Real Estate Investing

If you're like me watching little kids doing Easter egg hunt is a pretty beautiful thing, but I always feel bad for the littlest of the pack. It always seem so traumatizing to see that little one run for an egg.

She has her eye on only to have a bigger cadence sweep in and steal it at the last second Heights, Doug Hastings, with Moody radio and unfortunately the same kind of situation has become a traumatizing reality for families all across the country.

Families are out searching and finding their dream home only to have it pulled away by another hunter at the last second, which is why I'd really like you to meet my friends at United faith mortgage.

Unfortunately, this faith focused mortgage team can't scare off the other hunters but they can very quickly get you preapproved and make it look as good as possible to sellers. They specifically made a commitment to this podcast in our listeners to do all they can to help you. You can find the entire United faith mortgage story and especially read how their direct lender advantage can often save your family monthly and lifelong money@unitedfaithmortgage.com United faith is a DBA of United mortgage Corp. 25 Millville Park Rd., Millville, NY license mortgage banker for all licensing information, go to an MLS consumer access.org corporate MLS number 1330. Equal housing lender not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota and Utah and most people don't think of author Mark Twain as a financial advisor, but he did occasionally weigh in on investing one of his pickiest quotes is by land.

They're not making it anymore. I am Rob Weston. While many of fortune is been made investing in real estate.

It's also an easy way to lose money if you don't know what you're doing real estate expert Sanford Coggins gives us a crash course today than it's on your calls at 800-525-7000 800-525-7000. This is moneywise live for biblical wisdom. Today's financial decisions. So I guess today is new to the program. Sanford Coggins has nearly 30 experience in real estate investing is the founder and CEO of vision, wise capital, which controls a portfolio over $50 million in real estate assets.

More importantly, he's a faithful follower of Christ, a very good friend and Sanford great to have you with us in the program today rubbed an auditor to be able to serve you and your well. I'm looking forward to diving into this topic so many of our listeners are thinking about real estate investing. Whether or not it would be good for them. Sanford is says someone who's been so successful in real estate investing. I know that you have an overriding philosophy on how you approach this space and I think that would be a great set up today for you to begin to unpack this topic by sharing that with us directly reflect back two years ago when I was introduced to the idea of the difference between ordinary and extraordinary, and the fact it is just a little extra so we hurried over into our business by virtue recognizing that serving the investors and our vendors can do anything in business at an enterprise is certain ordinary but going to servicing our resident and making sure that we serve our city that were buying property that the extra and we we make a habit of pursuing that extraordinary effort is phenomenal because we honor the Lord in doing that. We serve others as you said, and when we do that we put ourselves in a position to experience God's best as well.

It's just good for business. Sanford I'd be interested to know how you compare real estate to other forms of investing like let's say the stock market.

Years ago I was actually more active in managing stocks and bonds for investors and was probably to consider it one of God. In Matthew 25 invested in that whole parable of the challenge and I thought about it where one traded in ghetto and gained one of them was not very productive and breaking that oath that I realize a few things are true, wanted to had a long time to do the investing and the second thing might be more speculative is they didn't borrow. There is no evidence of that. And apparently they work but afforded her brow, which was consistent with what happened regarding an and I thought about the diligence in the laziness and the slothfulness that God talks negatively about me and work for it. When I look at that picture and I think about how want to minimize the amount of borrowing real estate allows me to do that I can borrow at a much lesser leverage rate so that I don't have to risk losing the asset to the lender a downturn which is what we do requires more if you will just have to actually work the product to make it work for us and for our investors. Obviously you were buying real estate investments in the portfolio as a professional investor on behalf of your clients. Let's talk about our listeners for a moment in the opportunity they have to buy real estate as an investment. So often there wondering if it's right for them, and in particular whether or not they should be borrowing to do it. What you learned in your business, and over the years that could apply to helping them navigate that decision about the use of debt and buying real estate investments. I have been so clear in saying that the greatest risk in real estate is not the real estate itself. It's really the way you structure the financial modeling and if you overleveraged and I can give you some very specific algorithms that identify just how much leverage you should have anything to get a property you overleveraged in a real estate deal and you hit a bump in the economy. That's where you lose everything. That's when you have a recognized loss and so I'm I'm very clear on the fact that leverage is something we shy away from we minimize it, but it does boost returns undoubtedly so very very careful in how we apply that's so good. As we say often here borrowing is permissible but clearly over time. We want to move to be more and more debt free and as you point out Sanford in terms of evaluating just the merits of the investment having that leverage under control means using minimal debt is so key to the ultimate return, you can achieve elsewhere to continue to unpack this just around the corner. His real estate investing for everyone in December. Think about the housing market he's going to California today is an interesting perspective Sanford Coggins.

