Can you really own your own home at 24? Check out David Sidoni’s guest, a first-time homebuyer who dumped her landlord and bought her own place. Madison hated her landlord because the apartment she was living in was messy and dirty. Plus, she felt she was throwing away her money in the trash. If you’re a homeowner, you can easily turn your mortgage into a killer investment. If you want to find a place you can call your own, this episode’s for you. Tune in and dump your landlord!
Real Story From A Real First-Time Homebuyer – Madison’s Story
How A 24 Year Old Bought A House All On Her Own
It’s storytime. This is the story of a young woman that looks about twelve years old, but she’s actually 24. She despised the place that she was renting, and not only that, these are her words, her landlord hated people. She took matters into her own hands and she got out there and talked to a few realtors. She got mad discouraged. She felt like she was a price tag when she talked to them. Eventually, her story does have a happy ending. Let’s hear how things turned around for her and her incredible journey from a frustrated renter to a happy homeowner.
It’s time for another first-time buyer success story. If you’re a new reader looking for buckets of details and information, you can scroll through the episodes and get a whole bunch of that, but even though this is a story time, we do have a lot of tips and wisdom in this episode. It’s jam-packed. Do you think you’re too young to be a homeowner?
Madison’s 24 and by herself, she bought a condo in the super expensive area of Southern California. Straight up, she’s my hero and you can be too. Her stories are inspirational. It’s a real-life experience and it’s no BS. This is actually how it happened, the details and tips that can help you become my new hero. Tons of powerful information here.
If you are here every week and getting tired of me giving you guidance, now you can learn directly from another success story. No matter where you are in this process, I’m talking if you have no clue at the very beginning or you’re ready to start off writing offers right now, Madison’s story has tons of great insights to give you some quality tips, tools and techniques to build your confidence and straight-up pump you up. Let’s get right to it.
Everybody here she is. She’s world-famous. She’s amazing. She’s incredible and she’s a homeowner. Madison, how are you doing?
I’m doing okay. How are you?
I’m good. Madison, why don’t you tell everybody readers where are you?
[bctt tweet=”Make a place your own that feels like home. You don’t have to call a landlord if you want to paint the wall. ” via=”no”]
I’m sitting in my cute little office in my new home.
We’re very excited for you. Everyone out there is trying to figure out how they can buy a home. That’s why they clicked on the show. The first thing I would tell you if you want to be like Madison is you need to pick your awesome up by about ten degrees because home chick is the best. Why don’t you tell us what led you here? What was the decision process for you to buy a house?
I had moved back to California after going away to college. I moved to Kentucky for college and I had always planned on coming back to California. That was in December of 2019. I had moved into an apartment complex. I’ve lived in the dorms in college and that was all paid for. That wasn’t ever a big deal. I hated this apartment complex. Everyone was nickel and diming me for everything. I was paying $3,000 a month, which is like a luxury. I’m bougie. I’m OCD. I was paying for my style, but it was irritating me. I knew that if I owned a place, knowing the general market of what you pay for a mortgage and what you could pay for a two-bedroom, two-bath if you were either renting from an owner owned it yourself, I would be probably paying $1,000 less.
It was about $3,000 for a two-bedroom, two-bath in Irvine, California. I was not happy throwing away all of my money. That lease ended in July of 2020 and I decided I wanted to start shopping. I was like, “I’m going to rent from an owner for a year.” I signed another year-long lease at a cheap little place I found in Laguna Niguel and that worked out fine. I was like, “This is going to be where I’m going to stay and then in the course of next year, I’m going to shop.” I had spoken to several realtors and I didn’t like them. It was weird. I felt like I was a price tag.
I asked a bunch of questions because I wanted to know every little thing about what I was doing and no one would want to answer my questions. They’re like, “You don’t need to worry about that. Let’s get you pre-qualified.” I was like, “What’s the process?” “We’ll get you pre-qualified. Don’t stress.” I’m like, “I don’t want to run my credit for you if I don’t even know I’m going to work with you yet.” That was creeping me out.
I decided to start Googling how to buy a home. I was in a podcast phase. I decided to search for a podcast on how to buy a home and I found your podcast. I binge listened to every single episode and then I sent you an email. I was like, “Can you recommend someone?” Luckily, you’re like, “I’ll do it.” I’m like, “Okay.” It was the best email ever sent because you got me a great deal. I have other friends that are trying to buy or being that weird, “I’m waiting for the bubble to burst,” kind of buy and I’m doing way better than they are because I found you.
I’ve got to ask you this. You said that you knew that when you were being OCD and all fun things Madison, you said that $2,000 rent or mortgage, those are potential. How did you know? You were paying a $3,000 rent. How did you wake up one day and know, “I could own for $2,000 a month?”
I would dream scroll on Zillow and I would see the prices. I would look at the Zestimate and it told me about what it was. I’ve seen these cute little two-bedroom condos. I was like, “$2,300 a month. Perfect.” I get it. It was like 20% down and it gave me all the spiel of what that Zestimate was. Approximately, it was going to save me a bunch of money. It was right because I put 5% down. I’m paying a little bit more than that $2,300 Zestimate, but I’m paying less than what I paid at the apartment complex.
