January 18, 2025 • 32 mins
Join us on the Carolina Contractor Show as we navigate the tumultuous world of home construction and ownership. We set the stage for a deep dive into the challenges facing today's housing market, where rising house prices and limited inventory are creating unique hurdles for prospective buyers. From DIY renovations to selling a self-built home, we share personal stories and valuable insights that highlight the importance of making informed decisions in a fluctuating market.
As the conversation unfolds, we explore creative strategies that may just turn the tide for young adults aspiring to own a home. We discuss innovative ideas like investing in land for future development or considering vacant commercial properties as potential living spaces. With advice on budgeting, financial discipline, and the potential benefits of tax incentives and special loan programs, this episode is packed with actionable tips to help you navigate the complexities of today's economic landscape. Whether you're a seasoned homeowner or stepping into the market for the first time, these savvy strategies could be the key to unlocking your homeownership dreams.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to the Carolina Contractor Show with
your host, general ContractorDonnie Blanchard.
Carolina Contractor Show reallygreat show, great people,
fantastic hosts, eric and Donnie.
Important question, donnie,before we start the show who do
(00:23):
you have winning the Super Bowl?
We're going to revisit thisreal quick.
Speaker 2 (00:27):
I think in the beginning of the season you
caught me off guard and I pickedthe Philadelphia Eagles, and so
they had some ups and downsthis year, but they're still in
it surprisingly.
So I think I'm just going tostick with my initial bet and
leave the dance with who Ibrought Okay.
Speaker 1 (00:41):
I think that's really good and I think that's not a
bad choice.
I picked the chiefs.
I might be biased, but they'rein it too In it as of the moment
we've done the show.
I mean, things can changequickly, but we made these
predictions preseason, so no onecan say well, why did you wait
till January to make aprediction who's going to be in
the Superbowl, when you knew whothe playoff teams were in the
Super Bowl, when you knew whothe playoff teams were?
(01:03):
Nope, we don't play that way.
We put our gut into it and wehave a gentleman's bet no money.
We just get to mock the otherperson for a year, unless one of
our teams don't win, which Idon't know what we're going to
do with that.
Speaker 2 (01:19):
Yeah, I think that we hit three out of four, so San
Francisco 49ers are the onlyones that didn't make it.
But Baltimore, kansas city,philadelphia, let's go.
Speaker 1 (01:26):
Yeah, it's going to be good.
Always love football.
It's the best time of the year,all right.
Now back to the real thing.
Uh, you heard that guy startoff the show.
It's the Carolina contractorshow.
We'd like to talk about yourhouse.
We talk football because it'stopical and and you're probably
into football too if you'relistening to our show but
basically we talk building andconstruction and renovations and
DIY projects and house flippingand all sorts of stuff like
(01:48):
that.
If you hit the website,thecarolinacontractorcom, you
can find links to past shows.
You can download them inpodcast form.
We've also got our social mediaIG and Facebook and all that
stuff and YouTube and, as I'vementioned before, if you go to
the YouTube site, it's a chanceto say hey, I want to connect
those voices to something visual.
(02:09):
Well, to keep all the women atbay cause we're we both we're
not available.
Sorry, ladies, we use filterswhich make us look older than we
really are, but in truth,donnie and I are as close as
you're going to find to a GreekGod.
So when you go to the website,just remember we have filters on
, so we look like a contractorand a builder.
(02:31):
I guess I should say who I am.
I don't think I've done that,donnie.
My name's Eric Smith.
I work in home builders supplyin Wilson, greenville.
Donnie is a general contractor,owns Sure Top Roofing, owns
Blanchard Building Company and,as a general contractor, owns
Sure Top Roofing, owns BlanchardBuilding Company and as a
general contractor, he's reallythe boots on the ground of the
construction world.
I deal in the safe confines ofan office for the most part
(02:54):
selling supplies.
Now, me and Donnie don't dobusiness together, but it gives
you an idea how we work together, in the sense that I know one
side of the business is veryimportant, especially dealing
with customers.
In the sense that I know oneside of the business that's very
important, especially dealingwith customers.
Donnie deals with customers andcontractors and subs and a
whole lot of stuff.
So we just talk about thingsthat we know about and that's
what we do every week on theshow and if you have a question
(03:15):
about your house you can clickthe Ask the Contractor button.
It goes to.
Donnie answers those questions.
Sometimes we do them on theshow, other times we do those
questions as an entire show.
Not going to be doing thattoday.
We're going to be talking abouttrying to buy a house,
especially if you're in theyounger skew, but anybody's
affected about buying a housebecause you, donnie, like me,
(03:38):
are probably locked in at apretty sweet rate.
Speaker 2 (03:40):
Yeah, I got a really good rate and I would be foolish
to sell.
But, that being said, I've gota lot of sentimental value.
I built my house with my owntwo hands.
I designed it, drew theblueprints.
I spent a mini, a night herewith a heater, a radio and a can
of Iannowini's just you know,getting working through the
night man and um, anyway, it wasuh, it was.
(04:01):
It was fun.
It took me about 14 months tobuild the house, but I saved a
lot of money and my kids havespent just about every Christmas
in the house that I'm in.
Good interest rate paid waydown.
I still owe a little bit on it,but yeah, I don't think it
would make sense for me to selluntil my family gets a lot
smaller.
Kids move out, get on their own.
Speaker 1 (04:18):
And in my case, same thing and also would rather
reinvest money to upgrade thehouse than I would to want to
sell it and move somewhere else.
Because, again, interest ratesdo play a part in this.
And if you're in the youngergenerations, I have a niece and
her husband and her just boughta house and they have a growing
family and it's not impossible,but it is hard to buy a house
(04:42):
and so we're going to go oversome of those things today and
we also we're probably going totry to get a lender on sometime
and do a show with a mortgagelender who really can help
people figure out.
How hard do I really need tohave 20% cash down?
Oh, it's impossible to buy agood house today.
Where should I live?
They give information that theaverage person won't know.
(05:03):
So we're not going to pretendwe're lenders.
So we might talk about interestrates, but I think, from my
experience of talking to youngergeneration about buying a house
, their biggest problem, donnie,is they have big eyes that are
bigger than their bank accountand they want like their forever
home.
I have an idea of a beachfronthouse.
It's a just steps off the oceanand it has eight bedrooms and
(05:26):
six baths or maybe even theirdream house, isn't that
expansive, but it's still maybesomething in the future.
They need to start off with astarter house, so to speak
Absolutely.
Speaker 2 (05:39):
I think the internet and DIY shows on TV are to blame
a lot for that.
You know, these people getideas off of Pinterest and they
shop around and what you justsaid.
Their eyes are bigger thantheir pocketbook and that's a
real thing.
Because they want all the bellsand whistles and they don't
realize that.
You know, a starter home isabout the only thing realistic
(06:00):
for them when they're in astarter job.
Speaker 1 (06:03):
Yeah, and we'll go over the definition of starter
home and what that is, becausethat phrase is thrown around a
lot.
I do want to give some funfacts.
Maybe they're not fun.
Some people think if I don'thave a degree and a good job and
earn this amount, I'm not goingto be able to get a house ever.
Not necessarily true.
The average income of a collegegrad is $77,636.
(06:26):
That's with a bachelor's degree.
A high school diploma gets you,at about the same age, $42,500.
Now, right off the bat you cansee there's a big financial
advantage to that degree.
