Hey, we’re the property brothers
and we’ve been helping people find their dream homes
for what, over 25 years.
And we are gonna answer your property ownership questions
that you asked AD on Instagram.
[jazzy music]
Right here.
[Together] What three things-
Do we have to read them all together?
Together? Is it?
[Together] It’s what twins do.
See what we did there?
You’re thinking of a…
Donut. Sandwich.
Oh, okay.
What three things do I need
before I decide I’m ready to buy a home?
Hmm. Money.
Yeah.
Good lawyer.
Yeah.
Good looking contractor.
No. Financing.
You need to be organized.
For qualifying, you wanna make sure you’re pre-approved
and you’re qualified on the financial sub.
And you really need to sit down
and think about what is important for you.
Don’t get a house that only solves right now.
Get a house that will also work for you in five or 10 years.
I remember when we bought our first house, we were 18,
we were just going into college and we had no money.
We had $200 and we had,
we found a creative way to finance the home
and get into it by assuming someone’s mortgage.
So we basically got our first house for 200 bucks,
had a bunch of tenants paying us rent
and then we were making 650,
yeah, I think it was 650 bucks a month.
And it actually provided us the revenue that we needed
to buy our next home.
And then we just continued flipping houses
and got kind of good at it.
When does it actually make more financial sense
to rent versus buy?
There’s no sense in kidding yourself.
If you can’t afford to buy right now,
then it’s not the time to buy.
A lot of people are actually partnering up with a sibling
or a friend or somebody to get into a home
for the first time because that’s the only way
that they can do it.
And it’s totally fine.
In fact, once you get into the real estate game,
it’s easier to progress in it.
They do say though that the next generation
will be the very first generation who cannot afford
to buy a home on their own. Yeah.
So that’s unfortunate.
And that’s because there’s a massive lack of housing.
Especially with the affordability crisis
and the housing crisis right now.
A lot of people are really weighing,
does it make the most sense to buy a home or should I rent?
And what is my lifestyle?
Do I want to spend all my money on a mortgage
or do I wanna save it in money and travel
or spend it in other ways with my family?
The steps for me would be sit down,
find a fancy little journal or notepad
and write down all of your must haves and your lifestyle.
Not just the house must haves, but what do you need in life?
What does your family need?
And then what are you looking for in a home?
And that can help you break down
whether it makes more sense to buy or rent.
Are there still affordable places to buy houses in America?
Yes. Define affordable.
If you’re looking in an area that’s the hot area,
you’re likely already overpaying.
So look for the areas that are up and coming.
It is really hard if you’re in any of the major cities,
it’s super expensive.
You know, even in LA, if you were to go a couple hours
outside of LA you can find some decently affordable,
but it doesn’t necessarily work with your lifestyle.
I couldn’t live two hours outside of LA
and commute into LA every day for work.
That would be terrible.
I have an investment portfolio out in North Carolina
and one of the reasons too
is we’re trying to create beautiful,
affordable homes for families
and out there there is actually a better price point
for people to be able to afford, so.
What are the stages of buying a home or property?
How about a little 101 on the home buying process?
So you decided that you want to have your home,
you’ve got all your finances together,
you’ve spoken with your bank,
you have your down payment,
you find the right house,
and you wanna be working with a real estate professional
who is representing your needs.
The thing is, the listing agent is representing the seller.
I believe in having separate parties
represented by separate people.
Yeah, you want somebody with your best interest in mind.
So your real estate agent will help you shop the market.
Hopefully they’re really good at what they do like I am.
And you’ll get a great property.
You’re gonna get that offer in.
It’s gonna be accepted because you make a reasonable offer
and you don’t try and low ball for no reason.
And then your money’s gonna go into escrow,
you do your inspections hopefully if everything goes well
and you don’t have any big changes.
Or even if you do, then you close on the property
and you move in
and depending on whether you wanted a renovation or not,
that’s the next bundle of joy.
Is it true that you need enough money
for a 20% down payment to purchase a home?
This constantly changes as things tighten up
and then things loosen up.
No, you can actually still purchase a house
with less than 20%.
Just realize the more money you put down,
the more confident the bank is gonna be.
So generally a better lending rate you will get.
But speak to your financial advisor,
speak to your mortgage broker,
speak to somebody who can give you the options
because they want your business.
So you ask all the questions you want
and figure out what the best product is for you.
I also think it’s important too,
when you’re putting together your budget for your home.
Look at everything outside of just the mortgage, right?
You gotta look at your taxes,
you need to look at your utilities.
A lot of houses are getting rid of gas.
Even in California you can’t put gas in new homes.
But that can really boost up your electrical.
So you gotta make sure you know all your costs
before you get into a home.