I’m paying about $200 more than what I was paying for the rent from the owner and it’s going into equity every month. Frankly, back in 2019, I was fresh out of college. Now I have several years into my career and I’m making much more money than I was making fresh out of college. My actual budget, my free money, my spending money has increased because my overall salary has increased, but now I’m owning and my overall home payment is technically the same as it was then, but it’s a better use of that money.
I haven’t touched on that on the show a lot, but that it’s an overall philosophy and it’s a little more. I want it to stick to the basics and get people to know that they can do this, but when you’re talking about understanding when you’re younger, if you’re going to be renting from 23 to 27, most likely it’s when you’re going to have incremental salary increases as well. If you take a little hit that first year and you go from the bougie place to a cute place, that’s yours. Not only is it going to be in a position like you’re talking about where it’s less, but it’s going to become more affordable as you go on in your career.
It’s worked out for me and I didn’t anticipate having any incremental salary or any of that. I had my budget and I stuck to it. Technically my budget hasn’t changed. It’s the money that’s coming in that has changed. Whenever I’m able to save is I’m able to increase at the end of each month. I took a little bit of a hit on my overall mistake as far as my down payment goes, but now it’s like, “I’m making a place that’s my own. It feels like home. I don’t have to call a landlord if I want to paint a wall or color. I can make it whatever I want and it’s fun. It’s a little bit of an adventure.”
That leads me to a good point because for the readers out there, I think Madison is incredible. I did this show so I could go back in time and talk to 23, 24-year-old David Sidoni and turn him into Madison. That’s the whole point. That I had that headspace about it. One of the interesting things for me is you talked about the fact that you dipped into your nest egg. This was one of those things you and I had the push and pull on. Are you happy that you dipped into your nest egg now that you’ve had a chance to look at all the numbers overall?
You got me in touch with an amazing mortgage broker, Dino. He’s phenomenal. He sends me these home reports completely free and he pays for it. I know he does that at his own business, which is phenomenal and it’s a free service to me. Yay on the customer service. I get these monthly reports about what the value of the property was when I purchased it in April 2021 and then what the value of it is nowadays.
I see that I’m up like 5.6%, which is great. That is triple what my nest egg was. I’ve been putting away money since I was about fourteen. I got my first job at fourteen and I saved everything I ever had because I didn’t have any expenses at the time and luckily for me, I had a scholarship for college. I didn’t have to dip anything for that. I was able to put away and save and I worked full-time throughout college. I had this money.
First of all, she said, “I was fourteen. I didn’t have any expenses.” How many fourteen-year-olds know what a freaking expense is? Second of all, she’s got a full ride and decides that she’s going to work full-time so she can save. You don’t have to be a Madison to get there, but it helps.
Working full-time made it easy. It kept me busy. It kept me focused in college. I was able to graduate college and not have to like stress about, “Do I need to move back in with my mother? I didn’t ever want to do that.” I was comfortable and it was good.
You got the 5%, which is more than if you touched your nest egg.
That was the point. My original was put 3.5% down. I wanted to put as little of the amount of cash down because this is my cash. If the world were to end and the world had just ended with COVID, so I was being all here. Luckily, I didn’t lose my job. My job, I could do it remotely. It was fine, but if something happened where I did have to lose my job and I lost my income, I was like, “This is what I was going to live on.” I feel more secure having six months’ worth of expenses put aside. I have three months of expenses put aside and I’m building that backup, but I’m having a little bit of fun because I’m making the place my own.
[bctt tweet=”You’ll make dumb choices when you know nothing about the process. ” via=”no”]
It’s making it good and I’m putting money into place. I’m still increasing its value. Theoretically, the 5.6% is realistically a little bit higher than that because I’ve made upgrades that are increasing it more. When the interest rates and everything is correct, we’ve discussed that I’m going to refinance. I’m going to have a lot more money in this and I have equity in this house than I ever had in that nest egg and it’s a killer investment.
I did the whole piece on the bubble and there’s still time. We’re doing this with Madison in the summer of 2021. There’s still time. We’re probably going to be going this through 2022. Madison had a great head on her shoulders and we’re always talking about this and it’s really fun. I knew the little numbers and you must love Dino’s little automated update that you get. Isn’t it awesome?
It shows a little chart and day. I love this part. As you can see April, it’s weird and volatile throughout 2020 because I see a trend in the history data. You see April 2021 and then I see this big line all the way up because you had May, which happened, and everything spikes all the way up. It’s a nice little mountain.
Climbing the mountain literally on paper and, of course, metaphorically now as we’re building your empire. You came in pretty darn prepared. Did you have any fears besides that the realtors you were talking to you that didn’t give a crap about you?
That was the first thing. I didn’t know if I was going to be making a dumb choice because I knew nothing about this process. I didn’t have anyone to guide me through it.
