AI Rated Our $4M San Francisco Offer a 92. Here's Why It Makes Sense

Drew Hendricks00:30

Welcome to the latest episode of We Fixed Real Estate. We took a little one or two week hiatus to sharpen our pencils. No, that’s weird, but that’s okay. I have right click on here and I’m just gonna well, Fred, you do have a pencil. Oh, see, we’ve been sharpening our pencils. See another great intro. Jen, how are you doing?

Fred Glick CADRE#0150761500:45

See I was I was I was very busy sharpening, yeah. Oh it’d take me two weeks to do this.

Jennifer May00:48

Okay.

How are you guys doing?

Drew Hendricks00:56

I’m doing good. Just got back from Canada. It was a wonderful trip. Came back straight to the King Tides. I don’t know if you’ve seen online what’s been going on on the coast of California, but stuff’s flooding that’s never flooded before. And we have zero surf. Like they’re if

Fred Glick CADRE#0150761501:12

Yeah.

Drew Hendricks01:13

you look at Balboa Island, it the houses are under like a foot of water.

Fred Glick CADRE#0150761501:18

It’s crazy. It’s absolutely crazy. Combined with all the tides and the moon positioning and it’s just four different things coming together at once that nobody could predict

and god forbid there’s an underwater earthquake.

Drew Hendricks01:36

my gosh. Or and this is not this

Jennifer May01:36

my gosh.

Drew Hendricks01:39

is not like a one and done. This is gonna be going on,

Fred Glick CADRE#0150761501:41

No.

Drew Hendricks01:41

they say t through March, and the highest tides or the highest like Kelvin wave, where in case you don’t know what the Kelvin wave is, it’s this um surging almost like a sloshing of the water. And so the tides that are normally seven or six point five feet are now coming in at eight point five feet. So the sea levels here are two feet above normal and they’re gonna continue to rise, but they’re rising in tandem.

with the winter surf that’s could cause tremendous flooding and housing implications along the coast.

Fred Glick CADRE#0150761502:12

Yeah, I think downtown LA will be beachfront soon. I mean, it’s just getting ridiculous. Um

And if you don’t know how far downtown LA is, it’s about 12 miles from the beach. So it’s it’s crazy because it’s basically flat until then. And if this water keeps coming up, I’m about two blocks from the beach, and nothing has been affected here yet, but still it’s it’s a problem. Uh

we have a house I made an offer on with a buyer today in Santa Barbara and in uh Isla Vista at Galeta.

And I said to him, You ha if you get this under contract, you have to get a geological survey done by somebody who knows what they’re doing to see if this thing’s gonna collapse. I mean, he obviously came in lower than the asking price, and there’s not a lot of action on it. But yeah, I mean you’re gonna see these houses in Malibu, these houses in New Newport Beach is is is is Venice now.

Drew Hendricks03:15

Mm-hmm.

Fred Glick CADRE#0150761503:16

It it’s people going around on boats and

Paddle boards and it’s crazy, you know, if it’s gonna recede. They they don’t even know. So yeah, it’s it’s

It’s the time and not the time to buy on these types of properties because there’s going to be people who are going to be completely frustrated and just say, I’m out of here. I don’t care what price I get. And you can even have the assignment of the insurance proceeds. So we ought to talk a little bit about flood insurance. What is

Drew Hendricks03:50

Yeah, d would flood insurance cause something when

it’s not actually a flood, it’s like a title insurance.

Fred Glick CADRE#0150761503:55

Well that’s a good question. I don’t know that without getting somebody, but I was just gonna say that flood insurance covers kind of the damage to the property, but all your belongings are not covered by flood insurance.

They’re covered by

Jennifer May04:10

really?

Fred Glick CADRE#0150761504:10

your Yeah. So you you have to have hasshold contents insurance. And then, you know, each insurance company has you know, nobody reads the policies until you have to. Now’s the time to read your policy to see what’s covered. There will be lawsuits. There, you know, the whole following after this is over will just be a mess. It you know, this is this year’s version of the fires. Fires were horrible. This year

we got floods. It’s you know, welcome to California. Uh you know, it ain’t the weather’s pretty except for the few days that it’s not and

Drew Hendricks04:49

Yeah.

Jennifer May04:49

Yeah.

