A First-Time Homebuyer's Guide to Navigating the Changing Real Estate Market in 2024 with Fred Glick Of Arrivva

Drew Thomas Hendricks00:00:00

Hello, everyone. Welcome to the latest episode of We Fixed Real Estate. Today, we have Fred Glick on the show, your real estate realist, and we have René Pérez, real estate pricing savant and budding restaurant critic who’s on-site in Chicago at, where is this, René?

René Pérez Jr.00:00:21

As you see in the background here, I’m not showing my face here, but I’m at the new McDonald’s spin-off, CosMc’s.

So it’s about an hour west of Chicago, actually.

Fred Glick00:00:37

What is this, like an upscale coffee shop? They’re just starting to compete with Starbucks?

René Pérez Jr.00:00:43

Exactly, you’re exactly right, Fred. So McDonald’s realized, I mean, so people don’t know this, right? But a lot of how McDonald’s makes their money is on the actual burgers, but it’s on owning their real estate and franchising out the space.

Fred Glick00:00:58

If you saw, if you saw the movie, you’d know that.

René Pérez Jr.00:01:01

Oh, I didn’t see the movie. So I probably should have watched that movie. But anyhow. Yeah. Anyhow,

Fred Glick00:01:09

Two and a half hours.

René Pérez Jr.00:01:10

They realize, look, we don’t actually have to have an interior space. We can just have these drive-thru panels. And as you can see here, it’s a what? Four drive-thru panels.

Drew Thomas Hendricks00:01:20

Oh, so there’s no interior. You can’t eat inside.

René Pérez Jr.00:01:22

Yeah, there’s no interior, but there’s no interior. And I’m still not going to be able to eat anything because it’s a three hour wait time. It’s a really bad video.

Drew Thomas Hendricks00:01:33

How do they queue up the cars for three hours?

René Pérez Jr.00:01:37

Oh, because it’s in a loop. There’s like a circle. I can drive around too. Let me see. Oh, I can zoom in.

Fred Glick00:01:42

People are ridiculous for a cup of coffee just because it’s made by McDonald’s. McDonald’s is not exactly known for its quality.

René Pérez Jr.00:01:48

Well, we’ll add a link to the full menu on the podcast, but they have some nice funky things like some churro almond lattes and just Got a whole bunch of funky,

Fred Glick00:02:02

More sugary crap.

Drew Thomas Hendricks00:02:04

Oh, I thought this was a health food thing. I thought they did like quinoa bowls.

René Pérez Jr.00:02:08

Oh, no, no. So McDonald’s is trying to do this thing where like they just bring back. Well, it’s like, as like astronomical, right? Like just universe, just like things you wouldn’t find in your regular suburbs.

Fred Glick00:02:23

All right. So here’s the real estate question. We all know there’s the Starbucks effect when Starbucks opens. You know, the value of real estate allegedly goes up because there’s more people with more money and Starbucks knows this. I don’t think there’s going to be any kind of a bump because of the McCafe or whatever the heck it is.

Drew Thomas Hendricks00:02:43

The CosMc’s.

Lurking around the corner, the CosMc’s, if anything, it’s just going to be more traffic. So it’s going to be worse. So that’s the real estate poke on this.

René Pérez Jr.00:02:53

Hmm. Yeah. That’s a good question to ask. So Well, we always ask the good, the good real estate questions.

Fred Glick00:03:02

Yeah.

René Pérez Jr.00:03:02

And we do know it’s always about location, location, location. So there you go.

Drew Thomas Hendricks00:03:07

Now these people, do they serve like dinner food?

René Pérez Jr.00:03:10

Yeah. So they, well, they have like, Oh, I actually don’t know the full menu.

Cause I was just going to try it out as I got here. But so they have like, just like chicken wings, but with like different sauces that are just not common or like fries with cheese and oh, I have a plane. I think there’s a plane,

Drew Thomas Hendricks00:03:32

Whoa.

René Pérez Jr.00:03:34

Showcasing the three-hour wait time for the Mc CosMc’s.

Fred Glick00:03:38

We got our man, we got our man on the scene. Yeah, man on the scene.

Drew Thomas Hendricks00:03:42

So I got a dare for you. Go up to the first person in line and see if they’ll order you some food and you can pay them.

