What is on your real estate bucket list? In this episode, Jason Bible and Robert Orfino talk about their real estate goals, their plans for the Real Estate Texas Center, and their passion for real estate. They talk about the decrease in the mortgage market and what you should be doing with your real estate. Robert and Jason also dive into the importance of refinancing your loans and how you can get your hands on free money out in the market. Plus, get to know the biggest risk for landlords when the market shifts and what you should look out for and pivot when that comes.
Listen to the podcast here:
Real Estate Goals And Plans For The Real Estate Texas Center With Co-Host, Robert Orfino
More guys on roofs. You know who was on a roof? B squared. We’re going to do a whole two-hour long radio show from his new crib. I want them to all be moved in, get the house all set up, and then we’re going to sit out on the back patio. Tell me about how fun it is to build your own house.
How fun is it being a contractor?
I called him for a favor. I said, “Let me guess, you’re at the house, aren’t you?” He goes, “I’m on the roof.” I’m like, “What are you doing?” I don’t remember what it was. It’s something ridiculous. I’m like, “You’re enjoying this, aren’t you?” He’s like, “I just want to get this done.”
Luis, that barbecue from that house that you’re splitting into a duplex, is that going to be donated to the Texas Real Estate Center?
I’ve already asked him that and he said it wasn’t there anymore. I’ve got a bucket list here in my real estate career of certain things I want to do for deals. I’ll give you an example. I know a lot of investors. Eddie is a good example. I think he’s done 1,500, 2,000, 2,500 houses, something like that. You and I are up to, I don’t know, 1,000, 1,200. I have not yet gotten a free car out of it. I want to buy a house and get a car for free. I think Eddie’s gotten 3 or 4. The fact that I have not gotten a free car yet is bugging me. Let me explain to the audience what’s going on here. A lot of times when you buy these houses, they need work and sometimes there’s a car there. They got the title for it and you’re like, and I bet this is how Eddie does it, “What are you going to do with that car? I can give you my number if you give me the car too.”
We’ve bought houses that had cars in them. The most famous one we bought was out in Katy and had a 300 Z in it. I got excited and the guys called me and they’re like, “Jason, there’s 300 Z. We know you’re an import car guy.” I drove over there and opened the garage. I’m like, “It’s a non-turbo automatic.” I called my buddy George and I’m like, “How much would it cost to switch over all that stuff?” We’re doing all that research, then the owner’s brother came over and said, “No, I’ll take the car.” There are a couple of these incidents where I’ve been close, but I’m like, “I want to get a free car with a house.” It’s on the real estate bucket list. Do you have a real estate bucket list?
No, I don’t. I don’t even like real estate, to be honest with you.
You’re going to let this secret out.
I don’t have a bucket list. My bucket list is to get the organization set up with real bosses, real chiefs, the real C-Suite there, and for me to come back once a month and collect checks from wherever I decide to go.
Rob has already threatened me. He’s going to show up once a month, go, “Where’s my check?”
“Where’s my check? Who do you need? Let’s get this done.”
“I’ve got to get back on the plane. I’m going to Disney.” It’s your flight from Dana Point to Orlando on your stop in Houston.
It’s a stopover from John Wayne to MCO. You bet.
You’ve got the Mickey ears on and you and Kathryn walk-in, “We’re looking for our checks.”
I did the whole thing that hour and I’m not in love with real estate. How can you fall in love with brick and cement? It’s organic material. It’s dirt and trees. I love my dog. I love my wife. I love being inspired by nature. I love the things that I love. I do not love with wood and sheetrock.
Sitting on that porch in one of the beach houses is dope.
That experience is great. Do you need the house or could you get the same experience walking up to the beach and dropping a chair on the beach?
That’s true. Sitting on the back of your beach house, it’s all glass on the back and it sits on the beach.
I’m going to have some dope properties when I retire. For the lease, I’m driving around in a Winnebago.
Why don’t you fire up that Facebook Live when you’re in Corpus and you’re looking through that oval window in the kitchen there.
