Eran Sinai: Happy Wednesday everyone! Eran Sinai here; Consumer Guardian Law, Lunch N Learn Radio. You can listen to us. You should be listening to us, especially today. ESPN 1700 a.m. or watch us live, and you do wanna watch us today. I’m telling you, lunchNlearnradio.com. I have here two great people, good old friend, I mean she is younger mold but she is good young friend and she is Maureen Martin. And Maureen is a mortgage originator with HomePlus Mortgage. Hi Maureen!
Maureen: Hi Eran!
Eran: Good to have you back.
Maureen: Thank you.
Eran: And Maureen introduced me to a nice, great lady, her name is Jamie Kurtz and Jamie is the realtor with Team Aguilar Real Estate. Welcome Jamie!
Jamie: Hi, thank you for having me.
Eran: Thanks, I mean, before the show I heard you guys laughter and everything and I’m like, “Oh my God, this is gonna be a great show today.”
Maureen: Two peas in a pod here, right?
Jamie: It’s gonna be a kettle show.
Eran: Just thinking about that makes me think that it’s gonna be like, [recording –whohoohoohoohoo. [Laughter]
Maureen: Probably, that’s probably close!
Eran: So, we have so much to talk about and you know what I actually wanna start today with, it’s not really related to you because you ladies are always gonna be young.
Maureen: That’s right.
Jamie: That’s right.
Eran: But…and always look young but here is the thing, this guy is often called the next Thomas Edison, okay, his name is Raymond Ray Kurzweil. He was born in 1948 but what he is, he is the principal inventor of the first charge-coupled devices, the flatbed scanner, the omni-font optical character recognition, the first print-to-speech reading machine. So many more things. He is a real brilliant man and he is being very much…he is what people consider futurist and an inventor and here is what he said. Now, even Bill Gates, by the way, said about him that he is the brain and really if we are talking about future this is the guy we should count on what he has to say. Now, here is what he says, he says that, you know obviously you have heard the phrase, life is short or like what would I do to be at that age group, right? Believe it or not in 15 years you might not have that problem anymore. He believes that, like he says more than once, humans are on their way to living for eternity. And in an interview he had with PBS, okay, recently last week, he described how it will happen. He said that by the year of 2030 computers are gonna be so small, computers are gonna be the size of blood cells, okay, and they are gonna be in your body, travelling around your body collecting data and they are gonna take that senses, awareness, physical pains or all kinds of alerts that your body send you and shoot it to the cloud then you will be able to resolve all those problems before they happen. And the time of us going back and living to eternity or life extension services they call it, is really around the corner.
Maureen: I mean but…[laughter]
Jamie: Who wants to live that long?
Eran: Okay, so that was on and we’ll talk about it
Maureen: And where is this cloud anyway? I am really curious about the cloud.
Eran: Okay, so this, just to let you know, life extension service science, also known as the anti aging medicine is identified, you know, it’s all those life extension products, experimental gerontology. I can’t even say those words they are so complicated and above me, but they all got to go with this stem cell research and all that. They are really talking about that it’s really possible. Okay, I’m not saying it is or isn’t because, look, there are a lot of people that say that, you know, it’s not gonna work. There are ethical ramification of life extension that are debated by bio-scientist, you know.
Maureen: Well let’s just assume, let’s assume that this occurred and what are we gonna do about population control?
Jamie: And trash control and the earth.
Maureen: We won’t have enough room
Eran: I mean, I don’t wanna get into that. What are we gonna do?
Maureen: I don’t mind looking young!
Jamie: I wanna look young but let’s use that science and improve quality of life for those that have ailments and then let’s just expire when it’s time.
Interviewer: You know, what are you gonna do…I’m gonna tell you something you are not gonna like, what are you gonna do with all the toilet paper?
Jamie: That’s what I’m saying, the trash, the earth?
Maureen: The plastic bottles?
Eran: It is crazy, it is totally …I think…[recording – This is ridiculous!]
Eran: It is, isn’t it?
Jamie: Absolutely!
Eran: I mean, but look, he says, even…like it says, Bill Gates says about him 10 years ago, and I’m quoting, he said that, “He is the best predictor of the future artificial wisdom.”
Maureen: He is like today’s Nostradamus.
Eran: So people are really…yeah, we may wanna take him seriously. After all, he is responsible for so many inventions that have changed our lives.
Maureen: The scanner!
Jamie: That’s a big deal.
Eran: Speech recognition, there are so many things he is responsible for and I mean, yeah, look, some of the products have been criticized by medical experts including the American Medical Association, obviously, but he says that everything in a strange way is a part of a life’s circle. He says that after all the human race advance and eternity is no longer a dream. If we spend the last couple of thousands of years justifying death, we no longer have to surrender to that old reality. Things may just have changed.
