Rehab Loans: Your Competitive Edge in Buying or Selling! (Make The Compromise Starter Home Your Dream Home Today!

Unlock the hidden potential of rehab loans and transform your real estate game! Join Aaron Morrow and Brian Laflame as they dissect the world beyond the popular FHA 203K loans, introducing you to VA renovation loans, USDA loans, and investment property options. Discover how these financial tools can enable you to turn less expensive homes into dream properties, especially in a competitive market. Learn the critical differences between FHA 203K standard and streamline loans to make informed decisions about your next property investment.

Are you a veteran or active duty military personnel? This episode is a must-listen as we explore the incredible benefits of VA loans, allowing for zero down payments on multi-unit properties and up to $50,000 for renovations. Imagine creating an additional stream of income while securing a strong financial future. Understand how investing in fixer-uppers can significantly boost property value and generate rental income, especially for those transitioning out of military service. Plus, get a sneak peek into the often-challenging USDA loans and their stringent requirements.

Curious about real-life success stories? We dive into a compelling case study of a rehab loan project in Auburn, Washington. Learn how one client transformed a property with strategic renovations, increasing its resale value and personalizing it to their taste. We wrap up with exciting news about our local realtor services in the Seattle area and the launch of our new newsletter. Whether you're a homebuyer, seller, or investor, this episode is packed with valuable insights to help you master the nuances of rehab loans and real estate financing.

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Explore through neighborhood vlog tours, and city pros and cons videos, and get unmatched insights into relocating to the Greater Seattle area! Transition confidently with guidance from a native Realtor® who's eager to help you settle in your perfect home! 🔑

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Aaron Morrow Realtor Serving (King, Peirce, & Snohomish counties)
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This is my Intro to every Podcast and YouTube video 

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Transcript

Speaker 1: 0:16

hey everyone, it's aaron morrow. Again brian laflame here. We're here to give you another live podcast and today's episode we are going to be talking about rehab loans Super.

Speaker 2: 0:29

For me to go to rehab.

Speaker 1: 0:31

I said I bet most of you have either not heard of them or you're curious on want to know more about them. But there's actually quite a lot that you can do with them and most people just don't take advantage of them, depending on what market they're in, or just never even look into them. So we're here to kind of do a deep dive on it and go over the strategies that you can use, both as a home seller and a home buyer, fully maybe utilizing these loans, and we'll even show you some before and afters of a client of ours that actually took full advantage of a rehab loan, to give you a realistic example. So without further ado, again, my name is Aaron Morrow, local realtor in the greater Seattle area. I serve both homebuyers and sellers, primarily in King Pearson, snow and Osh counties, but I've gone into Skagit and Thurston if I like the client and the client likes-.

Speaker 2: 1:24

On occasion.

Speaker 1: 1:25

Yeah, on occasion. Yeah, definitely. I have plenty of video testimonials from clients that have bought, like Gig Harbor and et cetera, over there. So, without further, oh and Brian, of course, he is the man, the myth, the legend is Washington resident.

Speaker 1: 1:44

He's also a lender, so he knows a thing or two when it comes to home loans. So he knows a thing or two when it comes to home loans. So if you guys have any questions in the chat since we're live now on TikTok, instagram, youtube, linkedin put them in the chat. We'll see them and we'll answer them and if not, we'll get back to you after. Feel free, in the chat I did put all of our contact information in there and, again, this is going to be a heavy visual aid. So if you're listening on the podcast, you could always head on to YouTube once the live is done to check out what the visual aids look like, or even I might start.

Speaker 2: 2:18

Close your eyes and dream about it.

Speaker 1: 2:20

Brian, we might start putting a link to let people download the guides. You know that we show off on the podcast and then if they if they like to just listen, but they want to see what the heck we were referencing, uh, we'll do it that way too, so great guys yeah, definitely good. Okay, well, let's get into them. Um brian, because I've actually done, um I've done one or two rehab loans.

Speaker 1: 2:46

Um I I always find them interesting. A lot of people are kind of scared about the process or like are mystified they. They maybe hear from other people that they don't work that well or they take too long to close or etc. Etc. Maybe some realtors are turned off by them or people again just never hear about using this product. But when I took your class recently to learn even more about them than just the limited knowledge that I have on them, I was amped. I was like, oh man, more people should learn about these and like rule it out as a strategy if it's something they want to do or not. You know, yeah for sure, and some of the materials that Brian went over with me is what he's going to share today.