But the average debt of acollege graduate with that
bachelor's in the USS is $29,300.
For someone in North Carolinait's really high.
(06:49):
The average college tuitionstudent loan debt, I should say,
in North Carolina is $38,695.
So if you're buying a house andyou have that degree, your
salary might be $30,000 more,but your debt is almost $40,000
right off the bat.
(07:09):
So a person who has a trade job, which we're big fans of, might
actually have a betteradvantage to get a house,
especially if they save becausethey're not having to pay off a
debt load right out of school.
Speaker 2 (07:21):
Not to mention if they were smart and stayed at
home their first four years outof high school.
They may be making less moneyand of course that was just
averages that you threw outthere but they may make less
money but they've had four yearsto accumulate a lot more for a
down payment and so forth.
And I just think that of coursewe'll get into that with the
mortgage lender next week, butthat makes life a lot easier
(07:43):
when you can come up with thatdown payment because you really
don't have any expenses exceptfor food and gas.
And I just think it makes sense.
And I'm a big proponent oftrade schools, like you
mentioned, we've done severalprograms where we covered all
the pros and cons of tradeschool versus high school,
versus college.
And unless there's a specifictrade that your college
(08:04):
specializes in and everybodygoes to NC State for engineering
or something like that, if youdon't come away with any kind of
skill set that you can actuallyapply in a job in year one,
(08:31):
then I don't know if I agreewith it.
I listen to a psychologist allthe time and this guy he's great
, but he always says thatcollege is just pleasure island
for teenagers.
For four years he takes it astep further in saying that
young men.
It handicaps those guys becausethey don't have to say what
they're going to do for finiteanswer and, in all fairness, not
everybody knows what they'regoing to do when they're 20, 21.
(09:02):
But at the same time, I justthink that it's a very expensive
thing to come out of collegewith a lot of debt and a very
important point in your life,and those four years between 18
and 22 are super critical.
Speaker 1 (09:15):
We're going to talk about this in a little bit more
detail, but I think it's atwo-pronged approach.
If you're a young kid or ifyou're a parent and you've got
kids that are even in middleschool, it's never too early to
start setting their mind of whatthey would like to have in life
, not only just a job.
But we never talk to our kidsabout a house.
They need a mindset for whatthey would like to get and they
(09:38):
can't start too early.
And the reason I say middleschool is because middle school
leads to high school.
Good grades in high school,very good grades in high school,
as a matter of fact lead toscholarships, so you can still
go to school and not pay a lot.
We instill that in our threekids.
My son right now is in college.
I'm not going to name thecollege.
It's an all men's college, sothere's only a few in the U?
S.
You could probably figure itout.
(09:59):
But he worked really hard inhigh school and he got his
associate's degree in highschool and he got almost a
quarter of a million dollarsfrom this school that he attends
in scholarship money.
So he's going to have almost nodebt and he's not going just
for fun or using a uselessdegree.
He wants to work in somethingenvironmental, environmental
(10:19):
biology, something that youcan't trade school for, but he
knows what he wants to do and heknows what he wants.
Speaker 2 (10:27):
So it's a good time to start, I think it's exactly
the opposite of what I just saidin Zach's situation.
Quick question Does he evenrealize how big of a deal that
is?
Speaker 1 (10:38):
That's funny.
You say that, donnie, becausemy wife and I, kim, have tried
to convince him he did anamazing thing and it's slowly
registering.
But if you told him his firstsemester in college, we were
blown away straight A's.
The only thing he didn't get anA in was chemistry, and that's
basically because he had toteach chemistry 101 college
(11:00):
level himself to himself and hestill got a C plus in it.
Um, but he, he doesn't.
He doesn't realize it till hispeers talk to him and realize oh
, I actually did pretty amazinghere, but yes, he did.
We're parents, we don't meanmuch.
Our opinion doesn't mean muchsometimes to our kids.
Speaker 2 (11:22):
Biggest takeaway there is how much he took after
his mother.
Speaker 1 (11:25):
I'm not going to deny that she's the smart one my
wife's multiple degrees,master's, and she also not to go
too far off the rails here, shetook a finance course through
Campbell University and gotcertified to teach it in high
school.
So she did basically home ec,ec budget, how to manage your
money.
They're bringing that back toschools.
(11:45):
By the way, Her first year waslast year.
All of her students passed it.
She got recognized for it, butshe's got a certification now on
that.
So she's the brains.
I'm the beauty.
We all have our gifts.
We just need to embracewhichever one they are.
But, nice, she got from him.
The beauty.
We all have our gifts.
We just need to embracewhichever one they are.
But she got from him.
Okay, let's go back to thistopic.
Back to the subject yeah,Starter house.
I want to talk what the quickdefinition of a starter home is.
(12:07):
It's a house in the lower thirdof a home value in a given
region and the US average,according to Zillow, is $196,000
.
Let's just say $200,000 for astarter home.
That's an amazingly largeamount of money.
A mortgage on that 30-year withthe current rates at about 7%
or so, that's about $1,350 amonth.
(12:29):
That's for a small house andI'm paying less than that a
month for a big house.
So having that low interestrate locked in really helps a
lot.
The other thing you're going tohave to think about if you want
to get a house is it's okay toget a starter home.
That's why they call it thatit's not to be.
Your long-term house is whatyour debt to income ratio needs
(12:50):
to be.
A lot of lenders again we'llhave a pro on in the very near
future say 25, 28% of yourmonthly gross income is
preferred, but some people areit's 45% and that's considered
not unusual and that kind of.
I don't know.
That's a.
That's a huge amount of yourmoney going to your house
payment Remember your mortgagepayment, isn't it?
You're going to have utilitiesand taxes, escrow things like
(13:13):
that.
So, um, you can be a.
Was it a?
House rich, cash poor yeah,that's kind of scary.
So I did have some things Iwant to talk about with lending,
but I don't know if I wanted toget into that, since we were
going to get a pro on.
So let's go somewhere where thebig question is that you might
(13:33):
be able to help.
Donnie, how do we get in thisplace where buying a house seems
impossible.
Is it one thing or multiplethings?
Speaker 2 (13:41):
Yeah, I think that it's the perfect storm and it
all just kind of happened at thesame time.
So big thing is higher houseprices.
My house jumped up in valuewhat?
$200,000 since the pandemic andthe cost of everything has gone
up.
You know, you, you think about,uh, the next part of that is is
(14:03):
uh, inventory.
We still don't have the house,the small, especially the small
houses out there to uh supportall the influx we have here in
North Carolina.
We, we set up, you know, sixmonths ago how North Carolina is
the third most influx state inthe country and, uh, we're
behind Florida and Texas.
And aside from that, everybodywants to come here.
On top of that, where I am, uh,right here west of Raleigh,
(14:25):
where the corridor of 40 and 85emerged between Greensboro and
Hillsboro, it just tons and tonsof businesses are coming here
and I mean there's constructiongoing everywhere, not only the
workers, uh, constructionworkers, but the future
employees.
Everybody's got to find a placeto live.
So I just think that theinventory shortage has a big
(14:45):
thing to do with that.
You know, student loan, debt itcosts more than ever to go to
college.
Now the tuition, it's justsilly.
It's about five times what itused to be when I went to
college, and maybe that's normal, but it just, it just seems
like a lot when you, when yousee just how much these colleges
are charging and I think that alot of those are taking
advantage of every grant programin the book and you think about
(15:07):
when you get a starter job,that's the lowest income you're
probably going to have in yourcareer.
