Hear from seasoned successes and rapidly rising new agents in this special episode highlighting January 2022’s best real estate podcast moments. Guests share strategies, market predictions, opinions, and more. Listen and learn what these Real Estate Rockstars are doing to make 2022 their business’ best year yet.
Listen to today’s show and learn:
Why agents must add value [4:37]
How to get an offer accepted right now [5:43]
Advice on starting a real estate team [8:26]
How to succeed in today’s competitive real estate markets [8:39]
Stop looking at list price like it even matters [9:02]
Advice for people who are considering a career in real estate [9:51]
Why Karen likes FSBO leads [12:56]
Smart real estate investment strategies for the younger generation [15:03]
Giving clients extra value [17:36]
The business-owner mindset ness [19:08]
Leading with your core values to build a quality team [20:54]
Blake’s first real estate deal [25:08]
Planting seeds with potential clients as a new agent [26:27]
Advice on accomplishing your goals with visualization [30:29]
What Real Estate Rockstars taught Chaz about winning business [30:54]
Why new agents need to be intentional about their business [33:23]
The stock market crash and how it could impact real estate [34:31]
Don’t rely on headlines to make financial decisions [35:33]
The secret to successfully selling new builds [37:08]
Three things Robert wishes he knew as a new agent [39:09]
Related Links and Resources:
Thank You Rockstars! It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email. -Aaron Amuchastegui
Promising review: “I saw these containers for the first time on one of those aesthetically pleasing TikToks. I thought to myself, ‘I need these to be my best organized self.; When I came to Amazon and saw how much they were, I was appalled. Because, quite frankly, why would I spend that much on ONE little container? I was so curious as to why it was so expensive, I went ahead and bought one to see what all of the fuss was about. When I got the package, and took that sleek heavy duty bad boy out, I knew immediately why it was on the higher side. It’s sleek, durable, adorable, and excellent quality. It’s microwave safe, which is nice. It’s also dishwasher safe, which is even nicer. I realized that I do, in fact, need these in my life. I plan on purchasing more of them and I definitely recommend giving them a try!” —Ally
Get them from Amazon for $25+ each (available in two sizes and five colors).
Are real estate agents really replaceable? Matt Chick and Jeremy Fuhst of Impact Real Estate don’t think so. On this State of the Market podcast, we discuss why AI can’t replicate what true real estate professionals do. Plus, we explore the housing market’s decline and how to deal with greedy sellers when the time comes to talk price reduction. Don’t miss it!
Listen to today’s show and learn:
The BIGGEST story in real estate right now [2:05]
Home prices fall again in September [7:50]
Arizona’s housing market loses some steam [9:40]
Setting expectations with greedy sellers [14:06]
Zillow pumps the brakes on buying [18:59]
How hard it is to hire good contractors right now [22:28]
Goldman Sachs predicts prices will surge through 2022 [27:44]
How high rental rates have climbed in 2021 [29:01]
Why tech will never replace agents [32:36]
The agent’s responsibility: how to protect your livelihood [34:44]
The real reason why America is running out of stuff [44:14]
Unemployment on the decline [48:53]
Final words from Matt Chick [51:08]
Where to find Matt and Jeremy [51:23]
Related Links and Resources:
Thank You Rockstars! It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email. -Aaron Amuchastegui
In June I shared some tips for reducing home energy costs. Most of the information came from Michael Bluejay’s excellent guide to saving electricity. I was curious how much electricity invidual appliances use, so I ordered a gadget that Bluejay recommends: the Kill-a-Watt electricity meter. The official web site declares:
Connect your appliances into the Kill A Watt™, and assess how efficient they are. A large LCD display counts consumption by the Kilowatt-hour just like utility companies. You can figure out your electrical expenses by the hour, day, week, month, even an entire year. Monitor the quality of your power by displaying Voltage, Line Frequency, and Power Factor.
I’ve gone through our house and measured the power consumption of random devices:
Microwave (while dormant, simply displaying time): 2 watts — It costs us roughly $2/year to leave the microwave plugged in all the time.
Microwave (while heating a bowl of homemade bean soup for dinner): 2020 watts
Nintendo Wii (while playing Trauma Center: Second Opinion): 16 watts — Far less power than I would have guessed.
Strand of Christmas lights: 39 watts — More than I would have guessed. It will cost us roughly $3 to have this strand of lights plugged in during the Christmas season.
MacBook Pro (recharging with battery at 66%): 58 watts
Oil-filled radiator-style space heater: 520 watts on low, 820 watts on medium, and an unknown amount on high. I tripped the circuit breaker when I tried.
Dual-control electric blanket (one side set to three, the other turned off): 80 watts, declining by a watt every few seconds (presumably because it requires less power as it gets warmer — I don’t know). I stopped watching after it had dropped to 58 watts.
Desk Lamp: 5 watts
Nighlight: 1 watt — Assuming the nightlight is on 12 hours/day, it costs about 50 cents to run for an entire year.
