sharma
04:24 “Good ones will make the deal before the contract is written so you're not writing your offer blindly.” -Abhishek Sharma
07:57 “Keep an eye, there's a deal every week.” -Abhishek Sharma
08:00 “Be patient when placing offers and don't take it personally.” -Abhishek Sharma
08:08 “Buy home based on your income in the next five years because a home is something you're going to live in a while.” -Abhishek Sharma
Connect with Abhishek Sharma:
Abhishek shares his own life stories and extracting the mental models which informed his critical decisions. He is a business executive who is passionate about yoga and self-development. Abhishek received his MBA from UC-Berkeley and performs private and public speaking engagements.
TRANSCRIPTION:
Abhishek Sharma: Hi, everyone. This is Abhishek from shakethecosmos.com. I am going to talk a lot about real estate's today. And do you want to start in real estate? It sounds easier than that, huh. Where do you start? What is a good price when you're placing an offer? What makes a good agent? There's so many of them. How can you make sure you buy a home you can afford. So I'll hopefully do more of these, and let me know if you liked this episode by sending me a note, subscribing to shakethecosmos.com, hit the follow button on this episode, and they'll help me out in the organic search results. Feel free to share this with other friends. You can always subscribe again, and that will help me out. So number one thing, starting out in real estate, a lot of questions come to mind what is a good price when you're placing an offer? I'll just start how I started, and I'll start with three strategies for starting out.
“You will pay more for your home than you buy an investment property because it improves your quality of life.” -Abhishek Sharma
So number one thing as I look back at the past 11 years of real estate that I've done, number one thing that I always keep in mind, there is a deal every week so what do I mean by that? Don't lose a house over 5000, and one of my early investments, I remember, it was a home. So way back in 2008, my agent actually gave me a book, and I'll include a link to it. But essentially, the book is called Wall St. Journal: The Complete Real Estate Investing Guide. And what I learned from that was, you will pay more for your home than you buy an investment property. So that is something to keep in mind as you're thinking about, well, I'm buying a home or investment. You'll pay a premium for a home because it just improves your quality of life. And I'll get more into the investment pieces later. And then really the deal every week concept, kinda makes sure that you're not really trying to time the market. And because it's very hard, almost impossible to time the market, I have made deals when the market is recession, I've made deals when the market is strong, I've made deals when the market is just doing nothing. So that is something of a possibility. So just something to keep in mind, it also gives you a way to think about real estate as just a forever game. If you think about it, I think about it as the game sometimes.So that's number one, there is a deal every week.
“Good ones will make the deal before the contract is written so you're not writing your offer blindly.” -Abhishek Sharma
Number two, be patient. So what do I mean by that? Be patient when placing offers. So when I got first started back in 2008, 2009, I placed like 11 to 12 offers and it was still a competitive market. It always feels like a competitive market. I remember taking it very personally, the first few offers like, oh, my God, my offers not being accepted, what do I do? And it was just painful. And that's when I learned not to take it personally. And then over time, I'll give you the tip of what happens. The good real estate investors know this. Your agent should make a call to the other agent and work out a deal before you even write the offer. So good ones will make the deal before the contract is written. So you're not just writing your offer blindly. Shout outs too, I'll give you an example.
If you're looking for an agent in NorCal, go to Tim Swanson. I remember that guy, he's a closer and that's just that type of stuff when I meet a closer. So there again, you're going to meet a lot of agents and many agents don't like, they sometimes do less than 10 deals every year, so your conversation with them is really important. And I always just look for a closer, like is that person a closer? And you could just ask them straight up, are you a closer? And what that would mean is you want to see what deals they have done in the last six months, did they represent somebody in that zip code. So it can be very specific, like I was buying a property, or selling a property in Ohio, and definitely did not want somebody that, even though that was one zip code, I did not want somebody that had not sold something in that zip code. So definitely important to be patient when you're placing offers, and have that closer agent with you, if you can.
Alright, number three, and this is gonna sound strange, and I'd love to get your comments on it as well. So hit me up at shakethecosmos.com, or leave a comment if you're listening on YouTube. So number three, this is a controversial one but it takes a little bit of a mindset effort. And maybe we'll get into that in some of the other episodes, but buy home for your income in the next five years. So what do I mean by that? And this one is a strange one to think about. But if you're going to be making more money in five years than you make today, I'll just make something up. If you are making, let's say, $100,000 this year, and you hope to make $120,000 five years from now. So just keep that in mind, in the back of your mind as you are looking at homes. And there's gonna be times, or it's a matter of a monthly payment of maybe $15 or a $20 and you could buy your dream home in the dream neighborhood. So just keeping that mindset does stretch you a little bit, it is a little scary like, am I putting more money than I can afford? But again, kind of keeping in mind, if you have a certain type of graduate degree, if you have a certain type of profession, there are statistics that support how much money on average people make in those degrees, in those statistics can support that. So taking a little bit of risk, and that was something I had to think about as well. When I was originally starting out in 2009 and went on to buy investment properties later on. So something to keep in mind is just buy a home based on your income in the next five years. So those are three strategies for starting out.
“Keep an eye, there's a deal every week.” -Abhishek Sharma
“Be patient when placing offers and don't take it personally.” -Abhishek Sharma
“Buy home based on your income in the next five years because a home is something you're going to live in a while.” -Abhishek Sharma
Number one, just keeping an eye. There's a deal every week. Number two, just be patient when placing offers, and don't take it personally and have a closer agent on your side. And number three, buy a home based on your income in the next five years. Because home is something you're going to live in a while. So real estate, think about it usually from like a five year perspective. You can go into sort of there's two models, there's the value model, there is the flip model. So the value model, people do think about investments and homes as a longer term horizon. And then the flip model is where people think about it very short term. I'm going to buy it, and I'm going to sell it. I'm going to flip it very quickly for quick profits. I have more experience with the value model so my philosophy, my tips are more around that. Some people have said that some of the money I've made has come from flips. They call some of the renovations that I've made into the houses call them flips, or they look like a flip. So there is some gray area there. But essentially, when you talk to real estate investors, people who are experienced, they will tell you there is a value model. And then there is the flip model. So we can sort of stop there and start to pause.
But essentially, I'd love to get your feedback, your questions. So that's really it. Some topics that I'm thinking about next is how to be a landlord getting started into a real landlord, even if you don't have an investment property. And then also buying your first investment property. How is that possible? How can you make it happen? Taking ownership and sort of the emotion side, the mindset behind. So if you're interested in some of that, again, shoot me a message, hit the follow button, show me your support and then I will continue to make more of this in the series about real estate and how to get started. Hope you're doing well, staying safe and healthy, and have a nice day.