So that, coupled with all thosethings, it's just, it's not a
good situation.
The lender lending guidelinesyou know post 2008,.
Everybody had to crack down onthe criteria to give a loan to a
young person.
So you got that and you know, Ijust think that this isn't on
(15:33):
the hard list.
But inflation.
You got to think about how muchit costs for insurance, gas,
groceries and just the cost ofliving, and that's got to come
into play.
When it used to cost what$1,200, $1,500 a month for just
living expenses, you know that'sgone up by at least 50% and I
just don't like the odds for theyoung folks.
(15:54):
What's your take on it?
Speaker 1 (15:56):
Well, the inflation up like a rocket, down like a
feather.
It's not going to abate quicklyand inflation is tied a lot to
(16:18):
government spending.
And so if Trump, getting inoffice, can get the doge or as
were, back to where they werearound COVID, the shortage would
just take off again because ofsupply and demand.
People will be buying it ortrying to buy and trying to
build, and they couldn't keep up.
But there's no one quick fixand I don't have a magic wand
(16:47):
description that would say, hey,this is what caused all this.
I think there is.
People need to be honest withtheir priorities, though I think
there's a lot of people thatsay I can't afford a house.
But if you went through afinance course, say like my wife
teaches or Dave Ramsey orsomething, and you were honest,
you would go yeah, I can'tbelieve this, but I found $385
more a month that I was peeingaway on little stuff.
(17:08):
Or well, I want to get a housebut that car has a sunroof.
Or I know I have nine guitars,but that custom strat's pretty
cool, I want that with my coffee.
So there's a reality of you'vegot to get into a budget if you
want extra stuff that has to goon top of that house payment,
car payment, your leisureactivities, and I think that's a
(17:44):
big wake up call.
Speaker 2 (17:45):
It was for me.
I remember when I got out ofcollege and I lived in an
apartment and I remember Ineeded a set of tires, and tires
back then were 400 bucks, 500bucks for a set of tires, and I
think that's the last thing Iever borrowed from my dad
(18:20):
no-transcript and and he stillhad a pretty darn good life on
top of that and I thought I gota long way to go.
So that was my wake up call andI I agree wholeheartedly.
It's just, uh, these kids haveto make better decisions with
their money and andunfortunately they just don't,
just don't have the capacity todo that.
They just came from mom anddad's dime in most cases and
(18:43):
until they have to go throughabout two hard years, and it's
just, it's hard to say that.
And, like I mentioned, with theinventory shortage, everybody
not everybody, a lot of thepopulation bought houses during
COVID and that was right, theywere smart, that was right
before the cost of everythingshot through the roof with the
lumber price increases and soforth, but not only that.
(19:06):
Like you mentioned before,nobody that has a good low
interest rate from five, six,eight years ago is going to sell
right now, because you know youwouldn't even make a lateral
move, at best You'd have to gobackwards and I don't, I don't
know.
Uh, it's just, it's not a greatscenario and I know we're going
to get to some strategy here,but um, it's, it's the perfect
(19:27):
storm.
I think that if any of theseareas could ease up a little, it
may make things easier for theyoung folks.
Speaker 1 (19:32):
Yeah, I think and let's be honest, we were
fortunate in our time frame ofgrowing up, donnie we kind of
could have it all.
We could have the car and thehouse payment and those extra
things.
Right now it's temporary, we'rehoping, but you can't get all
those great things, so you gotto make that priority.
We mentioned President Trumpearlier.
(19:54):
In a new administration he getssworn in.
After the inauguration there'sa new phrase coming out Trump
effect and we think there's somethings that could happen with
housing with the Trump effectLower interest rates, as we've
just mentioned multiple times inthe show.
Tax incentives Right, he couldask Congress to develop some
sort of tax incentive orincentives plural that people
(20:18):
could have that would help themget into a house.
Special loan programs as I said, overspending is the biggest
problem, but I mean, I think I'mnot saying the government needs
to pay for your house, but theyshould lower your taxes or give
you a break in some way if ithelps you get into a house, and
I think Trump would be a big fanof that, wouldn't you agree?
Speaker 2 (20:40):
I do.
I think that that might be theonly short-term solution,
because he's not going to fixinflation overnight, he's not
going to fix the inventoryproblem overnight.
He obviously can't just paycollege grads more and force
companies to come out of pocketan extra 10 grand a year per
person.
I mean there's so many thingsthat are long term to solve this
(21:02):
, but I think in the short term,exactly what you said getting
the interest rate down, that's abiggie.
I mean, that's probably thebiggest because it could drop
somebody's house payment.
You know, five, six, eighthundred dollars a month on even
a starter house and taxincentive on the backside of
that.
These young folks don't knowabout taxes yet, but anyway it
(21:23):
may.
It may shape what they do atthe voting booth.
It did me and I don't.
I don't think the taxes are bad, but but I do think that we pay
way too much, and especiallybeing a self-employed person.
I do think that we pay way toomuch and especially being a
self-employed person, not veryfair on that end.
But you know the tax incentivesand lowering that interest rate
, if there's a special firsttime buyer program and I do
think that there are a couple ofthose that if we get the
(21:46):
mortgage guy on next week thathe's so well versed in, that
there are some things in placenow, and so that that can only
get better.
All right, this is.
Speaker 1 (21:53):
Carolina Contractor Show now, and so that can only
get better.
All right, this is CarolinaContractor Show and we're
talking about how hard it is tobuy a house, especially younger
generation.
And what Donnie was referringto is we're going to get a
mortgage or a lending expert onthe show next week to talk in
part of the process of buying ahouse that we just don't know
enough about.
But let's kind of refocus,donnie.
Instead of trying to tellpeople how do you buy an
(22:15):
existing house?
A few minutes ago I was talkingabout if you're in middle
school or high school or youhave kids in that age, you can
start help them focus on how toget a house in the future.
But there's maybe anon-traditional way you talked
about.
Even buying land is a great wayto kind of avoid the prebuilt
(22:37):
house that you're trying to buyis maybe start thinking before
the house is even on the land.
Let's get some land for ourself.
Is that a good option?
It?
Speaker 2 (22:45):
is, and I'm going to talk to the people who have a
good living situation right now.
So if you have a supportiveparent and you can hang out at
your parents' place for a yearor two extra, or maybe even a
little bit longer, you know,land's not a bad idea.
My fiance's daughter she's 22and fresh out of college has a
great job, but it is anentry-level job and the thought
(23:06):
of her having to come up with$1,800 to $2,000 a month to buy
a starter house, it just doesn'tmake sense.
And she sends us links fromZillow all the time hey, check
this out, check this one out.
And of course I always look atthe location, I look at the size
and she's sending us thousandsquare foot plans for $270,000.
And it crushes me as a builderto know what I could build that
(23:29):
house for if she had a piece ofland.
So I think land is the way togo.
And I'll take that a stepfurther and say in that if you
could find a piece of land,whether it be an acre to five
acres, and you could put a muchsmaller down payment on that
land than you could on an entirehouse, and then when you get
that land, this is where theplanning comes in, because you
(23:51):
could put either a starter homeon that, and that would just be
for you, which isn't a badinvestment idea.
But you could put either astarter home on that, and that
would just be for you, whichisn't a bad investment idea.
But you could also look alittle further, because duplexes
and triplexes, you know you'repaying by the square foot.
