Episode of My First Million with Sam Parr and Shaan Puri.
Transcript
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Kind: captions Language: en where I try to say this to everyone and they hate hearing it let me ask you a question real quick and we don’t have to you you bought your house so your house is in a you could say where you live if you want but we’ll say it’s a nice neighborhood that still has some issues in San Francisco it’s like I would say one of the less nice neighborhoods overall but it’s still desirable because it’s like in a hipster area do you regret buying your home yes do you as your what you can want to say what your rights is is that your new house or not yeah sure so the new house front is seven grand a monk and was that less than your mortgage yeah it’s less overall because with a house you have you know property tax you have your mortgage and then you have like you know sort of the house maintenance issues that come up over time that you know we’re just miscellaneous things do you think you’ll make it a bit money a little bit less but similar you think you’re gonna make any money off of this deal not really and that’s good you know because selling house has a lot of fees so like you know when you buy a house if you want to sell it the next day you basically need to sell it for 5% more just with the broker fees and then there’s like the transfer tax and then there’s you know all the staging costs you know it’s gonna cost us 15 grand to stage the place and fix up the paint and the you know little scuffs and scratches that we’ve had along the way and then our you know we didn’t take care of a long as good as we should have so we gotta get a landscaper so there’s all these costs to selling so it’s gonna come out that you broke even any wood for free or as they come out that you just lived for a crate or whatever the yeah I lived for I lived it basically about what I could have lived renting it or maybe a little bit ahead we’ll see how it Nets out like it’s unknown right like with the cove it and stuff like we don’t even know you know for somebody to come do an open house tours like a lot of friction now it’s like wear your mask signed this waiver blah blah blah so I don’t know where it’s gonna sell for but the reason I regret it is not because of any of that you know right before I bought the house like I had been house hunting and like a week before I was hanging out with soui Antilles you know 100 times wealthier than I am and I asked him I said do you own your place and I was hanging out at his house he says no why don’t you own like you know just the most baller house here because you could and he was like oh yeah no I like the you know I like the flexibility on taint blah blah and I was like mmm it seems like he just kind of didn’t give me the full answer there so I asked him it again at the very end up walking st. want to make you feel bad yeah I was walking to my uber and I was like so if you were me would you buy and he goes no I hope wait why and he goes he goes really simple he’s like I just think I can get a better cap rate and better return on my money essentially doing other things than than buying a home so like you know you put your down payment down 20% your home in our case 25% and that money sits in your home and it’s appreciating at the rate of your home appreciation which is like you know very specific well I think yeah historically across all homes I think it’s 3% yeah exactly the San Francisco did a lot better during a certain era where was like 10-15 percent a year but his point was basically like yeah like I know that my if I take all my options for how to deploy a dollar you know stock market I can expect about a 7% return and you know I can do private you know startup investing I can do private equity I can put my money hedge fine I can do multi kind of real estate there’s like all these things I can do putting it into a down payment of a house is not the best way and on top of that it doesn’t spit off any cash flow so like if I do if I just buy a home and I rent it out to someone I get the appreciation of a home plus I get the cash flow every month we’re trying to say this to everyone and they hate hearing it and I understand why they keep hearing it but I think buying how in our in our in Austin all of our staff buys homes and I’m like look don’t tell me you’re buying this house because it’s a good investment tell me you’re buying this house because you want to like when I bought my stake last night I didn’t think that this $30.00 is a good investment I did it because I thought why not a financial investment but a good investment like it made me happy I wanted it I work hard so I can have things I want so if you’re so like if you buy your house don’t tell me you’re doing it because it’s you’re just throwing away money on rent right tell me you’re doing it because it’s gonna make you happier because you want to because that is a good reason but to say that it’s an investment that’s [ ] you could say that it’s a great way to preserve wealth but it absolutely in most cases is not a great way to make it what else right yeah exactly yeah and and I don’t blame anybody who thinks that I thought that five seven years ago I also said right isn’t renting like flushing money down the toilet and if you buy your home you have equity and blah blah blah and I learned pretty quickly first person I talked to they were like no that’s not exactly how it works so yeah if you haven’t gone down that rabbit hole go down the red hole because they sort of American dream of like own your own home with your you know your white picket fence in your backyard that is pretty silly and yeah it also made a lot more sense with the ratio of income to housing prices was closer than it is now now it’s significantly different out of that and you face like you know risk right like when I’m in my home and now boom remote work is on the rise being in a city is not not the thing anymore it’s like oh [ ] you know people take it for granted that these things just sort of go up and you know you’re one shift away you know as soon as elem us can make the Hyperloop work where I can commute long distances in like 20 minutes or less then people are gonna want to go live further away have way more you know space resources and whatnot and not want to be impacted you know like I sardine into a city a lot of people will choose that and so your one technological shift or one policy shift or in this case one policy plus biological you know terror away from not wanting people not wanting to be in a certain type of real estate class like the way the real estate is now struggling because of because of what’s going on you get a whole lot of unemployment and now people can’t pay the rents and you know every month rents are dropping it was like 99 percent of people pay their rent last month on the multifamily stuff that I I read ninety percent of people are paying their rent and if that dips below you know a certain number maybe it’s 82 percent or whatever it is now all of a sudden you’re underwater in a multi-family real estate the way that I like to live because so I’ve been an entrepreneur since I was 16 making money on my own not necessarily all the time a lot of a lot of money but like having to like go out and hunt and kill each week and I like am allergic to like really big purchases and I’m allergic to getting locked into stuff and I actually think that me being allergic to that has actually hurt me I think that had I increased my overhead on some things my overheads really cheap I had I increased my overhead I actually would have worked harder to like have to like fulfill that overhead but now I mean if I don’t work for many for very long I don’t even know how long maybe forever I’m fine and I just prefer to be on that defense cockroach than putting you know and say forces so you got to put down three or four hundred thousand dollars on home I’m like a [ __ ] I don’t wanna that’s scary I don’t want to do that you know what I mean yeah and so I’ve never had the courage to do it [Music] [Applause]