Maureen: Yeah, but that’s man made change and so you know when you, like, mess with the ecosystem, you know, that’s why they have limits on how many animals you can kill when you are hunters and stuff, because if you mess with that ecosystem you mess with, you know, how it all works and I think that’s what make it so scary.
Jamie: I agree.
Eran: And also, look, There is a lot of people, you know, look at the Bible and said, well according to the Bible, God said, you cannot live, you will not live more than 120 years.
Maureen: That’s still kind of long.
Eran: That’s still kind of long but nobody does.
Jamie: Have you ever seen that movie Wall-E? That’s what I’m picturing. It’s just the earth is covered in trash and somebody builds this huge spaceship and everybody just gets fat because everything is electronic, touch screen, you get the menu. And then little Wall-E goes and cleans up the earth and compacts all the trash and puts it in a nice little cube and then somehow the spaceship comes back to earth.
Maureen: Little kids. [Laughter]
Eran: I don’t know but here is the thing, so think about that but even there are people today that live to 90, 100, whatever but what is the quality of life. But according to him, that would not be a problem because…
Maureen: Okay, all…my thing is, you get to 110, 120, all your friends are dead, right?
Eran: Well, you won’t anymore, according to his theory.
Maureen: Right.
Eran: The problem is, there are some people that they can’t wait for them to be gone off here [Laughter].
Jamie: So can we pick and choose who gets to live that long?
Maureen: No that would raise ethic issues in a way.
Eran: Exactly! So, I mean complicated but anyway, I wanted to bring it to you because I’ve known you Maureen for years and you have not changed so I figured, do you use that?
Maureen: It’s the Botox! [Laughter]
Jamie: Yes! Yes!
Maureen: That’s the way we are grooming today but we’ll see, we’ll see [Laughter].
Eran: Alright, so anyway, I figured let’s have some fun before we really dive into the market. So we have so much to talk about, I want to talk about a guy that paid his mortgage in three years. Is it worth it? Is it not worth it? Should we are should we not? There are 10,000 new baby boomers a day. We talked about that baby boomers are those born…what was it?
Maureen: Forty-six to 64
Eran: Forty-six to 64, right.
Maureen: You just made it.
Eran: That’s right, we just did. I did, not you.
Maureen: Me? Out!
Jamie: I’m out of that equation.
Eran: You are the generation Z. Did you say that you were born in 2000?
Maureen: No, you have 2010.
Eran: That’s right.
Jamie: Whoa!
Eran: Exactly, exactly.
Maureen: I’ll take it.
Eran: Yeah you will. So, we want to talk about that and we wanna talk about the fact that’s it really, believe it or not, it is getting harder to become a home owner especially in San Diego. So we will talk to Jamie about that. We will talk to Maureen about should we are should we not pay our house in three years and there is so much more but we got to go and pay some bills so when we come back we will continue. Eran Sinai with Jamie Kurtz and Maureen Martin, we will be back with you.
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Eran: Welcome back. Eric Clapton in the background, Eran Sinai with Jamie Kurtz and Maureen Martin. So that was Eric Clapton, right? So today in 1945 Eric Clapton was born, that’s his birthday today.
Jamie: Ah, happy birthday Eric.
Eran: That’s right! Now, why did I pick that song? Because this song was written for the movie, Color of Money. I don’t know if you have seen the movie or not but it’s directed by Martin Scorsese and it’s about, you know, with Paul Newman and Tom Cruise as pool sharks.
Jamie: Yes, yes.
Eran: Okay, so you know what I’m talking about. The bottom line is because Teddy or Eddie who was Paul Newman didn’t like the techniques of Tom Cruise who was shady and so it’s all about honesty and it’s all about integrity. And bringing you guys and bringing you Maureen and you Jamie, I figured, you know, couldn’t tie better because talking about integrity. So you have been doing that for a while and we were just talking about other banks now that they haven’t been…haven’t had integrity, double jeopardy, but they had to close down or there I think, so I just think it ties in really well. So, let’s jump to you Maureen for a second. So you have been in the business for…
Maureen: Seventeen years, but I only look like…
Eran: Seventeen years.
Eran: Yeah, you started….I remember you told me…
Jamie: When she was 10.
Eran: Your grammar school teacher was like, “Maureen, you can’t get into the business, it’s too early yet” but you did anyway, right?
Jamie: Put your pager down, Maureen, no pagers in class [Laughter].
Maureen: No pagers in class [laugher] I’ve got one by the way.