Speaker 2: 3:27

So I'll let you get a word in Brian. What do you think? All right, good show guys. See you later. Is my screen sharing right now?

Speaker 1: 3:36

Yeah, let me pull it up, guys. Okay, so we're going to share what Brian is going to be going over All right.

Speaker 2: 3:42

So we're talking about rehabilitation loans, renovation loans, and when most people think about rehabilitation loans, they just think about two or three K. Now, if you're a buyer or if you're a realtor, I think that would be the term that you are familiar with if you think about rehab loans.

Speaker 2: 4:03

But there are so many other options and it's what made me want to bring this to our real estate partners, and Aaron in particular, but it is super, super, super useful in a market like this, where you have tight inventory and cash out refinances rates might be a little bit too high to be able to make the home you have the home you really want or the home you're looking for, the home you really want. So this allows you to shop. Say, you have $800,000 taste but a $600,000 budget. It allows you to bring that $600,000 home up to your $800,000 case and make it much more personalized for you.

Speaker 2: 4:34

So there are a ton of other rehab loans.

Speaker 2: 4:36

I don't know if you guys know this, but you can do investment rehab loans, which is kind of crazy the standard two or three K, of course there are VA renovation loans, so you can get one with a VA loan, with a USD loan, with an FHA loan, with a conventional loan for a second home, for an investment property. There is so much more to this than most people get, and so we're going to go over a few of the loans that are available for most people. I'm going to skip over the realtor stuff I did, but then we're going to go through an example of how the math works out. To make a renovation loan make somebody so much more money than if they just put all their money into a house. Right? So the two or three case standard.

Speaker 2: 5:16

There are two different sorts of FHA rehab loans. Fha renovation loans is two of them. There's the standard and then there's a streamline and the standard all that really means is you can. The streamline means it has to be below $35,000 in repairs and fees, and standard is going to be over $35,000 in repairs and fees. You can go up to and I checked this twice with the FHA guidelines and with HUD $1 gajillion, but that's kind of a max that they'll go.

Speaker 1: 5:44

They don't want to see anything one gajillion in one.

Speaker 2: 5:53

The way a rehab loan works is you purchase a home, say, for $,000, and you want to do $50,000 of work on it. So in most cases you're going to put an offer in for $500,000, and then you're going to get a contractor that goes out after the offer is accepted and says and you're going to say hey, this is the work that I really want done and this is the work that I really have to have done.

Speaker 2: 6:08

Give me a bid on that. Your contractor will give you a bid and then we will send you a contract plus your bid to the appraiser. And the appraiser is going to give us an after improved value, so it has to appraise them for the $550,000 that you're asking for total purchase price plus improvements, your down payment. You won't have to bring that $50,000 to closing. Your down payment will just be based off of that $550,000, quote-unquote purchase price after improved value, and the contractor then can take a 50% draw at closing so that $50,000 that you've put in to improve the property goes into an escrow account. At closing the seller gets their $500,000.

Speaker 2: 6:51

That gets sent out just as a normal transaction by escrow, the money gets sent to all the people that the money needs to go to.

Speaker 1: 6:58

And then the $50,000 gets put into an escrow account.

Speaker 2: 7:01

Now your contractor can draw 50% right away to get work going, to buy some stuff for their time to really get to work, and then for a standard which is over $350,000, or, excuse me, over $35,000, you do have to have what's called a HUD inspector. Housing and Urban Development will send out somebody with your contractor when you're looking at doing improvements in the house and they will say this stuff has to be done if anything.

Speaker 2: 7:27

But if you're doing that standard, so you have over $35,000 in improvements then when your contractor needs more money, their draws are going to require a HUD inspection and they can get up to five draws. So your contract can go back five times to get more money to continue the work.

Speaker 2: 7:43

And you know it's getting done well, because you have a HUD inspector out there every time. So that's the 203k standard, and then limited is very similar, but it is under $35,000. And you have one final inspection from the appraiser. So you can take 50% out of closing and then for the next 50% out, you have a final inspection from the appraiser. No HUD consultant is involved or contact is involved. You have minor non-structural repairs.

Speaker 2: 8:10

So say you wanted to recarpet the house or repaint it. Or say you wanted to redo the countertops, or you know, the main bathroom, you wanted to add a bathtub. I don't know what these things cost. But say you wanted to do some work to kind of make the house your own. You know how many times you've walked into a house and you said man, I really love this house, but I can't, I don't like that thing.