I sent the TV down. They sent stuff down. I’m like, “Change the doorknobs to these doorknobs, please.” I don’t love real estate. It is a business for me. It is a job for me. I am passionate about my job, but real estate is an offshoot of the things that we do. One of the things we do is take care of investor’s money, whether it’s coming as an investment or a loan. We have two open loans if anyone’s interested in lending us money, a first deed. We got one in the Heights and we have another one down in Corpus. Our good friend who did one of our deals is coming back to pick up two more deals. Two of the four are on there. If you want to do some first deed lending, let us know. We also have crowdfunding.The marketplace is changing. Click To Tweet
Let’s talk a little about the first deed stuff.
This all works together.
This is a great way to learn real estate without, screaming, yelling at contractors, meeting with inspectors, and all that stuff. It’s a great way to get your feet wet and experience what it’s like to buy a piece of property, what the closing process looks like, rehabbing it, and then seeing that property gets put back on the market for rent or for sale and make it a little bit of money on in the interim.
We have a combination for investors. We started sorting some people that are tire kickers versus the people who are interested in investing in our crowdfund or working with us in other areas. We’re doing a walkthrough of our small apartment that we have here in Houston that we’re beginning renovation on. That’s going to be exciting. The one that we’re buying in the Heights, that’s another one where if you are a lender on that, we will be doing open houses there and bring people through to see the progress that happens. It’s a great way to learn as well as make interest on the loan. What happens in with those single families is we get a first deed of trust loan from a guy like Rick from his retirement account. He does the lending and then we moved them into our single-family fund. There is automatically a buyer at the end. There is an exit strategy sitting there and if you’re interested in any of that, (281) 401-9008, text us or give us a call.
We have all these synergies, Jason.
I have got to find that word.
We have to pivot a little bit.
The marketplace is changing. What happened to all my real estate crash guys? They all seem to have disappeared.
There are no crashes. Everyone now believes that there are no more crashes. You can change your mind. It’s okay. You can’t delete the videos of your previous opinion. That makes you shady.
What’s so funny is I get, “I’ve always said.” I’m like, “What are you talking about?”
The words we’ve got to stay away.
I’ll never forget when I got on the radio in mid-2018. I did a presentation on it where Trump comes out and he starts tweeting at Mnuchin and said something like, “Rates is too high. You’ve got to bring the rates down.” The Federal Reserve listened, which was crazy. That’s when I got on the radio. I said, “It’s time to buy an apartment complex. It’s time to buy a single-family. Buy everything.” I will never forget. People told me how insane I was. Do you remember 2018? There were supposed to be 3% rate hikes in 2018 and in 2019 there were supposed to be 6%.
Going back up to 7%.
I’m telling you, they’re not coming up. Where are we at now?
The lowest ever.
I’ll never forget when you and I did our first market update webinar for Corona. You said 2.8% 30-year fixed-rate mortgages. I can’t remember who it was. Maybe it was Pablo. They tagged me on a post and he said, “2.75% on a 30-year. I refied yesterday.” I was like, “You’ve got to be kidding.” I’m like, “Here we are, kids. Rates are cheap, buy real estate.”
You refi your personal residence so you have less expensive and more capital to spend. You also want to refi some of those Fannie and Freddie investment properties. That could be over 6%. You want to bring them down probably the high threes at this point on the investor loans.
Jenifer gives us an update and she’s been on it with all this rate stuff. It’s been fascinating. I’m talking to her and a handful of other folks and it’s like a daily update. If you remember when Corona got kicked off and the mortgage market fell apart, it was the secondary market that fell apart. Rates jumped up to 100 bips. Then it would drop and it would come back. There’s some discussion about negative rates with the fed and I’m like, “Can we see a 1% mortgage, a 2% mortgage?” When you get into finance, below 7% is almost free money. When you start digging into it, it’s almost free.
That 5% to 6%, the world is fine.