While researching this post, I learned that cable boxes are hidden power hogs. It hadn’t occurred to me to test ours, but I’ll do so tonight. (I read one report of a cable box drawing 100 watts. If you leave yours on 24/7 as we do, that’s about $100 a year!)
The Kill-a-Watt’s best feature is the ability to measure power consumption over time. If I want to see how much power the cable box really draws, for example, I can leave it plugged into the Kill-a-Watt. After a few days, I can check the cumulative power consumption in kilowatt hours and compare it to the amount of time that has elapsed. (Both of these are measured by the device.) Simple arithmetic will show me how much I’m spending to power the cable box!
The Kill-a-Watt does have some minor drawbacks:
The unit doesn’t measure power consumption for large appliances like a range, or a washer or dryer.
The unit itself is rather bulky. When you plug it in, it’s tall enough that it crowds (and usually blocks) the other receptacle in a standard outlet.
The screen can be difficult to read, especially for a chubby old geek like me. The readout is relatively dim, and most outlets are located near the floor. I had to do a lot of crouching and crawling to make readings.
The user must do some math in order to figure out overall power usage and, especially, how much the usage costs. Fortunately, the math is relatively simple.
Once you have the initial information, the Kill-a-Watt isn’t very useful. It’s not a tool you will use all the time.
I find the Kill-a-Watt fascinating. It makes an abstract topic concrete. I can read all sorts of tips about how to save energy, but they’re all rather esoteric until I can actually see the numbers in front of me. The Kill-a-Watt gives me those numbers.
Note: I purchased this device using Amazon credit earned from this site. I also purchased several personal finance and self-development books for future review. I hope to begin “re-investing” some of the site revenue in items to review and to give away to readers.
Americans take today’s selection of mortgages for granted, but financing a home is a much different experience than it was a century ago
By
Matthew Wells
The furniture industry was booming in Greensboro, N.C., 100 years ago. A furniture craftsman making a solid, steady income might have wanted to buy a home and build up some equity. But the homebuying process then looked very little like it does today. To finance that purchase, the furniture maker first would need to scrape together as much as 40 percent for a down payment, even with good credit. He might then head to a local building and loan association (B&L), where he would hope to get a loan that he would be able to pay off in no more than a dozen years.
Today’s mortgage market, by contrast, would offer that furniture maker a wide range of more attractive options. Instead of going to the local B&L, the furniture maker could walk into a bank or connect with a mortgage broker who could be in town or on the other side of the country. No longer would such a large down payment be necessary; 20 percent would suffice, and it could be less with mortgage insurance — even zero dollars down if the furniture maker were also a veteran. Further, the repayment period would be set at either 15 or 30 years, and, depending on what worked best for the furniture maker, the interest rate could be fixed or fluctuate through the duration of the loan.
The modern mortgage in all its variations is the product of a complicated history. Local, state, national, and even international actors all competing for profits have existed alongside an increasingly active federal government that for almost a century has sought to make the benefits of homeownership accessible to more Americans, even through economic collapse and crises. Both despite and because of this history, over 65 percent of Americans — most of whom carry or carried a mortgage previously — now own the home where they live.
The Early Era of Private Financing
Prior to 1930, the government was not involved in the mortgage market, leaving only a few private options for aspiring homeowners looking for financing. While loans between individuals for homes were common, building and loan associations would become the dominant institutional mortgage financiers during this period.
B&Ls commonly used what was known as a “share accumulation” contract. Under this complicated mortgage structure, if a borrower needed a loan for $1,000, he would subscribe to the association for five shares at $200 maturity value each, and he would accumulate those shares by paying weekly or monthly installments into an account held at the association. These payments would pay for the shares along with the interest on the loan, and the B&L would also pay out dividends kept in the share account. The dividends determined the duration of the loan, but in good economic times, a borrower would expect it to take about 12 years to accumulate enough money through the dividends and deposits to repay the entire $1,000 loan all at once; he would then own the property outright.
An import from a rapidly industrializing Great Britain in the 1830s, B&Ls had been operating mainly in the Northeast and Midwest until the 1880s, when, coupled with a lack of competition and rapid urbanization around the country, their presence increased significantly. In 1893, for example, 5,600 B&Ls were in operation in every state and in more than 1,000 counties and 2,000 cities. Some 1.4 million Americans were members of B&Ls and about one in eight nonfarm owner-occupied homes was financed through them. These numbers would peak in 1927, with 11.3 million members (out of a total population of 119 million) belonging to 12,804 associations that held a total of $7.2 billion in assets.
Despite their popularity, B&Ls had a notable drawback: Their borrowers were exposed to significant credit risk. If a B&L’s loan portfolio suffered, dividend accrual could slow, extending the amount of time it would take for members to pay off their loans. In extreme cases, retained dividends could be taken away or the value of outstanding shares could be written down, taking borrowers further away from final repayment.