I guess today you can find more about him and vision wise capital.com that's vision wise capital.com much more to come on moneywise live stay with us will be right back. Thanks for joining us today on moneywise live joining me today my friend in real estate investing expert Sanford Coggins, CEO and founder of vision wise capital that controls over $50 million in real estate assets Sanford you have a unique vantage point into this space being someone who resides in California where the real estate market. Let's just say has been interesting you found pockets of incredible value there for your clients you sent something before the break. That was really interesting to me just related to your philosophy of not only achieving a desirable financial return in serving your investors but really how you position your company and your real estate portfolio with an intentional focus on serving the residents that actually live in these properties talk about that aspect of what you do a real hot button. I never felt have to be in any kind really no reason for the investors to when and enterprise to win and not have the residents went so we treat them with a great deal of respect we meet my goal is to retain 50% of our tenants only by property for renovation, then that means there were to be increasing rents in summer and I need to move, but where were approaching that goal now and I think we do it because the day after we close escrow. We actually visited with every chat one on one or one on if you would answer their three greatest questions. The first question is what my regular day and we tell them because clearly and schematically regarding work out. The second question is, so when you can increase my rents are going to have to move out and we can't because that's exactly what we have written 1/3 question is what you do to justify the rents so we show the previous project and what we do under the kitchens and soft close cabinets and drawers of the very thing we do internal and external.

At that point they gotten look for place to live, and they usually look at a one or 2 mile radius and we never priced our product any higher than what's already available so they tend to stay and I and we enjoy that very much.

We don't like displacing people we don't like having them To change their school district for their children. We host barbecues early on so they get to know one another and develop a sense of community. It's we have a blast with these residents and they tend to by virtue of history pay their rent because through this pandemic which collected over 94% of the rents because I think they see the landlord of the face and not just as a check receiving entity out there somewhere that makes all the difference Sanford as our listeners are thinking about real estate investing, and I know many of them are his real estate investing for everyone or should some investor stay away.

I do not question a lot over the years and conclusions like is a personal financial plan that a necessary item for everyone. I think that it is I think it's for the sake of balance. I think it's for the sake of being able to have a non-correlative portfolio that could have something waiting in every economic chart and real estate definitely does that. If you're directly invested in art and off since the downturns in some more typical interest-rate markets than bonds or stocks may be affected by, yes, interesting, and a lot of this has to do with what we talked about a moment ago and that was the leverage. How much debt are you taking on to buy a property unpack that a bit more what have you learned about leverage and its impact on real estate investing and how might that apply to individual real estate investors.

I think the hot button beside the way we manage and handle and communicate with residents of the debt issue that I believe that if you minimize the debt on your real state investing. Then you also significantly minimize the risk of losing the asset to the lender in the event of a black swan or some unexpected economic event, like a pandemic. And what we've done in that regard is mathematically figured out what level of debt can we have a property without the risk of losing it to the bank and we come up with a 50% number just backing into algorithms that allow that to be our number with that number we would've made it to the great recession without losing not one asset we made it to the pandemic without having a notice of default so I would recommend to anyone investing in real estate not to be aggressive on the debt. It's the one way that you have not only realized but a recognized loss is not acceptable that's really helpful as ever and I know you deal mostly with commercial real estate, but I'm confident you have an opinion about the current surge in home values, especially having a front proceed to what's happening there in California. Is this a good time for someone to invest in residential property, you write exactly right is not my primary business model and maybe I will have primary data to share with you but I can tell you this. I think it's really spot on.

