August 12, 2025 • 36 mins
Your home isn’t just where you live—it could also be your ticket to extra income! Today on The Jon Sanchez Show at 3pm, we’ll explore creative, practical, and even potentially tax-smart ways to turn your primary residence into a money-making machine. From adding an ADU to renting on Airbnb, we’ll cover strategies that could put money in your pocket every month—without selling your home!
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Episode Transcript
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Speaker 1 (00:06):
Good Tuesday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven eighty can't which. It's a
pleasure to be with you and a pleasure to be
with my co host around the horn. We shall trouble
mister Dwight Millard Hyland's mortgage. How are you, my friend?
Looking debonair as always.
Speaker 2 (00:21):
I'm doing fantastic. John. It's a pleasure to be with
you and Corey as well.
Speaker 1 (00:26):
Thank you, my friend. Mister Corey individuality, looking handsome as always.
How are you well?
Speaker 3 (00:30):
Thank you. I know now that Dwight told us somebody
told me it looks like.
Speaker 1 (00:34):
I'll never at it, all right, having a cowboy hat,
he said. One of his friends told that he looks
like witty with the with the cowboy hat. Yeah, I
can see that. Okay, all right, let me give you
a little bit of a vice, Dwight. Some people look
really good in cowboy hats, like Mond Bailey, who's producing
(00:56):
the show right now. Others like me and you know,
you're the beach looking guy right a baseball cat yep,
exactly exactly. We just have to learn what lanes you know,
that we can play in in our lives and what
makes us look good or not looking too good at all.
Speaker 4 (01:13):
I'll send you, guys the picture so you can get
a good life.
Speaker 1 (01:25):
That's a good stuff. I like that. Well, thank you
all for joining us today. We do appreciate we got
a great show lined up for you. You know, we
touched on this story, guys, or this topic quite a
long time ago, and I thought it would be a
great time to revisit this and that is this. Think
about this for a moment. Your home isn't just where
you live, right it could also be your ticket to
(01:46):
some very nice extra income. I was gonna say substantial,
but I won't go that far. We'll to say some
very nice extra income. So what we're gonna do today
is we're going to explore the creative, the practical, and
even potentially tax smart ways. I know you look those
terms to turn your primary residence into a money making machine.
The boys are going to go through things like eighty
(02:07):
us renting out on Airbnb, so on and so forth,
and so many other starters. I think we have about
nine of them that we're going to try to cover
for you. But you know, Dwight, the reason I thought
about this topic is I was fortunate enough last week
to have you on the phone with a new client
talking about reverse mortgages. Right, that's one way of course
that people can have their house, you know, pay them
(02:29):
instead of vice versa. And you know, once again, it
was a very very wonderful conversation we had and hopefully,
you know, we're gonna be helping this client out to
get that done. But there are so many other ways,
Corey Edge, so many other ways that people you know,
again getting creative instead of saying, you know what, I
need some extra income. Maybe I'm a widow now, or
maybe you know, I just bought my first house and
(02:50):
I've got an extra you know, two or three bedrooms,
whatever the case may be. You just got to get
creative right now, and look at ways if you do
desire to start earning something come on your home. There's
much multiple, multiple ways that it can be done these days.
Speaker 3 (03:02):
Yeah, and you just kind of remember you have you
have a piece of real property, and some people have
extra space in their garages or in the house. I know
a lot of times, John, I'm sure you quincher in
the same way. They may not want somebody living in
their house with them. But if you have extra space,
if you have a swimming pool, if you have I
mean I have friends that store their boats over the
winter at somebody's house, absolutely, and they pay that person.
(03:25):
There's there's companies like they act like an uber where
you go on there and say, I need you know,
one hundred square feet of garage space to store stuff,
and then you go put it in their garage and
they pay you. You're right, let your imagination run wild.
Speaker 1 (03:39):
They let your imagination run well. I mean one example
too that you you mentioned was, you know, somebody has
a long driveway right and they don't use it right
maybe the southwest rural house kind of like where you live,
that type of thing. It's like, yeah, you know, bring
your boat over or bring your RV. I mean, folks,
if you're you know, every shopping for a boat or
an RV or or maybe you have a you know,
(04:01):
a classic vehicle that you don't care if it's outside
or something, go call around these days and find out
before you buy this, what storage space costs you for
any of those items. And if you can find a
buddy that probably will pay or charge you significantly less
than what some of the storage facilities, you're probably gonna
jump on it. I mean, it's just it's it's amazing
(04:21):
the cost out there. And now, you know, as we've
touched on now nowadays, just about every housing track it
seems like has ho waste. You can't even keep it
at your house even if you had the space. So yeah,
this is a this is just a great timely topic
for everybody.
Speaker 3 (04:34):
You know, we've talked about before. There's so many tenants
now in so many apartments, and all those people have stuff,
you're right store so right, the market is very deep
for those kind of things.
Speaker 1 (04:44):
Yeah, hey Dwight, real quick before we get to the
stock market side of things. From a from a lending perspective,
can you can you include that rental income in qualification.
Let's say somebody here's a scenario, they say someone has
a house and they side again, rint out of bedroom,
turn it into airbnb. You know, sometimes whatever the case is,
(05:05):
to bring in some extra income and then they call
you up and go dway. You know, I want to
do a cash out refinances. I want to pull out
whatever fifty grande hundred grand. Can you include that income?
Speaker 4 (05:15):
Yeah, it was so you know John, when this all
started from I think the most popular was the traveling nurses.
Speaker 2 (05:20):
And I've got a friend. I've got a friend who.
Speaker 4 (05:23):
Does keep the books and includes it on their tax returns.
And if you included his income, you report.
Speaker 2 (05:28):
It, I can count it.
Speaker 4 (05:29):
So typically, you know, we getting that two year timeframe,
but absolutely so if you need that extra income because
you're going to do something that that's a great way
to you know, and again people get a little you know,
I don't want to pay the government, but you can't
have your cake and eat it too out in every case.
Speaker 2 (05:46):
So as long as you're reporting it, I can count it.
Speaker 1 (05:49):
Yep. Okay, that's the key. You got to be able
to report it. Now, that traveling nurse idea that was
I remember talking to a lot of nurses when I
was down and out, and yeah, they were paying some
do put sums of money to rent places, I mean
because their employer was paying the vast majority of it,
who then was turning around and charging in our case
(06:10):
the local hospital right for the living portion of the
of the traveling nurses wages and stuff. So it was
almost like I likened it to almost like military housing.
You know, they get Basic Housing Allowance or BHA as
they call it. Which is generally going to be tax
free in many cases. But you know, they'll pay some
depending upon what area the military person is, they'll pay
(06:32):
some substantial, some some money. I mean down southern California.
I mean they'll pay you know four I've heard, so yeah,
if not more, and I know up in San Francisco
it's even more, or down San Francisco. It can all be.
Just got to be creative, Just got to be creative.
Speaking of creative, boy, oh boy, boys, what do you
think of our inflationary data? Huh? Not too bad? Not
(06:54):
too bad. Market absolutely loved this inflationary data. So let's
get onto the stock market side. And I want plenty
of time to get to our real estate topic. So
you know, we we were kind of flat in the
in the pre market session, up you know, twenty five
thirty points on the Dow futures and then five point
thirty this morning. Here comes the CPI report, and let
me tell you this number. You know, if you're not
(07:17):
glued to your TV or you know, glued to the
financial news of the day, you're probably gonna laugh when
I tell you that Wall Street you got so excited
about this number because it was a good number, but
it wasn't a fantastic number. But Wall Street just went,
oh my god, this is great. Why because now this
is going to be even more reason for the Fed
(07:37):
to give us an interest straight cut in the month
of September. So let me go over with what the
number did. So CPI once again measure of inflation on
the retail side, right, so we get that, we got
that today. We're gonna get PPI inflation on the wholesale
side on Thursday. But here's what the CPI numbers showed.
So month over month up two tents over percent. Year
over year, it rose two point seven percent, and this
(08:00):
was where everyone got excited. They looked at the previous month,
June's number, and that number month over month was up
or excuse me, a year over year was up two
point eight. So we dropped from a year over year
of two point eight down to a year over year
two point seven. And that was enough to get everybody excited. Now,
if I get over to what we call the core,
(08:21):
they strip out the food and energy side of it
because that's more volatile. It was up three tens seven
percent month over month. That was in line with the
expectation year over year up three point one percent. But
I went back to June's number and year over your
core was up two point nine So we rose on
the core side of it, stripping out food and energy,
(08:42):
but we came down when you look at the headline
as we call it, where you include food and energy.
So you know, you really could have said, Wow, this
could be a good bad reporter or just an okay
report because one kind of counteracted the other. Right, the
core year over year was not as good, but the
top line year over year was a little bit better
than expected. So this report really could have gone a
(09:04):
lot of different ways. But man, as soon as that
report came out at five point thirty, the futures took
off and we just kept going higher and higher. Best level.
