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- [00:00]
A
Give me just a minute. I'm going to talk to you about the hidden wealth in home buying and the lie that's been told to young renters today. You've been told it's unaffordable. You've been told there's no chance of getting a down payment together. You know, starter homes 30 years ago averaged 1200 square feet. Then builders changed the game. The average starter home today is 2,500 square feet. Do you really need all that space? There are actually lots of options. You know, 54% of first time buyers get help with their down payment, so don't be afraid to ask. Multi generational homes are 17% of all sales. Maybe there's an option to move in with the fam. Also be willing to move out of a major metropolitan area a little further out of town. That'll give you a chance to maybe buy something a little cheaper. Here's the truth. The average net worth of a homeowner is 43 times that of a renter. Be an owner, don't stay a renter. Top of the morning to you. I'm Brian Buffini. We have a great show lined up for you today. Renting versus buying. This really is a hot topic, especially since so much information, dare I say misinformation on this topic is available online today. When it comes to the conversation surrounding renting versus buying, I just made a case for buying a home in a minute, but I know many questions still linger. And even if you agree the choice is clear, you may be thinking, well, it's unfortunate because I don't have a choice. I don't have the freedom to make that choice. Well, let's unpack this a little bit more in today's blueprint on how you can become an owner instead of a permanent renter. When I say that the average net worth of a homeowner is 43 times that of a renter, I want to explain to you right now in our blueprint why, you know, I just saw actually today online two graphs and it said why you should stay a renter and showed buying a home payment of 2,500, renting a home, 2500. And then it said, oh, well, you've got property taxes when you own, you've got insurance when you own. You've got to take care of the property. So you got upkeep. And it said, why don't you take the money instead of the tax and the upkeep and the insurance, take that money and invest it over the course of 30 years and in 30 years. Here's how much net worth you'd have. That's the kind of crap that's put out 24, 7. Nowadays, in fact, young people are being told the smart play, the wise play is to stay being a renter. Well, I'm going to walk you through financially, what that's not the case. Also, psychologically, I can also share with you sociologically why that's not the best thing you can do when you purchase a home over here. Yeah, your payment might be 2,500 and your rent is 2,500. You have property taxes for sure. Both your mortgage interest and your property taxes calculate as a tax deduction. That tax deduction has been guaranteed by the national association of Realtors and their lobbying efforts for 50 years. So you get a nice big tax deduction off the mortgage interest and the property taxes. Secondly, these characters online say the rent is going to stay the same for 30 years. You're lucky if the rent stays the same for 30 days. Nowadays, when you buy the home, you guarantee what the payment is. You've decided this is what the payment is forever. In addition to that, if you pay a little bit extra, maybe you make one extra payment a year, you'll take the length of the mortgage down seven years, which means now you can pay it off in 23, not just 30 years. Oh, by the way, you might get appreciation, which has typically happened 4 to 5% a year for the past 50 years. So the property value goes up, the mortgage comes down, you build up more equity, and your payment is guaranteed. As a renter, you have no equity at all. Your payment is not controlled by you, it's controlled by the landlord. And that person says thank you every month when you make their mortgage payment for them. So, no, the smart play is not renting. The wise play is always to own. Andrew Carnegie was one of the wealthiest Americans who ever lived, and he said that 90% of all millionaires become so through owning real estate. The second reason why your asset base goes up so much is homeownership is a hedge against inflation. Now, everybody's recently had a lesson in inflation. It's gone up 25% in the last five