So even a duplex it, becauseit's two units, it's not going
to cost any more by the squarefoot.
Well, maybe a little bit more,cause you got two water heaters
(24:11):
and, um, you know, two HVACsystems, but it's not
exponentially more.
There's only a handful ofthings that you have to pay
double.
And what that could do is, uh,you could put someone in the
unit next door to you that couldpay the rent for the next door
unit and pay the mortgage loanfor the whole thing.
And you know, I skipped a stepthe the land.
(24:32):
If you could get the land paidfor in just a few short years
and we're able to have a goodliving situation that allowed
you to do that you could usethat paid for land as collateral
, you know, to do theconstruction loan.
So, um, I say all that to saythat young people are going to
have to get more, uh, creativethan ever.
And I even had the thought of,um, if you live in an area with
(24:54):
like a downtown portion of whereyou know where we live the all
the shopping and restaurantshave migrated to the Western
part of the County.
So we have a downtown area.
That's really nice and the theyou know the city's put a lot of
money into it to maintain it.
So it's not a bad area oranything.
But there are a lot of vacantcommercial properties.
You know, look, look or try tomake connections and there are a
(25:15):
lot of older folks who haveplenty of money who are pulling
for the younger generation.
You may find someone who has acommercial property who would be
willing to owner finance thator sell it to you in some form
or fashion with creativefinancing, and you could put a
little money into that, remodelthe upstairs, live upstairs and
rent the downstairs out to acommercial business.
And you know the rent for acommercial business, even in a
(25:36):
slower downtown area, is goingto be more than what would be
for, you know, that duplex orthat residential, um, that
residential unit.
So that that's one idea.
I missed out on a heck of anopportunity in Mebane when I was
in my mid twenties and the ladywanted I don't know, 60,
$70,000 for it, and I had littlechildren and I said there's no
(25:58):
way possible I could do that.
And this predatory how do yousay that?
What's the right word for that?
These people who come in andscoop up commercial properties
for peanuts oh, jerk balls, yeah, something like that.
And the guy came in and I thinkhe bought it for about 30 some
thousand and she was just readyto get rid of it because it was
(26:18):
a headache I could have.
I could have negotiated alittle bit better and got that
property cheaper.
When I say it it hurts mystomach to ride by there.
Now there it's.
It's completely occupied.
Five different uh units arerented out.
The upstairs would have been abeautiful dance studio that I
could have rented out, you know,in a prospering, growing town,
(26:40):
and I missed out on that.
But I said the commercial ideajust because that's always,
that's always in the cards andyou know that could set you up
for a long-term investment,which is a great thing.
The next thing I'll saystrategy wise and I had this
idea a long time ago and thenkids happen.
But I was going to startsomething called expandable
blueprints and I don't thinkthat there's anything online
(27:01):
like that still.
But I had an idea to sell ahouse plan and a you know phase
one, two, three, four.
Phase one being you knowsomething with a very attractive
front elevation and having, youknow, headers in the walls
where you could actually do thebreakthrough to an addition.
And having phase two where youcould add to the sides or the
back or just different thingsstructurally that would support
(27:22):
it for the roof line thatpiggybacked over on the other
rafters that were existing, andjust having something that
worked structurally for a youngcouple that could build phase
one when they could afford it,build phase two, three and so on
to four.
So, you know, something likethat wouldn't be a bad idea and
any architect is capable ofdoing that.
Gosh, if somebody wanted to dothat, you know, I would be
willing to draw those houseplans up for them.
(27:42):
But that was my big idea and Ithought about coming up with
about 20, 30 plans, puttingthose online and just seeing
what happened.
But I still think that's a goodidea regardless, if I ever make
a website to do that and um, Ithink the fourth point that I
wanted to make and I pulled allthese are out of my brain.
None of this is isn't off ofsomething I read on Google.
But uh, get your kids and I'magainst credit cards, but they
(28:07):
do have prepaid credit cardswhere you could put 500 or a
thousand dollars and it countsjust like a credit card in terms
of building your credit scorewhen your children turn 18, go
ahead and if they're going tospend gas money, food money and
you're going to help them out,go ahead and get them a prepaid
credit card so they can build acredit score, because if they
have four years of that and theynever have a ding on their
(28:27):
credit or anything, I can't tellyou how valuable that is to
have a good credit score cominginto 22, 23 years old.
Speaker 1 (28:33):
So just an easy way to plan ahead, yeah, and you
just teach them to be carefulwith it, Say, just go out and
fill up your tank with 25 bucksof gas and pay it off, and then
go to the movies next month andyou know after four years well,
seriously, after four years yougot 50 months of credit history
and a great record.
They're going to just see thatyou did use it and you did pay
(28:56):
it and you don't have any dingsand it's automatically going to
go up.
Don't go with.
Be aware of the credit fixersthough, that say, oh, we'll
repair your credit for athousand bucks.
Usually you just end up out ofa thousand bucks and and they've
kind of done something, maybeunderhanded to you.
I do want to also add, like Isaid, my niece and her husband
worked really hard and they gotthemselves their house and they
(29:19):
have three kids, a baby alsojust born at the very end of the
year they get the right off thewhole 2024, and their baby was
born on the 30th.
But they found out after yearsof saying we can't get a house,
they found out they could whenthey asked a realtor and the
(29:39):
realtor said, oh, that's alllies about that part, or that's
not true, or that's true, buthere's what we're going to do.
And it wasn't but three monthslater they got their house.
So you need to ask people in thebusiness realtors, lenders what
can I do to get this house?
Because the news makes it soundimpossible.
So if you have a budget, you'rerealistic and you talk to
(30:01):
people who know something aboutit, you can get a house.
And 7% is not a horrible thing.
Please don't say 7%.
Mortgage is horrible.
When you have a credit cardwith 2,500 bucks on it at 29.99%
, you're going.
Well, that 7% for a house iscrazy.
No charging coffee on a creditcard and paying 30% is what's
nuts.
But you have a connection witha mortgage lender.
(30:23):
So next week we need to getthem on so they can go in some
detail and help people realize,especially the younger
generation, a house is not outof reach.
You just need to get someknowledge.
Speaker 2 (30:36):
Yeah, absolutely, and be creative and be aggressive,
all the things.
Houses aren't going to fall inyour lap like they used to.
You're not just going to drivedown the street and see a for
sale sign, make a call, do thedeal and you're all set.
It's a different time,different day and time and you
know, you young people, there'san opportunity out there to
learn a lot and we're here tohelp.
(30:59):
You can hit us up through thewebsite thecarolinacontractorcom
.
Click the Ask the Contractorbutton.
That will send a direct emailto us, and whether you're
Raleigh area, burlington area, Ihave an amazing connection with
real estate agents and mortgagelenders and it's taken me a
long time to build theserelationships, but I'm happy to
pass those contacts on to youguys, so reach out anytime.
Yep you.
Speaker 1 (31:19):
Eastern 95ers.
You cool people know thatbarbecue should be vinegar based
.
I know some realtors inNashville, wilson County.
Same type of thing legit peoplewho will just do anything they
can to help you get a house.
So we're in it for the youngergeneration, because our kids are
that younger generation.
So tune in.
Next time we're going to have areal knowledgeable person on
(31:40):
tell us about mortgage lendingand what you need to do if
you're in the market for a house, and you don't have to be young
, you can be our age If you'relooking for a house.