Speaker 2: 8:28

Or, oh my gosh, this carpet is so dated. Or this carpet is so stained and I just not going to have the money to repair it after I've moved into this house. This is the way that you do that. This is the way you can walk into a house, see the cosmetic things that just aren't quite sitting right with you, but everything else makes sense for this house. It's the right location, it's got the right room size and it's the right size house and it's got the right yard, and you know everything about it is right, except you're like I just wouldn't feel happy inside of this house. Well, this is how you get that stuff done within your budget.

Speaker 1: 9:00

Right, yeah, we're going to have to pay for it out of pocket. Exactly, exactly.

Speaker 2: 9:05

Yeah, yeah, it's quite, yeah, it's quite a hack. Yeah, it's quite a hack. Also, I want you guys to understand that you can do this for up to a four-unit complex, so you can do it for a condo, you can do it for a house, you can do it up to a four-unit duplex, triplex or quadplex. I don't know why we call it a duplex, triplex, quadplex. I'm going to stop that. Why did we stop? Why did somebody just not know quad?

Speaker 1: 9:32

And so they said I know, I know they just flipped it over to fourplex. You know what, though, but fourplex?

Speaker 2: 9:38

we live in a society, aaron. We live in a society. We should have rules.

Speaker 1: 9:42

Hey, did you ever buy that I?

Speaker 2: 9:47

heard we just had a price drop on the deuceplex. The deuceplex dropped its price.

Speaker 1: 9:52

Yeah, the deuceplex.

Speaker 2: 9:53

The deuceplex price.

Speaker 1: 9:54

Just one half of it, though One unit.

Speaker 2: 9:57

Just one half. The rest of the class is mostly going to be puns, you guys, so buckle in.

Speaker 1: 10:01

It will be the fecal point of the podcast from now on, and it was at that point where one of our viewers on TikTok dropped off oh, it's dropped out, just dropped off at the pool peaced out at the deuce so you can do this up to a fourplex, which is incredible.

Speaker 2: 10:18

You live in one and you can fix up the other four. You can fix them all up like you can do it a condo, you can do it a single family home up to a fourplex.

Speaker 2: 10:26

This is you could house hack and you could. You could double house hack. You can house hack and you can repair the like a fourplex to get maybe just to bring it up to where a place. You could get more rent for it. I was like you could do it. You can also get a conventional rehabilitation home. Not a lot of people know that you can get a conventional rehabilitation home. You can also do it for your second home. So say you're shopping in Ocean Shores or Cannon Beach or what's the one on the other side of the mountains that everybody goes to Over by. Why am I, why am I blinking on that lake?

Speaker 1: 11:03

I know me too.

Speaker 2: 11:04

It doesn't matter. Are you talking about? I think I have in-laws that have a house over there yeah. And I can't even think of it right now.

Speaker 1: 11:12

Well, it's because it's outside my service area, so why should I?

Speaker 2: 11:15

Yes, yeah, we are super hyper-focused over here. Yeah, lake Chelan, yeah.

Speaker 1: 11:22

Is it yeah, lake.

Speaker 2: 11:24

Chelan, Okay, Lake Chelan. So say you want to buy a house over want so you can look at houses that need some work and do a renovation loan to get it to what you need it to be, for much less expensive than if you were to buy, you know, a top dollar house that would really suit your needs. You can do it. Do this for a second home as well. Now Aaron's going to have a link to all this information. You can. I don't want to bore you with all the loan stuff and repair costs and all of that stuff that we went over with real estate agents.

Speaker 2: 11:53

Your lender and your realtor will know all about that. But you are going to have this access if you accessible to you, if you want it, you can do an investment. So cool. So the difference between you can do a second home, one to four units, second home on a home stock commercial If it's an investment it can only be a single family home.

Speaker 2: 12:17

You can't do a duplex, triplex or uh fourplex as an investment, so you have to live in one of the units if you're going to be doing this for conventional house hacking essentially yeah, yeah, so you can still get rent from the other ones, you can house hack and and uh, it's like a double hack, you know double hack if you're a real estate investor duplex, you know yeah, if you're a real estate investor and you have a tenant that's moving out that you haven't been to the house in a while they've been there five, six, eight, 10 years you can do a homestyle investment refinance to get the money out, to push into the house, to get it up to where you can rent it out again for top dollar.