Eran: That’s right. she didn’t show off because she was like, sorry I’m busy because I’ve got things after school. Alright, so quickly, what happened with WJ Bradley? What’s your take?
Maureen: So my understanding of what happened…so recently in October we had a major, major change in the industry which is called TRID. So in the last 40 years we have not had changes that are this critical, if you would, and really significant. I mean, we have had so much. Every form has changed, every timeline, everything has changed. It has really just turned the industry over. So it was really challenging for lenders to comply because the guidelines were a little vague and so investors and banks and everybody kind of had to figure it out on their own and my take is that WJ Bradley was not able to get their loans that they had already originated under TRID. They weren’t able to get them sold so when direct lenders, like what I am, with direct lenders they loan in their own name which is what WJ Bradley did. They put their loans on a warehouse line so basically they get a loan to fun the loan and then they sell it after they fund the loan to the investors but if they can’t get the investors to buy it then they can’t get it off their warehouse at all.
Eran: Then what happened to those loans?
Maureen: So they got to sell them at a loss
Eran: Because if they can’t sell them to the investors, the investors isn’t buying it because they don’t comply with the guidelines, the rules or whatever. And that’s why it is so important when you are in escrow, if anyone has ever been in escrow which I am sure that you guys…I know you guys both have, when the lender ask you for so many things I always joke, like, so sorry, you know, I’ll be over later for your, you know, for your DNA sample. And we ask for so much because we have to put together a file that, if opened and when opened say over the next 30 years, it has to speak for itself. They can’t call the borrower and say, I don’t understand what this means. So it has to kind of tell a story based on the guidelines of that very moment to be saleable and they get opened, they get reviewed.
Eran: And I know, I’m gonna give your number because…I know last time by the way, someone did call you after the show, right?
Maureen: That’s correct.
Eran: So obviously people know and they like what you have to say. So Maureen’s number is 619-8577191, 619-8577191 and Maureen is a mortgage originator. And you know what? She is not just a mortgage originator.
Jamie: No, she is not.
Eran: No, she is not, right, she is much more than that.
Jamie: She is a super seller.
Eran: That’s right, and she knows her business.
Jamie: She absolutely does.
Maureen: Well, and it is so cheesy, if it is true, I always say, it’s not just a loan, it’s an experience because number one, when you are in escrow it can be so stressful. It can be so stressful. So if you can’t find your lender you can’t get the answers that you need or you know, the processors is asking you for the same thing, you know, ten times in a row. It can be extremely frustrating and you are getting ready to move, and you are trying to find your movers and you’re removing contingencies which your earnest money deposit is at risk. I mean, there is so much and, and, and, and.
Jamie: Timeline.
Maureen: And so….
Eran: And it’s a big investment.
Maureen: Ah, it is, it is.
Eran: Well not for everyone, I mean, let’s say, take for example, you know, it’s funny because today in 1853 Van Gogh was born. Vincent van Gogh, you know, he was known for cutting his ear. It wasn’t really his ear.
Maureen: For love. It was for love.
Eran: Whereas the truth is, it was only the lobe, it wasn’t the whole ear, so that people made a big deal out of it. It’s not common, it’s only the ear lobe.
Jamie: He’s not…yeah.
Maureen: He’s not that crazy.
Eran: Precisely, he is not that crazy.
Jamie: What about Edgar Allan Poe, wasn’t it the whole ear? Or are we talking two….
Eran: I think it’s two different ears [Laughter]. But here is the thing, during his last time here I only saw one picture….one painting.
Maureen: Right.
Eran: And today also in ’87, it just so happens on his birthday. Today in ’87, I mean, he was born in 1853. He sold his sunflower painting in an auction in New York for 39, I’m sorry …yeah, 39.85 million dollars.
Maureen: That’s a beautiful picture too.
Eran: Yes, it was a beautiful picture.
Maureen: Hope I don’t make my money after I die.
Eran: That’s exactly right.
Maureen: I’ll do my loans when I die.
Jamie: That was fun.
Eran: Alright, talking about making money, we have a guy, paid off his house in two years, right?. Regret, no regret, what’s your thought guys?
Jamie: Regret.
Eran: Regret, okay. Jamie said regret, why?
Jamie: Well, tax write-off, first of all. And I think there is bigger and better investments with your money. So whatever the price point may have been, it probably wasn’t here in San Diego, that’s a given.
Maureen: That’s aggressive.
Jamie: That’s aggressive and probably not possible too.