We’re improving your property while we’re doing this. This is what the people want to read about. You got in, you got 5.6%, but you’re actually improving the property. This is a little trick for everybody. At 5%, she’s got the PMI on it, but when she refinances it, she’ll get rid of the PMI and the way that you get rid of the PMI is when your home’s value gets or our loan is only 78% of the value of the property. She put 5% down. She’s got 5.6%. Now she’s sitting at $89,000. We got to get her down to $78,000. If she puts the money in here and the house gets reassessed at another $10,000 because what she had that PMI could be gone in a year.
Based on how the market is, I’m going to wait it out until it’s the perfect moment financially, but we’re redoing the bathrooms. We’re updating the kitchen a little bit. We put new floors in. We did a fresh coat of paint everywhere. There were some weird colors on the walls and there was a tunnel in the walls that wasn’t done well. We’ve textured and repainted, so it’s like a brand new place. I put money out, but I’m getting much more back because one, I’m an owner and two, the market is increasing in general. The places around me are selling for $20,000, $30,000 over what I paid. I’m sitting on something that’s going to make me a lot of long-term money.
It’s one of the only investments that you have in your life. You’ve been great putting money away, getting your nest egg going, but you don’t get to sleep on those investments or hang out in them or get ready in the morning. You’re talking about improving your quality of life. You’re putting money into something that’s making money, but it also means that when you do hair in the morning, it’s a nicer bathroom. That’s pretty awesome.
It was definitely the right choice. Back to what I was afraid of as a part of this whole process, I didn’t know anything and I was afraid of getting taken advantage of because I am young and I made myself clear. I asked so many questions. It was obvious that I didn’t know anything. I’m not the type to play a game where I’m like, “I know about PMI.” I have no clue what that meant. I didn’t know any of this. It was finding somebody that I could trust was the scariest part. The fact that I’ve come across your show and you literally told me every single question, you answered questions that I didn’t know I had. I didn’t know which questions I should be asking.
You would do that on a call with me if I think for an hour and a half. It was supposed to be a twenty-minute phone call, meet and greet. You talked to me for an hour and a half because I had a billion questions and you didn’t care. You cared about helping me. It’s not like you needed me as a buyer. Everyone else seemed like they needed me. They needed my money. I didn’t like it. It felt slimebally. You seemed like you were doing this for a good cause and that’s why I jumped into this whole thing. It was the best choice ever.
You actually guided me through it and I always knew throughout the entire time. I wasn’t any taken advantage of. I was making a smart financial choice. Even when I had questions throughout the process, you were like, “Chill, here’s your answer and let’s backtrack. Think about the bigger picture.” That was needed. You still do it. You have many other clients other than me, it’s not like you needed me to make any money, but you still took the time to make sure that I felt good, which was perfect.
Here’s the fun thing about this. I’ve mentioned to my show that I’m starting a little video series on it. I had twelve first-time buyers. Take one guess that who was the cheapest one?
Me, probably. I’m assuming, though, because of how we got into this place was insane.
By 50% compared to the other ones. It happens sometimes. Sometimes there are people that are here but guess, who’s the first person I interviewed? They’re all $800,000 first-time homebuyers, but you were so much a part of what I wanted people to understand with the show. It’s a combination between me going, “This is someone who can believe and understand the numbers are going to work,” it’s so funny. I loved it. It was fun.
The reason why the twenty minutes turned into an hour and a half was not because you had a lot of questions. The questions you were asking were coming from a bigger picture place about your finances. When you were open-minded to realize that, yes, it’s a place that you live, but it also can be the foundation of taking your nest egg and putting it in a nest egg in a nest house.
That was the hard part for me because I had $25,000 in cash, and I had my investments. This was literal cash that was outside of what I contribute 15% of my income to into investments and all of that fun crap. This was literal my growing cash reserves. I knew I wanted to put it on a down payment, but I didn’t know if I wanted to make sure that I still had at least $25,000 in there. Maybe I want to save $50,000. I was always scared about getting rid of this number and seeing that number go down substantially.
It scared me because it doesn’t matter what else I have elsewhere in other accounts. There was something about this account that I had been nurturing since I was fourteen that made me want to love it and protect it. At the end of the day, it’s taken a hit, but it’s going to grow substantially more and it was sitting there in cash. It wasn’t making anything. Even though I loved it, it was wasted love.
It’s a shiny little object on your shelf that you should feel good about the fact that you did. My son, all he has to show for his money-saving is the Oculus. No, I bought him that. It was his Xbox. I don’t know. It was something bought that isn’t going to be worth $7 in ten years. Here’s another interesting part of the story. I’m going to throw this question on you. I didn’t tell you about this. One of the big things that you and I were talking about was timing the end of your lease. We happen to get rent back on this property that we put an offer on in March.
[bctt tweet=”Give your every dollar a job.” via=”no”]
If they’d had 30 days and you had to move in 30 days, there was a chance you might not have taken it because you didn’t have the monthly budget that you had written out to pay to the end of the contract in the lease that you were in. Let’s think about if you had bitten the bullet and done it and double paid rent and gotten way out of your budget, you still would’ve got 5.6%.
I would have and that was silly.
You were telling me that you would have missed the line.