Speaker 2: 12:44

That's just one thing.

Speaker 1: 12:46

That's so cool.

Speaker 2: 12:46

Yeah, the VA has an incredible, incredible VA renovation program. It's pretty simple. You can get up to $50,000 for this. You can't do any like luxury items or anything but you get. It's super simple to do and it is a really, really great way for veterans to make the house be the way they want it to be. Again, one to four units If you're a veteran and you can get into a duplex, triplex or fourplex for zero down on your VA loan and 50 grand to fix it up to a place where you get to make money off of it and this is your retirement.

Speaker 2: 13:20

It's genius, genius, genius, genius. This is something that I think should absolutely be told far and wide to active duty and veterans. If you're a 22, 24, 26 year old active duty enlisted person who's not sure if they're going to stay in or not sure if they're going to get out, this is a great way to build up another stream of income. If you do want to get out of the military I was in for 10 years and having another stream of income to get out of the military is huge. Maybe you want to go to college at the GI Bill and have rentals from your second, third and fourth units.

Speaker 1: 13:52

Do you hear me man? Because, it's not sharing anymore. I can definitely hear you. Yeah, I wanted to make you HD for a second while you're saying this.

Speaker 2: 14:00

Oh cool cool, cool, and then I ruined it.

Speaker 1: 14:03

So I'm going to say that again so you can splice it too. Yeah, say it again for all the vets. Say it louder in the back when we uh that ladder in the back of the vets because they have. They have hearing issues, oh my god, if you are a veteran so if you're a veteran, who's?

Speaker 2: 14:18

you know 23, 24, 25, 26. I was in the army for 10 years and getting out of the military without a second stream of income can be incredibly stressful, and what uh kind of makes people stay in the military if it's something that they want to observe and they want to move on from this is a great way to have another sheet of income, a zero down loan.

Speaker 2: 14:36

You can buy one, two, three or four units, so you can buy a triplex, live in one, get $50,000 to fix up the other two, rent those out and you've got in for a zero down. A zero down loan. Up to $50,000 in repair costs for our active duty and for our veterans in repair costs for our active duty and for our veterans. It is an incredible way to build your wealth and an incredible way that's super attainable for you. Yeah 100%.

Speaker 1: 14:59

That's absolutely phenomenal, yeah.

Speaker 2: 15:01

Yeah, I'm so excited about that I got to tell you. I can't tell you how excited I am for this.

Speaker 1: 15:07

Any local vet peeps looking in JBLM area listen to this.

Speaker 1: 15:12

Because, there's plenty of houses out there that could become something that you wanted, that you might be able to go in and get a better deal on, because it's in that sweet spot where it's not a complete teardown that all of the investors are fighting over it, but then it's also kind of the ugly duckling that not all of the other first-time homebuyers are fighting over as well. So you could find that sweet spot where we could walk in and get you a good deal on the house, where we get it fixed up to your liking, all wrapped into this loan, where you're not have to pay in an out-of-pocket.

Speaker 2: 15:44

No, we've got people that are looking, say, at $400,000, that are going to do this renovation program, and so then they're in $450,000, 450. But this house would be worth 520, 550 if the work had already been done before they came to buy it. So they really increase their purchase potential and you get to personalize it to what you want. It's your house, you get to make it yours.

Speaker 1: 16:05

Yeah, I mean, there's virtually like no downside.

Speaker 2: 16:09

There's no downside. It's a regular VA loan where you get to have financing the cost of construction to make it your own. I just I I'm in love with this and I wish more people knew about it and used it great, I'll throw your um all right, so the last one we're going to talk about is usda. Okay, yeah, so the usda everyone always asks about these.

Speaker 1: 16:29

These are like the hardest loans to get into. Well, usda there. There's rumor that USDA is doing.

Speaker 2: 16:36

It's true, the USDA. Is this really great marketing tool, I'm going to say. But the backside of the USDA getting people approved for this is incredibly difficult. They have very high. They say there's a minimum credit score of 620. But in reality, when we are trying to get people approved, it ends up being much higher than that. The debt-to-income ratio has to be much lower. It is a grip problem and there is rumors that the USDA will be having more common sense underwriting than what they've had so far and maybe matching what they say their guidelines are. If you have a 620 credit score and a maximum debt-to-income ratio of 42,.