Fred Glick CADRE#0150761504:49

and we pay for it. So that’s that’s the biggest problem here. But

Yeah, it’s horrible. It’s absolutely horrible. But but it will have an effect on real estate. Obviously, showings will drop in these places. Stuff will go off the market. Um and it could be a long time before they come back after evaluations. And like you said, it could go till March. I mean, it it’s absolutely nuts. So, you know,

Drew Hendricks05:16

Yeah, the biggest tides are predicted, the biggest king tides are supposed to be coming

right around Christmas. Like actually Christmas

Fred Glick CADRE#0150761505:22

Marvelous.

Drew Hendricks05:23

Eve is the um like so in San Diego, the highest ever recorded tide was like it’s eight. This and that was back in or seven point eight back in twenty fifteen. San Diego hit eight point five feet last week, but it’s th this next one with no surf surge. And in no in December it might actually click past nine feet.

So if you’re

Fred Glick CADRE#0150761505:46

Yeah, so Santa

Santa needs a boat in st

Drew Hendricks05:49

Mm-hmm.

Jennifer May05:50

um

What does it mean no surf surge? It’s just rising. It’s not like, like where you could actually ride the wave. Yeah.

Drew Hendricks05:56

Yeah, so if you well no, so if you imagine,

Fred Glick CADRE#0150761505:56

Or it’s clo closeouts.

Drew Hendricks05:59

you know, you’re at the beach and the w the waves are like one to two feet, a little bit of water

Jennifer May06:04

Yeah.

Drew Hendricks06:04

goes up on the sand. But imagine the the surf’s ten to twelve feet. So these ten to twelve foot breakers are coming in and it causes the surf the w water just to be pushed up further and harder.

Fred Glick CADRE#0150761506:16

And and

it seems to be crashing right away.

Drew Hendricks06:19

Mm-hmm.

Fred Glick CADRE#0150761506:20

They’re th they’re closeouts, so they’re unsurfable. I mean you can get up there for two seconds. Right. Exactly.

Drew Hendricks06:23

Or they or they crash right on the beach ’cause there’s no sand. Like if you look at the the what

I really want to see if if the marine room lives through the um winter. Now I know if you’ve ever been to the marine room in La Jolla. It’s right on the water in La Jolla shores. And at high tide on a normal day, the w the waves lap up and hit the window. Now the

Jennifer May06:44

wow.

Drew Hendricks06:44

window is actually below water on the high tide. And if you have a ten foot surf going bashing that window, you’re toast.

Jennifer May06:54

And is there water inside the place now or no?

Drew Hendricks06:58

Not right now. Not right now, but uh

Fred Glick CADRE#0150761507:00

Not yet.

Drew Hendricks07:01

it it can only take it’s designed for like a little bit of a water hit. It’s not designed

Jennifer May07:06

Yeah.

Drew Hendricks07:06

to be an aquarium or reverse aquarium.

Jennifer May07:09

man.

Fred Glick CADRE#0150761507:09

Yeah.

It might be an aquarium. We might be what the

Drew Hendricks07:13

Ha ha.

Fred Glick CADRE#0150761507:14

fish are looking at. I mean and you’re getting fish coming up from Mexico that have never seen California. You know, just just the the fish and this the sea life are just all confused. They don’t

Drew Hendricks07:26

Yeah.

Fred Glick CADRE#0150761507:26

know where they are. They’re just being pushed around.

Drew Hendricks07:29

It’s Looney. So if you’re if you’re looking at property

on the coast of California, there may be some buy opportunities if you’ve got the wherewithal to

Make your house seaworthy, I guess.

Fred Glick CADRE#0150761507:39

Yeah, I was looking at North Carolina and the Outer Banks there were houses that have been on stilts. I I’ve been there a few times and I remember these houses and they’re just collapsing.

Drew Hendricks07:51

Mm-hmm.

Fred Glick CADRE#0150761507:52

I mean the East Coast is not getting away with it either. So it’s it’s interesting.

Jennifer May08:00

crazy

times.

Drew Hendricks08:01

Let’s talk let’s talk about we were the other day we were talking just in on our marketing meeting about using Claude and using Claude to rate offers, which you guys have been doing. I mean, there’s all these ways to use AI and leverage AI in the real estate world.