I would be sitting in the condo that I hated the Laguna Niguel because it was old, ugly and cheap. It was fine. It was gross and I hated living in somebody else’s mess was like, “No.” I would still be there. I would still be pissed off at the ugly kitchen, the ugly floors and the dirtiness of it. I would be paying money that felt like I was throwing into the trash can every month because my landlord was a complete a-hole. I was making him richer and he wasn’t putting any money into this place at all. He’s sitting on it. I’m like, “I would still be wanting to be him, just not the mean part. The nice version.” It would be nice to be putting that money into an investment. Instead of making a payment every month, I’m making an investment every month like I’m doing with all of my other accounts.
Frankly, my fears were I don’t touch my larger investment account. My larger investment account sits and stays. Do I have enough in there that I could have covered plenty? Do I have enough in there that I could have paid 20% down? Yes. Did I want to touch it? No. that sits and stays because it makes me money the longer it sits these days. Theoretically, what I done and not had my fear, although it all worked out the way and it worked out perfectly because you and our friend the listing agent, killed it for me. I pulled $10,000 out of my investments and double-paid rent for three months. It’s fine and had a little bit of a hit. That’s not even a big hit. It’s a small hit, but I was paranoid about it. I couldn’t think of the bigger picture. When I was in the middle of everything, it was hard to think of the bigger picture.
To explain to readers out there, the way it worked is she wouldn’t have purchased if we had to do April, May, June where she was in the new house. The reason this one worked is because the seller decided to stay there. We did a rent back and she got to stay in the ugly place, which she hated, until July. What she now looks back on is she and I would have these wonderful debates and conversations where not while I was pushing her to do it, but I would say, “You could pull from that big investment and pay both because this is a screaming deal.”
We got this agent who’s going to give it to us way under market value. I think even if you double-paid for a little bit, you’re going to do better in the long run. Now when we go out and we start investment shopping for you to build your empire, we’re going to have a different understanding of the whole overall picture for you.
I think it also helps to explain why it was such a big deal is every dollar I had in income is budgeted. Every dollar has a job. I don’t have my income. I don’t have like, “Payday, let’s go buy a bike.” I’m much like, “The bike was budgeted for July only, Madison.” My finances are super structured. I have X coming in, I have 100% X coming out and that spreadsheet is zero at the end of the month. Whatever’s leftover from whatever I need to spend, it goes into savings. I don’t touch the savings. It goes into new investments and I don’t touch the investments.
Having expenses for three months that exceeded what my income was, was terrifying because I have never been in that situation where I’ve ever feared not having enough to make sure that I could still invest 15%, that I could still have $0 leftover. It’s like everything had a job. I’ve never been in a situation where I felt like I didn’t have control over my money. At the end of the day, I did. I was scared and being paranoid. You had me and you had to hold my hand and be like, “We’re going to come to Jesus. It’s going to be fine.”
I’ll wrap it up with this because here’s what I hear. I hear you saying amazing stuff that a lot of our readers are probably like, “I can’t believe the way she runs her month. I’m never going to be able to do it.” There’s something interesting about that. You always know exactly what’s going to happen every month. Even though you had the money to do 20% down, you had no question that it was smarter to do lower down.
I have many people who call me up and say, “I want to save money because I want to put as much money down as I can so I have a lower payment. That’s why I don’t have the PMI.” Yet, someone as studious as you realized that you could still be lower than your bougie $3,000 a month place with a low down payment. That was the smarter move because you could use the rest of the money the way that Madison wanted to use it.
I started off wanting to do 3.5% down because that’s what I had in my cash account. That was what I had saved so far. I knew I wasn’t going, “I didn’t want to touch anything else because that I had a different job.” The cash that I had was that was the job. It’s different for me. I knew that it was more important for me, instead of waiting around several years to save up the 20% in the cash account, that I wanted to start paying on equity. I was sick and tired of this throwing away my money and I wanted to figure it out in any way, shape or form. At the end of the day, that nest egg grooves throughout my closing process. I ended up being able to put 5% down, thanks to the recommendation of Dino, my mortgage broker.
He showed me the numbers because he also knew my brain. He showed me a spreadsheet and we punched in the numbers and he’s like, “If you put 3.5% down, this is what you’re going to have. Think about 5% down. This is what you’re going to have.” It made a huge difference for like, “I’m going to go ahead and do the 5%.” My plan changed throughout the course of everything. The way everything went down, I ended up getting this place a lot cheaper than I anticipated spending. I anticipated a $500,000 place. I got this place for $475,000 and I did have a little bit more flexibility than I had originally planned, which made life easy.
Madison, I am so glad that I did get to take the time to work with you and that’s the mission of the show. It was so exciting to work with you and your story is going to inspire many people. It’s also going to freak out a bunch of people. If you’re out there and you’re 23 and Madison scares you, she also scares me. Be cool with it.
I’m glad I trusted the process because I remember when we went and saw the first cute place. It was listed at $500,000 and it went for $590,000. I would have been stressed out of my mind and it wasn’t the right place. I waited and at that point, I was about to give up. I was like, “I can’t do this. I don’t want to do this. I’m going to be fine. I’m going to wait longer. I’m going to wait it out.” I got to the point and I trusted you. I trusted the process. We found this place. We jumped on it and got in here quick on a Wednesday morning at 10:00 AM and we were the first to see it. We were the first to put an offer in.