We have a shelter in place occur last year that cause millennialist to save money because the hatchet pages were going out and spending it on lifestyle nearly as much and I believe that's really a pull up a point of reference for why single-family homes are selling so rapidly to an aging millennial demographic with housing being necessary for families at their now growing and you're right there house you selling off the shelf like hotcakes you have interest-rate parallel that help in the commercial market. We don't experience the same sense movement is still driven primarily by economic valuation and not as much by location and school districts so that were not experiencing same run-up in values but your point. California is very expensive and you did. You do have to navigate through how you invest and how you run the numbers for this particular part of the country that's exactly right in back to your earlier point about minimizing debt that really becomes even more important markets like this so someone is thinking about moving into real estate investing.

What from your experience. Would you offer in terms of advice on homework they should do before making an offer on an investment property. I believe it more buffet heroes monitor philosophy on finance and money, and is clearly that the greatest risk investing is not knowing what you're doing believe that in real estate, like pretty much anything else you need to know all the various factors that are likely to impact your profits and your capital and some of those.

Maybe wait out in terms of plausibility and the various risk profile you wait out and prioritize. But if you don't know every facet of those risk factors that your subject could be caught by what I called out in ignorance tax people just don't know. And that's just how that works in real terms, and to minimize that.

I think people find advisors and trustworthy operators that they feel do know the answers to those questions and that's the whole point of finding an advisor that you can trust to do just that. So then our real estate investment trust Sanford a better way to go for the average investor to have an allocation that's uncorrelated to stocks and bonds in their portfolio. When he reached came out in 1960. It was an effort by Pres. Eisenhower at that time to allow smaller investors to participate in what institutions were being able to freely enjoy and I still think that's true. I think that if an investor is smaller in terms of their capital base REIT is a great opportunity for them to engage in a relocate investment.

I see the alternative picture I have of that is that reach in many cases especially publicly traded REITs are not really real estate. We don't want to confuse God. There are shares of a company that owns real estate and therefore they trade and shares and they are volatile and very much like the stock market as if an opportunity to have an entrée to real estate, but is not directly investing in real estate, which is a part of the good of the of the activity that really gives you the greater return and a large amount.

Modify your risk. We just scratch the surface today. So what have you back to talk much more about REITs and also direct real estate investments. Sanford really appreciate you coming by today. Thank you very much Rob I've enjoyed it and have a great deal of you and your team without question. Thank you Sanford. Bless you buddy Sanford Coggins is been our guest today. You can find more about him and wise capital.com your calls or next. 800-525-7000 with his lies live today calls and questions. The lines are filling up that we have going for a few more years. The number 800-525-7000 just ahead will be taking your calls on anything financial saving or investing. Perhaps you thinking about giving or paying off debt whenever it is 800-525-7000 just a week left in the month of June here in the summer.

It's a great opportunity for me to remind you that moneywise media is entirely listener supported so we can only do what we do through your generous support but would you prayerfully consider a gift beyond the giving to your local church. If you would we'd certainly be grateful just to moneywise live.org, click the donate button and that is the way to give quickly, easily and safely and thank you in advance. Let's head to the phones first step today is and in Pennsylvania hi and thank you for your call. How can I help you, about 300,001. Applicant finally gets rolled over at that hundred thousand hundred thousand left to do something went and I was wondering should we do recommend I put the enemy or an annuity or so. Now I it's money that I really don't have to use right now okay very good.