“Imagine you are in year 11 of what should be a 12-year repayment period and you’ve borrowed $2,000 and you’ve got $1,800 of it in your account,” says Kenneth Snowden, an economist at the University of North Carolina, Greensboro, “but then the B&L goes belly up. That would be a disaster.”
The industry downplayed the issue. While acknowledging that “It is possible in the event of failure under the regular [share accumulation] plan that … the borrower would still be liable for the total amount of his loan,” the authors of a 1925 industry publication still maintained, “It makes very little practical difference because of the small likelihood of failure.”
Aside from the B&Ls, there were few other institutional lending options for individuals looking for mortgage financing. The National Bank Act of 1864 barred commercial banks from writing mortgages, but life insurance companies and mutual savings banks were active lenders. They were, however, heavily regulated and often barred from lending across state lines or beyond certain distances from their location.
But the money to finance the building boom of the second half of the 19th century had to come from somewhere. Unconstrained by geographic boundaries or the law, mortgage companies and trusts sprouted up in the 1870s, filling this need through another innovation from Europe: the mortgage-backed security (MBS). One of the first such firms, the United States Mortgage Company, was founded in 1871. Boasting a New York board of directors that included the likes of J. Pierpont Morgan, the company wrote its own mortgages, and then issued bonds or securities that equaled the value of all the mortgages it held. It made money by charging interest on loans at a greater rate than what it paid out on its bonds. The company was vast: It established local lending boards throughout the country to handle loan origination, pricing, and credit quality, but it also had a European-based board comprised of counts and barons to manage the sale of those bonds on the continent.
Image : Library of Congress, Prints & Photographs Division, FSA/OWI collection [LC-DIG-FSA-8A02884]
A couple moves into a new home in Aberdeen Gardens in Newport News, Va., in 1937. Aberdeen Gardens was built as part of a New Deal housing program during the Great Depression.
New Competition From Depression-Era Reforms
When the Great Depression hit, the mortgage system ground to a halt, as the collapse of home prices and massive unemployment led to widespread foreclosures. This, in turn, led to a decline in homeownership and exposed the weaknesses in the existing mortgage finance system. In response, the Roosevelt administration pursued several strategies to restore the home mortgage market and encourage lending and borrowing. These efforts created a system of uneasy coexistence between a reformed private mortgage market and a new player — the federal government.
The Home Owners’ Loan Corporation (HOLC) was created in 1933 to assist people who could no longer afford to make payments on their homes from foreclosure. To do so, the HOLC took the drastic step of issuing bonds and then using the funds to purchase mortgages of homes, and then refinancing those loans. It could only purchase mortgages on homes under $20,000 in value, but between 1933 and 1936, the HOLC would write and hold approximately 1 million loans, representing around 10 percent of all nonfarm owner-occupied homes in the country. Around 200,000 borrowers would still ultimately end up in foreclosure, but over 800,000 people were able to successfully stay in their homes and repay their HOLC loans. (The HOLC is also widely associated with the practice of redlining, although scholars debate its lasting influence on lending.) At the same time, the HOLC standardized the 15-year fully amortized loan still in use today. In contrast to the complicated share accumulation loans used by the B&Ls, these loans were repaid on a fixed schedule in which monthly payments spread across a set time period went directly toward reducing the principal on the loan as well as the interest.
While the HOLC was responsible for keeping people in their homes, the Federal Housing Administration (FHA) was created as part of the National Housing Act of 1934 to give lenders, who had become risk averse since the Depression hit, the confidence to lend again. It did so through several innovations which, while intended to “prime the pump” in the short term, resulted in lasting reforms to the mortgage market. In particular, all FHA-backed mortgages were long term (that is, 20 to 30 years) fully amortized loans and required as little as a 10 percent down payment. Relative to the loans with short repayment periods, these terms were undoubtedly attractive to would-be borrowers, leading the other private institutional lenders to adopt similar mortgage structures to remain competitive.
During the 1930s, the building and loan associations began to evolve into savings and loan associations (S&L) and were granted federal charters. As a result, these associations had to adhere to certain regulatory requirements, including a mandate to make only fully amortized loans and caps on the amount of interest they could pay on deposits. They were also required to participate in the Federal Savings and Loan Insurance Corporation (FSLIC), which, in theory, meant that their members’ deposits were guaranteed and would no longer be subject to the risk that characterized the pre-Depression era.
The B&Ls and S&Ls vehemently opposed the creation of the FHA, as it both opened competition in the market and created a new bureaucracy that they argued was unnecessary. Their first concern was competition. If the FHA provided insurance to all institutional lenders, the associations believed they would no longer dominate the long-term mortgage loan market, as they had for almost a century. Despite intense lobbying in opposition to the creation of the FHA, the S&Ls lost that battle, and commercial banks, which had been able to make mortgage loans since 1913, ended up making by far the biggest share of FHA-insured loans, accounting for 70 percent of all FHA loans in 1935. The associations also were loath to follow all the regulations and bureaucracy that were required for the FHA to guarantee loans.