Speaker 2: 17:17

If somebody has that, well, you've advertised that that's what you need to be qualified, but in reality USDA sometimes, a lot of times, is much more conservative, and that will be the same with this. It's definitely a thing we'll look at and maybe it works, maybe it doesn't, but if it doesn't work we can use the FHA conventional renovation as well. So USDA is zero down. The differences of this is it can only be one unit, they do not allow for condos or manufactured homes and it's only for purchases. And you can see here the bid amounts for structural is seventy five thousand and non-structural is thirty five thousand.

Speaker 2: 17:50

So don't worry about all the rest of what these are, but the USDA is going to be the most difficult one.

Speaker 1: 18:00

Of course it always is, but it's still something worth exploring? Yeah, definitely.

Speaker 2: 18:03

Rule it out.

Speaker 1: 18:03

Rule out all possibilities when you're looking to buy. Why just stop with?

Speaker 2: 18:07

one product. Why wouldn't you? Yeah, one of the differences between USDA and FHA conventional VA loans is FHA conventional VA loans.

Speaker 1: 18:16

look at their automated underwriting, so they have automated underwriting systems.

Speaker 2: 18:23

They run their automated underwriting through either Desktop Underwriter or Loan Prospector Fannie Mae Desktop Underwriter, freddie Mac Loan Prospector and you can run FHA VA conventional through either of those. The USDA has its own automated honorary system called GUS. G-u-s is what it stands for and it's just it's much more difficult to get approved. They're just kind of separated themselves. Great loan program, wonderful for people who fit into it. Just don't I would say don't set your heart on that and only that.

Speaker 1: 18:51

Got it Okay.

Speaker 2: 18:53

All right. So here's another thing that I really wanted to go over. So we went over all the loan programs, the FHA and their two tiers of rehabilitation loan under $35,000 and over $35,000.

Speaker 2: 19:09

What those look like, conventional. How you can do it with a second home. How you can do it with an investment property. How you can do it with a second home. How you can do it with an investment property. How you can do it with your owner occupied property. How you can do a refinance and build a construction cost in the va rehabilitation loan absolutely incredible up to fifty thousand dollars for a one to four unit. Zero down, just like a regular va loan.

Speaker 2: 19:28

Make the house your own or move into a duplex, triplex, fourplex and house hack something that you can really really make um you know, build your wealth and allow yourself the opportunity to have the option to get out if that's what you want. If you want this, your school, or you want to go into whatever job you wanted to do after the military.

Speaker 1: 19:46

Whatever you want to do, give yourself the opportunity and the options to do that, and then we had USDA.

Speaker 2: 19:51

So one thing that I brought out to our real estate agent friends is sitting down with you, the buyer and doing a buyer's consultation and helping you to understand what your options really are, and the fact that the real estate agents that I work with and Aaron is at the top of this list.

Speaker 2: 20:07

we refuse to work with somebody who's just transactional, who wants to make a buck off of a person. This is absolutely somebody who, from the moment they meet you and Aaron is this person. From the moment they meet you, they are dying to be an asset to you, moving forward.

Speaker 2: 20:21

Your best interest is in Aaron's interest all of the time, and it's why he's so successful, because he really believes that that we all do well. We all do well and I'm going to speak for Eric here, because I've muted him the better you do, the more fulfilled he is. It is you have to have a job. That means more than money, and really we have the opportunity to absolutely leave people better than how we found them in this job if we care enough to do so. And this is one way that you'll be left better.

Speaker 2: 20:49

So this scenario is one that I want to bring up to our real estate partners. It's a buyer who wants to buy a fixer-upper and they've got like $100,000 to put into a house after the down payment and the closing costs. So this could be you. Maybe you sold your house, you want to move in a new house and down payment and closing costs, and then you're like I'm going to hold back a hundred grand because I want to put some work out of this house. So we're going to see how this advice using this sort of a loan program instead of using that money would absolutely cost or make you over a million dollars. So you can see, here we're doing the same renovation loan or paying cash for improvements. Whoa, you guys saw the sausage being made, back there with those other slides, back there with those other slides. And then we're going to look at what the monthly payment difference is your savings over five years and then your net worth over 30 years. So what we're doing here is most clients are going to adjust and most people are going to adjust the rate of payment, and so when presenting one offer and another, this is what that example would look like A renovation loan.