You might have questions andagain, hit the website
thecarolinacontractorcom.
Again, thanks for checking usout, check out social media,
check us out on YouTube and wehope to see and you hear us next
week on the Carolina ContractorShow.
Speaker 2 (32:01):
Thanks everybody.
Speaker 1 (32:03):
Make America great again and visit
thecarolinacontractorcom.
The Carolina Contractor ShowGreat people Eric and Donnie,
good ideas, big fan, reallygreat guys.
Welcome to the Carolina Contractor Show with
your host, general ContractorDonnie Blanchard.
Carolina Contractor Show reallygreat show, great people,
fantastic hosts, eric and Donnie.
Important question, donnie,before we start the show who do
(00:23):
you have winning the Super Bowl?
We're going to revisit thisreal quick.
Speaker 2 (00:27):
I think in the beginning of the season you
caught me off guard and I pickedthe Philadelphia Eagles, and so
they had some ups and downsthis year, but they're still in
it surprisingly.
So I think I'm just going tostick with my initial bet and
leave the dance with who Ibrought Okay.
Speaker 1 (00:41):
I think that's really good and I think that's not a
bad choice.
I picked the chiefs.
I might be biased, but they'rein it too In it as of the moment
we've done the show.
I mean, things can changequickly, but we made these
predictions preseason, so no onecan say well, why did you wait
till January to make aprediction who's going to be in
the Superbowl, when you knew whothe playoff teams were in the
Super Bowl, when you knew whothe playoff teams were?
(01:03):
Nope, we don't play that way.
We put our gut into it and wehave a gentleman's bet no money.
We just get to mock the otherperson for a year, unless one of
our teams don't win, which Idon't know what we're going to
do with that.
Speaker 2 (01:19):
Yeah, I think that we hit three out of four, so San
Francisco 49ers are the onlyones that didn't make it.
But Baltimore, kansas city,philadelphia, let's go.
Speaker 1 (01:26):
Yeah, it's going to be good.
Always love football.
It's the best time of the year,all right.
Now back to the real thing.
Uh, you heard that guy startoff the show.
It's the Carolina contractorshow.
We'd like to talk about yourhouse.
We talk football because it'stopical and and you're probably
into football too if you'relistening to our show but
basically we talk building andconstruction and renovations and
DIY projects and house flippingand all sorts of stuff like
(01:48):
that.
If you hit the website,thecarolinacontractorcom, you
can find links to past shows.
You can download them inpodcast form.
We've also got our social mediaIG and Facebook and all that
stuff and YouTube and, as I'vementioned before, if you go to
the YouTube site, it's a chanceto say hey, I want to connect
those voices to something visual.
(02:09):
Well, to keep all the women atbay cause we're we both we're
not available.
Sorry, ladies, we use filterswhich make us look older than we
really are, but in truth,donnie and I are as close as
you're going to find to a GreekGod.
So when you go to the website,just remember we have filters on
, so we look like a contractorand a builder.
(02:31):
I guess I should say who I am.
I don't think I've done that,donnie.
My name's Eric Smith.
I work in home builders supplyin Wilson, greenville.
Donnie is a general contractor,owns Sure Top Roofing, owns
Blanchard Building Company and,as a general contractor, owns
Sure Top Roofing, owns BlanchardBuilding Company and as a
general contractor, he's reallythe boots on the ground of the
construction world.
I deal in the safe confines ofan office for the most part
(02:54):
selling supplies.
Now, me and Donnie don't dobusiness together, but it gives
you an idea how we work together, in the sense that I know one
side of the business is veryimportant, especially dealing
with customers.
In the sense that I know oneside of the business that's very
important, especially dealingwith customers.
Donnie deals with customers andcontractors and subs and a
whole lot of stuff.
So we just talk about thingsthat we know about and that's
what we do every week on theshow and if you have a question
(03:15):
about your house you can clickthe Ask the Contractor button.
It goes to.
Donnie answers those questions.
Sometimes we do them on theshow, other times we do those
questions as an entire show.
Not going to be doing thattoday.
We're going to be talking abouttrying to buy a house,
especially if you're in theyounger skew, but anybody's
affected about buying a housebecause you, donnie, like me,
(03:38):
are probably locked in at apretty sweet rate.
Speaker 2 (03:40):
Yeah, I got a really good rate and I would be foolish
to sell.
But, that being said, I've gota lot of sentimental value.
I built my house with my owntwo hands.
I designed it, drew theblueprints.
I spent a mini, a night herewith a heater, a radio and a can
of Iannowini's just you know,getting working through the
night man and um, anyway, it wasuh, it was.
(04:01):
It was fun.
It took me about 14 months tobuild the house, but I saved a
lot of money and my kids havespent just about every Christmas
in the house that I'm in.
Good interest rate paid waydown.
I still owe a little bit on it,but yeah, I don't think it
would make sense for me to selluntil my family gets a lot
smaller.
Kids move out, get on their own.
Speaker 1 (04:18):
And in my case, same thing and also would rather
reinvest money to upgrade thehouse than I would to want to
sell it and move somewhere else.
Because, again, interest ratesdo play a part in this.
And if you're in the youngergenerations, I have a niece and
her husband and her just boughta house and they have a growing
family and it's not impossible,but it is hard to buy a house
(04:42):
and so we're going to go oversome of those things today and
we also we're probably going totry to get a lender on sometime
and do a show with a mortgagelender who really can help
people figure out.
How hard do I really need tohave 20% cash down?
Oh, it's impossible to buy agood house today.
Where should I live?
They give information that theaverage person won't know.
(05:03):
So we're not going to pretendwe're lenders.
So we might talk about interestrates, but I think, from my
experience of talking to youngergeneration about buying a house
, their biggest problem, donnie,is they have big eyes that are
bigger than their bank accountand they want like their forever
home.
I have an idea of a beachfronthouse.
It's a just steps off the oceanand it has eight bedrooms and
(05:26):
six baths or maybe even theirdream house, isn't that
expansive, but it's still maybesomething in the future.
They need to start off with astarter house, so to speak
Absolutely.
Speaker 2 (05:39):
I think the internet and DIY shows on TV are to blame
a lot for that.
You know, these people getideas off of Pinterest and they
shop around and what you justsaid.
Their eyes are bigger thantheir pocketbook and that's a
real thing.
Because they want all the bellsand whistles and they don't
realize that.
You know, a starter home isabout the only thing realistic
(06:00):
for them when they're in astarter job.
Speaker 1 (06:03):
Yeah, and we'll go over the definition of starter
home and what that is, becausethat phrase is thrown around a
lot.
I do want to give some funfacts.
Maybe they're not fun.
Some people think if I don'thave a degree and a good job and
earn this amount, I'm not goingto be able to get a house ever.
Not necessarily true.
The average income of a collegegrad is $77,636.
(06:26):
That's with a bachelor's degree.
A high school diploma gets you,at about the same age, $42,500.
Now, right off the bat you cansee there's a big financial
advantage to that degree.
But the average debt of acollege graduate with that
bachelor's in the USS is $29,300.
For someone in North Carolinait's really high.
(06:49):
The average college tuitionstudent loan debt, I should say,
in North Carolina is $38,695.
So if you're buying a house andyou have that degree, your
salary might be $30,000 more,but your debt is almost $40,000
right off the bat.
(07:09):
So a person who has a trade job, which we're big fans of, might
actually have a betteradvantage to get a house,
especially if they save becausethey're not having to pay off a
debt load right out of school.