Maureen: And if he has that kind of dough. But I mean, you know, in the article, I read an article about it and it said the balance is like 150,000 that he had paid off. And I mean, that, you know, depending on your income and that could be a significant amount of money. So, I mean, you can do so much more. I mean, returns right now, I know the stock market is dipping or whatever but you know, historically, my dad, he is such a great guy, he always said, you told me you love the stock market. You told me, was the stock market more in 1970 than it is today? Yes dad, you know. [Laughter]
Maureen: What about 1980? You know, it will eventually go up, it’s gonna drop but it is gonna go up.
Jamie: Eventually.
Eran: Yeah and he’s like, show me today, where it was in ’70. Is my point taken? And then he is sitting in his chair and he is like, [recording – song, hallelujah] [laughter] That’s what it is.
Maureen: But it’s the same thing with house prices. You tell me Eran, in 1970’s, are the house prices higher than they were in 1970, today?
Eran: Obviously not.
Maureen: There is no way they can be, you know, so it depends. Eran, you know, and my dad would love you for this, the rule of ’72.
Eran: Hmm huh, Sorry, I’m choking on my own water again. It’s not saliva it’s just water. So look, we are talking about the cost of money. I call it OPM, which is other people’s money, right? So if you get 150,000, okay, and rather than pay off your houseyou’re your mortgage, mortgage rates are really low, it’s below 4 percent, okay? We cant call it exactly but it’s below 4 percent, okay? The rule of 72 says, if you take that 150,000, per say, let’s take conservative.
Maureen: Conservatively, it’s 6 percent.
Eran: Six percent which analyzer or financial planner will say that a long 30 years you can take 6 percent. The rule of ’72 says interest you’re getting divided into 72, so 6 into 72 is 12. Every 12 years your money will double. So let’s say he took that $150,000, in 12 years you’ll have 300, in 24 years he’ll have 600,000, right? Thirty-six years he’ll have $1.2 million. That’s with the rule of 72. So…
Maureen: So his $150,000 house, likely in 36 years, you most likely will not be worth 1.2 million. It’s hard to say. Again, if it is definitely in San Francisco.
Jamie: New York?
Eran: Even then, I mean again, it depends but like Jamie said, you know, but what’s your financial situation?
Maureen: But a house doesn’t pay you unless you move out of it, you know, and then you are just getting meager rent.
Eran: And then you are sitting in it. So now he is sitting in a paid off house. It’s like money that is put in his safe deposit box. Yes, the house appreciates but the house would appreciate anyway.
Maureen: You could get rent but it’s definitely not going to be the same return as if it’s like 1.2 million.
Eran: And like Jamie said, the tax write off, I mean again it depends on your position but there is some benefit in that.
Maureen: There is a lot of benefits in that.
Eran: Go to Jamie with that 150,000, even if with 150 you could go get another house, right?
Maureen: Well, if you think about it, well, the down payment, split that up in two even, you know what I mean. Seventy-five thousand dollars down. I mean, if you are a VA. Jamie is great with the VA buyers, I mean, if you are a VA, FHA, a little as zero to 3 ½ percent, yeah.
Eran: And even if not 150, Jamie, that could get you good 20 percent on the house.
Maureen: True.
Jamie: Absolutely, yeah.
Eran: That’s a good chunk.
Jamie: Or back to Maureen’s point, you could even split it and have two, have a rental investment property and then have your own home as well. So, there is a lot more that could be done with that money, I think, here in San Diego. And again, it depends on your position, financial outlook.
Maureen: My financial planner too, he is always saying, “Only have a third in real estate, a third in real estate and you wanna kind of diversify yourself.
Eran: So, our consensus, what we think is…
Jamie: Regret.
Eran: Maureen?
Maureen: Boo, hoo, you need your tax write off.
Eran: Okay, so we all agree.
Jamie: You can find that finance lady.
Maureen: I don’t love debt though, don’t get me wrong.
Jamie: Yeah, and I would say, I am one of those people that I get super nervous when I borrow….I don’t borrow from people and even from a bank, I would be super nervous so I can see the appeal to give a huge….
Maureen: But if you borrow money from a person you couldn’t use the tax write off, so a little different.
Eran: Yeah, that’s true. So basically if, we said, you have 150,000 laying around and you’ve saved it in such a short time, our first reaction is? Certainly reaction is like, yeah, you know, maybe go to Jamie, get another house, go to Maureen finance the house.
Maureen: Get a couple loan.
Jamie: Get a couple loan, absolutely.
Eran: Then you are good to go.
Jamie: Well, there you go, building that portfolio.
Maureen: Exactly. No doubt about that.
Eran: Okay, case dismissed, we are done. Okay, we’ll move on. We’ll move on, okay, so now, in a minute we are gonna take a break but before we take a break Jamie, because we are gonna…when we come back I really wanna talk to you quickly about some real estate stuff that’s happening.
