Podcast

California Market Pulse: Spring 2024 With Fred Glick and René Pérez Jr. Of Arrivva

Fred Glick, a Broker, Real Estate Realist, and Founder of Arrivva, holds a stellar track record with over $2 billion in residential transactions while grounded in a lifelong passion for real estate. René Pérez Jr. is an adept Salesperson and Pricing Savant, who specializes in strategic problem-solving and long-term growth. 

Join Fred Glick, and René Pérez Jr., in the We Fixed Real Estate podcast by Arrivva where they share their expertise and insights in the constantly evolving landscape of real estate. Arrivva is a comprehensive real estate and mortgage brokerage, catering to qualified, motivated buyers, sellers, and mortgagees with a commitment to brokering with love, integrity, knowledge, a well-defined plan, and a transparent flat fee structure.

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Here’s a glimpse of what you’ll learn: 

  • Ringing in the new year with a market update, and with Fred and Rene debunking the winter deal myth while discussing the hurdles of flipping houses in desirable California neighborhoods
  • They point out a research agency’s findings that 49 percent of agents nationwide sold zero or one house in the last year
  • They delve into the ethical and legal consequences of mortgage fraud, highlighting the importance of understanding loan terms and the risks associated with such transactions
  • Exploring the spring outlook, Fred and René discuss the bustling start to the new year. They offer fresh insights into market trends and share expectations for January and February
  • The episode explores into how climate change impacts life on the coast, highlighting the recent floods along the California coast and its potential risks to property values
  • They dig into the idea of installing electric vehicle (EV) chargers to lift property values
  • Fred and René stress the importance of thorough research when buying property, particularly in flood-prone areas

In this episode with Fred Glick and René Pérez Jr.

The dynamic duo Fred Glick and René Pérez Jr. provides a quick market update as we enter into the first weeks of 2024, debunking winter deal myths and tackling the challenges of flipping houses in California. They delve into a revealing research study showing that 49 percent of agents nationwide sold zero or one house last year and the potential pitfalls of working with inexperienced professionals. They also touch on mortgage fraud, sharing a cautionary tale, ethical pitfalls, and legal consequences.

Midway into the discussion, they shift gears to the spring outlook, discussing the impacts of climate change on coastal living and property values, and stress the importance of thorough research when buying a property, especially in flood-prone areas. The duo explores strategies for increasing property values, debating the impact of installing electric vehicle chargers and advising on other impactful home improvements. Welcome to We Fixed Real Estate!

EPISODE TRANSCRIPT

[00:00:00] Drew Thomas Hendricks: Welcome to We Fixed Real Estate with Fred Glick, your real estate realist, and René Pérez, your real estate savant and budding restaurant critic. Welcome to the show. How’s it going, René?

[00:00:11] René Pérez Jr.: I would wish to critique sounds good right now. I’ve been eating too many salads.

[00:00:16] Drew Thomas Hendricks: Too many salads?

[00:00:17] Fred Glick: Good boy. Proud of you.

[00:00:20] René Pérez Jr.: It’s disgusting. Too healthy.

[00:00:22] Fred Glick: I mean, are you talking like, like using those places that mix everything together and have different stuff? Or are you talking about just spinach in a bowl?

[00:00:31] René Pérez Jr.: I’ve been to, I’ve been to those places too, but yeah, spinach in a bowl. And it’s like, well, the thing is it can’t be good, right?

Like if you add ranch or any dressing, it’s just, it’s not healthy anymore. So it’s like, I’ve been having to just eat vegetables. So anyway, I won’t talk about vegetables too much.

[00:00:48] Drew Thomas Hendricks: We are looking fit and healthy.

[00:00:51] René Pérez Jr.: Yeah.

[00:00:52] Drew Thomas Hendricks: Last time you were in the parking lot of McCosmick’s.

[00:00:54] René Pérez Jr.: Yeah.

[00:00:55] Drew Thomas Hendricks: Did you ever get to taste that coffee?

[00:00:58] René Pérez Jr.: No, I will have to wait two, three years until they come to the West Coast, which it shouldn’t be long. I’ve seen a lot of articles, McDonald’s and their expansion. I mean, if you look at McDonald’s stock. It’s just,

[00:01:10] Fred Glick: And they’re going to sell franchises, it’s, you know, they’re going to make upfront money to franchise fees at the best, you know, what do you pay for a few little things, right to the right to buy everything through us. That’s what you’re paying for.