Today we broke over five hundred on the Dow Jones
Industrial Average closed very near that four hundred and eighty
four point gain on the Dow one point one percent
to it closed a forty four thousand and four fifty
eight dwight. What kind of day was it on the
Nasdaq in the SMP today?
Speaker 2 (09:25):
I was waiting for another record setting day.
Speaker 1 (09:28):
You go, brother, there you go two hundred and ninety
seven point gain on the Nasdaq, up one point thirty
nine percent to close at twenty one thousand and six
eighty one. SMP hired by seventy two points one point
one to three percent to close at six thy, four
hundred and forty five. So it was just like I said,
it was like selling, you know, Corey to go back
to your your track time. It's like someone just you know,
(09:48):
fired off the starting gun and everybody got out of
the box and they just kept running and running and running.
Speaker 3 (09:54):
It was very interesting to watch it come out. Watched
the ten year fall and then I'm sure we'll talk
about it, yep, and hears starts arising pretty decently. Market drops.
Like I'm with you, I wasn't sure even even when
the real trading started. I wasn't sure which way they
were going to go with it, just because.
Speaker 1 (10:14):
Yeah, exactly, yep, you're absolutely right, could have gone could
have gone either way. So yeah, great, great, great observation
on your point. But so now let's go to the
end result. Why did this market get excited, like I said,
simply because it now is anticipating in a pretty good
likelihood that the FED is going to give us this
cut in September. So let's go to the CMEME FED
(10:34):
watch tool, which gives us the probability of that September
rate cut. The FED watch tool now is showing a
ninety four point four percent probability dwight of a September
rate cut. That is up from eighty five point nine
percent yesterday, but is now a sixty point five percent
(10:55):
probability of a second quarter percent rate cut at the
October meeting yesterday, that second chance was at a forty
nine point three percent probability. Or no, pardon me, now,
there's a forty nine point three percent probably of a
third rate cut in December. So again, to summarize, ninety
(11:15):
four point four percent probability of September, sixty point five
of a second one in October, and a forty nine
point three percent probability of a third cut in December. Guys,
what in the world would happen in your respective fields?
Do I? I'll start with you, Corey. We'll get your
answer when we come back from a break. If you
end up twenty twenty five with three rate cuts, where
(11:38):
do you We're six fifty eight today on the thirty
yere according to Mortgage News Daily, I'm sorry to take
that out of your mouth to why, but we're I mean,
that should push us pretty close to breaking six right
real close.
Speaker 4 (11:50):
Yeah, I think you're going to see at least a
seventy five basis point dropping the rate, you know, So,
I mean, I think it'll get a lot of subject.
You know, what what I wonder, John, is how quickly
the markets might start pricing in those probabilities, those statistics,
you know. I mean, you got to believe the ninety
four percent in September is probably already starting to filter
into the system a little bit.
Speaker 2 (12:10):
So that's going to.
Speaker 4 (12:12):
Give you some sign I mean, you know, we're in
the mid sixes, you know, as we'll cover, but yeah, yeah,
I could see us flirting with the high fives, you know,
even maybe mid And what's good about that is, okay,
you pay at a little bit of a point by
down here now in the low fives or that's a
good point.
Speaker 1 (12:29):
Yeah, it's a really good point. So when we come
back for the break, I want to throw that over
to you from a real estate broker's perspective, and that
is you know you'd mentioned last Thursday when we did
the local real estate Summary report, Obviously, in the beginning
of July you had said things starting to slow down.
The data reinforce that. But I'm curious as to your opinion.
(12:51):
If you get two or three rate cuts this year,
would you change your opinion on that slowdown? Right, we'll
be out of the season. But boy, this could be
the catalyst to get you know, even those that are saying, yeah,
my kids just started school, but boy, I don't trust
the FED and maybe they'll raise rates down the road.
I need to jump on this. Let's go find that
that that next home, So let's get your opinion on
that one. All Rather turn it over to Christen Snow
(13:12):
She's in the right now traffic center. Hello, Kristen, Welcome
back to the John Sanchiz Show on Newstalk seven eighty KO,
which with Cory zevgrilated to a White Mallard of Highlands Mortgage.
All right, once again, we had a heck of a
session today, four hundred and eighty four point gain on
the Dow one point one percent. Now's I got two
hundred and ninety seven points are one point thirty nine percent,
(13:33):
and the sp gained seventy two points one point one
to three percent. And once again, as Dwight correctly mentioned,
it was a record closed for the Nasdaq and the
SNP five hundred. All right, let's move things over to
the commodity side. Lost eighty three cents on oil, that
feels good, sixty three seventeen a barrel, just a six
dollars loss on gold, closed at three thousand and three
ninety eight ninety one ounce. And over to the bond market,
(13:54):
mister Miller, we already touched on the rates, but let's
go over to gain tenure yield to day, up two
basis points four to twenty nine. Once again, go over
your observation of the thirty year mortgage.
Speaker 4 (14:03):
Yeah, so the mortgage backed security, John broke rank with
the ten years, so we were up sixteen basis points
at the close. So you know, if it carries over tomorrow,
you'll see some a little bit better pricing. But we
finished out pretty much where we were on Thursday, six
point five eight on the thirty year mortgage according to
Mortgage News Daily, and the fifteen year at five point
(14:24):
nine to two.
Speaker 2 (14:25):
So you know, again the governes.
Speaker 1 (14:28):
Point nine two.
Speaker 4 (14:30):
Yeah, yeah, yeah, okay, yeah yeah, stayed at five point
nine two.
Speaker 2 (14:34):
I think that's exactly where on Thursday.
Speaker 4 (14:36):
But again the the FHA and the in the VAO,
the governments are at six point one four and six
point one five. So I mean, these are fantastic rates
considering what we've had for the last fourteen to eighteen months.
Speaker 1 (14:47):
So absolutely, a little bit.
Speaker 2 (14:49):
More, a little more improvement will be in good shape.
Speaker 1 (14:52):
You bet him? All right? Once again, before we went
to break, we started talking about today's catalyst to the
stock market, which again was the viewed as the benign
CPI data report. Once again up two tens of a
percent month over month, two point seven percent gain year
over year, that's on the headline. Estimates were a two
point eight percent gain year over year, so they beat that.
So we broke down excuse me, we broke down some
(15:15):
of the major components of course, of the of the report,
you know, the data that makes up the CPI number,
and I wanted to just hit on a couple of these,
see if everyone kind of agrees with this. So the
food index was was actually unchanged month over month, but
up two point nine percent year over year. Energy component
was down one point one percent month over month, down
one point six percent year over year. Corey, this is
(15:37):
the one I want to discuss with you this shelter index,
So this is rents et cetera, up two tenths over
percent month over month, hire by three point seven percent
year over year, and looking at the other categories, Corey,
the only other one that had a higher year over
year increase was the service index, which is up three
point eight percent year over year. So what are you
(15:57):
thinking on this? On this shelter side of it still
a little bit hot there of three point seven.
Speaker 3 (16:02):
Like I said, I think you probably still have a
supply demand imbalance in the rental market, right you still
have more tenants than they places, so the rents are
going to be sticky, and the cost to build things
right now is not going down the sticks and bricks
and plumbing and all those things. So I mean it's
it's going to be a sticky number. And I do
based on the conversation we're having before the breakout, do
(16:23):
want to go on the record, I don't think there's
any chance they cut three times this year. I personally
would be shocked if they cut twice, And you guys
obvious seen no better than I do. I still don't
understand why they feel like they need to cut based
on where the economy is at.
Speaker 1 (16:38):
Well, the answer is because inflation is indicative by the
CPI coming down a little bit, right, So that's remember
the fedes mandate. Let's remind everybody, you guys know this
two percent, right, but that's on the producer or the
personal consumption Expenditure report, the PC which is still right
around this two seven to eight. We had it last week.
I forget exactly what the number was, but we're still
(17:00):
above it. But now the bond market is starting to
price in. If you look at the shorter end of
the curve, you know, once again it is starting to
price in this this rate cut that that the street wants.
I mean, you you know, if you look, let me
bring up my my bond numbers here very quickly. But
if you look at how the bond traders you mentioned
this earlier, Dwight, if you look at how the bond
traders are doing this at this point, they are starting
(17:22):
to really look to you know, to price this in. Yeah,
I can't bring it up the it's refreshing right now
because we're obviously bond markets closed. But but the street
that the way the bond traders are looking at is like, Okay,
the FED, obviously, we know they're getting pressure from Trump.
We know we're gonna have a new FED chairman. We're
already starting to kind of narrow down that list to
(17:43):
who he wants to appoint. You can't can't you know,
they have to still or nominate. They can't be appointed
by him. So there's a lot of factors, I guess.
So what I'm getting to, core there's a lot of
factors pointing to the rate cut. Now, if you do one,
the other logic is, if you do one in September,
why not do another one in October? And we all
know that many times the FED doesn't like to do
(18:04):
a lot towards that end of the year because it
kind of sets the stage for the next year, right,
And I don't know if they want to go that
far out. So part of me agrees with you, Corey,
that three would be really aggressive. And frankly, after I
have not heard anywhere other than today this probability of
a third rate cut that is really new, based upon
(18:25):
this quiet CPI data. So you know, for sake of argument,
I think I'm going to be with you, Corey. Yeah,
two would be fine, but even that so Dwight six
fifty eight on the thirty year mortgage. Today we get
two quarter percent cuts September October fed goes idle get
into the new year, so we could still be down
what six two somewhere around there, probably on the third year,
(18:46):
I'm guessing.