Speaker 2: 21:51

Your purchase price plus $100,000 that you're going to do for renovations would make your actual you know the after value of your loan $650,000. Or you can buy the house for $550,000 and put your own $100,000 in. Now we're doing an FHA loan. In this scenario, it's just a loan. So most people look at purchase price. They'll look at the cash to close difference, which would be a big deal. So this person is putting all of their money at their down payment plus their closing cost, and then they're going to put this $100,000 or so into the improvement.

Speaker 2: 22:26

So that's the money that they have set aside Down payment closing cost and $139,000.

Speaker 2: 22:31

$139,000 for down payment, closing costs plus improvements. Now the person on the left, the renovation loan. They're bringing in just their down payment and closing costs after they sold the house. And a lot of people look at oh my gosh, this monthly payment is $670 less per month and I already have this money, so why wouldn't I just buy this house for $550? I don't want to pay this extra interest. I've set the money aside already. Why would I finance this in instead of just paying this money? So this scenario is going to show you how you can finance those improvements and buy exactly the house that they want, which will be worth more than the $550,000 they purchased it for.

Speaker 2: 23:08

So over five years, the total cost for the cash for improvements house versus a renovation loan, you're saving $67,996 by doing the renovation loan and this includes the increased interest that you're paying the balance and the increased principal that you're paying down the closing costs that you paid. All in, you're saving $68,000 over the first five years by financing and leveraging your money, instead of putting this $100,000 towards your improvements Now.

Speaker 1: 23:42

this is where it gets kind of crazy.

Speaker 2: 23:44

That's the five-year difference.

Speaker 1: 23:46

Right, Five years. Look at how long you keep this house. Let's talk about the people that want to be in the house longer than five years right.

Speaker 2: 23:51

Yes, you are making this house the way that you want it to be, and whether you stay in it or don't stay in it, but you keep this house for the term, and this is assuming you never refinance this loan to a lower rate. If you were to put that $100,000 into just an S&P index fund and never touch it again over 30 years at just a rate of 7%. Now, the last 30 years the S&P has brought in 12.34% on average per year.

Speaker 1: 24:20

So that's up years and down years.

Speaker 2: 24:24

So super conservative at 7%, you took 30 years to pay these two off. It was more expensive to pay off the $650,000 after value purchase when you did the renovation than it was at $550,000. So we account for that interest. We account for that increased principal that you're paying down. But the fact that you were able to leverage the money to do the rehab and then invest your money in the market made this client over $1 million extra in net worth. So you can see they both paid off their houses and $1 million extra in net worth.

Speaker 2: 24:58

This is the power of when you sit down with somebody like Aaron and Aaron's like hey, brian, I want you to talk about this thing because I think it's really, really, really going to help my clients. The power of talking to someone like Aaron, who really cares about what is going to put you in the best financial position moving forward.

Speaker 2: 25:15

This is what gets really exciting. Not only do you get to make the house that you want, but there's a scenario where you just sold your house and you want to buy a new house, and you get to make this house the way you want it, but you also then get to build your wealth over time. Both of those things are available to you.

Speaker 1: 25:31

Right, absolutely. That was a lot, you guys. That was a lot in what? 30 minutes? But amazing yeah, yeah great, I think it was very useful anything in the comments. Very useful um no comments yet.

Speaker 1: 25:51

Um one thing I will share now is I'm gonna show um let me present all this before and after yeah, yeah, because I've actually had a client in the last couple years, uh, do one of these and uh, it went great, it went fantastic for them. So let's see here, let me share, let me go and find it. Let's see here, let me share, let me go and find it. Let's see here. Is it? Where is it? Which one is it? Let me pull up this one Untitled doc. Ok, share, ok, perfect. So can you see the screen here, brian? Yeah, man.

Speaker 1: 26:39

Is this up? Okay, so this is a before and after of a client of ours. From our team, we helped them buy this property in Auburn, washington, near the Lakeland Hills area. This is before and after what I'm going to share here. So they bought it in I want to say it was 2017 and then turned around and sold it like three years later. So what they primarily use the rehab for was the painting of the whole exterior. And then let me go to the next slide here so you can see kind of what before and after with going with the different color kind of helped with the refresh there, but the inside here they did some interior painting um, yeah, so this you may say I liked the before better than the after.

Speaker 2: 27:30

What this person did when they bought the house with the reaper is they made it their own, so you would do different things, that's okay they made it there.