years. The fact of the matter is assets increase during times of inflation, stocks and especially real estate. And I'll share with you my journey. I bought a house for $219,000. Now, let me say this. I thought my arms and legs were going to fall off. I thought, I'm never going to be able to make that payment. In fact, I scraped together 21,000 for a down payment. And. And I asked the seller to carry back 21,000 in a note. I went to them about a year later, and I offered them 11,000 for the 21,000 I owed them. And they wrote it off and they said, we'll take the cash. I sold that house for 330,000. I was able to use that 330,000 because I'd bought down the mortgage to buy a $900,000 home. That home went up to 1.2 million. I sold that $1.2 million home and bought a $1.8 million home and lived there for a long time. Sold that home for $4 million, bought the next one for 4.8 million, and I just sold it last week for $7.5 million. Same person now again. My journey was fast and furious, the way my life has been, but it was a hedge against inflation over the past 30 years. That was my journey. Started at 219, ended at seven and a half million. And now that my kids are all grown and out of the house, I downsized and pocketed the difference. Will Rogers said this. You don't wait to buy real estate. You buy real estate and wait. That's really the key. The last thing I want to share with you is that owning creates stabilities for kids, families, and communities. Studies show children raised in a property their family owns have higher academic scores. They end up with higher incomes. More of them go on to become homeowners themselves than the regular generational population. 9% of kids who live in a home that's owned are better at math, 7% are better at reading, and 3% have fewer behavioral problems. It's good for families. It's good for your net worth. It's good for society. It's also a great feeling. Mike Plata was a third generation Mexican immigrant. No one in his family had ever owned a home. Mike was. He was a great contractor. He worked with concrete. He had done some concrete work for me on a real estate transaction. And I said to him, mike, have you ever considered being a homeowner? He goes, oh, no, Mr. Brian. No one in the Plata family has ever owned a home. I said, would you like to give it a try? What if I could show you a way that you could buy a home? He just didn't think it was possible. He thought it was something that he could never do. It's not something he grew up with. And I put him on a plan to save his money every month. Now, it took a while. I put him on a plan that we thought it would take three years. But as a contractor, he took on extra jobs. In fact, he started working a lot of weekends to save his money, to save his money. And I helped him buy a home in two years. I'll never forget the day when they were moving in. All of his family and his extended family were there. Myself and my brother Kevin, who was one of my assistants, we drove to the home and delivered platters of food for the whole family. He didn't hire a moving company, he just called in the family. And we had a fiesta to celebrate Mike Plata being a homeowner. Putting the keys in that man's hands. That was 35 years ago. I'll never forget the look on his face. I'll never forget the feeling it did for me. Real estate, home ownership changes a person's life. It's good for your net worth, it's good for your family, it makes for better citizens and better communities. And ultimately it gives people that sense. I own a piece of the rock. Well, that's why I made it my mission to help people buy a piece of the rock. And now, for the past 30 years, I help the people who help the people buy homes. Franklin D. Roosevelt said, this real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it's about the safest investment in the world. If you're a renter, Come on in, the water's warm. I know it's hard, I know it's difficult. It may seem overwhelming or even unrealistic, but you can do it. Put in the work, save your money, own a piece of the rock, and you Too could have 43 times the net worth of those who are still renting.
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B
Home means a lot of different things to a lot of different people. For some, it's a financial asset. For some, it's a lifestyle. For many, it's both. How should we be looking at our homes?