Speaker 4 (18:47):
Yeah, you might even see a six one five, you know,
maybe a six zho five you know. But but the
good news is again with the seller concessions we've talked about,
that buys into the fives, right, you know, it very
easily buys you into the five.
Speaker 1 (19:00):
Yeah, okay, Corey. So before we go to break we
get down to that level. Do you see any any
turnaround in the slow down that we're starting to see
in the data at this point as far as real
estate prices and activity, et cetera.
Speaker 3 (19:11):
I would think at the at the housing price stayed level,
but the cost, the monthly cost of the consumer went
down because of that, then that probably helps people qualify
it gets in there. I'll tell you I have a
house right now that we've put an scraw over the weekend.
We had four offers, all FHA, and they all needed
I think the smallest concession it was offered was ten
(19:32):
thousand dollars. Wow, all the way up to twenty five
thousand that they told me they had to have.
Speaker 1 (19:37):
No qualified that they told you they had to have
is you know.
Speaker 3 (19:41):
We had to bite the bullet on one of the concessions.
It wasn't the twenty five thousand dollars one, but still
they all said, hey, my client needs us to qualify
and closing costs and so it is interesting.
Speaker 1 (19:53):
Yeah, that's a great point. That is a great point.
Speaker 3 (19:55):
I got another quick story.
Speaker 1 (19:56):
If you haven't man, please list do it real quick.
Speaker 3 (19:58):
So I'm when I get bored, I read model a
bathroom in this old house, you know right, So I've
got one coming up. I got a remodel, and my
wife wanted the same flooring that we had in the
other bathroom. So I went down to the flooring story today.
I was talking to the guy, Hey, can you give
me the same flooring gut last time? So I looked
up and compared. He goes, yeah, we can get all that.
He goes, oh, you're lucky. It went down two dollars
(20:18):
a square foot from when you bought it two years ago.
Oh really, I go, why is that? He goes, I
think I won't tell you the company name, but he goes.
I think it's because they moved their manufacturing from China
to Vietnam and the price went I go, you go.
That's the first time I wanted something went down.
Speaker 1 (20:32):
In years ago.
Speaker 3 (20:34):
Kid, huge, huge, huge flooring company. But the price down
two bucks.
Speaker 1 (20:40):
That is something that is yeah, yeah, that's uh. That's
something we don't hear very often, something anything where the
price goes down. I we bought a new laptop for
one of the employees the other day, and yeah, I
got the it was a it was a Mac and yeah,
got to feel the tear off side of that side,
you know, part of it. So yeah, God, God bless you,
Cory for finding something where the price goes I love it.
(21:01):
I love it. All Right. When we come back, how
to turn your primary residence into income. That's right, we're
not talking remember properly, we're talking to your primary We've
got some great strategies lined up for you. But first
let's turned over to Jack Saban. He's got news, trafficking weather.
Hey Jack, welcome back to the John Sanchez Show on
New Talk seven to eighty k, which with Corey Insividrility
(21:23):
and to White Millard of Highlands Mortgage once again. We
finished with a game of four to eighty four on
the doubt the NASDAC grows two ninety seven s and
pup seventy two, both of the former a record finished there.
All right, let's turn your primary home into a cash
flow machine, right. I know it sounds so strange to say,
wait a minute here, rand All, I can understand, but
making money on my primary home, how in the world
can we do that? Well, the boys to put together
(21:45):
an incredible list that you actually can And let's again
set the table straight as to who can we do
this so or who could be considering this? So there's
a lot of demographics guys that could be considering this
idea is we said it the beginning of the show.
I run across this a lot with our clients. They've
got a big house. Husband dies or wife dies. They
(22:06):
he's like here or see was like I don't want
to move, but man I leave. You know three out
of my four bedrooms closed, or you know it's just
too big of a house. How can I make a
little bit extra money? Well, there's ways to do that. Again,
we all know about Airbnb and vrbo. Now we're not
talking about Airbnb is a stock. We're just talking about
the strategy behind this. So we're going to go through
(22:28):
nine different ways that you can consider doing this, and
again just let your imagination wonder because there are so
many ways. But Corey, give your little disclaimer that you
always do when we talk about this subject in regards
to whether it's a necessary dwelling unit or an ADU
or an airbnb in regards to local regulations, cause I
want to get that out of the way, make sure
(22:48):
we don't forget.
Speaker 3 (22:49):
That you have to be so every little municipality putting reno,
putting sparse putting, every little town across the country. It's
starting to enforce permit, so you have to have a
permit to do. Basically, short term rentals is what they're
going after. I have a permit to use your properties
as short term rental. ADUs are kind of different. There's
(23:09):
some municipalities that they'll let you do ADUs, but you
can't use them for short term rentals. So really check
in with your local guidelines to see what you need
to do. Especially if you're going to build something, make
sure you know what the rules are before you build it.
Speaker 1 (23:26):
Otherwise and use a license contractor don't. Yeah, that drives
to white and nets when he I've got a four
thousands ft home. But that one thousand foot edition I
did to include that. I just me and a buddy
did it on a Saturday with a case of beer. Yeah,
that didn't work that way with exposed Yeah.
Speaker 4 (23:45):
Well, John, John ad real quick to that ad us.
I'm gonna you're gonna start seeing financing options available in
these ad us here in no time. Oh you think so,
they're already They're already kind of in the works.
Speaker 1 (23:56):
Where was it San Francisco or somewhere down in the
Bay Area where they approved being able to offer the ADUs, right,
remember that, like a year or so ago. It was
one of the big, big cities that said you can
start using ADUs and offering them. You just remember that.
Speaker 3 (24:12):
Well, there's a lot of them. I think San Diego
is doing them.
Speaker 1 (24:15):
There's okay, a.
Speaker 3 (24:16):
Few of them. They have them, man, I don't remember
the exact stories in the Wall Street a couple of
months ago about I'm pretty sure with San Diego there guidelines.
You know, you get these unforeseen things. So they had
these ADU guidelines Accessory dueling units for everybody listening, and
somebody found a loophole in there and started building whole
developments with ADUs, and they had figured out how to
(24:40):
make basically they were tiny homes that they got around
the rules. So it's still a work in progress to
figure all this stuff out.
Speaker 1 (24:47):
Okay, very good. All right, so we got the disclaimer
out of the way, So let's go into more details
about the first way to make some money in your
primary home again the ADU ascessory dueling unit. So this
is where you can I mean some of the ideas
that you can convert a garage, you can conver in
a basement, a backyard structure, all into rentable living space. Corey.
Let's say you follow all your advice, you get all
(25:07):
the permits, everything's legal, so on and so forth. How
do you price something like that from a rental standpoint?
Speaker 3 (25:12):
Just whatever the market will bear. I mean, if let's
say that you are going to build from scratching an
accessory dwelling unit that is separate and it's a little
two bedroom, one bath day under square foot, I mean
I would price that against two bedroom, one bath apartments,
two bedteran one bath houses around there. I mean, that's
the whole point, and from a financial point, you want
to figure that out before you build it, to make
(25:34):
sure you're not building yourself a black hole.
Speaker 1 (25:37):
Now correct me if I'm wrong. I have read many stories,
Corey where people actually are able to command a higher
rental rate. Let's use your example, the two bedroom, one bath,
you know, Grandma's quarters as we call it. You know,
in the backyard, they're able to command a higher rental
rate per square foot because people, it's like you're living
(25:58):
at home, right, it's not like being in a bid
or in a in an apartment. A lot of times
they become very close friends with you know, the the
person or people living in the main house. And I
mean I've heard wonderful story. I got a friend right
now in southern California that he does that one of
his business partners, you know, let him, you know, rent
this a du in his backyard and see me Valley,
(26:19):
and he just loves it. I mean they have dinner
together a lot, and they you know, do all kinds
of these become really good friends. But I've heard more
and more stories like that, so you know, don't be
surprised what you can get from a rental site. Especially
if you're kind of a you know, a warm, welcoming
person and you know you like people and stuff, it's
maybe a really good way to go.
Speaker 3 (26:37):
No, I totally agree with this because it's it's in theory,
it should be better, I want to say, better, but
different than apartment. I think you got a little stuff
and got to go. As you mentioned, you've got to
be a people person. Because yes, I mean you both
know this. We have a little guest house that's right
next to a creek. It's I would never run it
out because when I come home to see anybody but
(26:58):
my family, right right right, I'm sure I could get
more than the apartment down the street. That's right, because
of the environment.