Yes it was. Give me my first questions he said your 80 and your income is really covering your monthly expenses your living off of Social Security or some other income sources that right and I find very good and how are you viewing this money. Is this money you'd like to grow. Obviously if you needed it for major medical expenses down the road or some long-term care. It would be there, but are you apart from that. Are you looking at it to pass on as an inheritance. Are you looking to do some giving it some point what what your primary motivation and driver behind this money in the future. Although it might likely, and then he laughed and inherited children is not sure what direction to you. Now if it if I should put it but I can't right now yeah very good. Well, I think the purpose of the money is obviously critical because that really gives rise into the time horizon, and if you're saying you know what I don't have any expected need for this money, there's always the unexpected need for it, but I don't have any expected need and therefore it could growth the Lord to reason you have good health, you could live a while longer and you a couple of decades so we need this money to last. And as you said you want to be a faithful steward of it and manage it wisely. You don't, you asked about a mutual fund you asked about an annuity and both could be in play here and the challenges there's all varieties of mutual funds very aggressive mutual funds that are all stock-based others that are much more conservative than have a mix of stocks and bonds and there's even fixed income only mutual funds that just have bonds and bond -like instruments and then on the annuity side there's a whole variety of annuities that you could use. I am not a particularly big fan of annuities just because they tend to be complicated and expensive and you tie up your money. The one significant benefit is if you just said to me Rob. I don't want to take any risk I want to transfer that risk to an insurance company in exchange for a guaranteed rate of return and willing to give up my money for that and that some point, you know, I could convert that to an income stream or I could get it back. You know that would be the only reason but again I think because of the cost and the complexity and the fact that it does severely limit your access to the funds. If you need it.

I'd rather you do investing outside of an insurance product like an annuity. So then that leaves you with okay what types of investments and you want to be properly diversified. So I think exchange traded funds are mutual funds of the way to go if you said you wanted to do this yourself and make those selections on your own.

I would say probably want to avail yourself of something like the sound mind investing newsletter@soundmindinvesting.org where they can help you select some mutual funds that are appropriate for your age and risk tolerance.

But my first recommendation for somebody in your situation would be to find in a trusted advisor, a competent for professional who knows the heart of God who understands the Scriptures who has significant experience in managing money in a significant track record.

We use the certified kingdom advisor is kind of the gold standard for those advisors and so if it were me I would find two or three certified kingdom advisors in your area.

Interview them find the one that's the best fit for you and the reason is this is a lot of money and you want to protect it, but you also want to grow it and I think going it alone perhaps would miss out on availing yourself of some real expertise that could understand you, your heart, what God's doing in your life, your goals and objectives. What you want to do with this money and then build an investment strategy that matches that so that you know it 80 years old. There's a focus on preserving what you have, but also growing it so you're not stuck with half a percent a year in a high-yield FDIC insured savings account.

You have the ability with your expenses covered to take a modest amount of risk. At least with a portion of the portfolio so that that portion could be more of a growth engine that would lift the whole portfolio, not eight or 10% probably not even 6%, but maybe four or 5% a year where if the market was down for two or three years. You just would let that portion ride and if you needed to draw something out you take it from the more stable portion that's the kind of portfolio and advisor could build for you but if you have the time and and desire you could do that yourself with some assistance from again.

Something like sound mind investing.org but reflect on everything I've said because of throwing a lot at you love your thoughts between volatile and stable. Yeah stable or volatile. It just has to do with the degree of fluctuation in the investments of volatile account would be an aggressive account and you'd have highs and lows that are deviations from the mean. With a bigger wave so you have higher highs and lower lows. You don't want that you want more stable, slow and steady so you're not can open your statement one day and you're down 20 or 30% lets you stay on the line will talk a bit more off the air and I think you're on the right track and I want you to get some wise counsel will talk to you more about how to do that. Stay with us much, much more to come in moneywise line back in moneywise line thanks so much for being with us today. We were talking with and just break and I mentioned the certified kingdom advisor. This is what we consider the gold standard in professional biblical financial advice.

These are men and women who are financial advisors, each with their own firms, they might be with the big name on Wall Street or they might be with an independent shop.

The key is they been especially trained to bring biblical counsel understand the counsel of Scripture as it relates to financial decision-making and through a 50 hour course in a proctored exam. They demonstrate proficiency in that on top of the pastor reference client references statement of faith.

Code of ethics. The annual continuing education requirements of a whole host of requirements that give us confidence that these are people who have met high standards and delivering competent financial advice from a biblical perspective is more than 1500 of them so you can find one in your area when you visit our website moneywise live.org just click find a CK back to the phones today 800-525-7000 in Missouri. I understand it's pronounced Yvonne set right very good.