It’s a contest between investors about who can get the lowest rate, “I got a 3.1%.”
Credit unions are handing that out. That’s great.
Where did you get that one? I want all that and then some.
On my personal rental properties, the ones that are in Fannie Mae loans, if I can refi, I think I have enough money saved on the monthly payments to buy a model three. I could put $20,000 down because my model three is $60,000.
I’m looking at $70,000. We need to test drive Teslas. We need to bring A-Rock along and video it. That would be entertaining. I can tell you on the house that we’ve got in Sugar Land, the rates are 4.125%, and at 2.5% or maybe it was at 3%, you’d save something $3,000 a year. The last one I refied was late last year. This is in the personal portfolio, not any of our funds or any of the other stuff. I want to say that was an investment deal at 4.125% and refiing that thing. Can you get into the low 3% with an investment property? Your cashflow is up another $100, $150 a month.
You start doing this mental calculus where you’re like, “Instead of $600 a month in cashflow, what if I go to like $150,000 and put it on a fifteen-year note?” That’s another thing. When you start running the numbers on this stuff, you can retire inside of 5 and 7 years with free and clear real estate. Add back in a fifteen-year mortgage instead of a 30, let’s say in a portfolio of twenty properties, you could end up with probably thirteen free and clear inside of five years with a fifteen-year mortgage plus the equity and selling seven off. You start doing the quick math on these things and I’m like, “You can put a dent.” We were chatting with one of our silent partners. I always wonder how silent he wants to be. We were talking about the commercial. What was he saying on a commercial note?
2.75% on a commercial building? I’m like, “That’s insane.” He’s like, “We can get that all day long.” I’m like, “Let’s get this thing rehabbed quick.”
My personal property is up in the Northeast. It’s like $1.5 million ARV and I own about $800,000 on it. if I can take that $800,000 from an average of 5.5% down to an average of 3.5%, that’s huge for me.
It’s a Lambo.
It’s a Tesla is what it is.
The rates are not going anywhere. I’ve said this for years now, they’re going nowhere. Dr. Dotzour said this. He’s an economist and one of the things he said is, “Every recession we come out of, it’s typically real estate that brings us out.” Rates are not going up. Rates are going to keep going down.
When you say the rates are not going to go anywhere, how much difference would there have to be? Let’s say we’re at 3% now. If we go to 4%, is that still within a range of like, “This is all good for everyone,” in your mind? What does it need to be when you will finally say, “The rates have shifted. Now we’ve got to do some of the things?” What does that look like?
I think we’ve got another problem where we’re done in real estate and that is the appreciation side. Even if rates jump up to 5%, 6%, 7%, there are these properties still going to cashflow. Don’t get me wrong. We can all talk about mortgages and low mortgages and it’s sexy, but the biggest risk we have as landlords now is the appreciation for holding onto them.
That’s why you can have no emotional attachment whatsoever to your rental portfolio. You’ve got to be able to pivot as soon as the market tells you to.
Synergistic pivots, I think that’s the bigger risk now. For those of you, all who have been landlords for the last years know exactly what I’m talking about. What happens when a market appreciates as much as ours has, obviously the properties have become more expensive, but so do taxes and insurance. It cuts into your bottom line. What lower rates allow us to do is recapture some of that cashflow with a lower rate.
Run the formula at 3% and you’ll see the difference between 5% and 3%.
I’m trying to envision a world in which we have 7% owner-occupied mortgages and I’m not seeing it. I hear all these guys and Dr. Dotzour said this too. Some people have been running around for the last 40 years. If you’ve got to remember, this is the last time we had 12%, 13% or 14%. I hear it with all the mortgage guys like, “I remember back in my day, they were 17%.” It’s not coming back.
Have you ever taken a transmission apart?
It’s like taking a watch apart and you’re like, “I don’t know how all this goes together.”
My brother has. He’s a class-A diesel mechanics. He’s taking those apart. Thank you, United States Army.