[00:01:28] Drew Thomas Hendricks: Yeah.

[00:01:29] Fred Glick: It’s good. It’s great.

[00:01:31] Drew Thomas Hendricks: Well, this is the first of the year. This is brand new year and Fred and René are here trying to give us a quick market update. The pulse of the market as we go into the first couple of weeks of 2024.

[00:01:44] Fred Glick: Yeah, go ahead.

[00:01:45] René Pérez Jr.: I was going to say, like, it’s been three out of three years where every Christmas and every New Year’s, we have to be our better by our computers making an offer.

So, yeah, that’s all for seasonality. Right? It’s always said, like, oh, the winter, it’s where you can get deals where, you know, you can get things for a lower price where there’s no buyers and there’s no sellers. But yeah, inventory was hurt this season, but the buyers are still out there. Buyers are still making offers.

So that’s kind of my kind of commentary there.

[00:02:20] Fred Glick: I 100 percent agree with him. And the thing is, though, there are no deals in great neighborhoods. It’s just not happening.

[00:02:31] René Pérez Jr.: Well, I think the concept of, of a deal in the winter break stems from the fact that during the winter, if you’re selling your house in that time period, you want to sell because you want to move on because there’s something negative in your life or be it what it may be, right?

But the market understands that you don’t want to list on the winter break because it’s a bad time to list your home. Right? So there’s that clashing commentary and that thought process. But the reality is that when someone lists a property in the winter here in the Bay, they probably list, they probably bought the house back in 1990.

And we have a deal right now, just for as an example where the person bought in 1991, they bought for 250, 000. It’s been 30 years. So odds are they’ve paid that off. They’re renting the place, so, I mean, yeah, sure, the rents might be really limited, but they don’t need to sell. They can just continue renting it and get that money until they get the price that they want.

So, for the people that do want the deal, well, that whole logic is just not gonna come to fruition because the people don’t owe anything on the house, so they don’t are, they’re not just going to sell it at any quote-unquote lowball sale price. So that’s where the problem kind of arises.

[00:03:55] Fred Glick: Yeah, I mean, you have all these wholesalers out there and they scream all over the internet about, “Hey, you can flip houses and all that.”

It’s such hard work. You have to get so lucky and the person has to be so desperate or not too bright to just give you their house for 100, 000 less than it’s worth, you know, so that’s not normal.

[00:04:19] Drew Thomas Hendricks: California coastal. I can see that because I talked to some friends that they’re flipping houses in Tennessee and they’re buying 95, 000 houses that they can flip for 125. Oh, it’s a whole different game.

[00:04:32] Fred Glick: Every day. Yeah. It’s a whole different game. It’s cheaper labor, cheaper materials, less licensing and, you know, city intervention on, you know, because we’re the land of regulation. We love it here.

[00:04:48] René Pérez Jr.: Well, but even, even in California, right? Like when you’re in the, in the 100, 300 K price range, because the, I guess I would like a better, I guess, wording, but because the commissions are so low because there’s just not that much money in play.

You look at listings that are 100k, they have horrible pictures, you know, they’re not going to have staging, they’re not going to be marketed by like a bigger company or a bigger agent that knows a lot of, you know, that has a lot of tenure, that knows how to negotiate. So you see these lower priced listings, and I’m talking 120k, right, where you can, you can flip those because there’s just nobody wants that. Right? There’s the deals that nobody’s trying to actually negotiate at a really, you know, ethical and I don’t know.

[00:05:40] Fred Glick: That is what it is. But that kind of brings us right into what we’re going to talk about a little further that there’s an article came out today. Some research agency did a thing that said 49 percent of the agents, and this is nationwide sold zero or one house in the last year.

So this industry is just full of part-time agents and you’re going to get your one deal. My cousin, I had to give him the listing cause my aunt would be really upset with me and I don’t want her to get upset. Cause then she’s going to tell my mom and my mom is going to bug me. So it’s like, okay, I just list the house with him. And he doesn’t know what he’s doing, so that’s,

[00:06:23] Drew Thomas Hendricks: That’s that widespread incompetence that the article talks about that you’ve got less than one house a year, you’re not, you can’t be getting ready to fully put it in yourself into that transaction. Right.