Fred Glick CADRE#0150761508:15

Mm-hmm.

Drew Hendricks08:16

And this one was this one was pretty interesting. Um

Fred Glick CADRE#0150761508:19

Yeah.

Drew Hendricks08:20

t tell us about that.

Fred Glick CADRE#0150761508:19

So yeah, this was

actually one of our clients. You know, we were going fact on offers. So he was buying in San Francisco, which is cuckoo for cocoa puffs. And the way we won the offer is we put in his highest bid and we had no buyer broker fee. and this was like a four million dollar-ish deal somewhere in that neighborhood.

So we were basically a hundred grand better than a compass or a cold.

Banker agent because they were putting two and a half percent in, because they always do, because that’s normal. Huh. Um, so we won the bid, and after we won the bid, my client put the offer into Claude and said, evaluate our offer. You know, obviously a longer prompt, but that’s what he’s basically saying. And Claude gave us a 92 out of 100.

Drew Hendricks09:12

Nice. Solidar.

Fred Glick CADRE#0150761509:13

as the quality of

our offer. We waived all the inspections, we waived everything, which everybody does anyway, because they’re all done. But yeah, it was it’s kind of interesting to see. But that’s a way like today, this would be interesting to do that guy who was making the offer in Isla Vista

He had me put things that were ridiculous and he didn’t want me to give them financial I mean this this was like the s one one of the most ridiculous offers I’ve ever made. I tried to talk him out of it, but you know, there’s no other bids and whatever, so I went and did it. But I’d love to stick it into Claude and say, how do you rate our offer? And probably get like a forty-three. I

Drew Hendricks09:55

Ha ha.

Fred Glick CADRE#0150761509:55

mean

the

You know, it it’s this wasn’t like it’s uh ready to go into foreclosure and has to sell next week. He’s got tenants in there, they’re they’re UCSB students, but you know, num is it still the number one party school in the country, which would make it

Drew Hendricks10:15

I don’t know.

Fred Glick CADRE#0150761510:15

the world? Yeah, but it’s it’s up there. Yeah, so

Jennifer May10:16

or San Diego. It’s definitely top 10.

Fred Glick CADRE#0150761510:20

definitely I’ll I’ll put it definitely top five. So

Jennifer May10:23

you

Fred Glick CADRE#0150761510:25

You know, I’m sure there’s a few kegs and few joints lying around in there, but

Yeah, college students. And and I remember back in Philadelphia there was this guy who did a ton of college rentals for Penn and Temple and other places. And he didn’t even bother getting co-signers because what are you gonna do? Chase the parents all over the country?

Drew Hendricks10:46

Mm-hmm.

Fred Glick CADRE#0150761510:47

It’s like these kids are gonna do what they’re gonna do. You take as much security deposit as you can and and go on from there. So student housing, it’s a whole different world. Uh renting you rent it by rooms. Th there there’s a million ways

Of doing it, but just be prepared to put some money aside to fix the place up when when they move. Um

Drew Hendricks11:09

Probably a thorough deep cleaning between

Fred Glick CADRE#0150761511:12

massive

Jennifer May11:11

Mm-hmm.

Fred Glick CADRE#0150761511:12

deep cleaning. Yeah, it’s like get the nuc call the nuclear uh power plant, ask if they know anybody does cleanups. It’s probably the best way to do that. yeah, so it’s I don’t know.

Jennifer May11:27

using

Claude to while Fred was on vacation when we had clients who wanted to put an offer on a condo in San Francisco that was priced really low just to show her even Claude thinks it’s priced under market because she thought just a hundred thousand over market was gonna do it because

Drew Hendricks11:46

Mm-hmm.

Jennifer May11:48

you know if you don’t know the game that they’re pricing them lower than they’re actually trying to

Fred Glick CADRE#0150761511:52

Yeah.

Jennifer May11:52

get to get people in the door then it’s very confusing and

She offered, what’d she offer? 100,000 over and they didn’t even respond.

Fred Glick CADRE#0150761512:00

Yeah, a hundred thousand over

and yeah, the sell the listing agent came back to me say this and and they were gonna have an they already had an offer date, like a week later set up. And then she said, you know, it seller’s not gonna re seller’s not gonna even

Jennifer May12:12

And Claude. Yeah.