Speaker 1: 27:37

You can do whatever you want. This person they bought and they said we don't like the yellow, we want the blue. So they went with the color they liked. You don't have to go with a beige or a color that you know you think someone else likes. Go with what you want. You know, um same with. That's what they did with this dark gray.

Speaker 2: 27:54

Look now let's kind of up it here so this is a bathroom remodel.

Speaker 1: 27:58

They did for the, the main bathroom. Um, they demoed and got rid of this combo right here and, uh, this is what they ended up doing with back here. So you know, added one of those clawfoot tubs. Um, refresh the walk-in shower. Um, I like the look of this a lot better now with that gray in the tile um, oh yeah, it looks amazing.

Speaker 1: 28:20

And then, got rid of that carpet. That carpet, that head went into the bathroom. That's gone now, and then, you know, put in um hardwood flooring. So check this out. I mean, this is what you can do in like stuff like this and wrap it into your alone. Um. Same with this is the kitchen, so they primarily focused on the master, or sorry, the main bathroom and the kitchen. And you know, painting basically interior, exterior, but with the painting or with the um before and after of this kitchen, just phenomenal work. You know, refresh the floors, uh, but kept that original hardwoods, which is great.

Speaker 1: 29:02

Really great job you know, yeah, completely, you know, just I mean, this is a brand new kitchen. What Hold on Thanks for? Oh, right here Canva. But yeah, like I mean just this is the prime example. They did what they wanted, you know, put the brick in there and then, um, it helps their resale value immensely when they sold oh my gosh, that's crazy yeah, seriously and like, that's just an example of what you know.

Speaker 1: 29:33

One example, guys like that's, that's the. That's the beautiful thing. How these rehab loans will work is you find the property where, like they say some of them even say they can only go cash or rehab, right. So we look for those properties and if the bones are good, the location's good, the lot's good, it's what you want, the room count. Usually all that, that stuff we're not looking at like adding to the house, you know, but like if you're looking for a cosmetic refresh, the way you want to do it in these houses, this is the loan product to look into, um, to to rule it out, really, and be able to get into that house because there's going to be less activity on that home and you're gonna, you know, like these guys, we found this house was sitting on the market for 30 days just because it was an ugly duckling, you know. So we were able to go into it, get a better deal on it. Uh, all that save, I mean, and it helped them to their next goal, where they they ended up moving down south to olympia. That never would have happened in that instance had they been continuing to rent and settle for not looking for a home that they can make their own, you know. So not that I harp, but we always bring home in this podcast the power of getting into home ownership, and this is one of those avenues where you could I want to say speed run, but you can shortcut quicker, you know into home ownership. So I think it's it's worth everyone taking a another look.

Speaker 1: 31:09

If, if you looked into the home buying process before and weren't thrilled with what was out there for the price point that you could qualify for, um, look into this strategy again to see if there's some houses that are like 100k less, that just need some work, you know and and see if this is something that you could do to get into it, and we're happy to help you with that. So if you're in the greater seattle area, please reach out to us. You've got our contact info. If you are nationwide, these are nationwide products, so we will get you in touch with the people that you need to be talking to, uh in order to uh, look into this or any of the other loan products and strategies, house hacking, anything we've been talking about on this podcast since the beginning of the year. Please reach out to us, utilize, utilize us we're. We're there every step of the way. Even if, even if it's virtual, if you're on the other side of the country, we want to see you succeed and get into homeownership.

Speaker 1: 32:05

Real estate is for everybody. It should be so. Um, yeah, great guys. Yeah, well, I don't see any questions in here. I'm sure, just like as always, always, the questions trickle in after we're done with the live. So I'm happy to get back to you guys. Our booking links are in. All of our contact info can be found below and all the comment sections. Like I said, we'll upload the podcast and give you podcast podcast listeners, a download link to what Brian went over today. And, yeah, feel free to reach out to us. Anything interesting going on right now, brian, outside of real estate for you.

Speaker 2: 32:45

To wrap, it up Outside of real estate. No, the market is trading big time on, stronger than expected. Jobs.

Speaker 1: 32:53

Yeah, I saw your. Yeah, Okay, talk about that. Yeah, I just interrupted, you. Yeah, I saw your post.

Speaker 2: 32:59

That's all right. We've had a real big. I've been trying to prepare the people who follow me all week for what was happening over the next, now into next week. This week is over.