[00:06:35] Fred Glick: And remember this kids, you go to, let’s say Century 21 or call a bank or whatever. He who has no deals and doesn’t know what he’s doing gets paid the same percentage as someone who knows what they’re doing. So if you choose to go that rate, that way, you know, negotiate him down or negotiate them to be a lot more reasonable because he doesn’t know what he’s doing.

[00:07:02] Drew Thomas Hendricks: And now’s your chance to brag a little bit. How much does, at average, how many do you think Arrivva and you and René did this year?

[00:07:11] Fred Glick: How many deals did we do?

[00:07:12] Drew Thomas Hendricks: Yeah.

[00:07:12] Fred Glick: I don’t know. I don’t know. We’ll add ’em up and tell you next week. I’ll start that.

[00:07:16] René Pérez Jr.: Yeah. No, actually we, we are really bad at actually keeping tabs on like how many deals.

[00:07:20] Fred Glick: Yeah, it’s there. It’s all in the software. We just

[00:07:22] Drew Thomas Hendricks: ‘Cause the idea, well, every house is on your site and it’s, you definitely have a page or two of deals, so it’s,

[00:07:28] René Pérez Jr.: Well, we can tell you that we don’t sell just one property a year. But here’s where this article’s flawed and where it’s just, it’s just cheap marketing because there’s a lot of licensed agents, but not all agents, even when they’re licensed, actually go on and do sales, right? A lot of agents are just transaction coordinators, referral agents, and you also have, you know, like, even if you look at, you know, what I sold and what Fred sold, you know, we do have all the listings you know, put through Fred.

And then if I remind the agents, I add myself, I don’t care enough to put myself on the listings. But if you look at my profile, it shows like, oh, he sold maybe three because those are the only ones that actually put me,

[00:08:13] Fred Glick: Here’s the thing, the more you sell, the more you’re going to get into the database of recruiters and recruiters are going to be calling you.

They think you’re making 3 percent on every deal. So it’s like, surprise dude, we have this other marketing system. It ain’t going to work. You call a banker.

[00:08:32] René Pérez Jr.: But that’s not the whole point. The whole point is, you know, you have a list of agents that don’t have any sales because the way that the sales are processed, right?

It’s regardless. Plus, a sale is a sale. Even if, even if you get 100, 000 or 1, 000, there’s still, there’s still that property that has to get on the contract, right? So,

[00:08:55] Fred Glick: Yeah. Oh, and the other thing the article was kind of weird about was that you know, this is just statistics that they got from NAR and the MLSs.

So there could be tons of other agents doing deals or not doing deals. We don’t even know about it, you know, for the non-realtor. So they didn’t count us. So, you know, it’s crazy. And the other thing is this article was on Inman News, which is just for people inside the real estate industry. So, whatever. Moving on, just stick with us.

[00:09:30] Drew Thomas Hendricks: Job-provoking, nonetheless. But, you know,

[00:09:33] Fred Glick: Exactly.

[00:09:34] Drew Thomas Hendricks: The thing to concentrate is that high commissions, and with the high commissions, it doesn’t necessarily guarantee competency.

[00:09:41] Fred Glick: There you go. Ah, look at that, René. Did you see it? We accepted the counteroffer. I didn’t even see the counteroffer.

[00:09:50] Drew Thomas Hendricks: Go on Holmes, on the podcast as we speak.

[00:09:52] Fred Glick: I’m telling you, we have one of our listings that we may have a deal on. So, we’ll do that after we get off of this.

[00:10:03] Drew Thomas Hendricks: We can pause it for a brief moment if you want to close it.

[00:10:06] Fred Glick: No, it’s okay. They got back to us on this, I think it was, what, three weeks, maybe, we got an offer?

These sellers are just from the, they’re fun. Let’s move on. Hey, let me talk about something else. We had a former, now former client that we fired today because what he wanted to do is go for a VA loan on a multi-unit property. Okay, which you can do up to, you know, 100 percent financing on four units.

Google for more details because there are a lot. But then he started asking me, he said, “We’re going to occupy all three units.” And the place was currently either occupied by two or three of the units. And, you know, we’re, I talked to the lender and the lender did not indicate that I had to give the tenants any notice to move as part of this transaction?

I go, “Okay.” And I just had to put in something in the agreement indicating that the buyer was going to owner occupy all three units. Then this guy starts asking me, he wants ROI numbers on renting the three units. I said I can’t do that. Ethically, I can’t do that. You’re applying for a VA loan, which is only for owner-occupants.