You took everything that everyone says is not possible, but you made it possible because one, you know the game, you know how to read people. The second walked in here, you already knew my boxes and you weren’t like, “I needed to have gray walls.” It was the normal boxes. I need to be able to make the profit from it and need to be in a good location, so I can rent it out down the line because I’m not going to live here forever. You knew all the good boxes that were going to make this a good financial decision. We walk into the house of blinders. It checked the boxes and it was a matter of, “Can I make this happen?” You knew exactly how to make it happen, knowing the game that I didn’t know.
If you have a good realtor like yourself that you can trust and that they’re not going to take advantage of you, they’re not trying to make a quick buck. You’re actually going to be able to win in this. We were like, “I’m going to co-sign that.” I could have been sitting in a place that I could not afford that wouldn’t have made me any money. Instead, I’m here in a place that is far under market value than what everything else is going for. Everything else next to me is going for $550,000-plus. I’m sitting on a goldmine that’s going to make me a lot of money for the rest of my life.
The beautiful thing about that is I’ve been doing this for years, and for me, it was fun. Working with you is super fun. There were other bigger paychecks in the summer but not big enough to fill the hole in my heart. Working with you, I was like, “This is great.” For us to be able to figure out that piece together, the reason I could walk into that place with you is because I knew what it could be as opposed to, “We’ll get pre-qualified.” No. What’s Madison’s twenty-year plan? A lot of first-time buyers out there need to understand. They need to think a little bit like you, Madison, on pretty much everything, but there’s also this thing.
[bctt tweet=”You can make what’s impossible possible if you know the game. ” via=”no”]
Realize that unless you are going to stay in the town that you grew up in and you’re going to live down the street from your mom and your cousins, that’s great. Find a good realtor for that. For the rest of us, times have changed. You’re not buying a $75,000 house, especially if you’re in a large area. This is the first piece of your financial puzzle. You and I had talked about every single piece, not just get pre-qualified. Let’s look at houses. I know how long you want to live here. Would you want to fix it up? What are the plans for this? I was looking at every house, thinking you might keep it forever. This could be your gold mine forever. You could rent this thing forever.
It’s my plan. I’m thinking I’m going to sit on it and rent on it forever. Potentially, we’ve talked about when it’s not going to be a bubble. It’s going to be a slow leak. When that leak starts to get a little bit, then we might think about selling it. By that point, it’s going to be several years down the road because of the way everything is and if you look at the numbers. You can listen to other podcasts for all that stuff.
The way the numbers are, it’s not going to be an issue for me for a long time. I’ll be able to make a lot of money on this place and maybe we’ll sell it before that leak happens and maybe we won’t. Let’s depend on what the numbers say and you’re going to be there guiding me through that process. I’ve already started my savings account for the next single-family home.
That’s the awesome thing between the charts from Dino and the phone calls from me. We’re going to stay on top of things. For those of you out there who are young, if you’re going to rent from 23 to 26 and you’re like, “Don’t tie me down,” all she did was take a little step down from the bougie place from $3,000 to $2,000, and now she gets to make this place on her own. She’s talking about possibly renting this place for the rest of her life, which could be an extra $1,000 or $2,000 a month. That’s awesome.
It’s like what my old landlord was doing. He owns that place forever. He bought his condo, and they’re going to go when he was my age. Now he’s 50-something and renting it out to people and makes money every month. I’m going to pay off my mortgage a lot faster than I plan to. I’m going to take 30 years to pay off my mortgage. My goal is eleven.
You get to be that landlord, except nicer.
I’m going to be nicer. I like humans, and I’m in a good location. Kids are going to the community college around the corner. All my boxes got checked. Everything worked out the way it was supposed to, and it’s a matter of trusting the process, having everything set up, and it’s like having a plan. That was why I first felt so comfortable when I went to talk to you is because you didn’t say, “Let’s get you pre-qualified. Let me confirm that you have money that I can make off of you.” That’s all they’re asking.
It’s like, “We got to get you pre-qualified.” They’re checking to see if they’re going to make any money off of you and if they can make money off of you, then they’ll talk to you more. If they can’t make money off of you, they’re going to blow you off. You’re going to talk to like six people, and I’ve had six different credit checks and you’re going to be frustrated.
I never went down that road. I was like, “Sorry. You want to pull my credit? Bye-bye.” It was great. When I first messaged, you just asked me, “What’s your plan?” I was like, “I think this is my plan,” and then you edited my plan. You’re like, “Think about it this way. This is the market. This is what’s going to happen. This is what you could do. This should be your plan.” Your system asked me the numbers. I gave you the numbers and you’re like, “Very doable. Let’s go about it like this.”
It was a step-by-step process and then only when we had a solid plan, we knew what we were looking for, you know what my boxes were, then we went and got pre-qualified with one of your recommended mortgage brokers. I got pre-qualified with three of them and ended up going with Dino because he’s phenomenal. Frankly, his numbers weren’t even the best of what I got pre-qualified for. Some of them qualified me for more, but I liked Dino better because it was a trust thing and he answered my phone.