How can I help you out each law firm are many troubling right back all their looking glass and I went to Lomax able mutual for backplane account. Nietzsche will find our current choice range for graphical anything.

Yes, what is it what's the time horizon for this money is this money that you think will be invested in the next 10 years or longer range flight American okay do you have savings emergency fund that you'd use if the washer dryer needed to be replaced unexpectedly or you had no some sort of unexpected expense or would you have to draw from this is for that okay and so this is money that really is earmarked for retirement okay and how far out would you okay very good in how much roughly money are we talking about Yvonne. Okay that's okay you 15,000 is a lot of money. And as you said, it's money that you know you want to grow it conservatively, but you wanted to be there know if you need it.

Down the road.

The good news is it sounds like your expenses are covered and so it really is truly for the unexpected and beyond just the month-to-month unexpected probably something medically related or something like that. You know I mutual fund Yvonne is simply a basket of investments in those investments could be anything from debt instruments like bonds to equities like stocks and anything in between including precious metals and other asset classes so you know mutual fund just speaks to how the investments are held there held in a fund and their priced it. What's called the net asset value at the end of every day. Based on the outstanding shares in the value of the investments in the basket so to speak, but among mutual funds.

There's all flavors and varieties from the most conservative without any stocks probably straight bonds and notes, other fixed income type assets all the way to the ultra high risk very aggressive. You know highflying tech mutual fund and everything in between. So I think what you're talking about is what you would tend to call a balanced fund which is a mix of stocks and bonds so that if you know the market was down.

You wouldn't be down as much as you would be with an all stock mutual fund and you know you still have some income being generated. I think the best way to go would be one of two ways.

One is if you visit with our friends@soundmindinvesting.org their sound mind investing newsletter could give you some great recommendations on some really stable conservative very high quality mutual funds that would meet your needs. If you want to make these decisions yourself with the assistance of somebody else again sound mind investing.org you'd want to subscribe to the SMI newsletter. These are believers in the give you very practical and excellent recommendations. Otherwise, I'd probably use with 15,000 what's called a Robo advisor where you would answer a series of questions you in those questions would respond indicating your desire to be very low risk, and conservative and then the algorithm would generate. It's called an ETF portfolio which is exchange traded fund. These are indexes that would be largely income-based indexes so they just capture the broad moves of the market, but based on the way you answer the questions.

It would put you on the very low risk end of the spectrum there very low cost.

And again there very broadly diversified.

The one I would look at would be the Schwab intelligent portfolios or betterment just based on the amount of money you have a good look at those two. So if you want to Robo advisor where you answer the questions and they build it for you. Betterment Schwab intelligent portfolios. If you want to pick them yourself. Sound mind investing.org can help with the mutual fund selections and we appreciate your call today to Chicago, Illinois Martha, thank you for your call. How can I help you land that I had been inherited inherently damning no matter how their well-intentioned however it is a little of an electrical area and pretty much work right now the only initially when we got married and out came the tax bill diligently. However, now, which is getting an increasing amount of tax in elk because it like extended fires. We know were aware of the work right. What PR actions that might make an enormously large tax bill for work.

Yeah well sorry to hear that you're in the situation. It sounds to me Martha like you might need to challenge your property tax assessment on this inherited land that generally speaking land that is almost worthless. Shouldn't generate a large tax bill in all counties and municipalities are hungry for tax money and over assessing property unfortunately is not uncommon. So what you would do is call the local assessor's office set up an appointment to appeal. You could fill out the property tax assessment appeal application. It would be found on the County tax website, then you'd file that application paying the required fees and wait for a confirmation postcard you'll request an exchange of information from your County assessor to find out what comps or other documents they used, to determine the property value and then you generally have 30 days prior to your hearing to request those documents and then you could certainly consider hiring a professional to represent you. I think the key is if you're right then it could help you to avoid a very large tax bill so I would take that as a next step, and certainly I would love for you to report back and tell us how it goes. I know that must be frustrating and maybe you'll be pleasantly surprised to find there some value in this property that you're unaware of.