So why are you asking me for these numbers? Maybe three years from now you decide you want to move. Then we can do it when we know what the rentals are. And he kept insisting. And I just reminded him, well, he probably didn’t know this, but I’ll remind everyone, mortgage fraud has a penalty of one million dollar fine up to a million dollar fine, and up to 10 years in prison.

So, I terminated our relationship with him. We’re not interested in you know, whatever he was concocting, even if he’s 100 percent right and going to live there, he just indicated to me in writing, he wanted me to analyze this. And I even said to him, the worst lawyer in law school who graduates knows that there is a pattern here.

And it’s now a conspiracy. So I’m not getting involved in your conspiracy to defraud the Veterans Administration and having the Justice Department show up. So kids here’s the lesson, like I said on South Park. Don’t do drugs. Drugs are bad. Don’t do mortgage fraud. Mortgage fraud is bad. Okay, there’s your headline.

[00:12:43] René Pérez Jr.: And here’s even more commentary. One, another lesson, listen to René because I warned Fred six months ago. You know, because this is

[00:12:53] Fred Glick: It’s a little goofy, but you know, I didn’t think you’d go to the fraud.

[00:12:56] René Pérez Jr.: No, it’s like, but you just know, right? Like I, I’m the person that usually is like, look, you know why we need to give people chances.

We can kind of educate. It’s important. But it’s just like this one, like, you know what, I hate losing business. I really do. But this one just has to go. Right? But, but here’s also where, I, so yes, fraud is wrong. But the other problem is that things do get lost in Slack and text communication sometimes, right?

So, whether or not he wanted to do fraud, that’s one thing. But in this scenario, you’re losing, you’re losing a lot of the commentary through text and that’s why phone calls won’t ever fully go away, right? Because you get on the phone with them, okay, you get an explanation of he just wants comps, and comps are important, right?

[00:13:47] Fred Glick: We have another, he wasn’t even asking, he wasn’t even asking for sales comps, he want rental analysis,

[00:13:51] René Pérez Jr.: But that’s because of his lack of being able to actually use his words, right? And, and say what he wanted, he wasn’t articulate enough to say, “Oh, I want comps to know what the full picture of this house is.”

[00:14:07] Fred Glick: I disagree, but

[00:14:09] René Pérez Jr.: No, no, no, no, no, no. This is important, right? Because there’s a three-unit property, right? What are the odds? As when you do comparables, is this going to be compared to a single-family house or is this going to be a rental property in the long run?

[00:14:20] Fred Glick: I also asked him, dude, did you do comps? You know, we’ll do comps also. I told him that in there so, but he kept pushing me on the ROI. He wanted the lowest price in the world in an ROI, but you know, I hear you.

[00:14:34] René Pérez Jr.: But to get the full context of a property, you do need to have that entire market analysis of the comp of the rental without the rule and ensure like you don’t know what the what it’s going to rent 10, 20 years from now, but there is a pattern of rents, right?

So it is a fair question to ask, even if you’re going to owner-occupy, eventually, you won’t owner-occupy three units. Right. If it’s a grandparents, the parents and the, the kids living in a three-unit property, odds are in 10, 15 years, grandparents are going to die. Right. That’s just, it’s me being, you know, a little cynical, but I mean, grandparents can die any day.

Right. So how much am I going to be, or how much will I be forced into renting a property? Now that law of renting a property for one year is just a general standard.

[00:15:22] Fred Glick: Show me the law. There is no law.

[00:15:26] Drew Thomas Hendricks: Yeah, help, educate me.

[00:15:28] Fred Glick: There is no law that says you have to, the law says you have to stay on the property and rectify for a year.

What it is with every lender, every lender needs to show intent.

[00:15:41] René Pérez Jr.: Yeah.

[00:15:41] Fred Glick: That’s what they’re all talking about. So let’s say you buy a property, intend on living there. You live there. Six months later, you get a new job in Shkabukiak. Can’t wait till they figure out what that was on there, on the transcription.

And you got to move. And it’s the kind of place where, you know, prices are good. So you want to just sell your place and find a new place there because you’ll be 10-year contract. You’re never coming back to this part of the country. And you have to sell. That’s one thing, you know, they understand that if you are then saying, “I’m going to rent it after six months,” it better be for a darn good reason.