I get engines. You give me one of those manuals and I can work my way around an engine. I’m not particularly quick. I’ve got to take it apart. I think the black art in the automotive world is the guys that rebuild the transmission. When you open it up and you’re like, “What is this mess? I don’t even know what this is.” The performance cars, they’re dual-clutch trannies and they’re a completely different ball game. There’s stuff everywhere. Who knows how that works. By the time we get to the electric car, it’s almost like a scooter. They’re not complex. That’s always one of those things that I have no idea how they work. What are you looking at right now?Below 7% mortgage is almost free money. Click To Tweet
Did you see Twitter put the blue exclamation point on one of Trump’s tweets?
What does that mean?
You need to fact check this tweet.
Trump said, “There might be some new regulations coming out for social media companies.” It’s unbelievable.
I’m sure the media is throwing a fit. They’re like, “The President is totalitarian.” It’s like, “You don’t know when you’re being made fun of.”
I guess we’re talking about politics. He was going off that Joe Scarborough when he was in office had someone dying in his office. It was his assistant. Because Joe’s anti-Trump, he’s saying someone needs to research that cold case. It was ruled an accident. She fell, hit her head and that was it. He was like, “Someone needs to open up that cold case on Scarborough.” Everyone’s going nuts about it and that was the big thing. You’ve got to stop that in Twitter. I feel bad for the family of this woman. That’s the real victim in all this stuff, but the nonsense that goes back and forth in that, the media takes it seriously. You can understand that maybe we should take the word of the President seriously. Guys like us, we’ll look at it and say, “He’s just a troll.” He’s trolling the media versus someone was like, “I expect my President to behave differently.” There are two points of view. I don’t usually follow this stuff but I was like, “What? Joe Scarborough killed someone?” I started looking at this and I’m like, “Look at that.”
This stuff with Biden, it’s hilarious.
Is it him? Do you think he’s got a buddy, like who’s the troll there? Is it the Trumpster?
That’s a good point. In the days leading up to the primaries, I remember reading the back-page analysis of what the campaign was like. It was like three assistants, an airline pilot and his phone and a charger. That’s how the guy got elected. It was crazy.
Also, Big Mac’s.
Do you know what kicked this whole thing off and you could blame Obama for it because it’s true?
The press event.
He should have never talked trash to Trump in the middle of the Correspondence Dinner. “I know something. You’ll never be President.” He’s like, “Really? Let’s give this thing a little run.”
That’s the motivation. When people tell me I can’t do it, that’s my motivation. Tell me I can do it, pat me on the back. Just go away, leave me alone.
You’ve got to think, he was Kingmaker. Everybody sees him in New York hanging out doing his billionaire nonsense. All of a sudden, you’re sitting there at the Correspondence Dinner and you get the sitting President saying, “We know what I know. Donald Trump will never be President.” He goes, “Uh-huh.” It’s not like he’s short motivation but all of a sudden it’s like, “There’s a new goal. That’s not a bad idea.”
“I’ve got a few years left.”
“Take the kids with me. Ivanka’s not going to like the House, but we’ll just be there for a little while.”
There’s a great Saturday Night Live skit with Dave Chappelle. It’s the night of the election. He’s in New York with all his Liberal coast friends. They’re like, “We need to win Florida and then this thing is over.” They have to come to the realization that Trump is the President and that things are not going their way. This election is the same exact thing. You have to understand the country you live in. This wasn’t a fluke that he won. People got up and voted for him who typically weren’t voting. They said, “Enough is enough. I’m going to vote.” Does it go to the other side? If it does go to the other side, then that’s the country you live in. People are isolated in their thoughts that they can’t comprehend that there are Americans in this country who love them, defend them, all that other stuff that think differently.
I don’t know why that bothers people much. You’re confronted with opposing views typically from TV and some news and that sort of thing. I think what’s fascinating is to watch it on social media.
That’s an echo chamber.
It’s fascinating to watch that roll out in real-time.