Speaker 1 (27:04):
Absolutely. Okay. So to conclude on this point, just make
sure you check with your zone regulations and the county
or the city and so on and so forth to
do it correctly. All right, Dwight, Let's go into the
second point, which again is something that everyone knows about
this year. These are, of course the short term rentals,
and when you say that, you think of the names
like Airbnb, vrbo, so on and so forth. So you
got to look at the pros the cons the inco potential,
(27:27):
but for the most part, usually an airbnb or short
term rental like this is going to command more on
a per day basis then let's say a long term rental. Correct.
Speaker 4 (27:39):
Yes, absolutely, and that's I think that's where they, you know,
the opportunity comes in. This is where those next gen homes,
you know, when they're building next gen, where they improve
your next gen is a separate entrance, what they modified
kitchen there. A lot of builders are going to that
with the with the OSCO set the bar that the
buyer is going to put their aging mother in laws,
(28:02):
and they don't. They turn it into an Airbnb or
vrbo and they get phenomenal nightly or daily returns for it.
So that one, especially if your house was built that
way or modified that way with the separate entrance, I
mean you just come and go as it just as
a guest and you really don't run into anybody. So
(28:23):
it's probably more common than we'd like to probably think
out there.
Speaker 2 (28:26):
I think a lot of people that have that are
probably already using it that way. What do you think,
do you agree, Corey with that?
Speaker 1 (28:32):
Oh?
Speaker 3 (28:33):
Yeah, I'm sure. The only thing too to remember is
most of these new communities. You got to figure out
your municipal rules for the city of town, but you
got to look at your homeowners restrictions or HOA make
sure that they'll allow short term rentals or.
Speaker 1 (28:47):
Any I think I read something the other day that
up in South Lake, which of course was a huge
VRBO airbnb market, and then of course the city council
voted to ban it. You your grandfather if you had
the permit, but you can get anymore that they've now
reopened that back up? Or am I right on that?
Speaker 3 (29:04):
That thing gets flip flops so many times I.
Speaker 1 (29:06):
Know I lose track of it right now, to be honest, okay, perfect,
all right, when we come back, guys, let's move on
to point number three, the long term room rentals. See
if we can make some money in our primary home
that way. Let's wrap it up with Christen Snow right
now Traffic Center. Hey, Kristen, welcome back to the John
Sanchez Show on News Talk seven to eighty k W
(29:26):
it's mister Bell large your phone number, sir, yes.
Speaker 2 (29:29):
Sir two four zero two zero two.
Speaker 3 (29:31):
Two, Thank you, sir, mister edge six seven three six
seven zero zero.
Speaker 1 (29:35):
Beautiful, Thank you, sir. All right, we've been talking about
how to turn your primary residence into income. We need
to hustle. I want to get these nine points done.
So we started off with the eighty US. The accessory dwellings.
This is again converting a garage of basement of backyard structure.
Number two, the short term rentals, the airbnb, the v vrbos,
anything along those lines. Corey. Number three the long term
room rentals, right, running a spare bedroom or a finished
(29:56):
basement for a steady monthly cast flow. Right. People want
this long term side of.
Speaker 3 (30:00):
It absolutely and these are big as you can imagine
around cottages because room rentals kids going to school easy
or not there much so. But you can do it
in any neighborhood, in any house.
Speaker 1 (30:10):
Love it, love it all right. This is fourth one. Boy,
this can take a special person. But let's throw it
out there. House hacking. You live in one part of
the home while you rent the other part to cover
your mortgage or a creat a profit. Yeah right, that's a.
Speaker 2 (30:24):
Divorce to me.
Speaker 4 (30:25):
Yeah yeah, yeah, But John, I think that's it's happening
more and more people are so yes.
Speaker 2 (30:32):
I mean it takes a special person.
Speaker 1 (30:34):
Quy, I love your six point package and storage income,
ringing out unused garage, drive a yard, space for vehicles, boats.
Speaker 3 (30:41):
R vs, anything to store. And then I'm sure you
guys have seen it. Now, if you have a swimming pool,
there's apps or you can I'm gonna say right out
your swimming pool. But people.
Speaker 1 (30:52):
Huge I could Yeah, yeah, yeah, yeah, exactly. Yeah, I'm
glad you brought that up, all right. Number seven, this
is kind of a fun one again for the right
personality event hosting, use your home or your yard for weddings, parties,
corporate retreats again, proper zoning and so on and so forth.
(31:12):
But you know, I mean not to reveal Corey's personal life,
but he has the most gorgeous, gorgeous yard, big bluscious
grass and pasture and things like that. Corey, That's an idea,
I know you never do it, but an ideal wedding scenario, right, folks,
let me tell you, because we're in that business, you
can make a lot of money renning out the right
space for a wedding. Wedding planners are looking all the
(31:34):
time for places and everyone, especially those of you that
have ranches and things. People love the ranch wedding venues.
So yeah, that's a huge money maker there.
Speaker 3 (31:42):
And my wife gets asked all the time.
Speaker 4 (31:45):
Yep, yeah, yeah, don't forget about event parking if you
live near the college and things like that.
Speaker 1 (31:51):
Good point, that's a good point. Yeah, exactly. Okay, so
that's event hosting. Now let's go to number eight. The
home based business, where you leverage part of your residence
as an office, a studio, workshop that generate income from
the clients. That's a great one. Of course, we all know,
and so many people do that. After COVID and so
on and so forth. All three of us work from
(32:11):
our residences are some part you know throughout the day.
It's amazing. So that home based business, that doesn't require
much more. But let's wrap it up. Kind of ties
in with the home based business. The tax benefits and
the pitfalls. You need to have a good accountant, good attorney,
et cetera, understand the IRS rules. The deduction is the
difference between primary residence rental property tax treatment. Coreate just
real quickly. I know you're going to give the disclaimer
(32:33):
you're not an accountant. But one thing I see with
people that do take the home office deduction, because remember, folks,
let's say you have a thousand square foot house, to
make it real simple, and you use one hundred square
feet for pure office. Right you're not you're not using
up part time, but it's a pure office. And so
that would represent one tenth of your overall square footage.
So you can take a tax deduction on again, your utilities,
(32:56):
your property taxes, sometimes your mortgage. Again check with your account.
But that's where a lot of times people Corey will
they'll do that home office deduction and then they forget
about it when they go to sell that property.
Speaker 3 (33:07):
Sure. Yeah, and that's where you need the account. And
I can't emphasize enough to keep detailed records, I mean
just detailer. I have a client right now, we're listing
our house, and she pulled up this accordion file every
penny she'd ever spent, no kids, just like here in
case something I go, I don't need that, but miss
your account's going to need it to pay Uncle Sam
(33:27):
because the basis of your house went up. So take
meticulous notes. And the home office deduction, I want to
tell you from experience is a key one that they
get you on and audits, So keep your stuff straight.
And if you take a little bit of the home office.
You got to take the whole thing. So make sure
you get some good.
Speaker 1 (33:45):
Advice right exactly. So, folks, we just gave you nine again. ADU,
short term rentals, long term room renolds, the house hacking.
Oh we forgot when I'm sorry, Hosting for film and
video shoots. I've had some friends that have done that,
especially like up if you live up in the pine trees,
you know, pick your favorite area. A lot of times
(34:05):
movie studios want to rent, you know, for a certain scene.
Huge money in that side of it. We talked about
the parking and storage income, the event hosting, home based business,
and then the tax benefits and pitfalls anything else in
one minute. Guys that you want to wrap up with
on this advice, I think John.
Speaker 4 (34:20):
With the ability of social media and the way to
get it out there, this has been the biggest This
is the most opportune time you've ever had to do
these these nine items, you know, because you can connect
to everybody.
Speaker 1 (34:32):
Yeah, no, you're absolutely Corey.
Speaker 3 (34:34):
Yeah, just choose your imagination. I mean, it's this whole
gig economy was made up because people use their imagination
with stuff they had.
Speaker 1 (34:41):
So there you go.
Speaker 3 (34:42):
Here's your imagination.
Speaker 1 (34:43):
Yeah, no, that's that's perfect and it's exciting too, because
again everybody's looking for extra income and I think one
of the things we got to look at going forward,
anything you have that's not being used, look at ways
be creative to make money with it, right, if that's
your desire. Some people are like, I forget, I don't
need a BT. Others, hey trying to make every every
dollar stretch. And I think the advice we gave today
is a great one to go. Excellent job, fellows, so
(35:04):
good to see us, so good to be with you.
Thank you all for being with us. We do appreciate it.
We'll be back with you tomorrow on the John Sanchez Show.
God let's have a great afternoon. Dwight Millard nmlsid Number
two four one two five nine a license Mortgage Loan
Officer with Highlands Residential Mortgage Limited and Equal Housing Lender
nmlsid Number one three four eight seven one. The information
shared on this live broadcast is for general information purposes
(35:27):
only and does not constitute financial or mortgage advice. Listeners
should consult directly with a license mortgage professional for guidance
tailored to their specific situation. All loans are subject to
credit approval and program guidelines. Not all applicants will qualify.
Loan terms and availability may vary by state and are
subject to change without notice. Highlands Residential Mortgage Limited is
(35:48):
licensed in multiple states. For a full list of state
licenses and disclosures, please visit https slash slash www dot
Highlandsmortgage dot com backslash licenses backslash. The views expressed during
this programme are their own and do not necessarily reflect
those of Highland's Residential Mortgage Limited.