René Pérez Jr.00:03:49

All right, okay.

Fred Glick00:03:49

Pay them 20 bucks for your order of something, just walk up there. Or wait.

René Pérez Jr.00:03:54

I’ll do that. I’ll do that. Yeah.

Drew Thomas Hendricks00:03:55

Our dare to actually get in their car and go through the drive-through with them.

René Pérez Jr.00:04:00

Yeah, well the problem is I’m not sure Drew is going to bail me out. So let’s see.

Fred Glick00:04:06

You’re on your own dude. And to the contrary. I got, okay, I had a problem with an old Macbook pro and I decided I couldn’t find the answer on Google.

So I went over to my local Apple store four days before Christmas and the guy said, well, “Walk-ins we can help you. It’s gonna be about four hours.”

René Pérez Jr.00:04:26

Will there be any, did you already order? Oh, I was gonna say, if there’s any way that you could order for me, pay you extra.

Fred Glick00:04:34

Go to the next guy.

René Pérez Jr.00:04:36

No. Alright. Thanks man.

Fred Glick00:04:38

Tell him you’re live on a real estate podcast from California.

René Pérez Jr.00:04:41

Oh yeah, yeah, yeah. She already ordered.

I don’t think they’re interested.

The problem was that the guys in the front would have done it. The lady after wasn’t so happy.

Fred Glick00:04:53

Is there only one drive-through for all those cars?

René Pérez Jr.00:04:57

No, there’s multiple. But

Fred Glick00:05:00

Oh, okay.

René Pérez Jr.00:05:03

I tried, I won the bet.

Drew Thomas Hendricks00:05:04

I admire your –

René Pérez Jr.00:05:05

My efforts. If I had a nice little microphone, probably would’ve worked out better.

Drew Thomas Hendricks00:05:11

Oh yeah. If you look over like on the beat reporter.

René Pérez Jr.00:05:13

Yeah. If I, you know, you know what the problem is, I’m not wearing my suit.

Drew Thomas Hendricks00:05:17

That’s it. You didn’t see for the, but you do look like you’re in Chicago.

René Pérez Jr.00:05:23

Okay. Alright. I’m gonna take off the camera now.

Fred Glick00:05:24

Arrivva media hats.

Drew Thomas Hendricks00:05:27

That, yeah.

Fred Glick00:05:28

Arrivva.Tv. There you go. I think we own that.

Drew Thomas Hendricks00:05:32

We do. You do. I don’t.

Fred Glick00:05:33

Probably, anyway.

Drew Thomas Hendricks00:05:35

So you were hanging out at the Apple store. I have a similar story, but what, so four days ago, what happened?

Fred Glick00:05:40

Me or René?

Drew Thomas Hendricks00:05:41

Yeah. You. You were at the Apple store four days ago? Yeah.

Fred Glick00:05:44

Oh, oh, oh, no, no, no. I was there today.

Drew Thomas Hendricks00:05:46

Oh shit. I was there yesterday. Okay.

Fred Glick00:05:48

Yeah, you had your hell yesterday. I don’t even wanna, let’s not even talk about that on the podcast, but cause I don’t want you to cry. Yeah, I left the Apple store in Manhattan Beach, which is not near the beach.

It’s up in case you don’t know it. It’s on Sepulveda in the shopping center. So I ran a couple of errands and then I came back here. And I’m in a, I guess I’m a mall, whatever you call these things now, where they just have a bunch of stores, but not an inside mall and outside. And it’s pretty damn quiet for four days before Christmas.

I don’t know. I was in the mall where Apple store was pretty quiet, but you know, it’s the middle of the day on a Thursday. So I don’t know if that means anything for retail sales and retail sales drive economies. And I’m, I’m thinking the retail sales are not going to be as good as they think. And yeah, it just smells that way, which is great for interest rates.

That’s it. I think we’re headed for some kind of a softy kind of landing, which will lead the Fed to lower rates. And if you listened to our last podcast, you know that just the Fed lowering rates doesn’t mean on that day the mortgage rates go down. They trade every day and they keep heading down. So, it’s going to be interesting. That’s the economics lesson for the day.

Drew Thomas Hendricks00:07:20

Anecdotally in San Diego. Yeah, I was at the Apple store yesterday too getting my screen fixed. And it was like one of those things where every, I had to download an update then wait 15 minutes. And I never, there was never a timeframe where I knew I was going to be there for three hours.