Based on the comps they furnish.

Maybe you could sell it but if not the ideal situation would be you could sit on it.

Get the tax bill way down because there's not a lot of value there and you could just wait and see what happens in the future. Maybe the put in some roads or something that'll change the landscape significantly and give you a piece of property. Something we appreciate your call to thank you very much, moneywise live were going to Florida to talk about the home that to somebody wants to sell and to be talking to Donna in Montana is well about renting or buying and Orion in Grand Rapids about testing.

More to come right after this joining us on moneywise live taking your calls and questions today on anything financial. This is the program and recognize that God owns it all skewered. Money is a tool to accomplish God help to apply God's wisdom to Lynn's question calling from Florida Lynn understand that you're looking to move into another home. How can I help you with thinking about it, we live, we're not home that we purchased in not 2020 in the middle of the pandemic. So we got a really fabulous interest rate of 1.75 and we moved in this past February were not crazy about the house with a nice house but now there's no emotional ties or anything and the cost of living here is very high. Everything like restricting gasoline all that. Plus we have to pay a community development District tax, which is in addition to your property taxes you pay this extra, and we also have an HOA fee which has already gone up. One thing is going to go up again. So with the realistic market being what it is weird considering whether we should sell this house and we could tell it based on comparable sales in the neighborhood we could sell for between six and 700 we paid for 80 and then we would invest that money that we got the profit and live like me somewhere for maybe six months or year living in a manufactured home. For example while we looked around and possibly found a house that was less expensive with the less costly HOA and without a CD so that people like you crazy well yeah one of the downside you're going to experiences if in fact you could get to 650 out of this and would be incredible women to realize real estate prices are skyrocketing but were talking about just over a year write about a year and four months. Is that right right right you know for you to make you hundred and $70,000 would be amazing if you don't live thereto out of the last five years, you will end up paying a capital gains taxes on this which you could avoid if you get to the two-year mark that would be one reason to wait, you know, you obviously could housing market softened between now and then we were talking another eight months. Certainly that anything can happen.

I don't think they're going to and were not in a bubble situation like we were in 08 and 09 with the credit crisis. This is there is real demand and real lack of inventory on homes. So yeah they could prices could soften, but I don't really see them in the next 6 to 8 months, declining and so do you just have to consider the tax aspect to this. The only other thing to consider would be just the fact you be moving twice which has its own expenses associated with it, as opposed to you. Perhaps timing it with the two-year mark where you you don't have the capital gains you and your husband would have 500,000 and gain that you could you exclude before paying any tech capital gains you be well under that and then go ahead and buy a stick built house in the art that's on your note you are considering a manufactured home and I think the key would be yes.

You could wait for the housing market to soften.

But the key would be are you can get enough softening for you to justify the added expense of moving twice buying and selling multiple times.

It has so it can be expensive.

Does that make sense though we kind of figured the commission you know what the real estate commission would immediately have to pay part of the coding, we still think we could clear hundred and 80,000 hundred thousand equity and hundred and 70,000 in equity in 80,000 additional profit. The people all across the street bought their house area 2021, 580, and they just sold it for 795 saying yeah yeah no I don't I know it is but it all the rest of you know that that have to be considered what capital gains tax. Well it depends you know it would probably be 15% for you on the gain you for most people that talk to okay yes yeah right so that's why I'm thinking if you get to the two-year mark you can you can skip that and then you could evaluate the housing market at that time. Decide whether you want to you. Note live cheaply somewhere and can wait it out, but I would be hesitant on investing the proceeds because unless you have a 5 to 10 year time horizon, especially given the run. We've had the last 12 years, and certainly the last year in the stock market. I'd be hesitant with you investing it thinking you're going to make some money in the next 2 to 3 years in the stock market that you could then pull out. What if right about the time you're ready to buy your next home. You know we had a recession in the your portfolio is down 20 or 30%. We certainly wouldn't want that.