Good Tuesday afternoon to you. Welcome to the John Sanchez
Show on News Talk seven eighty can't which. It's a
pleasure to be with you and a pleasure to be
with my co host around the horn. We shall trouble
mister Dwight Millard Hyland's mortgage. How are you, my friend?
Looking debonair as always.
Speaker 2 (00:21):
I'm doing fantastic. John. It's a pleasure to be with
you and Corey as well.
Speaker 1 (00:26):
Thank you, my friend. Mister Corey individuality, looking handsome as always.
How are you well?
Speaker 3 (00:30):
Thank you. I know now that Dwight told us somebody
told me it looks like.
Speaker 1 (00:34):
I'll never at it, all right, having a cowboy hat,
he said. One of his friends told that he looks
like witty with the with the cowboy hat. Yeah, I
can see that. Okay, all right, let me give you
a little bit of a vice, Dwight. Some people look
really good in cowboy hats, like Mond Bailey, who's producing
(00:56):
the show right now. Others like me and you know,
you're the beach looking guy right a baseball cat yep,
exactly exactly. We just have to learn what lanes you know,
that we can play in in our lives and what
makes us look good or not looking too good at all.
Speaker 4 (01:13):
I'll send you, guys the picture so you can get
a good life.
Speaker 1 (01:25):
That's a good stuff. I like that. Well, thank you
all for joining us today. We do appreciate we got
a great show lined up for you. You know, we
touched on this story, guys, or this topic quite a
long time ago, and I thought it would be a
great time to revisit this and that is this. Think
about this for a moment. Your home isn't just where
you live, right it could also be your ticket to
(01:46):
some very nice extra income. I was gonna say substantial,
but I won't go that far. We'll to say some
very nice extra income. So what we're gonna do today
is we're going to explore the creative, the practical, and
even potentially tax smart ways. I know you look those
terms to turn your primary residence into a money making machine.
The boys are going to go through things like eighty
(02:07):
us renting out on Airbnb, so on and so forth,
and so many other starters. I think we have about
nine of them that we're going to try to cover
for you. But you know, Dwight, the reason I thought
about this topic is I was fortunate enough last week
to have you on the phone with a new client
talking about reverse mortgages. Right, that's one way of course
that people can have their house, you know, pay them
(02:29):
instead of vice versa. And you know, once again, it
was a very very wonderful conversation we had and hopefully,
you know, we're gonna be helping this client out to
get that done. But there are so many other ways,
Corey Edge, so many other ways that people you know,
again getting creative instead of saying, you know what, I
need some extra income. Maybe I'm a widow now, or
maybe you know, I just bought my first house and
(02:50):
I've got an extra you know, two or three bedrooms,
whatever the case may be. You just got to get
creative right now, and look at ways if you do
desire to start earning something come on your home. There's
much multiple, multiple ways that it can be done these days.
Speaker 3 (03:02):
Yeah, and you just kind of remember you have you
have a piece of real property, and some people have
extra space in their garages or in the house. I know
a lot of times, John, I'm sure you quincher in
the same way. They may not want somebody living in
their house with them. But if you have extra space,
if you have a swimming pool, if you have I
mean I have friends that store their boats over the
winter at somebody's house, absolutely, and they pay that person.
(03:25):
There's there's companies like they act like an uber where
you go on there and say, I need you know,
one hundred square feet of garage space to store stuff,
and then you go put it in their garage and
they pay you. You're right, let your imagination run wild.
Speaker 1 (03:39):
They let your imagination run well. I mean one example
too that you you mentioned was, you know, somebody has
a long driveway right and they don't use it right
maybe the southwest rural house kind of like where you live,
that type of thing. It's like, yeah, you know, bring
your boat over or bring your RV. I mean, folks,
if you're you know, every shopping for a boat or
an RV or or maybe you have a you know,
(04:01):
a classic vehicle that you don't care if it's outside
or something, go call around these days and find out
before you buy this, what storage space costs you for
any of those items. And if you can find a
buddy that probably will pay or charge you significantly less
than what some of the storage facilities, you're probably gonna
jump on it. I mean, it's just it's it's amazing
(04:21):
the cost out there. And now, you know, as we've
touched on now nowadays, just about every housing track it
seems like has ho waste. You can't even keep it
at your house even if you had the space. So yeah,
this is a this is just a great timely topic
for everybody.
Speaker 3 (04:34):
You know, we've talked about before. There's so many tenants
now in so many apartments, and all those people have stuff,
you're right store so right, the market is very deep
for those kind of things.
Speaker 1 (04:44):
Yeah, hey Dwight, real quick before we get to the
stock market side of things. From a from a lending perspective,
can you can you include that rental income in qualification.
Let's say somebody here's a scenario, they say someone has
a house and they side again, rint out of bedroom,
turn it into airbnb. You know, sometimes whatever the case is,
(05:05):
to bring in some extra income and then they call
you up and go dway. You know, I want to
do a cash out refinances. I want to pull out
whatever fifty grande hundred grand. Can you include that income?
Speaker 4 (05:15):
Yeah, it was so you know John, when this all
started from I think the most popular was the traveling nurses.
Speaker 2 (05:20):
And I've got a friend. I've got a friend who.
Speaker 4 (05:23):
Does keep the books and includes it on their tax returns.
And if you included his income, you report.
Speaker 2 (05:28):
It, I can count it.
Speaker 4 (05:29):
So typically, you know, we getting that two year timeframe,
but absolutely so if you need that extra income because
you're going to do something that that's a great way
to you know, and again people get a little you know,
I don't want to pay the government, but you can't
have your cake and eat it too out in every case.
Speaker 2 (05:46):
So as long as you're reporting it, I can count it.
Speaker 1 (05:49):
Yep. Okay, that's the key. You got to be able
to report it. Now, that traveling nurse idea that was
I remember talking to a lot of nurses when I
was down and out, and yeah, they were paying some
do put sums of money to rent places, I mean
because their employer was paying the vast majority of it,
who then was turning around and charging in our case
(06:10):
the local hospital right for the living portion of the
of the traveling nurses wages and stuff. So it was
almost like I likened it to almost like military housing.
You know, they get Basic Housing Allowance or BHA as
they call it. Which is generally going to be tax
free in many cases. But you know, they'll pay some
depending upon what area the military person is, they'll pay
(06:32):
some substantial, some some money. I mean down southern California.
I mean they'll pay you know four I've heard, so yeah,
if not more, and I know up in San Francisco
it's even more, or down San Francisco. It can all be.
Just got to be creative, Just got to be creative.
Speaking of creative, boy, oh boy, boys, what do you
think of our inflationary data? Huh? Not too bad? Not
(06:54):
too bad. Market absolutely loved this inflationary data. So let's
get onto the stock market side. And I want plenty
of time to get to our real estate topic. So
you know, we we were kind of flat in the
in the pre market session, up you know, twenty five
thirty points on the Dow futures and then five point
thirty this morning. Here comes the CPI report, and let
me tell you this number. You know, if you're not
(07:17):
glued to your TV or you know, glued to the
financial news of the day, you're probably gonna laugh when
I tell you that Wall Street you got so excited
about this number because it was a good number, but
it wasn't a fantastic number. But Wall Street just went,
oh my god, this is great. Why because now this
is going to be even more reason for the Fed
(07:37):
to give us an interest straight cut in the month
of September. So let me go over with what the
number did. So CPI once again measure of inflation on
the retail side, right, so we get that, we got
that today. We're gonna get PPI inflation on the wholesale
side on Thursday. But here's what the CPI numbers showed.
So month over month up two tents over percent. Year
over year, it rose two point seven percent, and this
(08:00):
was where everyone got excited. They looked at the previous month,
June's number, and that number month over month was up
or excuse me, a year over year was up two
point eight. So we dropped from a year over year
of two point eight down to a year over year
two point seven. And that was enough to get everybody excited. Now,
if I get over to what we call the core,
(08:21):
they strip out the food and energy side of it
because that's more volatile. It was up three tens seven
percent month over month. That was in line with the
expectation year over year up three point one percent. But
I went back to June's number and year over your
core was up two point nine So we rose on
the core side of it, stripping out food and energy,
(08:42):
but we came down when you look at the headline
as we call it, where you include food and energy.
So you know, you really could have said, Wow, this
could be a good bad reporter or just an okay
report because one kind of counteracted the other. Right, the
core year over year was not as good, but the
top line year over year was a little bit better
than expected. So this report really could have gone a
(09:04):
lot of different ways. But man, as soon as that
report came out at five point thirty, the futures took
off and we just kept going higher and higher. Best level.
Today we broke over five hundred on the Dow Jones
Industrial Average closed very near that four hundred and eighty
four point gain on the Dow one point one percent
to it closed a forty four thousand and four fifty
eight dwight. What kind of day was it on the
Nasdaq in the SMP today?
Speaker 2 (09:25):
I was waiting for another record setting day.