I always had this expectation of leaving 15 minutes later, because it just wasn’t a phone loan. Three hours later, I got to leave. So I had a good, good, long experience. That Apple store was busy. It was very busy.

Fred Glick00:07:45

Buyers, buyers or repairs.

Drew Thomas Hendricks00:07:48

You know, the way they have all the people needing help in the back of the store and all the people actually purchasing stuff in the front.

But I do, I did not see a whole lot of new Apple bags go out the back.

Fred Glick00:08:03

Interesting. I think you would think everybody’s buying the Apple watch. You don’t have to hit on that stupid problem. They’ll fix it.

Drew Thomas Hendricks00:08:12

If I can tell by all the Amazon drivers driving up and down my street, people are ordering.

Fred Glick00:08:16

Oh yeah, that’s busy.

They’re ordering, but they’re not going to malls. Which leads, I mean, we’re going to have this crisis with office buildings when the refinances started and they’re starting to turn into residential finally. We’re going to have an issue with stores. I mean, people just don’t go to the store. What do you need to if you don’t have to, you know, it’s not an experience anymore.

Santa, you know, whatever. That’s about the only reason. But you do a virtual. I heard about this virtual Santa thing where you literally can have Santa in your backyard with VR.

Yeah, exactly. Same kind of thing. So you can bring the kids out back and have Santa interact with them. So what do you need them all for? Take a picture, Photoshop, put your kids on Santa. You don’t have to take them to the mall anymore.

Drew Thomas Hendricks00:09:04

The Sears, the Sears at our local mall just turned into a pickleball club.

Fred Glick00:09:09

There you go.

Drew Thomas Hendricks00:09:10

There’s many courts.

Fred Glick00:09:11

Pretty smart.

Drew Thomas Hendricks00:09:11

Couple stories of pickleball courts.

Fred Glick00:09:14

So, you know, as the world does, everything changes. So you keep up with the changes. What’s going to be? How’s this affect residential real estate? People are going to stay home more. They’re going to spend more hours in their house.

Like we saw that obviously when we had the pandemic, but kind of now there’s a seems to be a spread through, “Hey, I’ll just stay at home and make my house nicer.” Which makes more people in demand for staying there, which makes more people want to buy houses, which is going to drive the prices of real estate up, up, up.

Hello. Yeah, that’s your economics lesson for the day and the prediction. It’s just going to keep going. I mean, they, you know, we’ve had a couple of buyers this week doing a hundred grand under lists, you know, claiming blah, blah, blah. We don’t care. They laughed at us. They countered us at full price because they know there’s going to be, you know, after the spring market, which starts in the middle of winter in California, after the first slowly houses will come back, new houses will come up, but they’ll get eaten up because there’s plenty of buyers.

That’s really, really what it’s going to amount to. So I don’t want to keep boring you guys with all this stuff, but, you know, be prepared, know what you want, get as much information as you can. And of course, use us and get a rebate.

Drew Thomas Hendricks00:10:35

Yeah. I do have a question that came up in our, one of the comments streams, we talk a lot about savvy buyers and, you know, season buyers.

What advice do you have for first-time buyer who may be renting right now who is considering maybe getting into another one-year lease?

Fred Glick00:10:56

Getting into a one-year lease to spend. Yeah, depends what state you’re in like in California signing a lease. But if you want to get out of it you kind of can and the landlord is pressured by law to try to re rented for you.

So if you can, you know, you’re looking for a house, you find a house, you’ve got to, here’s the thing, you settle in September on the house, you don’t have an October mortgage payment, first payment’s November. So if you go in September, you, you got the contract in August, you tell your landlord, look, I’ll be out by the end of October.

Give him a 60-day notice, that’s fine. There’s some other statements.

René Pérez Jr.00:11:38

So, so, sorry Fred, but, so when you get on a tenant, a lease contract, there’s an actual part of the contract where you can state that you can actually break the lease if it’s because you’re purchasing a home. I think that’s probably the best way to do it.

Keep it, keep it transparent from the start, like, “Hey, look, I want to rent. I’m probably going to be here for a year, but can we write the contract up or it’s, depending on that.”

Fred Glick00:12:04

Get out on 60-day notice or something like that.