And that you’re going out of the area, not that, “Hey, I’m going to move back to my parents’ house and just collect rent.” Because you did it as fraud. It’s all about intent. And it’s for lawyers to do, but the point is there are companies out there that do post-closing audits. Realize that.

[00:16:40] Drew Thomas Hendricks: This is not exclusive to the VA loan. This is

[00:16:45] Fred Glick: Oh God, no. This is mortgage. This is post-closing. They’ll go and do things. They’ll send mail to you. And to see if you’re getting mail at that place there, they will research it on the Internet. They’ll try to look for you and find you and you know, hey, you have a sign. “Hey, I bought my new house,” you know, but they have ways.

I don’t know what the other ways are, but they know they could find ads to the property. Here’s what I would do. I would set up a Google alert for the address. And if I see it come up on Trulia for rent in three, in two months, then I know, hey, I’ve got a good case. Send it to the lawyers. So everything you guys who are trying to trick the system are thinking about. Is has already been thought about.

[00:17:33] René Pérez Jr.: Yes, there’s a difference between tricking the system in wanting to be prepared for what’s eventually going to happen.

[00:17:39] Fred Glick: Yeah, but

[00:17:40] René Pérez Jr.: If you have 3 units, you will rent 1 along the line. Like, odds are

[00:17:45] Fred Glick: Maybe, but that’s years from now and who’s going to pay what utilities and what are the taxes going to be?

What is the insurance going to be? I can’t predict that. Insurance is crazy right now. I mean, nobody does this. Nobody in the world does this. They just know they’ll be able to rent it. Right now, he’s got to qualify with all his income to support the entire mortgage. So it’s not like he needs the rental income to qualify.

So think about that. He can afford it. So the rest of this is gravy. Monthly – so the ROI doesn’t mean anything.

[00:18:18] Drew Thomas Hendricks: But what does he get out of it? A lower, I mean his,

[00:18:20] Fred Glick: He gets an owner-occupied interest rate and the VA and FHA loans are great rates better than conventional.

[00:18:27] Drew Thomas Hendricks: Okay.

[00:18:28] Fred Glick: That’s because you have a VA fee that goes on top of it and it’s insurance and FHA has got an upfront on a monthly payment for this insurance, but here’s the thing,

[00:18:40] René Pérez Jr.: You also get to get rid of the tenants that are currently there, so when you rent it again, you ask for a higher rent price.

[00:18:46] Fred Glick: Ah, you may or may not get away with that under the LA County rules about, you know, emptying a building and getting, he’s just asking for it.

[00:18:55] René Pérez Jr.: I mean, the thing is, when you see this on paper, it’s like, yep, this is fraud, right? What I’m just trying to argue is that it is important to know what the current rental market is to have a full picture of the market, whether you’re going to rent it or not, because okay, you buy it right now, even let’s say, let’s say he loses his job, right?

[00:19:13] Fred Glick: Go look on rent.com and look at rentals, that’s all. And just know you will be able to have, you rent that one for a thousand, you rent that one for 1500. Okay, that’s it. I mean, that’s, it’s that simple. You don’t do a massive calculation on it. You’re going to have all the expenses you’ve had. You have them paying utilities. That’s it. So let’s move on.

[00:19:32] René Pérez Jr.: I think that part of our job is to be full service and to be able to know.

[00:19:36] Drew Thomas Hendricks: Before we move on.

[00:19:38] Fred Glick: Relevant full service.

[00:19:39] Drew Thomas Hendricks: Help someone that doesn’t quite understand. So given this guy’s fraud, so it’s going to be, he’s going to get a lower interest rate by living

[00:19:47] Fred Glick: Back to that.

[00:19:48] Drew Thomas Hendricks: And then he can, and then he can inject the tenants maybe and charge them a higher rent.

The alternative is he buys it through the normal channels for a multifamily home, which has some nice incentives now, and he may or may not be able to raise the rent.

[00:20:03] Fred Glick: Let’s put it this way. No, no, no. Forget about it. Forget everything you just asked because it doesn’t mean anything.

[00:20:09] Drew Thomas Hendricks: Oh, it means –

[00:20:11] Fred Glick: Here’s a, no, no, no. I’m going to explain it a different way.

[00:20:13] Drew Thomas Hendricks: Okay. Thank you.

[00:20:14] Fred Glick: Here’s the ballpark. You go and look at this 123 Main Street house and you see that there’s a three-bedroom unit and two one-bedrooms, okay? I’m making this up. So you know you’re going to occupy the three bedrooms.