So if your time horizon is less than five years. That's even less than seven years. I'd probably stay very conservative keep that money protected so you're ready to move whenever that time comes and I would try to miss the capital gains tax, if at all possible, and to do that you gotta get to the two-year mark that we appreciate your: all the best to you in the days ahead to Montana for a how can I help you there. How paramount my apologies. How can I help you today morning to move to California to be near my daughter and I live in Montana. Needless to say, moving to California is very fit and I've done my homework there, but out of my car, went to that appointment and then I heard Gallagher to come and call they have to say how I didn't know whether I don't know what I won't get but about 30 to 40 out of my mouth and you know everything else is way about their yes so I'm 73 what's the most reasonable thing to do.

You know when you be to grant the tribe make you purchase the house to make payment are either back condo and look at the mobile home park where the senior community dark and the only time I can afford it but to pay eight 2000 base rent on those home purchased it right so many founded by well. One approach would be to stay plugged in and buy a lot of plane tickets to California to see your daughter because you're right, this is going your heading to one of the most expensive states in the country with regard to real estate.

Not to mention the taxes that you can be paying as you make that your home so I realize there's a pretty big reason for you to be there. Probably the biggest reason and that's family as I don't push back on that at all but I just want to make sure you go in with your eyes wide open because I don't want you to take on a bunch of debt and rental prices are very high right now so I think out there. You probably need to plan a trip to see your daughter and plan for it to be a working trip for you to really spend some time to understand what are the taxes you're gonna be paying when you get there and what options do you have on real estate and how do they fit into your budget because if you can't find something that you can make work. Despite the your desire to be there. It's gonna be a real problem financially and again both rental and purchase prices are sky high, which is why there is such a thing as a 50 year mortgage in California because nobody can afford the real estate and and there's a lot of people leaving and moving to states that with more reasonable real estate and certainly without the high state income taxes so I would just do your homework you know a good rule of thumb, Pharaoh would be that whatever that housing portion is of your budget. You keep the total below 25% of your take-home pay the portion you actually have to spend on a monthly basis. If you can keep it at 25% or below, then you should have enough to cover the rest of your expenses. If you can't do it. I'd perhaps push the pause button and see if you can wait it out asked the Lord to give you some wisdom on finding something that would fit your budget but that we appreciate your call very much. I know this is a challenging situation. I'm confident the Lord will give you some insight here on how to proceed to Grand Rapids, Michigan. Ryan, your to be our last caller. Today we have just about a minute.

How can I help you are sure all my situations that I had to refinance the property and came in for about $100,000 and I am kind of an aspiring real estate investor I have one rental property right now and I also have about hundred thousand student loans and so I'm considering picking up money and just waiting on my student loans are to be really fun, but I also have read and unaccredited research. I really say nothing. How really I have a good rate of loans right now and so I could turn that money into perhaps a good cash flowing real estate investment.

If I make a wise purchase consumption. If you wanted away and considered the stock market, but I heard last fall about half probably not to get take a risk with my money in the stock market, but also don't really need it right now so what what would be here.

I take on their well couple questions and again would be doing the whole of the time here but did you say you came into some money through a refi.

Does that mean you cashed out of your home to get this money I made a really good by Amarillo in about a year ago and it works an outcast flowing in.

I did refinance and pull this money out and it's still a good positive cash flowing property in your living unit. No one living in another city. Okay, yeah, I guess my own. I mean, it sounds like you have a bit of experience here me and I wasn't saying that the stock market is not the place to be for the long haul. I think it is you just got have the right time horizon, but it's a great passive investment and if you arty have some real estate. I like the idea of your investment portfolio being non-correlated meaning of the housing market is not correlated to the stock and bond market and so you have multiple asset classes so that may in fact be the place to go. The other option is just to pay this property off without money and let that cash flow even more, and then build it up, as opposed to using that I'd concerned about using debt to go into another property in this real estate market prices are sky high.

So I would go slow and I would use that money to buy real estate. We appreciate your call. I apologize for at a time. Moneywise lot is a partnership between Moody radio and moneywise media. Thank you for being here. Hope you come back tomorrow and join us will do it all over again in the Lord bless you