René Pérez Jr.00:12:07

Yeah. Correct.

Fred Glick00:12:08

I think the bottom line is read your lease, talk to your landlord.

Get it in writing, get it in writing, get it in writing, get it in writing. Everything in real estate must be in writing. Can I repeat myself a million times for that? Get it in writing. I don’t care what state it is. Get it in writing, signed by both parties. So that’s the key to it. Make it, even though it’s an email, make that email an addendum to the contract, to the original lease contract and have both parties digitally sign it so that you know, you have ironclad.

You know, nothing they can do to you. They can’t play with your security deposit when you move. Yeah. I mean, there are people who could get, you know, six months within a month to month. You know, if you’re thinking of buying, that’s kind of the idea to do. So again, check with your local whomever for whatever state you’re in. But,

Drew Thomas Hendricks00:13:05

In California with those, you know, the starter home landscape right now may have not gone up as high, but rent versus buy for a first-time buyer. What’s your thoughts on that for 2024?

Fred Glick00:13:20

Even rents are starting to come down a little, but they’re not dropping like 500 a month kind of drops. They’re a 100-month kind of drop.

So rents are basically about the same. The nicer buildings are going to get a little more money in the rent versus buy calculation, you can Google it. The New York Times did the most amazing full complete digital numerical thing on comparing rent versus buy. You got to take your tax return compared to, you know, if you’re going to itemize compared to standard deductions because of the interest deduction, tax deduction, you got to do all the numbers.

But aside from that, you’re building equity. You’re paying the mortgage every month. It’s paying principal down through there. You’re going to be there 20 years. It’s great. You’re going to have equity. Rent, obviously, you don’t have equity and the ability to get in. They made it a little bit simpler up to 1, 148, 700.

I think it’s the number you can get in literally with as little as 3 percent down, sometimes nothing down. The problem is there’s 20 people looking at that house and half of them are putting 20 percent down. So for the neighborhood that you can find that nobody wants to live in, I’m going to give it to you where there is no competition and you can get yourself a house that’s decent for under a half million dollars in California.

That’s a wait, wait for it. Wait for it. Wait for it. The Palm Springs area. Why? Well, everybody at the pandemic said, I’m out of here. I can go out to Palm Springs, Joshua Tree, you know, Yucca Valley, whatever, and chill and get away from everybody. And then I can Airbnb it. Well, everybody decided they were going to Airbnb.

It’s a guess what the local old-time homeowner, nasty old people decided with everybody they put in office is no more Airbnbs unless you get these like super special licenses. So, I mean, there is a gazillion properties. Go in Redfin type in Palm Springs, you know, three bedrooms up to half a million, you’ll see ton of lists.

Drew Thomas Hendricks00:15:31

Wow.

Fred Glick00:15:31

Yeah. I shouldn’t really say this because I’d probably get a ticket for it, but I was there and Monday I went from there to basically downtown L.A. in an hour and a half.

Drew Thomas Hendricks00:15:46

Speedster.

Fred Glick00:15:46

No traffic. No traffic on the 10th. No traffic. Not that that’s going to happen all the time. It’s about three weeks to get out there on a Friday afternoon, but you wanna buy a house, and guess what?

You live there a couple years, things start coming back. They may be loosen up the Airbnb rules. You can have it as an investment property down the road, or you can make a profit when the profits are back and then flip it to get another house somewhere else. But there’s an idea for you kids, Palm Springs. And we might as well throw a few, few ads on there Drew next year, just, just for fun.

Drew Thomas Hendricks00:16:21

Yeah. No, that’s it. That’s a great idea. I mean it’s, yeah, that’s, you got that –

Fred Glick00:16:27

Let me throw this out. Yeah, let me throw this out because it’s going to talk about it later. And I’m, I’m wearing this hat specifically. If you can see it, it says, can you see what it says?

Drew Thomas Hendricks00:16:40

Ballroom Marfa.

Fred Glick00:16:41

That’s correct. Okay. Ballroom is the name of some designer place. I don’t even know what it is. It’s some fancy design place. But Marfa, Texas is like this cool Texas place. And I speak of Texas because we are licensed there, but we weren’t active. Beginning next year, we’re going to get back to being active.