And you know, without any rent coming in, your mortgage payment is 2000 a month and your lender says, “Hey, you can afford 2000 a month.” Okay, great. Everything above that is gravy, meaning you then if you needed to the other two units. Total 3, 000. They take 75 percent of that. So it’s, whatever that is. I don’t do math that fast in my head.

Anyway, they use that as part of your income and they add it to your job income and all that to help you qualify. So if you need the rental income, you can get it. That is the way it is normally done. If under what he wants to do and owner occupy, he has to buy the property. He gives the tenants the proper state-approved notice in time saying he’s going to owner occupy, they move, then he owner occupies.

If he tries to rent it right away any of those units, that’s absolutely a million percent mortgage fraud. And also, I believe it’s in L.A. that he has to go back and pay the people who left a certain amount of money, he frauded them to get them out. Okay. He’s going to be in all kinds of who scout trouble.

Don’t do it, kids. Mortgage fraud is bad. Don’t do mortgage fraud.

[00:21:50] Drew Thomas Hendricks: Okay. Got it. Got it. Well, let’s get back to the spring outlook. This is the early winter outlook. I knew that we’ve heard that going into the new year has been very busy. What are you guys looking, looking, how do you guys see January and February shaping up?

[00:22:07] Fred Glick: Look at Mavericks. Did you see the height of those waves? 30-40 feet.

[00:22:12] Drew Thomas Hendricks: I used to have a house overlooking Mavericks. I surfed it in the 90s, late 90s back when I was a little more fit. Oh man, I was dying because I was on vacation going up to Paso Robles and I knew the people were with wanted to take the five no matter how I just wanted to convince them to do stuff because it was all time.

We would have been able to, it would have been quite the view.

[00:22:38] Fred Glick: But I would, I would have read in another car and like,

[00:22:42] Drew Thomas Hendricks: Well, it was the first time I’d taken the five up and I now got to see the actual flooding on that Tulare Lake area.

[00:22:50] Fred Glick: Oh, gee, you got to see flooding as opposed to 30 or 40-foot waves.

[00:22:54] Drew Thomas Hendricks: Well, I would have taken the 30, 40-foot waves, but I had not. I mean, there’s so many plots that are just underwater, but it’s weird how nature’s retaken it. There’s like reeds up in the, I don’t know how the reeds grew so quickly, but it all looks like, swamplands with cranes, thousands of cranes, and pelicans.

[00:23:13] Fred Glick: Wow. Cool.

[00:23:15] René Pérez Jr.: Well, and that’s a story with living in the coast, right?

So I think, so one of the things that I have been doing for the end of the year that I’ve been working on for a while now is looking at climate change tools.

[00:23:28] Drew Thomas Hendricks: Oh, yeah.

[00:23:29] René Pérez Jr.: And see.

[00:23:29] Fred Glick: Yeah.

[00:23:30] René Pérez Jr.: Hey, like, what are all these things that are so cool by the coast? Will they be really cool 20 years from now? Or will I not be able to live there because it’s flooded? Right. And I mean, the last weekend, I mean for those of you that are not in California, or that were on vacation somewhere, the entire California coast was flooded, right? Here in San Francisco, in Pacifica, there was flood, flood warnings. There was flood warnings in Santa Cruz.

There was flood warnings down in SoCal and Ventura. So, yeah, so a lot of property damage, right? And why is this important, right? Because a lot of times when Fred and I talk about, you know, how to make an offer on a property, we’re always thinking, you know, think long term. You’re going to own it long-term, right?

And well, what happens if long-term where you’re buying is in a flood zone and you can’t sell it because nobody’s going to insure it? And it’s just devalued just by where it is. So, Coast, it’s beautiful, it’s great to live by the coast, and we pay that California tax of living in the coast. But we have to know how to kind of actually know that we’re making the right decision.

So, there’s a lot of links out there. They’re not that great. I think we’re not there at the moment where, you know, there’s APIs that actually share a lot of insight as to, like, how the environment is changing. But one of the sites that I did find was climatealpha.ai now they were the only the only site where you can actually plug in your address and press enter and it won’t make you subscribe somewhere and it will actually tell you.