Fred Glick CADRE#0150761512:15

answer. But that’s a lesson for everybody. Guys, when it’s low price, you if you wanna do a preemptive offer, you better blow the doors off the seller.

Cash, no inspections, close in seven days, ridiculous price. That’s the only way you’re going to get a preemptive offer in a very busy market. There’s there’s no other way, you know. But my clients were like, Well, you know, this would make it easy, they don’t have to do an open house, and blah blah. It’s like, no, you don’t understand. They want to do an open house because they’re looking for buyers, so they’re thrilled to do it. Um, so

Drew Hendricks12:54

Maybe in a different marketplace.

Fred Glick CADRE#0150761512:56

Yeah. But why would you make a preemptive offer in in in a dead market? I mean, if they have an offer date, you just go in.

Drew Hendricks13:04

I see. I see.

Jennifer May13:05

see

when the house closes. under contract now, but Claude was saying at least $300,000 over would be a competitive offer, not even a stellar offer that they would pull from the market. So we can go back and check when it closes in a couple weeks to see if Claude was right.

Drew Hendricks13:24

Well, it’s definitely a very becoming an increasingly valuable tool for um competitive intelligence and guiding human actions. But you need a human to understand whether or not what it’s recommending makes sense.

Fred Glick CADRE#0150761513:37

Right. ‘Cause I I see these people say we’re an AI powered brokerage. Well what does that mean? What do you what do you use it for? What do you do? You know, there there’s reasons to use it. It helps us with comp research, which we I always do it anyway manually just to make sure they didn’t miss anything or screw it up. Um, but it kind of measures the

The amount of people and the demand. The demand side, which is the hardest thing to figure out, but it kind of sort of figures it out in one way, shape, or form. And there’s there’s tells and it’s able to pull that stuff and help you come up with an offer price that will make sense. So we use it for that and among other things. Um I have my Slack,

Jennifer May14:26

evaluating disclosures.

Fred Glick CADRE#0150761514:28

yeah. that’s the absolute best. Um

because th they’ve it’s gotten really good. It used to be Chat GPT was better because everybody

Drew Hendricks14:39

Mm-hmm.

Fred Glick CADRE#0150761514:40

was using it initially, but now Claude is caught up and it really can give us some great information. And I beat it up yesterday. I said, look

uh I want you to go through this. I want you to come up with what it’s gonna cost to fix, but I need proof of what it’s gonna cost to fix. Because the listing agent who’s, you know, got a R A O L account that I mean scared of AI says, eh, this is painting, yeah, yeah, yeah. I want a real contractor bid. You know, it’s like if you want a real contractor bid, go get it yourself. We’re telling you and I wanted Claude to make the reasons why they’re giving us this thing, you know, based on you would need these

materials and it would take this many hours and the cost per hour is X. You know, we give it definitive things. And haven’t tried it yet, but it’s it should work. So yeah, we’re just another use for Claude that that’s gonna make life better.

But it what I was saying was why our Claude is crazy now. I have someone working on

Uh and and she’s got it pretty good where if you go into Claude, if you go into Slack, you post a property that you’re interested in, it goes and it gets the disclosures for you.

Drew Hendricks15:56

Nice.

Fred Glick CADRE#0150761515:56

She we’re working on that. I’ve been dying for that. eh

Drew Hendricks15:59

You’ve been looking for that for a while.

Fred Glick CADRE#0150761516:01

Yeah, and she’s been great. Our new uh temporary CTO, I guess we’ll call her for lack of

Jennifer May16:07

you

Fred Glick CADRE#0150761516:07

a better word. Um yeah, it’s been fabulous for that kind of stuff.

So Jen, you got

Drew Hendricks16:15

That’s cool.

Fred Glick CADRE#0150761516:16

birds or something? Is that you or

Jennifer May16:18

It’s those parrots. Have you heard of the Pasadena parrots?

Fred Glick CADRE#0150761516:22

yeah.

Drew Hendricks16:22

yeah.

Jennifer May16:23

Yeah. My neighbor has a loquat tree, so they like to go out and be in the tree and eat the loquats. Yeah. The peacocks and the parrots. Yeah.

Drew Hendricks16:30

They’re expanding everywhere.