Speaker 2: 33:09

We've had some really good gains in the interest rate market and the 10-year treasury market, which is closely correlated with mortgage interest rates, and had a really nice rally heading into today. Today's non-farm's payroll added 265,000 jobs, I believe. Let me see 272,000 jobs and we expected 185. Last month we had expected to have it. Last month we added 175. We had expected something like 225 and only added 175. That number was revised down to 165.

Speaker 2: 33:46

The minutia of what goes on inside of that how many people are part-time, full-time, multiple jobs that doesn't matter. It's not as strong as the headline shows, but the market trades on the headline. So that came in a bit stronger than expected and set rates up a bit today. But after a really good rally down, they've come up a bit, so that's no big deal. Next week we have inflation, which is going to be a tough nut to crack, and then the Fed is going to meet and talk about whether or not they're going to raise, cut or keep their interest rates the same and have what their forward outlook looks like for the economy. So another big week in rates and we came out of it lower than when we entered into it by a pretty good margin. So we'll take that.

Speaker 1: 34:25

Translation for layman's terms are you saying that there is a decrease in interest rates or the interest rates went down?

Speaker 2: 34:32

Yeah, rates went down a bit from last week.

Speaker 1: 34:34

Okay.

Speaker 2: 34:36

And yeah it was and the reason that's important it's not just another week where rates go up or down is because of how much uh we had to get through, how many economic reports and how much market sentiment we had to get through. That could have gone either way. So they could have really spiked up had the data come in that way. But the way the data came in, health interest rates come down until we had some data that would normally send them up and it put a ceiling on that a bit. So a lot, a lot, a lot is going on in the interest rate market and this fed meeting in june is super important. They're almost certainly not going to cut, almost certainly.

Speaker 1: 35:07

We had two rate cuts already this week bank of canada and the european central bank I love hearing that from you, by the way, because you're going against the grain of what everyone else is saying that I've been seeing on social media. I've said great Scott's coming, you know, yeah.

Speaker 2: 35:22

The data doesn't bear that out and Powell's been pretty clear with what he said he needs.

Speaker 1: 35:28

Powell has shown up on our show twice now. Right, and if they don't?

Speaker 2: 35:34

cut it now. They're almost certainly not going to cut it before the election. Now the Federal Reserve is the government's bank. The Federal Reserve is not political. They're not partisan, but they understand the political landscape and they're going to try to affect it as little as possible while still doing what they need to do for the economy. So if we don't get a cut next week, we're almost certainly not getting one until after the election, no matter who wins, and they'll just get back to business as usual.

Speaker 1: 36:02

Absolutely, absolutely Well, we're getting to the end here. Thanks, tiktok, for everyone coming in at the end, like you normally do. But just sharing, on a personal note, my sister that lives right next door to me we, we foster dogs. Um, I've mentioned this on the show before. We foster several dogs, we babysit dogs for people and, um, we've had a couple of fosters uh come in through the last uh couple of weeks. It's been like kind of like wrapping one up the other and uh, one of them we didn't foster fail, but uh, we basically transported a dog to foster for like a 24 hour period with the intent that my sister probably wanted to adopt it.

Speaker 1: 36:46

So now we have a newest family member that lives right next door to us and his name was Randy and now his name's Odin, after the Norse God. But cute, cute fellow. So if any of you are following my sister on social media on Facebook, you can go check out. She's got a picture of the dog posted. Other than that, guys, thanks for showing up. We won't be next week, but the next week after that, you know, bi-weekly, right, is that?

Speaker 2: 37:16

the term Yep every other week Bi-weekly right?

Speaker 1: 37:17

Is that the term Yep Every?

Speaker 2: 37:18

other week Bi-weekly.

Speaker 1: 37:19

Yeah, exactly, we'll be on. So reach out to us before then if you want to start your real estate journey. And if you want to join my newsletter and you're not ready to start a real estate journey, the link is always in there and it's link in bio as well. I send stuff out. There's either a monthly or a weekly newsletter that I send some goodies out to people. So all right, guys, one last time. My name is Aaron Morrow, local realtor in the greater Seattle area, serving home buyers and sellers, primarily in King Pierce and Snohomish counties. I go above and below, to the right and the left, depending on if you like me, I like you, and then Brian, great guy. He covers all of Washington State as a lender and other states that we don't need to mention right now, just because you know.

Speaker 2: 38:08

We do not mention those.

Speaker 1: 38:10

Yeah, don't worry about it. Sounds good guys. Well, other than that, I hope you have a fantastic weekend and we will see you next time.