Okay. What is the median climate-adjusted average? Right? Of course, this is not going to be the only tool that you should use. It doesn’t know all the answers, but it will tell you, okay, based on where your house is, you are in a flood zone. You are in a, you’re close to a fire hazard zone. Is it, does it have a high risk of, or a low risk of insurability or homeowner’s insurance, which is another

[00:25:31] Fred Glick: Big problem right now. Yeah. Which is only getting worse.

[00:25:35] René Pérez Jr.: Yeah. And even in the car industry, actually, it’s getting difficult. Costco, actually Costco, one of the new lenders that we haven’t spoken about for insurances, Costco used to do home insurance and car insurance. They’re no longer accepting new vehicles. So it’s getting tougher.

[00:25:51] Fred Glick: Yeah. Why, what’s going on in the car industry? I understand housing.

[00:25:56] René Pérez Jr.: Well, I think for cars, it’s a lot of like, there is a lot of subprime lending, right? So it’s kind of like what happened 2008. So there’s that kind of stuff going on. But just in general, right? And insurers just, they don’t want that liability.

[00:26:11] Drew Thomas Hendricks: Also, cars have become like a zero-sum game. I mean, they don’t fix them too much anymore. I mean, a ding that would have been repaired 20 years ago is now totaled.

[00:26:20] Fred Glick: Yeah. Oh, yeah.

[00:26:22] René Pérez Jr.: Yep. Yeah.

[00:26:22] Drew Thomas Hendricks: With all the electronics.

[00:26:23] René Pérez Jr.: That’s why for me, like, you know, I drive a Tesla. If, yeah, if anything happens to it, it’s just an immediate total.

And a company has to, the insurance company has to pay out 30k like that. So, it’s just not worth it. So.

[00:26:34] Drew Thomas Hendricks: Where are you getting a Tesla for 30k?

[00:26:36] René Pérez Jr.: Well, no, the insurance. Well, you don’t, right? But that’s what the insurance would pay out.

[00:26:40] Drew Thomas Hendricks: Oh, sure.

[00:26:41] René Pérez Jr.: Right. But actually, you know, something that people don’t realize is that with the tax rebate in California and the federal rebate, you can probably get a Tesla, the entry-level for about like 35k. It’s not that expensive. People seem to think that a Tesla is like a big luxury, like high-end vehicle. It’s kind of not. We, you know.

[00:27:03] Fred Glick: Some people just think it’s just a nerd car and they won’t go anywhere near it. The analog people just won’t buy an electric car. You know, I don’t understand.

[00:27:13] Drew Thomas Hendricks: Yeah. Well, speaking about electric cars and chargers, like a few weeks ago, we talked about elevators, how a lift might be something that’s going to raise your property values.

[00:27:22] Fred Glick: Lift your property values.

[00:27:24] Drew Thomas Hendricks: Lift your property values. What about installing an electric charger, preparing the home for EV?

[00:27:30] René Pérez Jr.: Oh, yeah. And you have these bundles now, right, where you can buy a battery pack, you can install EV, like, you don’t, and you don’t have to actually have, like, a lot of insulation, but you don’t have to do a lot of wiring because you can add it as an extension to where your washer and dryer are, right?

[00:27:48] Fred Glick: Is it 220?

[00:27:50] René Pérez Jr.: Yeah. Mm-Hmm.

[00:27:51] Fred Glick: Okay, so you need a 220 line is all it really. It’s just a 220 line and a plug basically, Drew, I mean, it adds value, but it doesn’t add value. It’s like nice to see if you have your house listed, “Hey, this is cool. They have a charger. Mm-Hmm. I don’t have to buy one.” But you’re not gonna get a difference in price because

[00:28:11] René Pérez Jr.: I mean, if you have a, you know, electric vehicle charger, but the foundation’s cracked you’re not going to get, right? But if it is like, there’s some new builds, right? We like we’re working right now with the, the builder that’s doing like full solar powered, heat resistant, fire resistant homes. And one of the things they’re doing is, you know, installing those EV chargers. And going off of that, it’s like one other idea is it’s adding things like a sky, Starlink, right? Like, imagine your house like has the ability to have like good internet connection. That’s pretty good, right? So it’s, if it has all these nice little gimmicky stuff, it’s not going to sell the house, but it still gives you a, a way to advertise better.

[00:28:56] Drew Thomas Hendricks: But if it’s thought, if it’s thought out in like, for example, we ended up getting 40 percent more solar than we needed, anticipating increased electric needs. So that probably added a little more value to the house than if we had just done the bare minimum.