He’s giving you legit numbers. He’s not giving you the inflated stuff. Customer service is important with the mortgage broker. It’s true. If you ended up going with a broker mortgage and one of those people, you talked to a salesperson and then you talked to nine different people before you’re done. That’s why the minute we finished our twenty-minute phone call that turned into 90, I was like, “Great. Now I know, no matter what happens to Madison, if she buys something with me in three months or if she buys something made in three years, it’s going to be because she knows the whole picture and she’s making the right decision for her.”
I love Dave Ramsey. That’s how I model my financial life and he has a mortgage guide that he broadcasts on his show. Even after I had talked to you, I called them. They never got back to me because they ran my credit and they didn’t think I could make them enough money. It was lame because I wanted to verify. I have to verify everything. The three people that I got pre-qualified with you, who you trusted, who you knew that were a small town, good people that worked with a niche set of people that had a specific plan. I was like, “Is this the right plan?” I don’t want to confer with somebody that’s completely different. Let me get a different perspective and then as soon as I exited this unicorn bubble, I was like, “Take me back to the bubble. I don’t want to leave.”
I am going to capture that. If I did a Superbowl commercial, that would be, “As soon as I exited this unicorn bubble.”
I love Dave Ramsey. I like a lot of his philosophies. Do I agree with everything he says? No, but do I like his overall financial picture? Yes. If I’m going to trust anybody other than David Sidoni, who’s proved to me that he is trustworthy and is going to walk me through this process, it’s going to be somebody that Dave Ramsey recommends. I was like, “I’m going to see. Let’s double-check to make sure everything is right.” I double-checked and I ran quickly back to my unicorn bubble because of my unicorn mortgage broker and I’m a unicorn realtor and I have my charts. I have everything good to go. Dino doesn’t care about making any money off of me.
All he cares about is that it’s the best financial decision for me because if I’m making a good financial decision, I’m going to keep using them for the next 50 years of my life. It’s a long-term relationship and it’s financially beneficial for everybody. Everyone that says like, “If you’re trying to get podcasts people or people that can make a paycheck.” That is why they want you to buy now and you should wait until the bubble burst. It’s a bunch of lame, not smart stuff.
We both looked at each other and went, “We got to get this offer from this lady right now.” I read your mind there too. I know what you’re thinking. You and I have never even talked about that before. I genuinely freaked out of the unicorn bubble because, God bless him, Dave Ramsey got you to the position. Fourteen-year-old Madison grew so much with him, and there are some people that are going to buy a home, all Dave Ramsey style, because getting beyond a simple mindset for them is too much. It’s obviously a big, crazy endorphin rush for you. It’s an astute understanding for you to realize that you take the bits and pieces of what it is and I appreciate what you said. I’m glad that you’re a tough person to get to hear that I’m the person that you trust because I know you scrutinize like a mother.
I spoke to many people. I got recommendations from friends and from a realtor. They loved it. “Susie, my sister.” I have a good friend that is a realtor. She got her license, and she’s dipping her toes into it. She’s a little bit hurt that I didn’t use her as my realtor? Probably, but I would be in a scary financial situation if I didn’t have the right team and I didn’t have the knowledge. Now, like me, who didn’t know Jack anything about real estate before, I can constantly have conversations with about people with what my process was, what I did, how I prep for it because you didn’t hide anything. There was no closet door full of skeletons. It was literally all laid out.
I understood every single thing. I had the perfect team that understood what I needed. They answered my questions and handled the market the way it needs to be handled. The majority of realtors and mortgage brokers aren’t going to have that experience or know how to do it. The experienced ones that do, they don’t care about a first-time homebuyer. Most experienced realtors, especially in Orange County, they’re caring about the $6 million Laguna Beach House.
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You’re going to get passed off to the new kid on their team.
That’s what happened to me before I came across your show and those people knew nothing. They cleaned and answered my questions. To find somebody like you that cares about a first-time home buyer because you could go and you could easily go and sell the $10 million Newport Beach Home every five minutes. Those are a dime a dozen around here. Those clients are a dime a dozen around here. The fact that you actually dedicate your career to helping people like me is admirable and it set me up that I can be one of those $10 million Laguna Beach owners in six years.
You will and myself or my son will help you buy it. I will be doing the show full-time. It will be me, Dino’s kid and my son. For you, I’ll probably still be there. I’ll get off the retirement boat to come help you. What I’ll do is I’ll sail right up to the house that you’re going to buy because that’s where it’s going to be.
We’ve made the best financial decisions throughout the course of our relationship.
I’m humbled and I have to tell you the respect is mutual. I feel honored to be able to have worked with you. It fills me up and I want other people out there to realize that you can achieve on multiple different levels. There will be people that will be able to help you along the way. You don’t have to feel lost. You don’t have to feel empty. If you achieve a third of Madison’s grasp of something, you’re still going to be way ahead of the rest of everyone else. Someone that’s bright and is ahead of the game and talking about figuring out her expenses at fourteen years old, that’s not everybody. Even that person was completely lifted up when you got to a point where the team was as big a part as you doing your research.