Fred Glick CADRE#0150761516:30

Nice between peacocks peacocks and parrots. It’s the world of peacocks

Drew Hendricks16:37

Yeah, we’ve got a

Fred Glick CADRE#0150761516:38

and parrots.

Drew Hendricks16:39

we’ve got a population

down here too in Vista Carlsbed area. huh. They just thrive in California. They’re very loud.

Jennifer May16:44

of the parrots? Oh, they’re terrible. Yeah, they’re

loud.

Fred Glick CADRE#0150761516:51

Yes, yes,

yes they are. I mean you’re you’re in a closed place and we can

Jennifer May16:57

Yeah.

Fred Glick CADRE#0150761516:57

still hear them. It’s insane. So free pets with every house.

Jennifer May17:04

I don’t know, maybe I should get like an owl or something. Yes.

Drew Hendricks17:04

They’re all they’re all those are yours those green ones? The

yeah, they all seem to be the same color.

Jennifer May17:12

There’s so many different stories about why they’re around Pasadena. Someone, the story, it used to be, which I don’t even know if it’s true, is like when my dad was younger, like one of the pet stores was burning down and someone just opened the, is that, I don’t know if that’s true, but then there’s been other stories too, so I don’t know what’s actually true. Yeah.

Fred Glick CADRE#0150761517:30

Yeah, somebody brought them up here for a movie or something or from

South America. I don’t know how they got all here. Who knows? But they’re here.

Drew Hendricks17:35

Mm-hmm. Yeah. Down here everybody says it’s

escape pets.

And then you got the the parrots

Jennifer May17:44

I people let them go.

Drew Hendricks17:45

there’s that whole documentary, The Parrots of Telegraph Hill up in San Francisco. They’ve got that big population.

Fred Glick CADRE#0150761517:50

Ah right, right, right, right, right.

Jennifer May17:54

I didn’t know they were in San Francisco

Fred Glick CADRE#0150761517:54

They’re everywhere.

Jennifer May17:55

too.

Drew Hendricks17:57

And and they live so long that

Fred Glick CADRE#0150761517:57

Yeah.

Drew Hendricks17:58

they’ve got a quite I mean, you got eighty year lifespan and I think they’re

Jennifer May18:02

my gosh.

Drew Hendricks18:03

I think they’re fertile for like sixty. So you you can and they’re thriving, so I I think they’re they’re here to stay.

Fred Glick CADRE#0150761518:11

Wow. Between them and the turtles they’re the

Jennifer May18:11

You

Fred Glick CADRE#0150761518:15

right, they’re the only two things that are gonna be left on the planet are parrots and turtles.

Jennifer May18:20

We

also

have coyotes too. don’t know. Our new diamond bar listing also,

Fred Glick CADRE#0150761518:22

yeah, we all have coyotes.

Jennifer May18:25

they heated warn about coyotes being up against the reservoir. Is that a reservoir right behind the house that’s protected, the space?

Fred Glick CADRE#0150761518:33

I forget if it’s a reservoir. I know it’s this plot of land which you can’t build a it’s protected.

Jennifer May18:37

I know it’s protected, let the plot of land.

Fred Glick CADRE#0150761518:40

Yeah.

Drew Hendricks18:39

Yeah, you’re talking about a new

new listing that you have that we’re premiering.

Fred Glick CADRE#0150761518:44

Yeah, House and Diamond Bar with a a very cool view.

Drew Hendricks18:50

Mm-hmm.

Fred Glick CADRE#0150761518:51

Pool Yeah.

Jennifer May18:51

It’s a view of the canyon is what the

owner said. It’s like the canyon of Orange County, where the Orange County Canyon starts.

Drew Hendricks19:02

Mm.

Fred Glick CADRE#0150761519:03

yeah, so you’d be able to see it. It’s just a nice it’s just a really nice house. It’s uh four bedrooms.

Two full baths, was it, Jen? I’m trying to remember. Two full, yeah. Two and a half. Two

Jennifer May19:16

Yeah.

Fred Glick CADRE#0150761519:17

and a half, I think. Alright, don’t quote me, kids. Um freshly painted. uh just just

Jennifer May19:26

It has a very cool backyard

with a pool. It’s like his kids grew up being able to have all the sports parties at their house because they’ve got the lawn area, the pool, and they also have built this really nice retaining wall up to a wine patio at the top of the backyard that em Brett was saying you can overlook the candy.