Speaker 2 (07:21):
Not to mention if they were smart and stayed at
home their first four years outof high school.
They may be making less moneyand of course that was just
averages that you threw outthere but they may make less
money but they've had four yearsto accumulate a lot more for a
down payment and so forth.
And I just think that of coursewe'll get into that with the
mortgage lender next week, butthat makes life a lot easier
(07:43):
when you can come up with thatdown payment because you really
don't have any expenses exceptfor food and gas.
And I just think it makes sense.
And I'm a big proponent oftrade schools, like you
mentioned, we've done severalprograms where we covered all
the pros and cons of tradeschool versus high school,
versus college.
And unless there's a specifictrade that your college
(08:04):
specializes in and everybodygoes to NC State for engineering
or something like that, if youdon't come away with any kind of
skill set that you can actuallyapply in a job in year one,
(08:31):
then I don't know if I agreewith it.
I listen to a psychologist allthe time and this guy he's great
, but he always says thatcollege is just pleasure island
for teenagers.
For four years he takes it astep further in saying that
young men.
It handicaps those guys becausethey don't have to say what
they're going to do for finiteanswer and, in all fairness, not
everybody knows what they'regoing to do when they're 20, 21.
(09:02):
But at the same time, I justthink that it's a very expensive
thing to come out of collegewith a lot of debt and a very
important point in your life,and those four years between 18
and 22 are super critical.
Speaker 1 (09:15):
We're going to talk about this in a little bit more
detail, but I think it's atwo-pronged approach.
If you're a young kid or ifyou're a parent and you've got
kids that are even in middleschool, it's never too early to
start setting their mind of whatthey would like to have in life
, not only just a job.
But we never talk to our kidsabout a house.
They need a mindset for whatthey would like to get and they
(09:38):
can't start too early.
And the reason I say middleschool is because middle school
leads to high school.
Good grades in high school,very good grades in high school,
as a matter of fact lead toscholarships, so you can still
go to school and not pay a lot.
We instill that in our threekids.
My son right now is in college.
I'm not going to name thecollege.
It's an all men's college, sothere's only a few in the U?
S.
You could probably figure itout.
(09:59):
But he worked really hard inhigh school and he got his
associate's degree in highschool and he got almost a
quarter of a million dollarsfrom this school that he attends
in scholarship money.
So he's going to have almost nodebt and he's not going just
for fun or using a uselessdegree.
He wants to work in somethingenvironmental, environmental
(10:19):
biology, something that youcan't trade school for, but he
knows what he wants to do and heknows what he wants.
Speaker 2 (10:27):
So it's a good time to start, I think it's exactly
the opposite of what I just saidin Zach's situation.
Quick question Does he evenrealize how big of a deal that
is?
Speaker 1 (10:38):
That's funny.
You say that, donnie, becausemy wife and I, kim, have tried
to convince him he did anamazing thing and it's slowly
registering.
But if you told him his firstsemester in college, we were
blown away straight A's.
The only thing he didn't get anA in was chemistry, and that's
basically because he had toteach chemistry 101 college
(11:00):
level himself to himself and hestill got a C plus in it.
Um, but he, he doesn't.
He doesn't realize it till hispeers talk to him and realize oh
, I actually did pretty amazinghere, but yes, he did.
We're parents, we don't meanmuch.
Our opinion doesn't mean muchsometimes to our kids.
Speaker 2 (11:22):
Biggest takeaway there is how much he took after
his mother.
Speaker 1 (11:25):
I'm not going to deny that she's the smart one my
wife's multiple degrees,master's, and she also not to go
too far off the rails here, shetook a finance course through
Campbell University and gotcertified to teach it in high
school.
So she did basically home ec,ec budget, how to manage your
money.
They're bringing that back toschools.
(11:45):
By the way, Her first year waslast year.
All of her students passed it.
She got recognized for it, butshe's got a certification now on
that.
So she's the brains.
I'm the beauty.
We all have our gifts.
We just need to embracewhichever one they are.
But, nice, she got from him.
The beauty.
We all have our gifts.
We just need to embracewhichever one they are.
But she got from him.
Okay, let's go back to thistopic.
Back to the subject yeah,Starter house.
I want to talk what the quickdefinition of a starter home is.
(12:07):
It's a house in the lower thirdof a home value in a given
region and the US average,according to Zillow, is $196,000
.
Let's just say $200,000 for astarter home.
That's an amazingly largeamount of money.
A mortgage on that 30-year withthe current rates at about 7%
or so, that's about $1,350 amonth.
(12:29):
That's for a small house andI'm paying less than that a
month for a big house.
So having that low interestrate locked in really helps a
lot.
The other thing you're going tohave to think about if you want
to get a house is it's okay toget a starter home.
That's why they call it thatit's not to be.
Your long-term house is whatyour debt to income ratio needs
(12:50):
to be.
A lot of lenders again we'llhave a pro on in the very near
future say 25, 28% of yourmonthly gross income is
preferred, but some people areit's 45% and that's considered
not unusual and that kind of.
I don't know.
That's a.
That's a huge amount of yourmoney going to your house
payment Remember your mortgagepayment, isn't it?
You're going to have utilitiesand taxes, escrow things like
(13:13):
that.
So, um, you can be a.
Was it a?
House rich, cash poor yeah,that's kind of scary.
So I did have some things Iwant to talk about with lending,
but I don't know if I wanted toget into that, since we were
going to get a pro on.
So let's go somewhere where thebig question is that you might
(13:33):
be able to help.
Donnie, how do we get in thisplace where buying a house seems
impossible.
Is it one thing or multiplethings?
Speaker 2 (13:41):
Yeah, I think that it's the perfect storm and it
all just kind of happened at thesame time.
So big thing is higher houseprices.
My house jumped up in valuewhat?
$200,000 since the pandemic andthe cost of everything has gone
up.
You know, you, you think about,uh, the next part of that is is
(14:03):
uh, inventory.
We still don't have the house,the small, especially the small
houses out there to uh supportall the influx we have here in
North Carolina.
We, we set up, you know, sixmonths ago how North Carolina is
the third most influx state inthe country and, uh, we're
behind Florida and Texas.
And aside from that, everybodywants to come here.
On top of that, where I am, uh,right here west of Raleigh,
(14:25):
where the corridor of 40 and 85emerged between Greensboro and
Hillsboro, it just tons and tonsof businesses are coming here
and I mean there's constructiongoing everywhere, not only the
workers, uh, constructionworkers, but the future
employees.
Everybody's got to find a placeto live.
So I just think that theinventory shortage has a big
(14:45):
thing to do with that.
You know, student loan, debt itcosts more than ever to go to
college.
Now the tuition, it's justsilly.
It's about five times what itused to be when I went to
college, and maybe that's normal, but it just, it just seems
like a lot when you, when yousee just how much these colleges
are charging and I think that alot of those are taking
advantage of every grant programin the book and you think about
(15:07):
when you get a starter job,that's the lowest income you're
probably going to have in yourcareer.
So that, coupled with all thosethings, it's just, it's not a
good situation.
The lender lending guidelinesyou know post 2008,.
Everybody had to crack down onthe criteria to give a loan to a
young person.
So you got that and you know, Ijust think that this isn't on
(15:33):
the hard list.
But inflation.
You got to think about how muchit costs for insurance, gas,
groceries and just the cost ofliving, and that's got to come
into play.