Half the country is below average IQ. That’s how it goes. You can understand it and they’re on both sides. You see crazy stuff on social media. Whoever wins, that’s the country you’re in. You accept it. At the end of the day, there wasn’t a great impact by Obama or Trump on my life. If anything, Trump helped me more with taxes.
There’s some truth to that. I saved a little bit of money there.
Saved a little money in taxes. That’s it.
Accelerated depreciation is pretty sweet.
Bush, Clinton and the guys before him, nope.
I do want those green credits. We need Bush or Obama back for a week like, “Can you guys just push through?”
George was the greenest President we’ve ever had.
W could come in.
He did it the right way by incentivizing businesses and not by hugging trees.
If you’ve ever read about the ranch he built within the last years, it’s self-sustaining.
It’s absolutely off the grid. He enjoys it.
He could afford it. It’s like, “Let’s play with the technology.” The first Tesla was a Roadster that practically nobody bought.
Al Gore bought one.
That’s right, he did buy it. He is saving the planet. Where has Al Gore been?
He’s rolling tobacco in North Carolina. That’s what his family does. I’m sure he’s doing the circuit, I don’t know.
Where’s Obama? I guess he’s hanging out in Hawaii.
There is a protocol for past presidents. I think he followed it. The last few things he did were these commencement speeches, breaking those rules. We’re going to have Obama for another 40 years. He’s still young.
Although, he aged about 25 years.
They all do. Either they stop using the dye and they’re like, “I’m the President. I need to have gray hair. I need to look serious,” or they do gray.
Joe Rogan brought that up. He goes, “Trump doesn’t even look that different. It’s like the guy’s made for this kind of craziness.”Every recession we come out of, it's typically real estate that brings us out. Click To Tweet
We’re talking about all the things we shouldn’t be talking about. We have a code that specifically says, “Don’t bash other gurus.” Don’t do it. You’re not going to be invited on their stage. We don’t care.
I’m fine with that.
Don’t talk about politics. You’re going to split your audience. If you can’t be objective, we don’t want you following us, to be honest with you.
I don’t think our folks care.
There’s some dude with a truck up in Tulsa that gets ticked off when we talk about Biden, with his Carhartt jacket going onto this next $30,000 flip. He doesn’t like that we talk well about Democrats and we talk bad about fortune builders. We’re isolating our audience.
We switched electric companies and this one property, I’m like, “$62 electric bill?”
I’ve got a $2 electric bill.
I don’t know, for a couple of days with the switch over. I was like, “I’ll take that.”
One of the properties we’ve got, I had the power on, but we’re not using any power. They said, “We don’t show that.” I said, “I think there’s a tenant in there.” “We don’t show that there’s a tenant in there.” I’m like, “Really? It’s already hot.” That doesn’t make any sense at all. I was like, “Terminate the account.” It’s zero electricity for the last four months. I said, “I know there’s somebody in that property.” “We don’t show that it’s getting service.” I’m like, “Trust me, turn the thing off.” It’s funny because they hit you with that $5 or $6 a month charge and this was one of those accounts where we had paid over $200, $300. It had this credit and then I finally noticed, I’m like, “They’re ticking off like $5, $6 a month.” That’s the one I had closed, moved over. It was all a bunch of nonsense.
Little austerity, the Bible household.
That’s the extreme end of it.
Saving that $6 a month.
It was more just, I kept getting the letter. I keep getting the mail. When you open it up and like, “Here’s another. I thought that we closed this thing.” I’d have to go back and look at press properties. Usually, I call and disconnect it and it doesn’t automatically disconnect. I haven’t done that in so long. We’ve usually had somebody in the office that does all that. For this property, we didn’t have it.
We’re floating in the wind. We already ordered the flooring. I have the order for the floor paid.
For the new office?
Bring it over there and let it acclimate to the condition of the atmosphere there.
Are you doing a vinyl plank?
We’re going to do a vinyl plank.
What did you tell me, $50,000 for a carpet?