“The associations had been underwriting loans successfully for 60 years. FHA created a whole new bureaucracy of how to underwrite loans because they had a manual that was 500 pages long,” notes Snowden. “They don’t want all that red tape. They don’t want someone telling them how many inches apart their studs have to be. They had their own appraisers and underwriting program. So there really were competing networks.”
As a result of these two sources of opposition, only 789 out of almost 7,000 associations were using FHA insurance in 1940.
In 1938, the housing market was still lagging in its recovery relative to other sectors of the economy. To further open the flow of capital to homebuyers, the government chartered the Federal National Mortgage Association, or Fannie Mae. Known as a government sponsored-enterprise, or GSE, Fannie Mae purchased FHA-guaranteed loans from mortgage lenders and kept them in its own portfolio. (Much later, starting in the 1980s, it would sell them as MBS on the secondary market.)
The Postwar Homeownership Boom
In 1940, about 44 percent of Americans owned their home. Two decades later, that number had risen to 62 percent. Daniel Fetter, an economist at Stanford University, argued in a 2014 paper that this increase was driven by rising real incomes, favorable tax treatment of owner-occupied housing, and perhaps most importantly, the widespread adoption of the long-term, fully amortized, low-down-payment mortgage. In fact, he estimated that changes in home financing might explain about 40 percent of the overall increase in homeownership during this period.
One of the primary pathways for the expansion of homeownership during the postwar period was the veterans’ home loan program created under the 1944 Servicemen’s Readjustment Act. While the Veterans Administration (VA) did not make loans, if a veteran defaulted, it would pay up to 50 percent of the loan or up to $2,000. At a time when the average home price was about $8,600, the repayment window was 20 years. Also, interest rates for VA loans could not exceed 4 percent and often did not require a down payment. These loans were widely used: Between 1949 and 1953, they averaged 24 percent of the market and according to Fetter, accounted for roughly 7.4 percent of the overall increase in homeownership between 1940 and 1960. (See chart below.)
Demand for housing continued as baby boomers grew into adults in the 1970s and pursued homeownership just as their parents did. Congress realized, however, that the secondary market where MBS were traded lacked sufficient capital to finance the younger generation’s purchases. In response, Congress chartered a second GSE, the Federal Home Loan Mortgage Corporation, also known as Freddie Mac. Up until this point, Fannie had only been authorized to purchase FHA-backed loans, but with the hope of turning Fannie and Freddie into competitors on the secondary mortgage market, Congress privatized Fannie in 1968. In 1970, they were both also allowed to purchase conventional loans (that is, loans not backed by either the FHA or VA).
A Series of Crises
A decade later, the S&L industry that had existed for half a century would collapse. As interest rates rose in the late 1970s and early 1980s, the S&Ls, also known as “thrifts,” found themselves at a disadvantage, as the government-imposed limits on their interest rates meant depositors could find greater returns elsewhere. With inflation also increasing, the S&Ls’ portfolios, which were filled with fixed-rate mortgages, lost significant value as well. As a result, many S&Ls became insolvent.
Normally, this would have meant shutting the weak S&Ls down. But there was a further problem: In 1983, the cost of paying off what these firms owed depositors was estimated at about $25 billion, but FSLIC, the government entity that ensured those deposits, had only $6 billion in reserves. In the face of this shortfall, regulators decided to allow these insolvent thrifts, known as “zombies,” to remain open rather than figure out how to shut them down and repay what they owed. At the same time, legislators and regulators relaxed capital standards, allowing these firms to pay higher rates to attract funds and engage in ever-riskier projects with the hope that they would pay off in higher returns. Ultimately, when these high-risk ventures failed in the late 1980s, the cost to taxpayers, who had to cover these guaranteed deposits, was about $124 billion. But the S&Ls would not be the only actors in the mortgage industry to need a taxpayer bailout.
By the turn of the century, both Fannie and Freddie had converted to shareholder-owned, for-profit corporations, but regulations put in place by the Federal Housing Finance Agency authorized them to purchase from lenders only so-called conforming mortgages, that is, ones that satisfied certain standards with respect to the borrower’s debt-to-income ratio, the amount of the loan, and the size of the down payment. During the 1980s and 1990s, their status as GSEs fueled the perception that the government — the taxpayers — would bail them out if they ever ran into financial trouble.
Developments in the mortgage marketplace soon set the stage for exactly that trouble. The secondary mortgage market in the early 2000s saw increasing growth in private-label securities — meaning they were not issued by one of the GSEs. These securities were backed by mortgages that did not necessarily have to adhere to the same standards as those purchased by the GSEs.
Freddie and Fannie, as profit-seeking corporations, were then under pressure to increase returns for their shareholders, and while they were restricted in the securitizations that they could issue, they were not prevented from adding these riskier private-label MBS to their own investment portfolios.