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A
Yeah, a man's home is his castle. Was was said in the 1600s. And it's true then, it's true now. In fact, women probably have a higher priority on it. What we're seeing with younger people, first time buyers historically was 28, 29, up to 32 now. The average age of first time buyers, 40. What we're seeing is 50% of those folks are married. 25% of all first time buyers are single ladies. All the Single ladies, only 10% are single men. And we're seeing that showing up in young men feeling like they can't get ahead, can't afford a house. How do I get ahead? So they're going to crypto the online gambling going from 5 billion a year to 150 billion a year and it'll be at 300 billion next year. It went from taboo, especially with all the sports teams and channels. And now they're all sponsored and they all own a piece of the action. So now they own a piece of the action. Hey, bet on every game, bet on every inning. Here we go. And so what's happened is people are taking on more risk to do it then you have. People like Robert Kiyosaki wrote a book, Rich dad, poor dad, good book, I recommend it to a lot of people. It's a fable. So there is no rich dad, which took him about 20 years to admit. So don't mind calling out Robert on that one. But so it's a fable of someone giving him advice and there's some really good vice in there. And one of the piece of advice though he gives is that a home is not an asset. And that's bs. So a home is an asset, it's just not an income producing asset. And so it's an asset because it holds value of monetary value. It's an asset because you can pay down the mortgage and it's an asset because it can also increase in value. The other reason for the asset is that not all things like I own a lot of stocks now, they used to issue you stock certificates. I actually have stock certificates at Buffinian company and I have a big book. Well you don't really get those books anymore with the stock certificates. But when I own stock in a company, I technically own shares. Well you don't sleep in a share. You know, a share doesn't give you shelter from the storm. You don't raise your kids in a share. So that's why there's an emotional component to owning a home that's very significant to everything else. Food, shelter, clothing have been since recorded human history. The three basic food first, shelter second and then clothing third. A home is an asset, it's just not income producing. So the reason why this is important. So let's say someone at your age, you have a chance to have your home free and clear and paid off or you're really in a good equity position but. But now you take some of your money and invest it in the market. You invest it in perhaps other real estate. And so because the goal would that be with that other real estate, that it would be income producing. And so I did an episode of the original Brian Buffini show called the One Decision that Made Me a Millionaire. And it was about the difference between buying a home for appreciation or for cash flow. So I live in San Diego. If I try to buy a house here as a rental property, for cash flow, I got to put down 40 or even 50% down for it to break even. I can go to Columbus, Ohio, Fort Wayne, Indiana, I can go to parts of Arkansas, there's many cities I can go to and I can put 10% down and a property will cash flow. So if I'm looking for appreciation, I'm typically buying on the coasts in areas that have appreciated in the past. If I'm looking for cash flow, I'm going to properties. Like I own an apartment building in Indiana. You probably didn't even know I owned it.
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B
I don't.
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A
There's lots of those. But here's the thing. I own that property for 15 years. It's about, it's worth a little bit more than I paid for it. You say, well, that's a bad investment. No, it's a great investment because the cash flow is like a truck. Your house is an asset, it's also your home. And that's where the emotional thing is. So it's not an income producing asset. And that's where Kiyosaki is correct. I always encourage people to take care of the home front first because if a young person's coming up, buy the home, settle the family, secure the home front, then you make your investments from there. And so, yeah, would it be better to put that money in the stock market over the years? Yeah, probably financially. But where are you going to live? Where are you going to raise your kids? What neighborhood are you in? So there's a huge emotional, psychological component to the place you live. And so it is an asset, it's just not income producing.
- [14:00]
B
Okay, what was your 1 riskiest investment and your favorite?
- [14:09]
A
I mean, I've bought and sold a lot of real estate, so painting is what I come from. So buying fix and selling, so you never forget your first love. So I bought a home on Thornwood street in Claremont, California. And this is when after my motorcycle accident and I'm riding around and I don't want to make it too much, but it's true. And you've probably heard some of these stories where I had one leg, one bicycle wheel pedal, and the other was a piece of wood and I put my foot on the crazy, crazy. You've heard these stories, right? So I went looking around I drove, rode around on a bicycle. And I saw a house that was really. The garden was overgrown, the gutters were hanging down. I was just in a state of dilapidation. And I knocked on the door and this lady kind of had the chains going and she's looking at me and I go, hey, you know, I'm trying to get my way in the world. I'm trying to buy homes and fix them up. She says, I need to get out of here. There's a long story. It was tough situation, her husband was violent, she would lock herself in and whatever else. And I literally looked up. I went to a library. There was no Google at the time. I went to a library on how to buy a house. So I wasn't even a real estate agent at this time. And I literally got a one page form, photocopied it at the library, and it was kind of like, seller wants to sell, buyer wants to buy. And I bought this property for $105,000 and I didn't have the money to buy it. The promise was once I fixed it up and I sold it, I would pay her this price plus a 10% premium. It took her a while to trust me, but I would show up every day and I'm cleaning up the garden and I'm fixing the fences and I'm painting the front door. And I started. Her soon to be ex husband, he'd start a lot of projects and never finish them. So bit by bit, this house starts turning into what she always kind of hoped it would. And she kind of got engaged with that. Then by that stage, I was studying to get my license, so I put the home on the market and we sold it in three days. And I sold that house for 164,000, so paid 105. I never forget. I paid $14,900 to fix it up. I gave her an extra 10 grand. She got to move on with her life, which was a huge deal for her. And I got to buy my first piece of real estate, turn it and fix it, make a nice profit. And so that was the very first one. I've made an awful lot of money in real estate, but that was the sweetest money I ever made. And that's when I really kind of bit the bullet. And I was like, I'm in. Like I've eaten the forbidden fruit. And it was me buying, fixing, you know, I like to make things better and refine. So buying, fixing, turning that house, helping this woman who'd been in a tough spot, it just scratched all the itches for me. So that was 1986, and so that's 40 years ago. And that was my favorite very beginning
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B
of you changing a lot of people's lives, clearly. That's awesome. Yeah, Good stuff.