[00:29:10] Fred Glick: No doubt about it. And then it’s the other things in, in the garages, and I always say to do this is, you know, clean the floor, paint the floor, make the floor look pretty, make look like there’s never been a car on it.

And so you have that and you have a nice charger with it. That’s, it’s gonna add value. It’s something simple.

[00:29:27] Drew Thomas Hendricks: To a lot of people, they’ll go, yeah, and it’s a finished garage or semi-finished garage.

[00:29:31] Fred Glick: Yeah.

[00:29:32] Drew Thomas Hendricks: Adds some value.

[00:29:33] René Pérez Jr.: Well, I think, let’s put it this way, like instead of adding that electric vehicle charger, if you’re thinking of adding an electric vehicle charger, instead spend the 3, 000 on the floor epoxy, right? Because that’s what it costs, you know, around 3, 000 to do a brand new floor.

[00:29:49] Fred Glick: Make it gorgeous. Yeah. So I can always run a 220 line later.

[00:29:54] René Pérez Jr.: Because I know it’s in a budget, right? I mean that I don’t know how much that installation for electric vehicle charging is, but it’s bound to be close to what it’s going to be to paint the floor. So I would paint the floor. Don’t do the electric vehicle charge if you have to choose.

[00:30:08] Fred Glick: Okay, we agree for once.

[00:30:14] Drew Thomas Hendricks: It might just end the episode on you guys agreeing 2024 the year of harmony.

[00:30:19] René Pérez Jr.: Yeah. Well, just knowing where you’re buying if you’re looking long run, right? Because it’s, we do often get clients who ask us about, “Oh, it’s in a flood zone, right?”

And yes, you should be careful about if you’re buying in the flood zone. But there’s a lot of areas in California that are under a flood zone and not all flood zones are created equal.

[00:30:43] Drew Thomas Hendricks: As we found most of the Central Valley is a flood zone.

[00:30:46] Fred Glick: Oh, yeah, there’s underground streams and tributaries often. Different bodies of water that may be going under your house and in 100 years, it will cause a flood.

[00:30:57] René Pérez Jr.: And what I’m yeah, and the thing is, like, you look at websites like Zillow and Redfin, and they do have a tool that says, like, oh, flood zone warning, right? But but don’t be scared of those homes just because you see that generic label there on the website. You need to do a lot more research and to find out if their house is affected because that parcel that section of the house. And that’s what a lot of the tools that, you know, I have an article that has a lot of links as like, what are the available resources for, for home buyers, right?

Where you can actually take a look at your specific house, not just a general area, which is what a lot of these tools that are in Redfin do.

[00:31:38] Fred Glick: Yeah, they’re just like heat map. That’s all they are. But here’s the story because I’ve had these situations where somebody is buying, you know, single-family house on 10, 000 square feet, and it showed up as flood zone when they pulled up the address.

But what they had to do is they get a surveyor to be able to show that the house itself is not in the flood zone. It’s part of the land in the back, which even could have a slope 20 feet down. So you’re not going to make you pay for flood insurance on a house when the house is never going to flood. So if you have that situation, fight that situation with the lender, and then they will acquiesce, but find out what, what kind of process they want to be able to do that.

But yeah, totally fight it. So there you go, we can end it’s, you know, anticipating more in the rainy season here in California.

[00:32:32] Drew Thomas Hendricks: Yeah. So far, the Salinas, other than the big waves.

[00:32:36] Fred Glick: Yeah, the waves have been sick.

[00:32:38] Drew Thomas Hendricks: But the ski season has been horrible so far, there’s like,

[00:32:41] Fred Glick: Oh, Tahoe I hear just got hit though.

[00:32:43] Drew Thomas Hendricks: They finally just got hit. And I think Big Bear just got its first snow for the year.

[00:32:47] Fred Glick: Yeah. It’s too hot and Big Bear.

[00:32:49] René Pérez Jr.: That’s climate changed for you. Yeah.

[00:32:51] Fred Glick: There you go.

[00:32:52] Drew Thomas Hendricks: Well, looking forward to a great 2024. We’ve got a lot of good episodes in store for everyone. We’re going to sign off for the day.

[00:32:59] Fred Glick: There you go. Cheers.

[00:33:01] Drew Thomas Hendricks: Cheers, everyone.

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