It’s like the next question,
How do you know if a home is a money pit hole?
When you’re walking through your property,
anything that feels a little off should concern you.
And so write those things down.
Take pictures, ask questions, do follow ups.
We also call it the ick factor.
Use all your senses.
Look at the space, what looks like a little off.
Even if you see the switch plates
for your light switch is a little crooked
or a vent is a little crooked.
The more things like that you see that are a little off,
it means they don’t have the attention to detail
that they should have.
And there are probably bigger issues inside the walls.
Use your nose. Yes.
If you smell something musty
or if something smells rank,
that could mean that there is a plumbing issue,
a mold issue,
any number of issues.
If it’s a home that has really complex electrical,
you might want to even bring in electrician
to do an inspection on the electrical.
Keep in mind, if you just hire someone
to do a home inspection,
a lot of times the home inspectors
don’t have years and years of experience.
So they’re just going off a list of things
that they should be looking at.
It doesn’t mean if they don’t find something in it,
there isn’t a problem.
There could be something inside the walls
that they didn’t see.
Also, keep in mind,
just because you buy a fully renovated place
or a brand new place doesn’t mean
that it’s any better than an older property.
A lot of new buildings have more issues than old buildings.
You have to make sure you have them properly inspected-
Are you saying that flippers would cover up a problem?
What?
Yeah, they do all the time.
Yeah, it’s sad. So be cautious.
What types of property will bring back the most ROI
for an investor?
I have always found that a fixerupper
ends up putting more equity back in our pockets
’cause you’re either paying somebody else to do all the work
and then that person wants their appreciation
on the work that they did for their equity,
or if you find a place
that you can put your own-
Sweat and equity into. Yeah, exactly.
We did find though,
there was this balance in a lot of properties,
as soon as you started having to do major structural work
or major hill work, things like that,
it was a lot more money up front
and your margins started to diminish.
So we always tried to find a house
that architecturally was really, really great,
but just super dated and that was a lot easier to fix up.
How do I find and vet a good general contractor?
Oh!
So many good things.
I always have a couple of rules.
One, make sure that your contractor
has lots of professional affiliations.
Better business bureau,
registered with National Home Warranty programs,
things like that.
Also make sure it’s not somebody
who changes their number every two weeks.
Shady.
And the other big thing too is
because you’re getting someone who’s setting themselves up
like a professional, you wanna make sure
that they’re also giving you professional documentation
on everything, quotes in advance,
before you decide to go with them.
You shouldn’t be writing big checks
to them if they’re not bonded you.
You wanna make sure they’re a reputable contractor.
Also, keep in mind people are like, you know,
I wanna save that 10%.
I don’t need a general contractor.
But I have two kids.
I can’t imagine a full-time job
plus taking care of the kids,
plus trying to oversee a big construction project,
that is way too stressful.
Most renovations are the biggest friction point for couples.
So bring someone in to oversee it.
Nothing is worse than living in a renovation,
especially if you have kids.
I just thought of something worse
than living in your renovation.
Living in your renovation with your identical twin brother.
Oh! The worst. Oh, we did it for years.
I thought I was brilliant.
I cook breakfast every morning.
I give him my protein shakes every morning.
He didn’t like them.
I’m not very handy at all,
but how do you build your home improvement skills?
I wish more people would ask this question.
I love this question
because so many of the families we work with today
have no clue how to maintain their home, how to do it,
they have to hire someone for everything.
And is it just you and me or every time you hire a plumber
or an electrician, it’s a thousand bucks.
I don’t get it.
No matter what the project is.
It’s gotta be the same. So yes, it’s important.
I would say there are a ton of amazing books
that you can get sort of how to guides
on how to tackle all of the basics.
Again, a lot of great videos from professionals online.
Think about your own home right now
and the stuff that you need
and start knocking that off your list.
Learn these projects one at a time.
We started renovating houses when we were kids
because our dad was very handy and he would have us,
we built the family house, we built the barns,
we finished the basement in one of the houses.
So get your kids started young.
Parker already is my handyman.
He’ll hold my tools or something when I’m doing something.
They’re already not paying rent.
Make him work for it.
Do it.
The only hard part is, he’s three years old now,
but when he was two he would help me a little bit
and then Linda will be like,
Parker learned a new word today
that I’ve never heard before
and he probably shouldn’t be using.
And my trucker mouth comes out a little bit sometimes
when I’m like missing the nail with the hammer
and yeah, sorry Parker.
I wouldn’t know.
I’m an angel and I’ve never used nor heard these words.
Never cursed in your life.
We’re taking over the family farm.
Any advice on preserving structures
and memories while renovating for our own needs?