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A
All right, top of the morning to you. Welcome to Coach Em Up. You're on the Brian Buffini Show. Phil, why don't you tell everybody welcome. Who you are and where you're calling from.
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C
My name is Philip Willis. I'm from San Diego, California.
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A
Nice. So, Phil, what's your question here? If there's anything I can answer for you, what would it be?
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C
My question would be, so being 26 and living in California, it seems impossible to buy a home. And a lot of I've been hearing and seeing a lot of people are more renting and it seems to be the smarter move to rent. What do you think about that?
- [17:51]
A
I'll answer your last part first, which is one of the things that's going around is the smart move is to rent. And it's not the smart move. It's just, it's a really hard move. At 26, how do I buy a home when the average sales price in San Diego, California is 980,000, it's like, how do I work enough to make a living, save money, and ultimately get in the housing game? Now, I want to get you in the housing game because the average homeowner has 43 times the net worth of the average renter. And one of the things that's done typically is it shows, hey, it's 2,500 bucks to rent is 2,500 bucks to buy. But you got to pay property taxes and insurance. And insurance rates in California have gone through the roof too. So here's what I would suggest. And again, this may apply, it may not apply. Some people are getting help from a grandparent or a parent down the line to help with the down payment. Number two, there's a series of programs that are coming down the pike. In fact, one got passed today to create down payment assistance. So one of the things you're going to be able to do is to use some of your retirement funds and other things that you can borrow against tax free to be able to get a use a down payment. FHA and those other loans are also being expanded to be able to create very, very low down payment opportunities and raising the rate of how much you can borrow. Now, what I would say is this, is that the goal is to, to keep your eye on the price, right? And it's like, okay, it Might take me a little longer. We're going to work hard, we're going to live within our means, we're going to save. What's happening right now to a lot of people your age, Phil, is they feel like, in fact, single males are buying property at less than two and a half times the rate of single women. So what young guys are doing is going, man, I'm never going to get a chance to get ahead. You know what I'm going to do? I'm going to buy bitcoin. Which makes sense. Like, hey, you know why? Because my money could jump. And I don't know if any of your buddies have talked to you about that or even if you've jumped in on the bitcoin business yourself. Have you? Yeah, of course, because I'm trying to get ahead. The next thing is it's online gambling, right? It's everywhere, right? The generation before you, you couldn't do anything and now it's like, hey, man, the warriors have a game tonight with the Lakers. Steph is back, right? So online gambling has gone from 5 billion a year to 150 billion a year in a five year period of time. And guess who the demographic is? 20, 25 to 30 year old men. I don't think it's necessarily, you know, older generations might go, oh, they're lazy, they're looking for the quick hit. I think it's because a lot of people yourself, like, how the heck is this going to work? So let me bet it on the Lakers, let me bet it on the Chargers, let me bet it on bitcoin to see if I can make the jump. And here's what's most likely. If you ever played baseball, Phil, or if you watch the Padres, if a person's coming up to bat and they feel like they have to hit a home run every time or they're going to lose their job, what do you think they're going to do?