Jamie: Okay, I’m your girl.
Eran: How long have you been?
Jamie: Almost 11 years.
Eran: Wow! Eleven years. Where do you pick your girls up, in school?
Jamie: We were just good buddies.
Eran: And your business is mainly where?
Jamie: Mostly central metro area, San Diego. So anything…
Eran: What does that mean?
Jamie: From the beach area, take I-8 East, anywhere that kind of touches that veins into Mission Valley.
Eran: So, and again, Jamie is with Team Aguilar. She is a realtor and Jamie’s number is 619-9526455, 619-9526455. So let’s take a break, when we come back I wanna talk to you about the baby boomers coming in, what are they doing? Are they downgrading? What are they doing and is it or is it not hard to buy a house? Is it getting harder in San Diego. And then I wanna shift that and talk about what are the signs that you are not ready to get a mortgage. So you could both can help me with that. Alright guys?
Maureen: Sounds good.
Eran: Eran Sinai with Maureen Martin and Jamie Kurtz. We will be right back.
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Eran: Welcome back. It’s great.
Maureen: You pick a great song, you do.
Jamie: Great song!
Eran: Thank you. I love music.
Maureen: I know.
Eran: You know, I just want to shut off and listen but, you know, my wife says you always listen to music and you know we had friends over the week end and we had Pandora, we had Pandora listening, you know, and every song is about three seconds. I don’t pick the songs by, Oh you know, this is this, this is that so people are like, what is wrong with you? Anyway, which is Paul Simon, so today in 2013 actually, U.S. music producer and pioneer and digital recording Phil Ramone die. He was the biggest, he was the most successful producer in history, writing 40 Grammy awards, working with stars like Ray Charles, Bob Dylan, Elton John, Paul McCartney, obviously Billy Joel and Paul Simon. He produced major first commercials, so he has done so much. If you Google him, Wikipedia, there is like, in alphabetical dictionary of all the albums he produced. That was one of them.
Maureen: I would love to get one.
Eran: Ant the song though is, believe it or not, is a gentle reflective song dwelling on middle age, many baby boomers could relate. That’s what Paul Simon said. So it’s ‘for the baby boomers and…
Maureen: We are here to support the baby boomers.
Jamie: That’s right, we are!
Eran: We are gonna talk about it now because there are 10,000’s of new baby boomers…
Jamie: A day.
Eran: Entering a day. So what does that do to the market? Should we even care?
Maureen: Of course!
Jamie: Absolutely, we should care!
Eran: Oh well, I am one, I’m at the edge of it.
Maureen: You are right there at the cut there Eran, you know.
Eran: That’s right! So Jamie, what have you guys seen, what have you seen by the way on that?
Jamie: With the baby boomers, given our low inventory, we’ve got to care about every generation and where they are gonna fit in this place. The millennials, can they buy? When can they buy? The baby boomers, where are they going? Are they staying in their house? Are they downsizing? Are ‘they going to single level?
Maureen: Are they millennial kids living with them?
Jamie: Are there any millennial kids, yeah.
Eran: Exactly, right!
Jamie: Or do they wanna move in with their millennials and there is a select few that might want to move to assisted living. So there is a lot of opportunity there for everybody to be involved. The millennials can take over. There are investors that wanna go out there and flip homes. So if it’s all original you can sell cash, ten day close to a number of investors that will bring it up to current standard, sell it for a profit. So there is a lot to be done and we need to help everybody in the market of selling.
Eran: So is it or is it not harder now to even buy a house in San Diego?
Jamie: Well Maureen you might be able to answer that a little bit better.
Maureen: I think number one, it’s inventory. Our inventory is really low.
Jamie: So it’s competitive, you have to be prepared.
Maureen: It is extremely competitive. I mean, it just turned spring right now and, you know, historically speaking, spring and summer is more….
Jamie: It’s the best.
Maureen: You know, there is more inventory, the sellers might be holding out because they think they can charge more, you know, because there are more people looking, but in all honesty it’s like, it’s pretty crazy.
Jamie: It is crazy.
Maureen: It’s like, there is just not a lot and that drives up the prices. It does drive up the prices but…I mean back to the millennial, excuse me, I mean…
Eran: Baby boomers.
Maureen: The baby boomers, I’m getting a lot of calls a lot of calls regarding the reverse mortgages. I even just recently got one where, I don’t think it is really millenials maybe gen. X, moving in with the baby boomers, they were flipping it. And they said, you know, we wanna sell our parents house, who is out of the county and then have our parents move in with us.