At the same time, a series of technological innovations lowered the costs to the GSEs, as well as many of the lenders and secondary market participants, of assessing and pricing risk. Beginning back in 1992, Freddie had begun accessing computerized credit scores, but more extensive systems in subsequent years captured additional data on the borrowers and properties and fed that data into statistical models to produce underwriting recommendations. By early 2006, more than 90 percent of lenders were participating in an automated underwriting system, typically either Fannie’s Desktop Underwriter or Freddie’s Loan Prospector (now known as Loan Product Advisor).
Borys Grochulski of the Richmond Fed observes that these systems made a difference, as they allowed lenders to be creative in constructing mortgages for would-be homeowners who would otherwise be unable to qualify. “Many potential mortgage borrowers who didn’t have the right credit quality and were out of the mortgage market now could be brought on by these financial-information processing innovations,” he says.
Indeed, speaking in May 2007, before the full extent of the impending mortgage crisis — and Great Recession — was apparent, then-Fed Chair Ben Bernanke noted that the expansion of what was known as the subprime mortgage market was spurred mostly by these technological innovations. Subprime is just one of several categories of loan quality and risk; lenders used data to separate borrowers into risk categories, with riskier loans charged higher rates.
But Marc Gott, a former director of Fannie’s Loan Servicing Department said in a 2008 New York Times interview, “We didn’t really know what we were buying. This system was designed for plain vanilla loans, and we were trying to push chocolate sundaes through the gears.”
Nonetheless, some investors still wanted to diversify their portfolios with MBS with higher yields. And the government’s implicit backing of the GSEs gave market participants the confidence to continue securitizing, buying, and selling mortgages until the bubble finally popped in 2008. (The incentive for such risk taking in response to the expectation of insurance coverage or a bailout is known as “moral hazard.”)
According to research by the Treasury Department, 8 million homes were foreclosed, 8.8 million workers lost their jobs, and $7.4 trillion in stock market wealth and $19.2 trillion in household wealth was wiped away during the Great Recession that followed the mortgage crisis. As it became clear that the GSEs had purchased loans they knew were risky, they were placed under government conservatorship that is still in place, and they ultimately cost taxpayers $190 billion. In addition, to inject liquidity into the struggling mortgage market, the Fed began purchasing the GSEs’ MBS in late 2008 and would ultimately purchase over $1 trillion in those bonds up through late 2014.
The 2008 housing crisis and the Great Recession have made it harder for some aspiring homeowners to purchase a home, as no-money-down mortgages are no longer available for most borrowers, and banks are also less willing to lend to those with less-than-ideal credit. Also, traditional commercial banks, which also suffered tremendous losses, have stepped back from their involvement in mortgage origination and servicing. Filling the gap has been increased competition among smaller mortgage companies, many of whom, according to Grochulski, sell their mortgages to the GSEs, who still package them and sell them off to the private markets.
While the market seems to be functioning well now under this structure, stresses have been a persistent presence throughout its history. And while these crises have been painful and disruptive, they have fueled innovations that have given a wide range of Americans the chance to enjoy the benefits — and burdens — of homeownership.
READINGS
Brewer, H. Peers. “Eastern Money and Western Mortgages in the 1870s.” Business History Review, Autumn 1976, vol. 50, no. 3, pp. 356-380.
Fetter, Daniel K. “The Twentieth-Century Increase in U.S. Home Ownership: Facts and Hypotheses.” In Eugene N. White, Kenneth Snowden, and Price Fishback (eds.), Housing and Mortgage Markets in Historical Perspective. Chicago: University of Chicago Press, July 2014, pp. 329-350.
McDonald, Oonagh. Fannie Mae and Freddie Mac: Turning the American Dream into a Nightmare. New York, N.Y.: Bloomsbury Publishing, 2012.
Price, David A., and John R. Walter. “It’s a Wonderful Loan: A Short History of Building and Loan Associations,” Economic Brief No. 19-01, January 2019.
Romero, Jessie. “The House Is in the Mail.” Econ Focus, Federal Reserve Bank of Richmond, Second/Third Quarter 2019.
Rose, Jonathan D., and Kenneth A. Snowden. “The New Deal and the Origins of the Modern American Real Estate Contract.” Explorations in Economic History, October 2013, vol. 50, no. 4, pp. 548-566.
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Get a set of four from Amazon for $13.99+ (available in multiple sizes, unframed and framed, and in a Van Gogh set).
Take action on your real estate career and start making progress toward your goals! On today’s podcast with 30 Under 30 Honoree Dhaval Patel, we discuss why you shouldn’t wait to start working on your real estate career. We also share how to get over the fear of rejection when prospecting, offer our real estate predictions, and cover the benefits of joining a real estate team as a new agent.