Speaker 1 (09:28):
You go, brother, there you go two hundred and ninety
seven point gain on the Nasdaq, up one point thirty
nine percent to close at twenty one thousand and six
eighty one. SMP hired by seventy two points one point
one to three percent to close at six thy, four
hundred and forty five. So it was just like I said,
it was like selling, you know, Corey to go back
to your your track time. It's like someone just you know,
(09:48):
fired off the starting gun and everybody got out of
the box and they just kept running and running and running.
Speaker 3 (09:54):
It was very interesting to watch it come out. Watched
the ten year fall and then I'm sure we'll talk
about it, yep, and hears starts arising pretty decently. Market drops.
Like I'm with you, I wasn't sure even even when
the real trading started. I wasn't sure which way they
were going to go with it, just because.
Speaker 1 (10:14):
Yeah, exactly, yep, you're absolutely right, could have gone could
have gone either way. So yeah, great, great, great observation
on your point. But so now let's go to the
end result. Why did this market get excited, like I said,
simply because it now is anticipating in a pretty good
likelihood that the FED is going to give us this
cut in September. So let's go to the CMEME FED
(10:34):
watch tool, which gives us the probability of that September
rate cut. The FED watch tool now is showing a
ninety four point four percent probability dwight of a September
rate cut. That is up from eighty five point nine
percent yesterday, but is now a sixty point five percent
(10:55):
probability of a second quarter percent rate cut at the
October meeting yesterday, that second chance was at a forty
nine point three percent probability. Or no, pardon me, now,
there's a forty nine point three percent probably of a
third rate cut in December. So again, to summarize, ninety
(11:15):
four point four percent probability of September, sixty point five
of a second one in October, and a forty nine
point three percent probability of a third cut in December. Guys,
what in the world would happen in your respective fields?
Do I? I'll start with you, Corey. We'll get your
answer when we come back from a break. If you
end up twenty twenty five with three rate cuts, where
(11:38):
do you We're six fifty eight today on the thirty
yere according to Mortgage News Daily, I'm sorry to take
that out of your mouth to why, but we're I mean,
that should push us pretty close to breaking six right
real close.
Speaker 4 (11:50):
Yeah, I think you're going to see at least a
seventy five basis point dropping the rate, you know, So,
I mean, I think it'll get a lot of subject.
You know, what what I wonder, John, is how quickly
the markets might start pricing in those probabilities, those statistics,
you know. I mean, you got to believe the ninety
four percent in September is probably already starting to filter
into the system a little bit.
Speaker 2 (12:10):
So that's going to.
Speaker 4 (12:12):
Give you some sign I mean, you know, we're in
the mid sixes, you know, as we'll cover, but yeah, yeah,
I could see us flirting with the high fives, you know,
even maybe mid And what's good about that is, okay,
you pay at a little bit of a point by
down here now in the low fives or that's a
good point.
Speaker 1 (12:29):
Yeah, it's a really good point. So when we come
back for the break, I want to throw that over
to you from a real estate broker's perspective, and that
is you know you'd mentioned last Thursday when we did
the local real estate Summary report, Obviously, in the beginning
of July you had said things starting to slow down.
The data reinforce that. But I'm curious as to your opinion.
(12:51):
If you get two or three rate cuts this year,
would you change your opinion on that slowdown? Right, we'll
be out of the season. But boy, this could be
the catalyst to get you know, even those that are saying, yeah,
my kids just started school, but boy, I don't trust
the FED and maybe they'll raise rates down the road.
I need to jump on this. Let's go find that
that that next home, So let's get your opinion on
that one. All Rather turn it over to Christen Snow
(13:12):
She's in the right now traffic center. Hello, Kristen, Welcome
back to the John Sanchiz Show on Newstalk seven eighty KO,
which with Cory zevgrilated to a White Mallard of Highlands Mortgage.
All right, once again, we had a heck of a
session today, four hundred and eighty four point gain on
the Dow one point one percent. Now's I got two
hundred and ninety seven points are one point thirty nine percent,
(13:33):
and the sp gained seventy two points one point one
to three percent. And once again, as Dwight correctly mentioned,
it was a record closed for the Nasdaq and the
SNP five hundred. All right, let's move things over to
the commodity side. Lost eighty three cents on oil, that
feels good, sixty three seventeen a barrel, just a six
dollars loss on gold, closed at three thousand and three
ninety eight ninety one ounce. And over to the bond market,
(13:54):
mister Miller, we already touched on the rates, but let's
go over to gain tenure yield to day, up two
basis points four to twenty nine. Once again, go over
your observation of the thirty year mortgage.
Speaker 4 (14:03):
Yeah, so the mortgage backed security, John broke rank with
the ten years, so we were up sixteen basis points
at the close. So you know, if it carries over tomorrow,
you'll see some a little bit better pricing. But we
finished out pretty much where we were on Thursday, six
point five eight on the thirty year mortgage according to
Mortgage News Daily, and the fifteen year at five point
(14:24):
nine to two.
Speaker 2 (14:25):
So you know, again the governes.
Speaker 1 (14:28):
Point nine two.
Speaker 4 (14:30):
Yeah, yeah, yeah, okay, yeah yeah, stayed at five point
nine two.
Speaker 2 (14:34):
I think that's exactly where on Thursday.
Speaker 4 (14:36):
But again the the FHA and the in the VAO,
the governments are at six point one four and six
point one five. So I mean, these are fantastic rates
considering what we've had for the last fourteen to eighteen months.
Speaker 1 (14:47):
So absolutely, a little bit.
Speaker 2 (14:49):
More, a little more improvement will be in good shape.
Speaker 1 (14:52):
You bet him? All right? Once again, before we went
to break, we started talking about today's catalyst to the
stock market, which again was the viewed as the benign
CPI data report. Once again up two tens of a
percent month over month, two point seven percent gain year
over year, that's on the headline. Estimates were a two
point eight percent gain year over year, so they beat that.
So we broke down excuse me, we broke down some
(15:15):
of the major components of course, of the of the report,
you know, the data that makes up the CPI number,
and I wanted to just hit on a couple of these,
see if everyone kind of agrees with this. So the
food index was was actually unchanged month over month, but
up two point nine percent year over year. Energy component
was down one point one percent month over month, down
one point six percent year over year. Corey, this is
(15:37):
the one I want to discuss with you this shelter index,
So this is rents et cetera, up two tenths over
percent month over month, hire by three point seven percent
year over year, and looking at the other categories, Corey,
the only other one that had a higher year over
year increase was the service index, which is up three
point eight percent year over year. So what are you
(15:57):
thinking on this? On this shelter side of it still
a little bit hot there of three point seven.
Speaker 3 (16:02):
Like I said, I think you probably still have a
supply demand imbalance in the rental market, right you still
have more tenants than they places, so the rents are
going to be sticky, and the cost to build things
right now is not going down the sticks and bricks
and plumbing and all those things. So I mean it's
it's going to be a sticky number. And I do
based on the conversation we're having before the breakout, do
(16:23):
want to go on the record, I don't think there's
any chance they cut three times this year. I personally
would be shocked if they cut twice, And you guys
obvious seen no better than I do. I still don't
understand why they feel like they need to cut based
on where the economy is at.
Speaker 1 (16:38):
Well, the answer is because inflation is indicative by the
CPI coming down a little bit, right, So that's remember
the fedes mandate. Let's remind everybody, you guys know this
two percent, right, but that's on the producer or the
personal consumption Expenditure report, the PC which is still right
around this two seven to eight. We had it last week.
I forget exactly what the number was, but we're still
(17:00):
above it. But now the bond market is starting to
price in. If you look at the shorter end of
the curve, you know, once again it is starting to
price in this this rate cut that that the street wants.
I mean, you you know, if you look, let me
bring up my my bond numbers here very quickly. But
if you look at how the bond traders you mentioned
this earlier, Dwight, if you look at how the bond
traders are doing this at this point, they are starting
(17:22):
to really look to you know, to price this in. Yeah,
I can't bring it up the it's refreshing right now
because we're obviously bond markets closed. But but the street
that the way the bond traders are looking at is like, Okay,
the FED, obviously, we know they're getting pressure from Trump.
We know we're gonna have a new FED chairman. We're
already starting to kind of narrow down that list to
(17:43):
who he wants to appoint. You can't can't you know,
they have to still or nominate. They can't be appointed
by him. So there's a lot of factors, I guess.
So what I'm getting to, core there's a lot of
factors pointing to the rate cut. Now, if you do one,
the other logic is, if you do one in September,
why not do another one in October? And we all
know that many times the FED doesn't like to do
(18:04):
a lot towards that end of the year because it
kind of sets the stage for the next year, right,
And I don't know if they want to go that
far out. So part of me agrees with you, Corey,
that three would be really aggressive. And frankly, after I
have not heard anywhere other than today this probability of
a third rate cut that is really new, based upon
(18:25):
this quiet CPI data. So you know, for sake of argument,
I think I'm going to be with you, Corey. Yeah,
two would be fine, but even that so Dwight six
fifty eight on the thirty year mortgage. Today we get
two quarter percent cuts September October fed goes idle get
into the new year, so we could still be down
what six two somewhere around there, probably on the third year,
(18:46):
I'm guessing.