Jamie: Yes, I have heard that a lot.
Maureen: And then we are trying to kind of qualify who qualifies for what, I mean, they are all gonna live in this house and… I mean, this is an alternative for, you know, assisted living and that’s one way to do it.
Jamie: Yeah, I’ve heard that many times over where the millenials are…they have gone off to college or peace corps or wherever and they’ve come back and their parents’ home has a lot of value and the parents aren’t ready to give up but they can go out and maybe get a home improvement loan of some sort and then add on.
Maureen: Or the reverse mortgage because with the reverse mortgage the y don’t have any monthly payment.
Eran: And they can use that money for the down payment on another house, is that correct?
Maureen: You can… well, no. A reverse mortgage, you have to live in it.
Eran: No, no, no, but they can take the money and buy an investment house….
Maureen: If they…
Eran: If they are staying in the house?
Maureen: If they are staying in the house, correct. For an investment property that is correct but not for another owner occupied.
Eran: Yes, exactly, okay, yes, well obviously they are gonna have to stay but they wanna help their kids. Their kids are gen X, some millenials so then they can take a reverse on that, help their kids get the down payment, go to Jamie find a house come back to you and they’ll be one big happy family.
Jamie: And then they will live happy.
Maureen: Yeah, I mean, there is a lot of things with the reverse mortgage. I mean, number one, you can’t take it with you but, yeah, you can leave it to your kids. But some people don’t have children to leave it to.
Eran: Well, we are available [Laughter].
Jamie: I’ve got…my bank account number is…[laughter]
Maureen: And I think that it’s great, I mean, it’s a great opportunity to not have a mortgage payment, to use your equity for…you can take out, you know, it depends on your age as to see how much and your equity and your value to see how much you can take out but let’s just use an example. You can take out 200,000 if you were to qualify and put it in an account at 6 percent, you know what I mean, and kind of play that game, you know.
Eran: But yeah, let’s just remind the listeners that when we set 6 percent it’s an average for up to 30 years. We are not talking about, no one is gonna guarantee you 6 percent because you have to talk about rates and…
Maureen: But meaning, they can still take money out of the house and that it’s not wasted. You can earn interest in a conservative account and that could be the inheritance and then mom could still live…mom and dad could still live in their house without a mortgage payment and that’s the benefit of that.
Eran: So, where do you see, let me put you on the spot, where do you see the market going?
Maureen: Well, I mean…Jamie?
Jamie: I’ll say up. I’ll say up for now.
Eran: You say up?
Jamie: Yes, definitely.
Maureen: I mean, there are markets that we haven’t quite caught up to such as like San Francisco, New York, even Los Angeles, parts of Los Angeles. We are in a very desirable area. We are beach side, if you would, depending on what part of San Diego, but for the most part, I mean, 30 miles east is still the beach. Check out the weather, does anybody feel the weather lately? I mean…
Eran: It is, it is, my wife was in New York, we lived in New York City 18 years before we moved here 9 years ago. She was in New York two weekends ago and she was calling me, she said, can you try getting me out of here a day earlier, because talking about the storm coming and I don’t wanna get stuck. And I’m like, looking outside and sitting on the deck outside and like, a storm? What are you talking about? Isn’t it funny?
Maureen: Well, I mean, it is and I just…I see it’s supply and demand, you know, and there is a lot of demand for.
Jamie: A lot of demand and you’ve got to think about our buildable acres as well. To the north is Camp Pendleton. To the west is the ocean, to the south is Mexico and to the east is mountain and desserts. So within those borders are buildable acres, don’t quote me on this but I believe it is well below 200 acres. So everything is got to go up, everything is got to go vertical. But you still have that demand, you still have people moving here for the weather, you still have high rent.
Eran: And jobs are really…
Maureen: Booming! I just read an article that the jobs are coming south like from Silicon Valley because they literally can’t afford it up there. And I’m not gonna lie, I have a friend who moved up there and it is rainy!
Eran: It is.
Maureen: And it is cold and dark. [cross talk]
Eran: I went on a creek and the guys have been calling me to go on that creek and I said, oh my God, it’s been raining nonstop and I am not sure….
Maureen: So I’m like really, I’m getting a tan right now. So you have got to take that into account and not to throw out another movie but I just recently saw The Big Short and right now we are building all of these mortgages for the most part. I would say a solid 90, 95 percent of these mortgages are build on low 30 year fixed rates. So nothing is gonna happen. Their payments are not gonna go up, there is no adjustment period, there is no interest only.
Eran: And you have an analysis that describes to someone about how it can rebuild itself.