When it used to cost what$1,200, $1,500 a month for just
living expenses, you know that'sgone up by at least 50% and I
just don't like the odds for theyoung folks.
(15:54):
What's your take on it?
Speaker 1 (15:56):
Well, the inflation up like a rocket, down like a
feather.
It's not going to abate quicklyand inflation is tied a lot to
(16:18):
government spending.
And so if Trump, getting inoffice, can get the doge or as
were, back to where they werearound COVID, the shortage would
just take off again because ofsupply and demand.
People will be buying it ortrying to buy and trying to
build, and they couldn't keep up.
But there's no one quick fixand I don't have a magic wand
(16:47):
description that would say, hey,this is what caused all this.
I think there is.
People need to be honest withtheir priorities, though I think
there's a lot of people thatsay I can't afford a house.
But if you went through afinance course, say like my wife
teaches or Dave Ramsey orsomething, and you were honest,
you would go yeah, I can'tbelieve this, but I found $385
more a month that I was peeingaway on little stuff.
(17:08):
Or well, I want to get a housebut that car has a sunroof.
Or I know I have nine guitars,but that custom strat's pretty
cool, I want that with my coffee.
So there's a reality of you'vegot to get into a budget if you
want extra stuff that has to goon top of that house payment,
car payment, your leisureactivities, and I think that's a
(17:44):
big wake up call.
Speaker 2 (17:45):
It was for me.
I remember when I got out ofcollege and I lived in an
apartment and I remember Ineeded a set of tires, and tires
back then were 400 bucks, 500bucks for a set of tires, and I
think that's the last thing Iever borrowed from my dad
(18:20):
no-transcript and and he stillhad a pretty darn good life on
top of that and I thought I gota long way to go.
So that was my wake up call andI I agree wholeheartedly.
It's just, uh, these kids haveto make better decisions with
their money and andunfortunately they just don't,
just don't have the capacity todo that.
They just came from mom anddad's dime in most cases and
(18:43):
until they have to go throughabout two hard years, and it's
just, it's hard to say that.
And, like I mentioned, with theinventory shortage, everybody
not everybody, a lot of thepopulation bought houses during
COVID and that was right, theywere smart, that was right
before the cost of everythingshot through the roof with the
lumber price increases and soforth, but not only that.
(19:06):
Like you mentioned before,nobody that has a good low
interest rate from five, six,eight years ago is going to sell
right now, because you know youwouldn't even make a lateral
move, at best You'd have to gobackwards and I don't, I don't
know.
Uh, it's just, it's not a greatscenario and I know we're going
to get to some strategy here,but um, it's, it's the perfect
(19:27):
storm.
I think that if any of theseareas could ease up a little, it
may make things easier for theyoung folks.
Speaker 1 (19:32):
Yeah, I think and let's be honest, we were
fortunate in our time frame ofgrowing up, donnie we kind of
could have it all.
We could have the car and thehouse payment and those extra
things.
Right now it's temporary, we'rehoping, but you can't get all
those great things, so you gotto make that priority.
We mentioned President Trumpearlier.
(19:54):
In a new administration he getssworn in.
After the inauguration there'sa new phrase coming out Trump
effect and we think there's somethings that could happen with
housing with the Trump effectLower interest rates, as we've
just mentioned multiple times inthe show.
Tax incentives Right, he couldask Congress to develop some
sort of tax incentive orincentives plural that people
(20:18):
could have that would help themget into a house.
Special loan programs as I said, overspending is the biggest
problem, but I mean, I think I'mnot saying the government needs
to pay for your house, but theyshould lower your taxes or give
you a break in some way if ithelps you get into a house, and
I think Trump would be a big fanof that, wouldn't you agree?
Speaker 2 (20:40):
I do.
I think that that might be theonly short-term solution,
because he's not going to fixinflation overnight, he's not
going to fix the inventoryproblem overnight.
He obviously can't just paycollege grads more and force
companies to come out of pocketan extra 10 grand a year per
person.
I mean there's so many thingsthat are long term to solve this
(21:02):
, but I think in the short term,exactly what you said getting
the interest rate down, that's abiggie.
I mean, that's probably thebiggest because it could drop
somebody's house payment.
You know, five, six, eighthundred dollars a month on even
a starter house and taxincentive on the backside of
that.
These young folks don't knowabout taxes yet, but anyway it
(21:23):
may.
It may shape what they do atthe voting booth.
It did me and I don't.
I don't think the taxes are bad, but but I do think that we pay
way too much, and especiallybeing a self-employed person.
I do think that we pay way toomuch and especially being a
self-employed person, not veryfair on that end.
But you know the tax incentivesand lowering that interest rate
, if there's a special firsttime buyer program and I do
think that there are a couple ofthose that if we get the
(21:46):
mortgage guy on next week thathe's so well versed in, that
there are some things in placenow, and so that that can only
get better.
All right, this is.
Speaker 1 (21:53):
Carolina Contractor Show now, and so that can only
get better.
All right, this is CarolinaContractor Show and we're
talking about how hard it is tobuy a house, especially younger
generation.
And what Donnie was referringto is we're going to get a
mortgage or a lending expert onthe show next week to talk in
part of the process of buying ahouse that we just don't know
enough about.
But let's kind of refocus,donnie.
Instead of trying to tellpeople how do you buy an
(22:15):
existing house?
A few minutes ago I was talkingabout if you're in middle
school or high school or youhave kids in that age, you can
start help them focus on how toget a house in the future.
But there's maybe anon-traditional way you talked
about.
Even buying land is a great wayto kind of avoid the prebuilt
(22:37):
house that you're trying to buyis maybe start thinking before
the house is even on the land.
Let's get some land for ourself.
Is that a good option?
It?
Speaker 2 (22:45):
is, and I'm going to talk to the people who have a
good living situation right now.
So if you have a supportiveparent and you can hang out at
your parents' place for a yearor two extra, or maybe even a
little bit longer, you know,land's not a bad idea.
My fiance's daughter she's 22and fresh out of college has a
great job, but it is anentry-level job and the thought
(23:06):
of her having to come up with$1,800 to $2,000 a month to buy
a starter house, it just doesn'tmake sense.
And she sends us links fromZillow all the time hey, check
this out, check this one out.
And of course I always look atthe location, I look at the size
and she's sending us thousandsquare foot plans for $270,000.
And it crushes me as a builderto know what I could build that
(23:29):
house for if she had a piece ofland.
So I think land is the way togo.
And I'll take that a stepfurther and say in that if you
could find a piece of land,whether it be an acre to five
acres, and you could put a muchsmaller down payment on that
land than you could on an entirehouse, and then when you get
that land, this is where theplanning comes in, because you
(23:51):
could put either a starter homeon that, and that would just be
for you, which isn't a badinvestment idea.
But you could put either astarter home on that, and that
would just be for you, whichisn't a bad investment idea.
But you could also look alittle further, because duplexes
and triplexes, you know you'repaying by the square foot.
So even a duplex it, becauseit's two units, it's not going
to cost any more by the squarefoot.
Well, maybe a little bit more,cause you got two water heaters
(24:11):
and, um, you know, two HVACsystems, but it's not
exponentially more.
There's only a handful ofthings that you have to pay
double.
And what that could do is, uh,you could put someone in the
unit next door to you that couldpay the rent for the next door
unit and pay the mortgage loanfor the whole thing.