Listen to today’s show and learn:
Dhaval Patel’s start in real estate [2:35]
Why Dhaval wanted to become a real estate agent [4:49]
What prospecting looks like for a first-year real estate agent [6:44]
Getting over the fear of rejection [8:23]
Dhaval’s favorite real estate script [9:19]
Dhaval’s favorite real estate CRM [10:54]
How to get the results you want in real estate [12:45]
Aaron’s best office experience [14:44]
Dhaval’s first real estate deal [15:40]
The key to succeeding in real estate as a new agent [16:38]
Dhaval’s real estate goals for 2024 [19:17]
NAR’s 30 Under 30 Application process [21:40]
Finding balance between growth and action [23:40]
The value of mentorship and training [26:44]
The benefits of joining an experienced team [29:30]
How to beat turnover with company culture [31:03]
The No.1 real estate market in the nation [33:10]
Why buyer consultations are so important right now [35:42]
Real estate market analytics [36:42]
Real estate market predictions [39:13]
Dhaval’s advice on analyzing opportunities [42:08]
The best predictor of a real estate bubble [44:05]
The best way to connect with Dhaval Patel [46:10]
Dhaval Patel
Dhaval has lived in MA/CT for the past 10 years and has helped nearly forty families buy/sell their homes in the past 18 months. He looks forward to helping guide you on your real estate journey!
Their team @ ROVI Homes has over 100 years of combined real estate experience, and they are proud to be the #1 Real Estate Team in Massachusetts, in both Sales & Volume for 2021!
Dhaval’s mission is to relentlessly serve your best interest and add tremendous value, leveraging their key partnerships to give you a world-class real estate experience!
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It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.
Tired of relying on commissions for your livelihood? Listen to today’s podcast with Jon Matzner and learn how to add a new stream of reliable revenue to your real estate business with property management. In addition to sharing the easy way to get started in property management, Jon offers tips for streamlining any type of real estate business. Jon also gives advice on working with global talent, explains how to buy an existing business, and covers ways to ensure that every marketing dollar spent is put to good use.
Listen to today’s show and learn:
Jon’s start with buying businesses [4:01]
Jon’s first business [5:43]
Making every marketing dollar count [7:19]
Utilizing VAs to increase profitability [9:49]
How to help remote workers succeed [11:33]
The process of buying a construction business [17:23]
Running a property management company [23:24]
What most real estate agents get wrong about property management [27:00]
Leveraging global talent in property management [28:54]
Systems for boosting a property management business’ bottom line [34:13]
Technology for streamlining a property management company [36:22]
THE operating model for success with property management [39:12]
Crafting the life you want [44:35]
Where to find and follow Jon Matzner [48:05]
Jon Matzner
Extreme Outsourcer. Business builder, operator & investor. Spent 8 figures on high-quality, low-cost remote talent. Also, building a national “business in a box” company.
Jon is an experienced national security professional and business leader, usually splitting time between Dubai, UAE and San Diego, California.
In Jon’s work with the government, he was most recently posted to the Middle East. During his service, Jon worked and traveled around the world on behalf of the US Government. Jon also collaborated closely with local and regional allies to develop and implement non-proliferation and counterterrorism strategies.
Since leaving the government, Jon has launched several businesses, sold three, and acquired many others.
“I’m obsessed with Entrepreneurship Through Acquisition,” unlocking value in old-school businesses through systemization and leveraging high-quality overseas talent.
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Fuel prices have been hovering at record levels around the United States for the past few weeks. Now is a good time to review the best ways to improve your gas mileage and save money at the tank. I scoured dozens of websites and read hundreds of tips — these are the best of the bunch.
Save Money With Your Vehicle
Purchase a fuel-efficient car The best way to save money on gas is to drive a fuel-efficient car. It’s probably impractical to replace your current car for something that costs less to run, but if you’re in the market for a new vehicle, keep fuel economy in mind. Consumer Reports has several lists of fuel-efficient vehicles:
A list of the most fuel-efficient cars they’ve tested (CR loves the Toyota Prius)
A list of fuel-efficient SUVs
A list of cars that combine fuel efficiency and performance
This calculator from fueleconomy.gov allows you to compare the cost difference between two vehicles based on their MPG.
Keep your vehicle well maintained A car in poor running condition will use more gas than one that has been tuned up. According to this checklist at Advance Auto Parts, a dirty air filter can reduce gas mileage up to 20%. They also note that spark plugs in poor condition can reduce gas mileage up to 12%.
Be wary of gas-saving products The U.S. Federal Trade Commission warns that most gas-saving products are bogus: “Be wary of any gas-saving claims for automotive devices or oil and gas additives. Even for the few gas-saving products that have been found to work, the savings have been small.” Consumer Reports says, “Don’t waste your money.”
Keep tires properly inflated Underinflated tires aren’t just dangerous — they devour fuel economy by as much as 25%! (I know this from experience — whenever I notice a drop in MPG, my tires are usually low.) Overinflated tires aren’t efficient, either. Also keep your tires balanced and in alignment.