Speaker 4 (18:47):
Yeah, you might even see a six one five, you know,
maybe a six zho five you know. But but the
good news is again with the seller concessions we've talked about,
that buys into the fives, right, you know, it very
easily buys you into the five.
Speaker 1 (19:00):
Yeah, okay, Corey. So before we go to break we
get down to that level. Do you see any any
turnaround in the slow down that we're starting to see
in the data at this point as far as real
estate prices and activity, et cetera.
Speaker 3 (19:11):
I would think at the at the housing price stayed level,
but the cost, the monthly cost of the consumer went
down because of that, then that probably helps people qualify
it gets in there. I'll tell you I have a
house right now that we've put an scraw over the weekend.
We had four offers, all FHA, and they all needed
I think the smallest concession it was offered was ten
(19:32):
thousand dollars. Wow, all the way up to twenty five
thousand that they told me they had to have.
Speaker 1 (19:37):
No qualified that they told you they had to have
is you know.
Speaker 3 (19:41):
We had to bite the bullet on one of the concessions.
It wasn't the twenty five thousand dollars one, but still
they all said, hey, my client needs us to qualify
and closing costs and so it is interesting.
Speaker 1 (19:53):
Yeah, that's a great point. That is a great point.
Speaker 3 (19:55):
I got another quick story.
Speaker 1 (19:56):
If you haven't man, please list do it real quick.
Speaker 3 (19:58):
So I'm when I get bored, I read model a
bathroom in this old house, you know right, So I've
got one coming up. I got a remodel, and my
wife wanted the same flooring that we had in the
other bathroom. So I went down to the flooring story today.
I was talking to the guy, Hey, can you give
me the same flooring gut last time? So I looked
up and compared. He goes, yeah, we can get all that.
He goes, oh, you're lucky. It went down two dollars
(20:18):
a square foot from when you bought it two years ago.
Oh really, I go, why is that? He goes, I
think I won't tell you the company name, but he goes.
I think it's because they moved their manufacturing from China
to Vietnam and the price went I go, you go.
That's the first time I wanted something went down.
Speaker 1 (20:32):
In years ago.
Speaker 3 (20:34):
Kid, huge, huge, huge flooring company. But the price down
two bucks.
Speaker 1 (20:40):
That is something that is yeah, yeah, that's uh. That's
something we don't hear very often, something anything where the
price goes down. I we bought a new laptop for
one of the employees the other day, and yeah, I
got the it was a it was a Mac and yeah,
got to feel the tear off side of that side,
you know, part of it. So yeah, God, God bless you,
Cory for finding something where the price goes I love it.
(21:01):
I love it. All Right. When we come back, how
to turn your primary residence into income. That's right, we're
not talking remember properly, we're talking to your primary We've
got some great strategies lined up for you. But first
let's turned over to Jack Saban. He's got news, trafficking weather.
Hey Jack, welcome back to the John Sanchez Show on
New Talk seven to eighty k, which with Corey Insividrility
(21:23):
and to White Millard of Highlands Mortgage once again. We
finished with a game of four to eighty four on
the doubt the NASDAC grows two ninety seven s and
pup seventy two, both of the former a record finished there.
All right, let's turn your primary home into a cash
flow machine, right. I know it sounds so strange to say,
wait a minute here, rand All, I can understand, but
making money on my primary home, how in the world
can we do that? Well, the boys to put together
(21:45):
an incredible list that you actually can And let's again
set the table straight as to who can we do
this so or who could be considering this? So there's
a lot of demographics guys that could be considering this
idea is we said it the beginning of the show.
I run across this a lot with our clients. They've
got a big house. Husband dies or wife dies. They
(22:06):
he's like here or see was like I don't want
to move, but man I leave. You know three out
of my four bedrooms closed, or you know it's just
too big of a house. How can I make a
little bit extra money? Well, there's ways to do that. Again,
we all know about Airbnb and vrbo. Now we're not
talking about Airbnb is a stock. We're just talking about
the strategy behind this. So we're going to go through
(22:28):
nine different ways that you can consider doing this, and
again just let your imagination wonder because there are so
many ways. But Corey, give your little disclaimer that you
always do when we talk about this subject in regards
to whether it's a necessary dwelling unit or an ADU
or an airbnb in regards to local regulations, cause I
want to get that out of the way, make sure
(22:48):
we don't forget.
Speaker 3 (22:49):
That you have to be so every little municipality putting reno,
putting sparse putting, every little town across the country. It's
starting to enforce permit, so you have to have a
permit to do. Basically, short term rentals is what they're
going after. I have a permit to use your properties
as short term rental. ADUs are kind of different. There's
(23:09):
some municipalities that they'll let you do ADUs, but you
can't use them for short term rentals. So really check
in with your local guidelines to see what you need
to do. Especially if you're going to build something, make
sure you know what the rules are before you build it.
Speaker 1 (23:26):
Otherwise and use a license contractor don't. Yeah, that drives
to white and nets when he I've got a four
thousands ft home. But that one thousand foot edition I
did to include that. I just me and a buddy
did it on a Saturday with a case of beer. Yeah,
that didn't work that way with exposed Yeah.
Speaker 4 (23:45):
Well, John, John ad real quick to that ad us.
I'm gonna you're gonna start seeing financing options available in
these ad us here in no time. Oh you think so,
they're already They're already kind of in the works.
Speaker 1 (23:56):
Where was it San Francisco or somewhere down in the
Bay Area where they approved being able to offer the ADUs, right,
remember that, like a year or so ago. It was
one of the big, big cities that said you can
start using ADUs and offering them. You just remember that.
Speaker 3 (24:12):
Well, there's a lot of them. I think San Diego
is doing them.
Speaker 1 (24:15):
There's okay, a.
Speaker 3 (24:16):
Few of them. They have them, man, I don't remember
the exact stories in the Wall Street a couple of
months ago about I'm pretty sure with San Diego there guidelines.
You know, you get these unforeseen things. So they had
these ADU guidelines Accessory dueling units for everybody listening, and
somebody found a loophole in there and started building whole
developments with ADUs, and they had figured out how to
(24:40):
make basically they were tiny homes that they got around
the rules. So it's still a work in progress to
figure all this stuff out.
Speaker 1 (24:47):
Okay, very good. All right, so we got the disclaimer
out of the way, So let's go into more details
about the first way to make some money in your
primary home again the ADU ascessory dueling unit. So this
is where you can I mean some of the ideas
that you can convert a garage, you can conver in
a basement, a backyard structure, all into rentable living space. Corey.
Let's say you follow all your advice, you get all
(25:07):
the permits, everything's legal, so on and so forth. How
do you price something like that from a rental standpoint?
Speaker 3 (25:12):
Just whatever the market will bear. I mean, if let's
say that you are going to build from scratching an
accessory dwelling unit that is separate and it's a little
two bedroom, one bath day under square foot, I mean
I would price that against two bedroom, one bath apartments,
two bedteran one bath houses around there. I mean, that's
the whole point, and from a financial point, you want
to figure that out before you build it, to make
(25:34):
sure you're not building yourself a black hole.
Speaker 1 (25:37):
Now correct me if I'm wrong. I have read many stories,
Corey where people actually are able to command a higher
rental rate. Let's use your example, the two bedroom, one bath,
you know, Grandma's quarters as we call it. You know,
in the backyard, they're able to command a higher rental
rate per square foot because people, it's like you're living
(25:58):
at home, right, it's not like being in a bid
or in a in an apartment. A lot of times
they become very close friends with you know, the the
person or people living in the main house. And I
mean I've heard wonderful story. I got a friend right
now in southern California that he does that one of
his business partners, you know, let him, you know, rent
this a du in his backyard and see me Valley,
(26:19):
and he just loves it. I mean they have dinner
together a lot, and they you know, do all kinds
of these become really good friends. But I've heard more
and more stories like that, so you know, don't be
surprised what you can get from a rental site. Especially
if you're kind of a you know, a warm, welcoming
person and you know you like people and stuff, it's
maybe a really good way to go.
Speaker 3 (26:37):
No, I totally agree with this because it's it's in theory,
it should be better, I want to say, better, but
different than apartment. I think you got a little stuff
and got to go. As you mentioned, you've got to
be a people person. Because yes, I mean you both
know this. We have a little guest house that's right
next to a creek. It's I would never run it
out because when I come home to see anybody but
(26:58):
my family, right right right, I'm sure I could get
more than the apartment down the street. That's right, because
of the environment.
Speaker 1 (27:04):
Absolutely. Okay. So to conclude on this point, just make
sure you check with your zone regulations and the county
or the city and so on and so forth to
do it correctly. All right, Dwight, Let's go into the
second point, which again is something that everyone knows about
this year. These are, of course the short term rentals,
and when you say that, you think of the names
like Airbnb, vrbo, so on and so forth. So you
got to look at the pros the cons the inco potential,
(27:27):
but for the most part, usually an airbnb or short
term rental like this is going to command more on
a per day basis then let's say a long term rental. Correct.