Talk about affordability. We’re going to start in Dallas because it’s all over the map. There’s regular houses that you can get at decent prices still. And there’s really nice houses you can get. And it’s a strange market compared to California, but it’s still a pretty busy market. And we started last year in Austin, Texas.

It didn’t work out. We just couldn’t get any traction there for some reason, but I think we’re going to be really good to do basically Dallas. So that’s where we’re going to start. So we’ll be in Texas. We’re also doing mortgages in Texas. So that’s seven, whatever the Fannie Mae limit is there. I don’t know what the if they have a higher level of it.

But we’re always competitive in the mortgage space for Fannie Mae loans.

Drew Thomas Hendricks00:17:53

Is this the conforming limits?

Fred Glick00:17:55

Yeah, conforming limits. But if you go to conforminglimits.com you can look anywhere in the United States, in each county or MSA what the limit is. So go to conforminglimits.com. Look up Dallas, Texas, and I’ll tell you what a one, two, three, or four unit maximum planning may mortgages.

Drew Thomas Hendricks00:18:14

Or you can go to wp.arrivva.com/mortgage and find that fancy new table we created.

Fred Glick00:18:20

There you go. There you go. And you can do your mortgage app and we do custom rate quotes. We don’t have machine-automated interest rates. We’d like to do it. You give us the information. We’ll dig out and run around and look at different programs and what we can do. And then we’ll ping you and maybe have a conversation at Google Meet or something.

So we do the mortgages a little different. Also, there is no good consumer-facing way of getting the exact interest rate you need. One of these days we’ll get around to building it. We’ll do that. But right now, it’s like, it’s like the MLS. The loan officer has control. It sucks. But the, you know, the MLS, you don’t have access to agent-to-agent notes or lockbox codes, stuff like that.

Same with the MLS. You don’t know the exact rate. We can give you a ballpark rate based on blah, blah, blah. But I mean, sale price, loan amount, loan to value, credit score, type of property. There’s a million different things to figure out what a rate is. There’s no such thing as what’s your rate today.

Here’s an example of that. Today I quoted a guy, he was looking to purchase a property and I quoted him like five and seven eighths, right, or 5. 99. But then he says, I want to refinance my other property first. I, it’s a condominium cash-out refi that added up so much extra. It was 6. 875. So there’s a whole point higher because he’s doing cash-out refi that was a condominium.

So that’s why there’s this thing is the rate. You have to dig into the details to find out what the rates actually are.

Drew Thomas Hendricks00:20:03

That’s an important thing for people to realize because I do mortgage calculators and all this stuff and you got to take that with just like there’s an idea but it’s probably going to be, it could be a whole point and a half different.

Fred Glick00:20:16

Yeah, you just don’t know. Your credit score 739 is different from 740. 699 is different than 700. And they take the middle credit score of the lowest. If there’s two of you get the lowest of the two. So you’re all, they’re always working on the worst score. Well, no, I think they changed it so that they only take two scores or something instead of three.

And I don’t know, there’s some new calculation now. I can’t remember what it is, but also your credit score. If you go for a car loan, if you check it online or you go for a mortgage, three different credit scores, because they all have their different ways of calculating it. Car, the car guys are going to be higher.

If they want to, they want to push it out. Mortgage company is going to be more conservative. And your personal credit score is probably somewhere in the middle. If you just go look online and experience. So credit scores are fun and complicated.

Drew Thomas Hendricks00:21:11

Yeah. Yeah. Good. So going into 2024 Texas, you’re in Texas –

Fred Glick00:21:18

Yes, sir. I can’t believe an Eagles fan is going to Dallas, but

Drew Thomas Hendricks00:21:26

You’ll be incognito with your Ballroom.

René Pérez Jr.00:21:28

And I know we, I just started the podcast with McDonald’s, but the real reason why that was important was because they’re also going to be in Illinois. So, we’re finalizing and, you know, Chicago has properties that are, you know, in the 2 million ranges easily too, right? So,

Fred Glick00:21:47

Yeah, a lot of the suburbs and I’m spacing on the name of right in front of the first street next to the lake at Michigan. I don’t know. I forget my Chicago. Cause that’s got a bunch of condos there that are high priced. So, you know, I’ll just go, I’ll just go up to Mendocino and ask Oprah.

René Pérez Jr.00:22:16

Oh yeah. You can do that.