This is something that Jonathan and I
are very, very particular about
because when you have an old home,
even both of us live in century old homes,
there’s a lot of character
and charm of that era of the home.
You don’t wanna lose that
and just make it some modern renovation
that doesn’t make sense.
So capturing the old, the essence
or breathing new life into that
while bringing modern functionality,
that’s a really key thing.
There are a lot of properties
where you’re actually devaluing the property
if you get rid of the character
that makes that place so special.
So make sure you understand
the property that you’re living in,
what’s expected of that property on the market
by people in your real estate professional
can help with that.
And then also just make sure whatever you do
is gonna add not only a beautiful aesthetic,
but lasting value.
There are some things people do like
if you paint brick the wrong way,
you can actually erode the brick underneath
and cause a structural issue on the exterior of your home.
So. Yeah.
And one thing, so for a family farm too,
keep in mind a lot of old rancher farm properties
that we grew up in a ranch,
it was a lot of wood products everywhere,
but nowadays they’re composite materials
that look just like wood that will last way longer.
There’s innovation in the home space
that can really help you stretch a budget
and stretch the life expectancy of those products.
How do you get rid of that subtle old house smell?
Yes, Jonathan, to leave the room.
That, that’s true. Moving on, next question.
Yes. Oh, sorry.
Depends what is causing the smell.
So be aware that smells are generally trapped
in soft surfaces.
So if there are draperies, if there’s carpet,
anything like that, the materials, upholstered goods,
that’s usually what we’ll hold onto the smell.
So whether somebody was a smoker, if it’s cooking smells
or if it’s musty mold smells, that’s where you’ll find them.
The other thing too is in old houses
they never used to seal under the slabs of the home.
Concrete is very porous
and so the smells from underneath that damp dank smell
would come up through the concrete
and that’s what you’re smelling.
So if you’re ever taking out the flooring
in an old property, seal the slab
and there are special paints that you can use to do that,
it’s as easy as rolling it on.
Seal underneath before you put your new flooring on top
and that will keep that smell at bay.
Another thing to keep mind though too is certain smells,
like we was saying with water leakage,
there could be mold and issues in the wall.
So sometimes it’s nice to have a professional come in
to do a proper inspection of the home to make sure you know
if some of the smell issues are just surface
or if they’re hidden and could be a bigger problem.
You don’t want health issues with your family
because you’re living in a house
that might have mold spores in the air.
What’s the smartest way to plan
and use my budget for every phase of renovation?
My thing I would say is don’t just do the kitchen
and then you wait and you save a little bit
and then you do the bathroom
and then you wait, you save a little bit.
If you can try to pull together your budget
or finance yourself in a way
where you can do everything at one time,
it’s best to do it
because then you’re gonna save on your trades
because they’re not coming back multiple times
and recharging you.
They can bundle their packages with you a little bit.
Also, think of the expenses that you have to lay out for.
So for example, kitchens are very expensive
’cause you have lots of appliances and stone
and fixtures and things like that.
Well if you know you’re doing a full renovation,
start shopping now.
Don’t wait till the last minute
when you need to have the fixture
and you need to have the appliances
because all the retailers have big sales
at least every other month.
So if it’s a year long renovation
or a two year long renovation, start shopping now
and make sure from your contract
you know exactly what you need
so you don’t buy something that you ultimately don’t use.
So that’s a good way to find deals on things.
The other thing to consider as well,
when you are renovating, make sure you have a contingency.
That’s probably my number one advice for people.
Have a contingency of no less than 10%.
So you can party or get that big screen TV.
Exactly. Right?
That’s what people always think.
They’re like,
Oh yeah, my contingency is for a big screen TV.
No, it’s because every project has hidden problems.
You wanna make sure you have money set aside
so you’re not financially devastated if something happens.
This is something that’s a little annoying right now.
There are tariffs that are increasing the pricing
of certain products in the home,
but there are also a lot of trades and contractors
that are jacking their prices way up.
Oh, it’s ’cause of the tariffs.
No, they just found an excuse
to be able to jack their prices up.
So you need to be well aware of what the costs should be,
do your research, have an understanding of the base costs,
and make sure that you’re working with somebody
who can help you understand
what the labor costs should be as well.
I think because you’re here right now with us,
it means you’re the right sort of person
who’s thinking ahead, you’re planning ahead
and you’re gonna have an amazing project.
I hope you are now ready to buy your home
and if you have more questions, you know where to find us.
I didn’t wanna leave.
Are they kicking us out?
They are. Oh.
I drew something for you guys.
Oh my god. My little gift.
I am the bearded stick man.
Don’t encourage him. So beautiful.
Okay, yeah.
We’re gonna hang it up on the 80 wall thing.
You’re welcome.
This is worth a lot of money.