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C
They'll strike out more.
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A
They'll strike out more. And that's what's happened to a lot of younger people. So as hard as it sounds, I'm going to encourage you to get a budget, live within your means, and set aside a fund every month to put something aside as a housing fund. You never know when a parent or grandparent might be able to help you out with some of a down payment. The next thing is, you may have to start smaller, you may have to start further out, you may have to have a bit of a longer commute. You know, a lot of people right now I, for example, I have a company in Carlsbad, California, and people come into the office only three days a week. Some of my folks live out in Hemet, some of my folks live in Murrieta, some of my folks live in Temecula, where they're able to afford a house. It's a bit of a longer commute, but they're only coming in three days a week. So those are the kind of options. My main thing is this. Don't give in to the thought it's not possible. And it's smarter to rent. It ain't smarter to rent because the numbers show it's 43 times the net worth. If you buy a home, homes consistently appreciate over the long haul. You have a chance to pay down your mortgage, you, Your rent. That's not in your control. I own rental properties. I choose what the rent is. You don't. But when you pay, get a mortgage, you choose what the payment is, and you can, you can have that. Payments get fixed and you bite, fight, scratch, and claw to get into a house. And then what happens is you go, okay, after the first year, we're going to throw one extra monthly payment a year at the house. If you did that, you take seven years off the life of the loan. So now all of a sudden, the mortgage is coming down, the appreciation's going up, and you're owning more of the home and you're in control of the environment. So I'm. I'm going to encourage you to stay steadfast, continue to set the goal, save. And it doesn't seem like I'm only saving a hundred bucks. I'm saving 200 bucks, I'm saving 300 bucks a month. Just keep saving and the opportunity will present itself. You might have to. You might end up with a townhome in Santee or something. But it's a place where you start because once you're in the game now, you have a piece of the rock that you can move forward with. So it might take you a little bit longer, it might take you a few more years. But my encouragement to you is I had a conversation with a young couple the other day, and they're like, no, we want to live close to the freeway. We want to be close to the ocean. And they've basically almost doomed themselves to being renters for the rest of their life. They pay a ton in rent, and, um, they just had a baby. And, oh, by the way, the rent's going up and the place they have is too small. And now all of a Sudden now they're starting to think about it. So it's not impossible, but it is hard. I'd encourage you to keep setting your goal. Keep chipping away at it, and you may have to move out. You may have to get further. There is programs coming your way that might help you. Okay?
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C
Okay. Sounds good. Thank you.
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A
Stay the course, Phil. Stay the course. I want to see you in that first house.
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C
I will.
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A
I want to get my first house, baby. Thanks for calling in today.
- [24:10]
C
Of course. Thank you.
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A
Top of the morning to you, Chris. How are you doing? Why don't you tell everybody where you're calling from?
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D
Brian? Hi, I am Chris Bazer. I am calling from Cape May, New Jersey, which is normally beautiful. A little rainy today.
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A
All right. All right, we'll take it. We're down in San Diego. We could use the rain. What's your question for me today on Coach Em Up?
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D
My question is twofold for you. First of all, it has to do with inventory. Second of all, with threats. My inventory levels, my primary MLS is currently around 737 listings. That number two years ago was around 1450. That number in 2020, which was a normal market, is about 2024 or 2240. So our inventory levels are about a third of what they are. Okay, with Inventory level levels historically so low, I still feel there becomes a fine line between staying in touch with my contacts and over contacting them, especially on the buyer side. And I know we're doing the blitz right now, so I just want to know what your thoughts are on when too much contact is too much contact. And then to make things tougher real quick, the number two brokerage in our MLS as far as the buying side are non member MLS participants. So we're being encroached on more and more.