Fred Glick CADRE#0150761519:45

Yeah, there’s just two two Adirondack

chairs.

It’s pretty cool.

Drew Hendricks19:50

But yeah, this is the this is your little hangout spot up here and you’re looking down into the canyon. A little live

Fred Glick CADRE#0150761519:55

Yeah, really.

Drew Hendricks19:56

live view right here of that retaining well, it’s super cool if you wanna, you know, get away.

Jennifer May20:01

The owner

actually built the retaining wall, it’s all permitted and everything, but they did it themselves exactly how they wanted it so they could have the perfect view of the neighborhood and the canyon.

Fred Glick CADRE#0150761520:10

you’re buying a view that has a house attached. So

Jennifer May20:13

It’s a

really neat backyard too with a bunch of fruit trees a lot of avocado.

Fred Glick CADRE#0150761520:16

fruit trees are insane. Okay, so they have

Guava. They said the guava tree grows like crazy and gives off tons of fruit.

navel oranges lemon.

Was it limes or lemon lies, right.

Drew Hendricks20:30

That’s great. And is this in a cul-de-sac here or does it kinda win right?

Fred Glick CADRE#0150761520:33

Yeah,

kind of. Yeah, it’s kind of the end the the road is like a U and this is at the top of the U. So

Drew Hendricks20:40

Yeah.

Fred Glick CADRE#0150761520:42

it’s a great location. It’s quiet back there. You know, it’s really chill.

Drew Hendricks20:46

That’s neat. And you just

cruise right up here and I’m sure I’m not the first person to suggest to them they should have a sky ride down, but that’s up that’s up to the that’s up to the next owner.

Fred Glick CADRE#0150761520:58

a s or a slide

right into the pool would be cool too. Snaky water Yeah, exactly.

Drew Hendricks21:01

Oh you could do one of those t cool water water park slides. Oh all

gravity fed, you just pump it up to the top. you go bonkers on

Fred Glick CADRE#0150761521:12

That would be

Jennifer May21:12

There’s

a little spa too to the left of the pool, above ground one.

Fred Glick CADRE#0150761521:16

The the the

we don’t have the listing price done yet, but I can tell you this, it will be probably under the Fannie Mae uh jumbo limit, which is one million two hundred and fifty thousand. And the reason that’s good is this opens it to more buyers because you can get an FHA loan on this house with

Drew Hendricks21:40

Wow.

Fred Glick CADRE#0150761521:40

three and a three and a half percent down payment.

Obviously you need to afford the monthly. Um, you know, there’s the two one buy downs. Uh you can always do VA, obviously. VA’s got a decent five one arm. Um, so there’s some good financing available for this too. You don’t have to just be a twenty percent down person. Um,

Drew Hendricks22:01

Mm-hmm.

Fred Glick CADRE#0150761522:02

so makes it a lot easier to sell it and a lot more people will be able to buy it because of that.

Drew Hendricks22:09

absolutely.

Fred Glick CADRE#0150761522:10

Yeah.

And interest rates,

let’s talk about them for a few minutes.

Drew Hendricks22:14

Yeah, do we want to?

Fred Glick CADRE#0150761522:19

When you’re up in San Francisco looking at a you know seven million dollar house, you know, you you’re gonna be paying cash, you don’t care about rates. We all know that.

Um

People who are struggling who want to buy a house and you know rates have gone from the low sixes into the mid-sevens. Yeah, it’s hurt a lot. You know, maybe $25 per eighth, it gets pretty expensive. A few things to look at, especially in a market where it’s slow.

Uh you can go a little bit higher in price and ask the seller to pay up to six if you’re putting more than five percent down, up to twenty-four point nine nice down,

you can ask the seller to pay up to six percent towards your closing cost, six percent of the sale price towards your closing costs.

We actually have our lenders that give us prices all the way down. I mean, we see some, you know, here you can get a five and a half rate paying thirty thousand dollars. Well, guess what? Some of these deals, you’re actually able to get that credit. And here’s the great part, which nobody tells you. If a seller pays points for you when you buy a house, those points become tax deductible to you as a buyer if

Drew Hendricks23:38

Whoa.