Research is horrible. Prior to finding the podcast, it was so hard and nothing was right. I put my email and phone number on a form. I got five million phone calls.
When you go out to talk to people, then you become something they’re trying to capture. I do something unique. I try to educate.
Giving up free information to people should be enough proof right there that you’re in it for a good cause there’s a lot of money to be made in real estate. You can watch Selling Sunset on Netflix and see that. Anybody knows that.
I stab myself every time I watch those shows, but this is the thing. I didn’t do it at this age because I didn’t have me in a time machine. You had me and then this is going to go to other people. Those agents out there who help people plan, we’re going to rise. We’re going to change the industry because this next generation isn’t going to tolerate it.
What needs to happen is to prep financially, be smart, be ready. Don’t make a decision before you’re ready because otherwise, you’re going to have a house payment you can’t afford. Be smart with your finances and plan, then find the right team. As soon as you find the right team, trust them. If you’re in Orange County, you’re safe.
I am hearing some stories like this. I’ve been doing this a long time. I’ve got unicorns all over the place. We’ve got great people in Portland and Denver. I had a phone call with two people from Atlanta. When you talk to a realtor, I can tell in 25 seconds if that realtor on the other end that I’m talking to is going to be part of the unicorn nation or if the unicorn bubble is foreign to them and then I hang up.
If you’re in the unicorn bubble, trust the process, but it’s a scary process if somebody is trying to finagle you and make a paycheck off you because that is 99% of the people in the industry. You will end up going house broke because you had a bad team and all of that. Don’t let that scare you as long as you’re financially good and you’ve set yourself up and you’ve talked to your unicorn. You guys have your plan. Trust the process because it will get you far as long as you can trust your team.
Find somebody you can trust and read David Sodini’s show. His questions that you meant that you as a realtor, you’re going to have your own questions. The second you have that feeling of relief after you’ve talked to somebody, that’s your unicorn, because anyone that’s not your unicorn, you’re going to have more questions and feel more stressed out that phone call. If you get that second of relief, you’ve found your unicorn.
We’ve got 167 or 187 nationwide now. I had two phone calls before you and I talked. I’m talking to people all the time. Thank you very much. I’m humbled that you said some nice things. It’s exciting for me to work with you and I want everyone to have an experience like you did. I can’t say that. It was an awesome summer for me. All these different people, multiple offers and all kinds of crazy stuff. It was fun. It’s re-energized me.
I got all this stuff and now when I talk to other unicorns, if they’re not vibing right away, done. I’m fine. Go ahead. You work with your big listing people. There’s someone around the corner in your neighborhood who’s going to be good. We’re finding them. I hope that you got a lot out of Madison. I learn every time I talk to her. This time, I’m stealing it, getting your unicorn bubble.
It was scary. The moment I ventured out, I was like, “Why did I second guess anything?” I still thought I needed to second guess it because I had been burned by everybody else in this industry, but it was great. I don’t take congratulations and gratitude lightly. I’m nitpicky in particular.
You’re a tough cookie. This is the highest compliment I could ever get. Thank you very much. If we can get through all this Delta crap, let me know when your place has done because I still have a housewarming party to throw you.
You got to come and see. It’s going to be so cute.
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I want to throw you a party. We’ll probably still be in masks and stuff, but you do have an outdoor space so we can distance.
That part’s done. The patio is done. Everything’s all set up. I have a lot of gratitude. I am lucky that I found you because I don’t know where I would be without that and it’s made all the difference.
You set yourself up to get the level of service that was something where you could go even more with it. It’s a great combination. You worked your way to get here. I was pissed off at the industry after several years and wanted to work with someone like you. Perfect team. Thanks so much, Madison. I’m going to wrap this up with the other people. I’ll see you at the house.
Did I tell you Madison is a rockstar? What can we take away from her story that you can have a happy ending, dump your landlord and become more financially stable by paying yourself? I think probably the biggest takeaway from Madison is that she’s obviously a super conservative budget freak and I have no problem saying that to her face. She knows it and she digs it. She knows where every penny is. She said at the end of the month, she knows where it goes to zero, no matter what. Everything is accounted for. Someone that psycho-conservative still only put 5% down when she could have put 20% down.
Think about that. A crazy hyper budgeting, conservative person, and I use crazy in the nicest way, Madison, she still only put 5% down now. For those of you deep into your loan pricing studies, you might think that she’s nuts because she could have used a higher down payment for a lower monthly mortgage payment. That’s the goal, lower payment than she can use her money on other places, plus that 20% down would have avoided PMI, Private Mortgage Insurance, for an even lower monthly payment.
She’s not nuts. She has a plan for every cent of her money. She realized that 20% down on her $475,000 purchase, that was going to be a payment of $1,654. She looked at 5% down. That was going to be $1,995. What’s the difference with 20% down to 5% down? It was $341 more. The PMI on top of that, that she has to pay because she didn’t put 20% down, that would have been $94.