Speaker 4 (27:39):
Yes, absolutely, and that's I think that's where they, you know,
the opportunity comes in. This is where those next gen homes,
you know, when they're building next gen, where they improve
your next gen is a separate entrance, what they modified
kitchen there. A lot of builders are going to that
with the with the OSCO set the bar that the
buyer is going to put their aging mother in laws,
(28:02):
and they don't. They turn it into an Airbnb or
vrbo and they get phenomenal nightly or daily returns for it.
So that one, especially if your house was built that
way or modified that way with the separate entrance, I
mean you just come and go as it just as
a guest and you really don't run into anybody. So
(28:23):
it's probably more common than we'd like to probably think
out there.
Speaker 2 (28:26):
I think a lot of people that have that are
probably already using it that way. What do you think,
do you agree, Corey with that?
Speaker 1 (28:32):
Oh?
Speaker 3 (28:33):
Yeah, I'm sure. The only thing too to remember is
most of these new communities. You got to figure out
your municipal rules for the city of town, but you
got to look at your homeowners restrictions or HOA make
sure that they'll allow short term rentals or.
Speaker 1 (28:47):
Any I think I read something the other day that
up in South Lake, which of course was a huge
VRBO airbnb market, and then of course the city council
voted to ban it. You your grandfather if you had
the permit, but you can get anymore that they've now
reopened that back up? Or am I right on that?
Speaker 3 (29:04):
That thing gets flip flops so many times I.
Speaker 1 (29:06):
Know I lose track of it right now, to be honest, okay, perfect,
all right, when we come back, guys, let's move on
to point number three, the long term room rentals. See
if we can make some money in our primary home
that way. Let's wrap it up with Christen Snow right
now Traffic Center. Hey, Kristen, welcome back to the John
Sanchez Show on News Talk seven to eighty k W
(29:26):
it's mister Bell large your phone number, sir, yes.
Speaker 2 (29:29):
Sir two four zero two zero two.
Speaker 3 (29:31):
Two, Thank you, sir, mister edge six seven three six
seven zero zero.
Speaker 1 (29:35):
Beautiful, Thank you, sir. All right, we've been talking about
how to turn your primary residence into income. We need
to hustle. I want to get these nine points done.
So we started off with the eighty US. The accessory dwellings.
This is again converting a garage of basement of backyard structure.
Number two, the short term rentals, the airbnb, the v vrbos,
anything along those lines. Corey. Number three the long term
room rentals, right, running a spare bedroom or a finished
(29:56):
basement for a steady monthly cast flow. Right. People want
this long term side of.
Speaker 3 (30:00):
It absolutely and these are big as you can imagine
around cottages because room rentals kids going to school easy
or not there much so. But you can do it
in any neighborhood, in any house.
Speaker 1 (30:10):
Love it, love it all right. This is fourth one. Boy,
this can take a special person. But let's throw it
out there. House hacking. You live in one part of
the home while you rent the other part to cover
your mortgage or a creat a profit. Yeah right, that's a.
Speaker 2 (30:24):
Divorce to me.
Speaker 4 (30:25):
Yeah yeah, yeah, But John, I think that's it's happening
more and more people are so yes.
Speaker 2 (30:32):
I mean it takes a special person.
Speaker 1 (30:34):
Quy, I love your six point package and storage income,
ringing out unused garage, drive a yard, space for vehicles, boats.
Speaker 3 (30:41):
R vs, anything to store. And then I'm sure you
guys have seen it. Now, if you have a swimming pool,
there's apps or you can I'm gonna say right out
your swimming pool. But people.
Speaker 1 (30:52):
Huge I could Yeah, yeah, yeah, yeah, exactly. Yeah, I'm
glad you brought that up, all right. Number seven, this
is kind of a fun one again for the right
personality event hosting, use your home or your yard for weddings, parties,
corporate retreats again, proper zoning and so on and so forth.
(31:12):
But you know, I mean not to reveal Corey's personal life,
but he has the most gorgeous, gorgeous yard, big bluscious
grass and pasture and things like that. Corey, That's an idea,
I know you never do it, but an ideal wedding scenario, right, folks,
let me tell you, because we're in that business, you
can make a lot of money renning out the right
space for a wedding. Wedding planners are looking all the
(31:34):
time for places and everyone, especially those of you that
have ranches and things. People love the ranch wedding venues.
So yeah, that's a huge money maker there.
Speaker 3 (31:42):
And my wife gets asked all the time.
Speaker 4 (31:45):
Yep, yeah, yeah, don't forget about event parking if you
live near the college and things like that.
Speaker 1 (31:51):
Good point, that's a good point. Yeah, exactly. Okay, so
that's event hosting. Now let's go to number eight. The
home based business, where you leverage part of your residence
as an office, a studio, workshop that generate income from
the clients. That's a great one. Of course, we all know,
and so many people do that. After COVID and so
on and so forth. All three of us work from
(32:11):
our residences are some part you know throughout the day.
It's amazing. So that home based business, that doesn't require
much more. But let's wrap it up. Kind of ties
in with the home based business. The tax benefits and
the pitfalls. You need to have a good accountant, good attorney,
et cetera, understand the IRS rules. The deduction is the
difference between primary residence rental property tax treatment. Coreate just
real quickly. I know you're going to give the disclaimer
(32:33):
you're not an accountant. But one thing I see with
people that do take the home office deduction, because remember, folks,
let's say you have a thousand square foot house, to
make it real simple, and you use one hundred square
feet for pure office. Right you're not you're not using
up part time, but it's a pure office. And so
that would represent one tenth of your overall square footage.
So you can take a tax deduction on again, your utilities,
(32:56):
your property taxes, sometimes your mortgage. Again check with your account.
But that's where a lot of times people Corey will
they'll do that home office deduction and then they forget
about it when they go to sell that property.
Speaker 3 (33:07):
Sure. Yeah, and that's where you need the account. And
I can't emphasize enough to keep detailed records, I mean
just detailer. I have a client right now, we're listing
our house, and she pulled up this accordion file every
penny she'd ever spent, no kids, just like here in
case something I go, I don't need that, but miss
your account's going to need it to pay Uncle Sam
(33:27):
because the basis of your house went up. So take
meticulous notes. And the home office deduction, I want to
tell you from experience is a key one that they
get you on and audits, So keep your stuff straight.
And if you take a little bit of the home office.
You got to take the whole thing. So make sure
you get some good.
Speaker 1 (33:45):
Advice right exactly. So, folks, we just gave you nine again. ADU,
short term rentals, long term room renolds, the house hacking.
Oh we forgot when I'm sorry, Hosting for film and
video shoots. I've had some friends that have done that,
especially like up if you live up in the pine trees,
you know, pick your favorite area. A lot of times
(34:05):
movie studios want to rent, you know, for a certain scene.
Huge money in that side of it. We talked about
the parking and storage income, the event hosting, home based business,
and then the tax benefits and pitfalls anything else in
one minute. Guys that you want to wrap up with
on this advice, I think John.
Speaker 4 (34:20):
With the ability of social media and the way to
get it out there, this has been the biggest This
is the most opportune time you've ever had to do
these these nine items, you know, because you can connect
to everybody.
Speaker 1 (34:32):
Yeah, no, you're absolutely Corey.
Speaker 3 (34:34):
Yeah, just choose your imagination. I mean, it's this whole
gig economy was made up because people use their imagination
with stuff they had.
Speaker 1 (34:41):
So there you go.
Speaker 3 (34:42):
Here's your imagination.
Speaker 1 (34:43):
Yeah, no, that's that's perfect and it's exciting too, because
again everybody's looking for extra income and I think one
of the things we got to look at going forward,
anything you have that's not being used, look at ways
be creative to make money with it, right, if that's
your desire. Some people are like, I forget, I don't
need a BT. Others, hey trying to make every every
dollar stretch. And I think the advice we gave today
is a great one to go. Excellent job, fellows, so
(35:04):
good to see us, so good to be with you.
Thank you all for being with us. We do appreciate it.
We'll be back with you tomorrow on the John Sanchez Show.
God let's have a great afternoon. Dwight Millard nmlsid Number
two four one two five nine a license Mortgage Loan
Officer with Highlands Residential Mortgage Limited and Equal Housing Lender
nmlsid Number one three four eight seven one. The information
shared on this live broadcast is for general information purposes
(35:27):
only and does not constitute financial or mortgage advice. Listeners
should consult directly with a license mortgage professional for guidance
tailored to their specific situation. All loans are subject to
credit approval and program guidelines. Not all applicants will qualify.
Loan terms and availability may vary by state and are
subject to change without notice. Highlands Residential Mortgage Limited is
(35:48):
licensed in multiple states. For a full list of state
licenses and disclosures, please visit https slash slash www dot
Highlandsmortgage dot com backslash licenses backslash. The views expressed during
this programme are their own and do not necessarily reflect
those of Highland's Residential Mortgage Limited.
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My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.