Save Money by Thinking Ahead
Find the best prices Use the web to research the lowest prices in your neighborhood. For example, GasBuddy.com is “a network of more than 179+ gas price information websites that help you find low gasoline prices.”
Buy gas from a wholesale club Some Costco or Sam’s Club stores offer their members discounts of up to ten cents per gallon on fuel. Our local Safeway store gives us a three-cent discount on gas after we spend a certain amount on groceries. (Though we’d have to drive 25 miles to find a place to use it!)
Alter your commute time If possible, schedule your trips and errands for times when traffic is lighter. In an insanely detailed article, Omninerd found that commute times varied widely depending on the time the author left the house. If your company allows it, try coming in earlier or later in order to avoid rush hour.
Optimize your travel Consolidate trips: If you know you have to buy groceries, take your clothes to the dry cleaner at the same time, and then drop little Johnny at soccer practice. Combine multiple trips into one.
Lighten your load Carry only the bare necessities — don’t haul things in your trunk. “For every extra 250 pounds your engine hauls, the car loses about one mile per gallon in fuel economy.” [via Bankrate]
Reduce drag About half of your vehicle’s energy is expended overcoming air resistance. (The other half is expended in acceleration.) Reduce your car’s workload — remove anything that might cause drag: luggage racks, bike racks, ski racks, etc,
Save Money at the Pump
Buy gas on Wednesdays “Gas prices are statistically the cheapest on Wednesdays, but this is only true over a large number of days. It won’t be true every week.” Gas prices often jump before holidays, too. [via WikiHow]
Don’t go out of your way to save a few pennies on gas If it’s convenient to shop at a cheaper place, do so. If not, don’t. On a ten-gallon fill-up, saving five cents a gallon only nets you fifty cents. My car costs about 36 cents per mile to operate. It doesn’t make sense for me to go a mile out of my way to find cheaper gas.
Buy gas during the coolest times of the day “During these times gasoline is densest. Keep in mind – gas pumps measure volumes of gasoline, not densities of fuel concentration. You are charged according to ‘volume of measurement’.” [via HowToAdvice.com]
Use the right octane level for your car Using premium gasoline in an engine designed to run on regular doesn’t improve performance. Even some vehicles that call for higher octane fuels can run on regular unleaded, though with some loss of performance. (Check your owner’s manual.) You can save money by using the lowest octane rated gasoline that your car will tolerate.
Don’t top off your tank Trust the auto-shutoff. Overfilling can lead to wasted gas.
Be sure your gas cap is tight “Improperly seated gas caps allow 147 million gallons of fuel to vaporize every year in the U.S.” [via Advance Auto Parts]
Use a gas credit card I don’t like credit cards, but the best gas rewards credit cards can be a good way to save a few cents per gallon. Just be sure to pay off your balance at the end of the month!
The Nut Behind the Wheel
Drive at a constant moderate speed Edmunds.com found that the best way to improve fuel efficiency was to accelerate slowly and to brake over a longer distance. Aside from purchasing a new vehicle, this is the single most effective step you can take to reduce your costs. According to fueleconomy.gov: “As a rule of thumb, you can assume that each 5 mph you drive over 60 mph is like paying an additional $0.20 per gallon for gas.”
Use cruise control If you’re like me, your driving speed tends to fluctuate. Cruise control takes the human element out of the equation and keeps driving speeds steady. It’s the easy way to drive at a constant moderate pace.
Don’t idle Turn off your engine if you’ll be idling for more than thirty seconds. Starting your vehicle does use a burst of fuel, but not as much as allowing the engine to idle too long.
Anticipate stop signs and lights Plan ahead. The less you have to stop, the better your gas mileage. Make it a game to catch all of the green lights. Laugh at the other guy as he sprints from red to red.
Keep your cool Most people claim that it makes more sense to use air conditioning on the highway and to roll down the windows in city traffic. It’s commonly claimed that either method is going to reduce your fuel economy by about 10%. But according to research performed by found, there’s no real difference between driving with the windows down or using the air conditioner. Consumer Reports obtained similar results:
Air conditioning uses about 1 mpg, but safety (and comfort) increase with use. Opening windows made no significant difference in our gas mileage.
Do what works for you. (But please: don’t run your air conditioner with the windows open.)
Drive less!!! Walk. Ride your bike. Take public transit. Carpool. Combine errands. It’s obvious, but easy to forget: the less you drive, the less you’ll spend on gas.
Additional Resources
For more information on fuel economy, check out the following sites:
What are your favorite tips and tricks for saving money on gas?
The Consumer Financial Protection Bureau has a jam-packed agenda ahead with final rules coming soon that would cut credit card late fees to $8, create a registry of corporate “bad actors,” and require nonbanks to disclose terms waiving consumers’ rights to arbitration.