And you know, I skipped a stepthe the land.
(24:32):
If you could get the land paidfor in just a few short years
and we're able to have a goodliving situation that allowed
you to do that you could usethat paid for land as collateral
, you know, to do theconstruction loan.
So, um, I say all that to saythat young people are going to
have to get more, uh, creativethan ever.
And I even had the thought of,um, if you live in an area with
(24:54):
like a downtown portion of whereyou know where we live the all
the shopping and restaurantshave migrated to the Western
part of the County.
So we have a downtown area.
That's really nice and the theyou know the city's put a lot of
money into it to maintain it.
So it's not a bad area oranything.
But there are a lot of vacantcommercial properties.
You know, look, look or try tomake connections and there are a
(25:15):
lot of older folks who haveplenty of money who are pulling
for the younger generation.
You may find someone who has acommercial property who would be
willing to owner finance thator sell it to you in some form
or fashion with creativefinancing, and you could put a
little money into that, remodelthe upstairs, live upstairs and
rent the downstairs out to acommercial business.
And you know the rent for acommercial business, even in a
(25:36):
slower downtown area, is goingto be more than what would be
for, you know, that duplex orthat residential, um, that
residential unit.
So that that's one idea.
I missed out on a heck of anopportunity in Mebane when I was
in my mid twenties and the ladywanted I don't know, 60,
$70,000 for it, and I had littlechildren and I said there's no
(25:58):
way possible I could do that.
And this predatory how do yousay that?
What's the right word for that?
These people who come in andscoop up commercial properties
for peanuts oh, jerk balls, yeah, something like that.
And the guy came in and I thinkhe bought it for about 30 some
thousand and she was just readyto get rid of it because it was
(26:18):
a headache I could have.
I could have negotiated alittle bit better and got that
property cheaper.
When I say it it hurts mystomach to ride by there.
Now there it's.
It's completely occupied.
Five different uh units arerented out.
The upstairs would have been abeautiful dance studio that I
could have rented out, you know,in a prospering, growing town,
(26:40):
and I missed out on that.
But I said the commercial ideajust because that's always,
that's always in the cards andyou know that could set you up
for a long-term investment,which is a great thing.
The next thing I'll saystrategy wise and I had this
idea a long time ago and thenkids happen.
But I was going to startsomething called expandable
blueprints and I don't thinkthat there's anything online
(27:01):
like that still.
But I had an idea to sell ahouse plan and a you know phase
one, two, three, four.
Phase one being you knowsomething with a very attractive
front elevation and having, youknow, headers in the walls
where you could actually do thebreakthrough to an addition.
And having phase two where youcould add to the sides or the
back or just different thingsstructurally that would support
(27:22):
it for the roof line thatpiggybacked over on the other
rafters that were existing, andjust having something that
worked structurally for a youngcouple that could build phase
one when they could afford it,build phase two, three and so on
to four.
So, you know, something likethat wouldn't be a bad idea and
any architect is capable ofdoing that.
Gosh, if somebody wanted to dothat, you know, I would be
willing to draw those houseplans up for them.
(27:42):
But that was my big idea and Ithought about coming up with
about 20, 30 plans, puttingthose online and just seeing
what happened.
But I still think that's a goodidea regardless, if I ever make
a website to do that and um, Ithink the fourth point that I
wanted to make and I pulled allthese are out of my brain.
None of this is isn't off ofsomething I read on Google.
But uh, get your kids and I'magainst credit cards, but they
(28:07):
do have prepaid credit cardswhere you could put 500 or a
thousand dollars and it countsjust like a credit card in terms
of building your credit scorewhen your children turn 18, go
ahead and if they're going tospend gas money, food money and
you're going to help them out,go ahead and get them a prepaid
credit card so they can build acredit score, because if they
have four years of that and theynever have a ding on their
(28:27):
credit or anything, I can't tellyou how valuable that is to
have a good credit score cominginto 22, 23 years old.
Speaker 1 (28:33):
So just an easy way to plan ahead, yeah, and you
just teach them to be carefulwith it, Say, just go out and
fill up your tank with 25 bucksof gas and pay it off, and then
go to the movies next month andyou know after four years well,
seriously, after four years yougot 50 months of credit history
and a great record.
They're going to just see thatyou did use it and you did pay
(28:56):
it and you don't have any dingsand it's automatically going to
go up.
Don't go with.
Be aware of the credit fixersthough, that say, oh, we'll
repair your credit for athousand bucks.
Usually you just end up out ofa thousand bucks and and they've
kind of done something, maybeunderhanded to you.
I do want to also add, like Isaid, my niece and her husband
worked really hard and they gotthemselves their house and they
(29:19):
have three kids, a baby alsojust born at the very end of the
year they get the right off thewhole 2024, and their baby was
born on the 30th.
But they found out after yearsof saying we can't get a house,
they found out they could whenthey asked a realtor and the
(29:39):
realtor said, oh, that's alllies about that part, or that's
not true, or that's true, buthere's what we're going to do.
And it wasn't but three monthslater they got their house.
So you need to ask people in thebusiness realtors, lenders what
can I do to get this house?
Because the news makes it soundimpossible.
So if you have a budget, you'rerealistic and you talk to
(30:01):
people who know something aboutit, you can get a house.
And 7% is not a horrible thing.
Please don't say 7%.
Mortgage is horrible.
When you have a credit cardwith 2,500 bucks on it at 29.99%
, you're going.
Well, that 7% for a house iscrazy.
No charging coffee on a creditcard and paying 30% is what's
nuts.
But you have a connection witha mortgage lender.
(30:23):
So next week we need to getthem on so they can go in some
detail and help people realize,especially the younger
generation, a house is not outof reach.
You just need to get someknowledge.
Speaker 2 (30:36):
Yeah, absolutely, and be creative and be aggressive,
all the things.
Houses aren't going to fall inyour lap like they used to.
You're not just going to drivedown the street and see a for
sale sign, make a call, do thedeal and you're all set.
It's a different time,different day and time and you
know, you young people, there'san opportunity out there to
learn a lot and we're here tohelp.
(30:59):
You can hit us up through thewebsite thecarolinacontractorcom
.
Click the Ask the Contractorbutton.
That will send a direct emailto us, and whether you're
Raleigh area, burlington area, Ihave an amazing connection with
real estate agents and mortgagelenders and it's taken me a
long time to build theserelationships, but I'm happy to
pass those contacts on to youguys, so reach out anytime.
Yep you.
Speaker 1 (31:19):
Eastern 95ers.
You cool people know thatbarbecue should be vinegar based
.
I know some realtors inNashville, wilson County.
Same type of thing legit peoplewho will just do anything they
can to help you get a house.
So we're in it for the youngergeneration, because our kids are
that younger generation.
So tune in.
Next time we're going to have areal knowledgeable person on
(31:40):
tell us about mortgage lendingand what you need to do if
you're in the market for a house, and you don't have to be young
, you can be our age If you'relooking for a house.
You might have questions andagain, hit the website
thecarolinacontractorcom.
Again, thanks for checking usout, check out social media,
check us out on YouTube and wehope to see and you hear us next
week on the Carolina ContractorShow.
Speaker 2 (32:01):
Thanks everybody.
Speaker 1 (32:03):
Make America great again and visit
thecarolinacontractorcom.
The Carolina Contractor ShowGreat people Eric and Donnie,
good ideas, big fan, reallygreat guys.
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