Fred Glick CADRE#0150761523:38

you itemize.

It’s an it’s the most insane tax deduction known to man because you didn’t lay out the money. Yes, you’re paying for it in a higher price of the house, and you’re gonna live there a long time, hopefully, and you know it’s kind of gonna get buried in. But it’s fantastic. So that’s one way to get around this craziness. The other, and you probably heard these, there’s these what’s called two-one buy-downs, which means let’s say today’s rate is seven percent with no points. I’m just making this up, kids. I’m not giving you an APR. This is not.

A real demonstration of an actual raid. NMLS number 133975.

What they say is, okay, for the first year you can pay 5%. In the second year, you pay 6%, all based on the 30-year amortization. And then year seven, year three through 30, you pay 7%. So the idea is hopefully within two years the rates are going to come back down and you refinance into a decent long-term rate, as opposed to paying that 7% in year three and on. So that’s the theory of that. They even have and what it costs is since you’re going down two.

In the first year, one in the second, it’s three percent of the loan amount. It’s basically what it’s going to cost you to buy the rate down. So then you know, you go into your a

Agreement and have the seller pay the three points. And again, totally tax deductible to you. You get the better rate. So that’s that’s one way of compensating for this. Um, you can actually do this, and here’s a little trick that again nobody told you on a five or a seven-year arm. If you find a decent rate, yeah, let’s say the seven-year arm is half half a percent lower, let’s say it’s six and a half, no points. You get um

Four and a half year one, five and a half year two, six and a half year three through seven.

Then it becomes

Drew Hendricks25:35

Hmm.

Fred Glick CADRE#0150761525:36

a one year adjustable after that, but you’re gonna refinance at some point. So

Drew Hendricks25:39

Mm-hmm.

Fred Glick CADRE#0150761525:39

these are the couple ways. If you really need to get into a house, want to get into a house, find something at a really good price. That eventually, when this all turns around, you know, 10 years from now, 20 years from now, when you sell it, the values are gonna be back up.

It’s all cyclical, kids. Today’s rates and today’s values are not gonna stay the same. So always when we get a you know, raising rates, dip in price.

Prices, when the rates come back down,

then there’s this time where the values slowly come back.

So 2008, 2009, 2010, 11, we were still like uh mired in this crap, and then all of a sudden it starts slowly coming up, and by 2015 it’s nuts again.

So it’s all I’ve I’ve gone through all these crashes. I’ve been

Drew Hendricks26:30

I know.

Fred Glick CADRE#0150761526:30

I’ve been doing

mortgages since the mid eighties and the real estate since the early nineties. And so I’ve seen all these crashes and I I I don’t you can’t worry about it. There’s nothing you can personally do. You just have to

Drew Hendricks26:43

And then I think in the immediate time,

in the immediate like short term, it just seems like everything’s frozen, nothing’s changing. And you it looks like, this time maybe real estate’s no longer cyclical. Maybe it’s just gonna stay like this forever. But it doesn’t.

Fred Glick CADRE#0150761526:57

No.

Here’s what’s eventually gonna happen. You’re also gonna see the g people with cash coming in and buying this stuff, changing old houses from sale to rentals, holding them, flipping them, you know, more of individual or group.

people buying a few, the the big corporations buying all those single families, that’s they bought it at you know the the high part of the market. They they just figured it was gonna just keep going up and nonstop. But they’re the ones who were trying to sell and that’s part of why the values are going down, among everything else. I mean the good news is the economy is is chugging along.

It it’s in most places. I mean take AI out of it, it’s still okay. It’s we’re not in a recession, we’re not in a depression. it’s you know, it’s h th the reason rates are raised is to slow an economy down and stop causing the inflation.

But obviously we get the oil prices down and everybody just go out and buy EVs.

And guess what? The price of gas will go down significantly.

Significantly change your heating system over to an electric source. And

Drew Hendricks28:15

Oh E Vs. I thought you said a T V.

Fred Glick CADRE#0150761528:19

no, EVs, electronic vehicles.

Drew Hendricks28:21

Okay.