- [25:25]
A
Yeah. Well, you're asked two fabulous questions here. First, so let's talk about inventory. So what? When you talk about how much inventory and there's only a third of the inventory, it's actually not true. What's true is you have only a third of the inventory for sale. So what you have is you've got a market. And I would bet if you ran the analysis on it, you had a market that had a lot of people who got low interest rates. And so the reluctance to move is built into the rate. Now, for the first time in five years, we've just reached a number where there are more mortgages over 6% than under 3.5%. So that's taken a long time because it takes a while for things to level out. And so what you have is people were sitting on their property. And here's what we know. The reason why people move and need to move. They have babies, they have divorces, there's death. They have job transfers. And then also, I want to downsize or want to upgrade. So those are the five major reasons that didn't stop happening in Cape May, New Jersey. So what you need to let people know is this. No matter what you're hearing on the national level in Cape May, you need to lean into it and say inventories are one third of what they were just five years ago. So that means if you put your house on the market, you get a great opportunity to sell it right now. So if you want to upgrade or you want to downsize, the number one reason why people are moving is to be closer to family. It's 23% of all sales. And that's why you receive the marketing from us. Our marketing's been hammering this with the items of value. And I would just say this. The fear we have is, I don't want to be a bother. I don't want to contact people too much. The way in which you deflect that is when you reach out to somebody, say, you know what, Kris? You may not be wanting to move, but maybe you know someone at work or church or in your neighborhood who is, and I want to take it. I want them to take advantage of this opportunity, and that kind of takes the heat off. So how big is your database?
- [27:26]
D
My database is about 130 clients. And I did forget to mention my. My primary. This market is primarily a second home and vacation.
- [27:32]
A
Sure, sure, Exactly. I know. I know where Cape May is. And. But it's also. What's happening is people are selling their vacation homes to help a kid or a grandkid out in buying a home. So it's. What we're finding now is. And that's one of the reasons you have a such a stable market up there, is most of those second homes are people who have lots of equity, have lots of money, but they're actually. So when we've produced the items of value, for example, it's like, hey, here's how to help your child, your child or grandchild buy a home. 54% of all millennials are getting help with the down payment. A lot of people have actually been selling their vacation homes to help a kid or a grandkid buy. So that becomes the legacy market. So what you want to do is find all the different motivations that are out There in the marketplace, typically, we tend not to like, I have a second home. I have a second home that I have greater affection for than my primary home. Okay, But I will say this. I'm always interested in finding out about that market. I'm always interested in finding out what's going on. And so you just providing that information, providing that value, letting people know, it's very, very powerful. And I think to me, that whole area, you have your primary database, but every homeowner around your target market, those are, those are really, really opportunities for you. Because I guarantee you that their Realtor is not staying in touch with them. I guarantee you 9 out of 10 times the person who's sold in the house is not staying in touch with them. The reason I know that is that's why I'm in business, Chris. If people did that, I'd probably be painting houses somewhere, you know. And so my encouragement to you is provide the valuable information, provide the market updates, be that voice of value, not just to your primary 130, but also to the community. And I would, I would mail, I would send items of value, I would do that, and I would let them know, hey, I'm here for your questions in this area. But I will say this to you. What I'm seeing is about a third of all vacation homes in the country that sold in 2025 were somehow connected to a family move. Sometimes it was a multi generational purchase. So they sold their vacation home, bought a big property and had their kids or grandkids, you know, like with an ADU or a second casita or whatever else on the property. That's 17% of all sales last year. Just so you know, in my real estate career, that used to be about 6% of the market. So multi generational is the fastest growing type of purchase in real estate. And then also helping people with the down payment, believe it or not, I'll say it's a third of the market. And people are sitting on assets with equity and they could take that equity and help out a kid or a grandkid or do multi generational themselves. Just think about it in a different way. It's an asset. It's an asset, and people own that asset and they're looking for ways to reapportion that asset. Okay, got it.