Maureen: Right. You can assess the viability of the market when you can compare rent payments within a 10 percent variance of a purchase putting 20 percent down with a 30 year fixed rate. If you are within 20 percent of rent versus what your mortgage payment is, including taxes and insurance, if you are within that range then it’s a sustainable value.
Eran: So let’s use an example. If you bought the house and you put 20 percent down and your mortgage payment is 4200 and you can rent your house for 4500….
Maureen: Or 38.
Eran: Or 38, you are still within 10 percent range and you are not, what economist believe, we are not in a bubble situation.
Maureen: Right, that’s correct.
Eran: So when it comes to real estate, really what we are gonna do here is [recording- all we want to do is pop] [laughter].
Jamie: Absolutely, we are just gonna pump you up.
Eran: So it’s still the best great investment and look…
Maureen: Even if it goes down, we have seen even with a crash…
Jamie: Yes, it will come back.
Maureen: Even a crash, you know, we recovered in 8 years, significantly, and we are past the point of the high point.
Jamie: The high point, yeah.
Eran: And even more so when we talk about, before the show, that, okay, 8 years ago some people took mortgages, you know, they had a foggy mirror, they were able to get a mortgage, right?
Maureen: Yeah, they were all built on sand!
Eran: Right, but this time around, if you got a mortgage it’s based on somebody you can support…
Maureen: A strong foundation.
Jamie: A strong foundation, absolutely.
Maureen: It’s based on your income, it’s based on your assets, it’s based on your repayment ability, it’s based on your credit, you know, and it’s based on you having a job. So you know like that movie, you know, the people that were buying the houses…
Eran: I mean, the restaurants, remember the waitresses, and all those buying [cross talk] you remember that?
Maureen: I recall a waitress and she purchased five houses during, you know, you have stated income, and those were all ARMs and most of them were interest only ARMs. And sure of course they could rent them out and make the payments but for two years it’s interest only and then it jacked up and then…
Eran: They are done!
Maureen: Re-amortizes and then the rate goes up so and that’s why everybody…and there was no skin in the game 20 percent down, I mean.
Eran: So let’s quickly before we go into the break, so now, we are talking about housing, what can you…when do you know you are not ready for a mortgage?
Jamie: That’s a good one. When…
Maureen: You should share your story Jamie about a few months ago she had a client that would be interesting.
Eran: So when…give us some points, how do you know you are not ready?
Jamie: Quickly, battered and bruised credit, no assets, and a FICO score, let’s say below 600. Anything below 600, that’s….as Maureen was saying earlier, there has to be a story and they have to see that you are going to pay back whatever you are borrowing. So FICO score is a big deal, jobs, big deal.
Maureen: You can’t pay your car payment, I mean, I guess you have to live in your house but you have to have a car to go to the grocery store too.
Jamie: Here in San Diego, yeah, unless you can build up some kind of metro system.
Eran: Okay, so one thing you’re gonna look at, you know you are not ready when your FICO score and your credit is…
Maureen: Below 620. I mean, I think, then you are just gonna get gouged on the re, you know.
Eran: And not only that, you are gonna eat rice and beans, you know, you are gonna live to pay the mortgage every month.
Jamie: Yeah, that new house smell wears off after a while so [cross talk]
Eran: Alright, give me another one.
Jamie: Let’s see, we talked about jobs, having a job.
Eran: Okay, so you wanna have a steady job.
Jamie: A steady job. Steady employment where you can show two years.
Eran: Okay, so the job, FICO score, a good credit, not a bruised credit, and have some assets and savings. Am I correct?
Maureen: Yeah, and you, I mean, if you have had anything serious happened like a bankruptcy, foreclosure, short sale, deed in lieu, anything like that, you need a solid three year seasoning, four years and sometimes seven, depending on what it is.
Eran: And I’m not saying….you’re right, because I am not saying, look, bankruptcy is not…I’m not saying it’s a bad thing at all. It’s a business decision, that’s how I look at that. It doesn’t make you a bad person at all, but you know what? It might work for your benefit because now you are debt free, you can file again for a number of years, whatever, right?
Maureen: Hmm huh.
Eran: And the good thing is, now you have no debt, you waited three years, you go to Jamie, you get a house, go to Maureen. You can qualify someone to buy a house three years after a bankruptcy?
Maureen: And that’s possible…but only after you have learned from that bankruptcy.
Jamie: And learn from your mistakes.
Maureen: Because I have seen so many times where they are right back where they started.
Jamie: Yes, they are not paying off that credit card debt and I am like, huh hooo!
Maureen: You could see that debt rising up and it’s like , oh my gosh, they didn’t change their habit!