Someone quoted us $50,000 for the flooring. I was like, “Come on.”
That’s a lot of carpet. People always tell me that I love that new car smell. It gives me blaring headaches.
It’s a VOC.
It’s the VOC in it and I can imagine we’re going to get into a new office. It’s going to have fresh paint, new glass, new floor and everything. I’m like, “We need to open all the windows and turn the heater on and get this stuffed up.”
We’re doing it the right way. We’re using no VOC paints, I’m acute to that. The flooring will be there and off-gas for a couple of days before we even touch it. The biggest thing is going to be that carpet. We’ve got to run that. We’ve protected all of the air vents. We’re not getting any dust. Two days before occupancy, we can run the air conditioning over and over and vent it out. Pull out some of those VLCs and it will be a new office, new building smell to it, but it won’t be overpowering.
Whenever I get a new car, I bring the windows down a little bit. Turn the heater all the way up and sit in the driveway for 20, 30 minutes. Everyone’s like, “I love the new car smell.” I’m like, “I don’t like it at all.”
That’s an old question in the green world. Rob, what does clean smell like? You’re like, “The answer is nothing.” When you smell lemon, that’s something that’s off-gas. When you smell pine, that’s something that’s off-gas. Fabuloso is off-gassing.
There’s that convenience store that’s down the street from the Heights property now and I’ll never forget. The first time we walked in there, it was all Lysol and bleach and somebody was like, “This has got to be the cleanest convenience store in Houston.” Your eyes were getting clean. Let me put it that way. It was strong. My eyeballs were burning.
You come out with a sheen on my goatee. Cleaner in the air.
You don’t have to use a hand sanitizer. You just wave your fingers around. You’re going to go down to Corpus?
We’re moving some stuff out of the house that we’re pivoting on and running some furniture down there to the new Airbnb that will be up and running. There are some rules where we are. It’s a house we have to rent by the week, which is not a problem for this season. I can also rent out rooms there as long as I’m there. If I’m there, I can rent out the other rooms. It’s an elaborate setup.
Is that an HOA?
It’s a town. Otherwise, you’d have all those houses around Schlitterbahn, like people in and out every day. It would be crazy. They want to have a little control even though it means nothing.
What’s funny is the guy down the street, I think his boat costs more than that house does. It’s got to be a $5 million house. It’s pretty sweet. In a neighborhood with, $600,000, $700,000 houses, that’s interesting.
I’m excited to get our appraisal on that. I’m thinking north of $500,000 on that.
You guys go to the Mr. Texas Real Estate group and search around the videos. We’ve got videos in there. This particular property we bought down in Corpus Christi. I’d love the crow’s nest. Get all the way to the top and looking around. I’m like, “This is sweet.” It’s a cool place. You get to hang out there and roughing it.
We need a painter. I’ve got to go and find a painter and there’s a way to find a painter. I need another crew. I’ve got to go find another crew, work with some folks. We’ve also got some of our apartment syndication in Corpus Christi. We’re going to get our Section Eight inspections on these that are unofficial by one of our friends who was a Section Eight Master. They’re going to come through and do the inspection and get prepared for those. Putting those into the Section Eight marketplace. GoSectionEight.com and that will be a big step forward. We’re wrapping up that five-unit one. We’re almost done. I’m buying the kitchen cabinets.
That is hammering that thing out.
When we get to it, we move. The problem is we don’t have enough people to get to it right now. That’s an internal, critical, mass bottlenecking.
Somebody told me, “I managed by kink hose.” I said, “What does that mean?” He was like, “Wherever the kink is and the hose, then that’s what I manage and then the water starts to flow again.” I was like, “I missed that one in business school, but whatever.” I was envisioning like a cartoon, you kink the hose and it starts swelling and then explodes. You chase little kinks in the hose all day. I thought it was weird.
We’ll be back. Thank you so much. This is Robert and Jason, Mr. Texas Real Estate. If you need to reach out to us, it’s (281) 401-9008.