But the CFPB is operating under a cloud of uncertainty with the Supreme Court scheduled to hear oral arguments in October in a case challenging whether the bureau’s funding is constitutional. The legal and regulatory uncertainty will continue until the high court rules on the case by June 2024 at the latest. CFPB Director Rohit Chopra has been clear that the bureau is “not holding back” on rulemaking or enforcement.
“The CFPB is certainly no stranger to these types of challenges,” Chopra told American Banker in a recent interview.
But the CFPB got hit with further legal turbulence this week when a federal judge in Texas temporarily blocked implementation of the bureau’s small business data collection rule until the Supreme Court case is decided. Bankers have since urged the bureau to halt all bank data collection under the rule until after the outcome of the Supreme Court’s decision.
The ruling could change the calculus for the CFPB’s regulatory agenda going forward, potentially holding off several rules from going into effect. The judge granted a preliminary injunction to members of two bank trade groups and a private bank that had sued the CFPB, setting the stage for other trade groups to follow suit.
“This creates the precedent that fundamentally alters the CFPB’s agenda for the next year,” said Ed Mills, managing director at Raymond James. “The biggest development in favor of the industry is the most recent ruling and that there is a judge that says the CFPB can’t do anything until the Supreme Court has decided.”
The big question for banks, consumers and investors is not whether industry trade groups will sue the CFPB to block any final rules from going into effect but when and where they will sue. Trade groups have already threatened to sue the CFPB over the credit card late fee proposal, with the choice of venue likely in Texas, where Republican jurists dominate the U.S. Court of Appeals for the Fifth Circuit.
The CFPB “is going to get sued for everything and part of the reason why they get sued is because a number of the lawsuits have been successful,” added Mills.
The industry’s playbook for how to successfully gut a CFPB rule — and challenge the constitutionality of the bureau — is the years-long litigation over the payday lending rule. The bureau issued the payday rule in 2017 and was sued in 2018 by two Texas payday groups. Last year, a three-judge panel on the Fifth Circuit ruled that the CFPB was unconstitutionally funded through the Federal Reserve System and invalidated the payday rule. The CFPB appealed that ruling last year, teeing up the current constitutionality case before the Supreme Court.
In the case this week that temporarily halted the small business data collection rule for banks, the two bank trade groups also had appealed to the Fifth Circuit.
CFPB Director Rohit Chopra is poised to issue four final rules by year-end that could be challenged. A rule on credit card late fees is expected to be finalized in September or October and go into effect early next year. The rule is a priority for Chopra and many experts think the CFPB will not change its proposal to drop late fees to $8 from between $30 to $41 currently.
“Chopra has the authority to issue the rule on credit card late fees, and trade groups likely will look to file a lawsuit in Texas to get before the Fifth Circuit,” said Dan Smith, president and CEO at the Consumer Data Industry Association and a former CFPB assistant director.
Todd Zywicki, a law professor at the Antonin Scalia Law School at George Mason University, said the credit card late fee rule “does seem more likely to get the chopping block if the final rule resembles the proposal.”
Two more final rules expected by year end on nonbank registries — one for so-called “bad actors,” and the other that is a workaround of the CFPB’s invalidated arbitration rule — are also expected to be challenged. The CFPB proposed a rule in December that would create a public database of corporate lawbreakers, requiring nonbanks to report any state and local court orders or judgments involving consumer financial products. A second registry proposed in January would require nonbanks to register contract terms waiving consumers’ rights to arbitration.
“The bad actors’ registry just puts a bull’s eye on the industry,” said Eric Johnson, a partner at Hudson Cook. “I can see somebody challenging both of those rules while we’re waiting for the Supremes to act, especially now that two banking associations have had success before a judge.”
Finally, a much-anticipated proposal on open banking that would give consumers control over their personal financial data is expected to be finalized in 2024.
Chopra is mindful of the timeframe and deadlines for getting rules from the proposal stage through the public notice-and-comment process, and to the final rule stage before enactment. If the CFPB waits too long, there is always a threat — albeit a minor one, experts say — that a rule could be repealed by Republicans, assuming they take control of the Senate and Presidency and retain the House in 2024. Republicans used an obscure legislative process called the Congressional Review Act to overturn the CFPB’s arbitration rule in 2017 by a vote of 51-50.
The Congressional Review Act is one of the reasons the CFPB is moving quickly to propose other rules and get them finalized next year before the election. Proposed rules are coming in 2024 on overdraft fees, nonsufficient funds fees and credit reporting.
By halting compliance with a rule, industry hopes to stall or at least put off enactment until another day.
“The delay is really important for the industry because it opens up other avenues,” said Mills. “If there is an effective delay, could industry be saved by a Supreme Court decision and by the 2024 presidential election?”
The CFPB is moving quickly on rules to appear as though it is “business as usual,” despite the threat of the Supreme Court case, experts said.
“I can see where Chopra has sped up the bureau’s activities because they are trying to show all the good they think they’re doing for consumers to justify their existence and prove their worth to Congress,” said Johnson.