Fred Glick00:22:18

Not a problem. I know where she hangs.

Drew Thomas Hendricks00:22:23

So where are you in line now, René? Are you, are you any closer?

René Pérez Jr.00:22:26

I am actually going, I’m going to, I’m on the road now and I’m going down to, close to St. Louis, Missouri.

Drew Thomas Hendricks00:22:35

Oh, you abandoned the mission.

I’ve abandoned the mission of getting some nice, you know, sugary drink. Yeah. We just couldn’t wait there for three hours.

No, I wouldn’t.

Fred Glick00:22:45

I think you’ll never be able to taste the coffee. They probably use cheap instant coffee and they throw so much sugar crap on top of that. I don’t know what it tastes like.

René Pérez Jr.00:22:55

Yeah, no, probably.

Fred Glick00:22:57

Good formula. Good place to get diabetes.

René Pérez Jr.00:23:04

It’s okay. 10 years from now, doctors will figure out a way to get rid of them.

Fred Glick00:23:09

Yeah, they have Ozempic now, and it’ll be Ozempic Plus. Get skinny with no diabetes.

René Pérez Jr.00:23:14

Yeah, I need some of that actually.

Fred Glick00:23:19

It’s fun in LA to just look at people and say, Ozempic or not?

René Pérez Jr.00:23:23

Drew, we should dare Fred to do that on live video asking people.

Fred Glick00:23:28

Is this thing going on? Yeah, just get to skinny people and say Ozempic or not ?

René Pérez Jr.00:23:34

Yeah. Yeah.

Drew Thomas Hendricks00:23:35

It is all the rage. We, I was at a holiday party the other day and people were talking about how much they pay. What is it, like 750 a week?

Fred Glick00:23:43

To cheat on a diet is what they’re doing to, without the ideas of the long-term effects of it. Yeah. Good luck dude.

Drew Thomas Hendricks00:23:50

Don’t quote me on that quote.

Fred Glick00:23:51

I, you know what it’s up to me, legalize all drugs at this point. It’s just insane. Like, you know, bring back over-the-counter quaaludes, you know, come on. Stuff it’s just getting a little –

Drew Thomas Hendricks00:24:09

Oh just remembering the good old days.

Fred Glick00:24:11

Yeah. Yeah. That holiday spirit.

Drew Thomas Hendricks00:24:13

Any departing words, not departing, but last words for this episode number nine of We Fixed Real Estate.

Fred Glick00:24:20

The only thing wrong that I saw today is that the planes at LAX were taking off to the east instead of the west. So the wind is coming from the east to that airport. So it’s all weird here.

Drew Thomas Hendricks00:24:35

Oh yeah, that’s, I mean, it’s gotta be offshores.

Fred Glick00:24:38

Yeah, it’s not offshore, it’s onshore winds.

Drew Thomas Hendricks00:24:41

Oh wow. And you’re supposedly getting what, four inches of rain tonight.

Fred Glick00:24:46

Are we? Oh, goody. That’s what I want. Well, we need it. And then it’s supposed to be actually sunny and 60-something for Christmas day. Better than last year when it was typhoon season.

Drew Thomas Hendricks00:24:58

Oh geez. Yeah.

Fred Glick00:24:59

Anyway.

Drew Thomas Hendricks00:25:00

Well René, enjoy that.

Fred Glick00:25:01

It’s all we got. Everybody relax and come back next year and you know, refi, refi, refi purchase, purchase, purchase. It’ll be busy.

Drew Thomas Hendricks00:25:10

So rock and roll.

Fred Glick00:25:13

Exactly. René from the road. Anything more?

René Pérez Jr.00:25:17

Nothing for the road other than happy Holidays. Happy New Year and we’ll see you on the,

Fred Glick00:25:22

We’ll see you in the 24.

Drew Thomas Hendricks00:25:24

Sounds good.

Fred Glick00:25:26

Where the most important number will be? 14, but I won’t even go into that. You figure it out. That will be the number of the year.

Drew Thomas Hendricks00:25:34

Oh gosh. Now I gotta, okay, I’ll be Googling.

Fred Glick00:25:37

Okay.

Drew Thomas Hendricks00:25:40

Talk to you guys later.

Fred Glick00:25:40

Alright. Yep. Cheers.