Eran: And that’s right, when… and like I always say [ recording – I don’t have time to say this] don’t mess up your credit again!
Jamie: Don’t do it again!
Maureen: Do you know how long it is? So you can file bankruptcy?
Eran: After eight years.
Jamie: Eight? Really! They would let you do that? [cross talk]
Eran: Alright, let’s take our last break. When we come back we are gonna close strong and, don’t go anywhere. So Eran Sinai with Maureen Martin and Jamie Kurtz,we will be back with you, don’t go anywhere, alright?
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Eran: Welcome back.
Jamie: Hello.
Eran: Do you like this one?
Maureen: I like them, all though.
Eran: Well, that’s the Stranger, Billy Joel, and that’s another album produced by Silver Moon and…
Maureen: I keep hearing you saying those pattern.
Eran: No, no, no. Phil Ramone. So this song is about when we think we know someone but we often hardly know that person. That came…Billy Joel came with a lot of.… not a few, not that great albums and he came back with this one. So my lessons here are two things, first of all, don’t give up, okay, you know. Never give up. Two, you know, I am introducing you to people that what you see is what you get, you know, you don’t have to worry about not knowing people, afraid that they are gonna mislead you. You have Jamie, you have Maureen, what you see is what you get. They are not gonna steer you wrong so that’s my finale of the song for today.
Jamie: We are not going to steer you wrong.
Eran: Okay, this is the other segment and you have about, you know, that’s in a minute each, I want you to tell me, give me anything to take home. Someone listening and you can give them your number again, what lesson should we take with us home today?
Maureen: Well, I think we shouldn’t be scared. Number one, I mean, I think that if you are looking to purchase a home in there, you know, and you know, I see the people that are really getting their offers accepted are number one, and they are working with a super like, aggressive, but, you know, in a kind way, aggressive and a negotiator, who can negotiate with a seller. I mean, if you are one of like 10 offers, you’ve got to know that your agent is going about for you. I think that offer letters are really important too, you know, because we are talking about actual sellers now, not banks. So the banks back in foreclosure days were in sales but not taking care. So but the sellers care. They kind of, you know, if it’s an owner occupied sale they might care who is gonna live in it and I think…I see that that works a lot. And who you are working with as your financing, I would say, don’t pay more, pay sooner. So I mean, we can close and I just close a VA loan in 15 days. So let’s give the seller their money quickly and, you know.
Eran: Let’s give them your number again, Maureen is at 619-857191. Jamie, your words of wisdom.
Jamie: To tag on to what Maureen was saying, it’s definitely, don’t be scared but have a good team that you are working with. Have a great lender, have a great agent me, of course, and you want your team to speak to each other as well because we are on deadlines. We have timeframes and Maureen meets and exceeds her timeframes every single time and every time I call her for a question or her buyers called, she always answer.
Eran: And I do the same. So let me just give your number, Jamie, 619-9526455 and let me tell you two [recording – I’ll be watching you]. So before we go anyway, I wanna thank you for coming.
Maureen: Thank you very much for inviting us.
Jamie: Thank you for having me.
Eran: And you know me, I can’t finish without a little bit of a trivia. No I’m gonna ask you, I’m just gonna tell you. Okay, so, I was talking about that, its gonna be used on the moon, it can be used on the water with zero gravity, astronauts use it, Americans and Russians, it takes one tree, you can make 170,000 of it? A pencil! Today in 1858 the pencil was patented by Hymen Lipman of Philadelphia. Let me tell you a little bit, we use two billion pencils, No. 2, in America. It takes about 8,000 trees to make those pencils. And the theory is that one word ‘pencil’ comes from the Latin word “penicillus” which means little tail, okay? And before the invention of erasers, that’s on the pencils, a writer would have to use bread crumbs to erase his page.
Maureen: What would that page look like?
Eran: That’s right, and…
Jamie: Just like my son’s homework.
Eran: And people say, how long can…that’s funny, people say how long can a pencil write? The average pencil holds enough graphite to draw a line about 35 miles long or roughly about 45,000 words. History does not record anyone testing these statistics so it’s just an estimate. So I wanted to leave you with that really important information.
Maureen: Thank you so much!
Jamie: Very important, thank you.
Eran: I know you couldn’t go on your day without that.
Jamie: Not at all.
Eran: So Eran Sinai with Jamie Kurtz and Maureen Martin. I really wanna thank you for coming here.
Jamie: Thank you, it has been fun, for having us
Maureen: Thank you for having us.
Eran: You guys have been so awesome. I am so glad to have you. Have a great week for the rest it, great weekend and I’ll see you all next week.
Maureen: Okay, bye, bye.