That means if she’d put 20% down, she would add a grand total monthly savings of $435. Someone like Madison, she can do something with $435 a month, but here’s the way it works. Twenty percent down, save $435 a month. Five percent down, pay an extra $435 a month but keep $23,750 in her investments because she would have had to pull from her investments to go from 5% to 20%.
To her, this is what she wanted to do and because she found a team, the unicorn bubble, that listened to the type of spender and saver that she was, we gave her all the options and we helped her with her overall lifelong plan. We didn’t see her as a price tag. We didn’t see this as a one-time deal. We didn’t get her approved and shove her into any deal. We discussed, planned, listened and found the deal that suited her long-term goals.
Someone like Madison saw the extra $435 a month in payment that she was going to have to do if she did the 5% option. She’s paying $435 more, but she saw that as the beginning of a brand new savings account. If there’s something Madison loves, it’s a savings account. That’s because that’s what owning property is. She got to keep the $23,750 that she’d worked hard to save and she kept that in her investment account, still earning the massive compound interest. That’s a financial tip for you.
A lot of times, people liquidate their old investments, which have a historically earlier buy date, meaning this is probably purchased at a much lower rate than you could purchase that same investment. It means it’s been working on compounding interest. She got to keep that accruing at the old lower purchase rate while she used her home as a new savings account, a new growing asset established in 2021. She was leveraging her initial deposit with a super sick low-interest rate of 3.2% while keeping her cash over there in that previously established compounding account. Do you get all that? Come on now. Don’t be mad. That’s why you’re here.
If you didn’t get it, no worries. You’re going to all that soon. Once you get a unicorn team and you break down your specific situation. To simplify, let me break it down this way. 5% down versus 20% down. In her particular situation, would she rather pay $435 a month less or have $23,750 in the bank for a rainy day? Think about that. You’re like, “Still, that’s $435 a month more. What if the month is tight?” You’ve got $23,750 in the bank account. Let’s say every month was tight. $23,750 equals 54.5 months. That’s how many months that she could have paid that extra $435 from her own cash or she could have thrown it to the house and not be able to touch it. Both things grow, but there’s always a different way to look at things.
The next piece that I got from Madison’s story is something that we learned from one of my other stories, Alvin and Ashley. Seeking the information to start the planning. That’s probably one of the biggest reasons that the show is out there and touches many people. People are not getting good information. They’re not getting the information they’re seeking because lots of realtors and lenders don’t like to help with that planning part. What happens? The first buyer on their own, they go out there and they try to get everything in ABC order and then you end up not setting yourself up for the best outcome. You end up going BCA or CBA or something like that.
This is by far the biggest mistake I see all the time with hundreds of first-time buyers that I’ve worked with and hundreds of first-time buyers all around the country who DM me messages. This is like driving without a map. You’re going to get somewhere with limited and perhaps sometimes incorrect information that you gather all on your own, but why do that? They’re tough to find. That’s why I call them unicorns. If you hire a pro for free to help you along the way, they’re going to ensure the best possible outcome for you and make sure that you’re doing everything in the right order.
How did she fix that? With my favorite new term, she curled up in that unicorn bubble. I love that. It’s like my boy Coach Lasso, totally thrilled to see his superstar score, found the training ground, the unicorn bubble. He bought into this system and ended up becoming a huge star with massive endorsement, contracts, fans and groupies and posters. Madison probably has posters of spreadsheets all over the bedroom walls.
Sticking with the sports metaphor, the ball is in your court. Who you choose matters. When you start with the pro can matter even more. You can flounder around for a little while when you could have been on the path of success a lot easier. Someday, I’m going to be so successful that I’m going to be able to say success. Find a great team like Madison did. You’ll hardly notice anything while you’re inside your unicorn bubble and the process will be easier than you ever expected. It’s your choice to make it a good one. Find a unicorn, get your bubble and get some magic.
If you’re looking for one, DM me, email me, join the How To Buy A Home Facebook page. Check us out on YouTube, Instagram, Twitter and even TikTok if you want to see an old man dance. It’s all under David Sadoni or How To Buy A Home. Follow, subscribe but most importantly, get yourself a plan. Don’t just read and dream about it. Go to HowToBuyAHome.com, send me a message and let’s see if we’ve got a local unicorn in your area yet to get you on your happy path.
I truly believe this, Ted Lasso style. Madison’s awesome, and so are you. Your story is next, but stories don’t start until you start it. Passive reading gets zero results, but asking a pro for help and getting the right guidance gets you off the bench and gets you in the game. Sports metaphors are all over the place. I’m going to finish with one. I know you’ve never played before, but Ted Lasso never coached soccer before, and he rules because he leans on that bubble that he’s created. Start now. You can do this.
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This podcast was started for YOU, to demystify things for first time home buyers, and help crush the confusion. After helping first timers for over 13 years, I knew there wasn’t t a lot of clear, tangible, useable information out there on the internet, so I started this podcast. Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out. And if you’re not already a regular listener, subscribe and get constant updates on the market. If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts, or write a review on Spotify. Let’s change the way the real estate industry treats you first time buyers, one buyer at a time, starting with you – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused. Viva la Unicorn Revolution!
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