Fred Glick CADRE#0150761528:22

I mean, I I got one and I will never go back. I mean, it’s just silly. Uh, yesterday I had a drive up to Diamond Bar where our listing was, and I just stopped at the Tesla charger. I don’t have a Tesla.

But stopped at the charger and and took up two spaces because you know it’s on the wrong side, which uh they’ll they’ll clear that later. But you know, I I I did it at this hotel around the corner from me. And it’s like I went inside, had a cup of coffee and a muffin, came out and was done. So don’t be scared of the charge up times. It’s you know, if you have

Drew Hendricks29:00

They’re only getting faster.

Fred Glick CADRE#0150761529:02

yeah, they really are. And there’s more and more and more and more.

them and you get a home charger which is you know not the power charger but you put it in at night in the morning it’s a hundred percent or ninety percent or whatever

Drew Hendricks29:14

Mm-hmm.

Fred Glick CADRE#0150761529:14

you need so it there’s there’s a way to do it you just gotta get adjusted to it um and also

The interim is the hybrids because people are scared, well, I don’t want electric, but I don’t want gas. So here’s this hybrid. I mean Prius has been around for years and doing real well. But now the batteries are getting better. In a couple years, you know, they’re gonna get seven, eight hundred miles out of the batteries. Um technology is getting better and better and better with it. So and then

Drew Hendricks29:43

Yeah, that’s incredible.

Fred Glick CADRE#0150761529:44

I thought to myself, I have grandkids, you know six and four.

Drew Hendricks29:48

Mm-hmm.

Fred Glick CADRE#0150761529:49

And I thought, you know, my kids are my grandkids are never gonna know need to know how to drive a car. So by the time they’re

Drew Hendricks29:55

I that’s for sure.

Fred Glick CADRE#0150761529:56

ready for cars, they’ll all drive themselves. So that that’s the

Jennifer May30:00

That’s crazy.

Fred Glick CADRE#0150761530:01

future. It really is. So you know, the basic

Drew Hendricks30:05

Least for daily commuting.

I g I think they’ll still be like the off road enthusiast or people driving those type of things. But like the the daily commute is over.

Fred Glick CADRE#0150761530:10

of course. Yeah, Jay Leno will still have five thousand

cars. Yeah. Exactly. Exactly. It’s just silly. What do you want to you know? Get the it it’ll also take down the pollution in the air, which will help th help clean up the air. Little things that certain people don’t give a crap about, but you need to.

It’s it just makes a lot of sense. And, you know, we even have on the contracts in California and Washington a box that we check it off if there’s an E V charger that comes with

Drew Hendricks30:44

Nice.

Fred Glick CADRE#0150761530:44

the car. So that’s that’s part of the contracts now. So it’s it’s getting more normal. Uh I don’t know. But if we do a listing there’s a way to put in has

Drew Hendricks30:48

Is that part of the feature list on Zillow and Redfin now? Like what the current like what the house has? Seems like it should be. Mm-hmm.

Fred Glick CADRE#0150761530:58

an E V charger, so it’ll show on there. So

you know, hit Command F type E V and you’ll find it on the page. So

Drew Hendricks31:06

It’s

and that’s one of those benefits though of and people looking for houses. Th if they’re looking for a tournique solution, that’s a solution that many people are probably trying to find.

Fred Glick CADRE#0150761531:18

It’s a beautiful thing.

Drew Hendricks31:20

Well, we’re heading into the Halloween stormy weekend. So I gotta

Jennifer May31:23

you

Drew Hendricks31:23

go I gotta go prepare. So I think this might have been the last no, it was the last episode. This is the last of this episode of We Fixed Real Estate.

Fred Glick CADRE#0150761531:30

Of October, yes.

Drew Hendricks31:32

Oh, and of October. And instead of messing up the end, I messed up the beginning, but now I’ve also kind of messed up the end.

Fred Glick CADRE#0150761531:38

As long as you messed it up, Drew, we’re we’re proud of you.

Drew Hendricks31:41

Okay. Everyone have a good Halloween weekend. Well, you’ll be hearing this after Halloween. Oh, and the cool outro,

Fred Glick CADRE#0150761531:44

Yeah, go listen to her outro now. Yeah, exactly. Chi

Jennifer May31:47

Good.

Drew Hendricks31:48

Yeah.

Let us know what you think in the comments.