Summary of "Seeing Greene - Episode 30" | The David Greene Show

Podcast Information:

• Title: The David Greene Show
• Host: David Greene
• Description: Real Talk Real Estate with David Greene dives into the exhilarating world of real estate business and investing, offering unfiltered stories, insider details, and expert insights for those looking to build wealth, pivot their careers, or simply understand the intricacies of the real estate industry.
• Episode: Seeing Greene - Episode 30
• Release Date: January 9, 2025

Episode Overview

In Episode 30 of The David Greene Show, titled "Seeing Greene," host David Greene addresses a variety of listener-submitted questions related to real estate financing, property management, and investment strategies. The episode provides actionable insights for both novice and seasoned investors, interspersed with personal anecdotes and expert advice.

Listener Questions and Expert Responses

1. Utilizing Equity in Seller Financing

Listener: Dustin K., Chicago
Timestamp: [02:51]

Question Summary:
Dustin is engaged in an owner financing deal with a family member who owns a nine-unit building in Chicago. He inquires about leveraging the existing equity in the building as a down payment without tapping into the equity of his other properties.

David Greene's Response:
David explains that using the equity of a property you're in the process of purchasing isn't feasible since ownership—and thus equity—hasn't been established yet. He advises that if the seller requires a down payment, Dustin must source it from elsewhere, such as borrowing against another property or using personal savings. Greene emphasizes the limitations of seller financing in this context and suggests alternative financing strategies.

Notable Quote:
"You can't use the equity from the building that you're buying for the down payment of that same building, because it's not your equity yet." – [02:51] David Green

2. Deciding Between Selling or Renting a Property

Listener: Dustin K., Cleveland, Ohio
Timestamp: [05:18]

Question Summary:
Dustin owns 27 units and manages them alongside a full-time job as a school teacher, real estate agent, and home inspector. He is contemplating whether to sell a property that has appreciated significantly to take advantage of tax-free gains or to continue renting it out for steady income.

David Greene's Response:
Greene praises Dustin's multifaceted approach to real estate investing and career management. He advises viewing the sale not as relinquishing a property but as exchanging equity for new investment opportunities. David underscores the importance of assessing whether the current property’s equity is working optimally and suggests that if selling can lead to higher returns elsewhere, it might be a prudent move. He also highlights the potential of rehabbing properties to increase their value and cash flow.

Notable Quote:
"If you sell this property that you don't want to have to sell and you take the tax-free money, can you then go invest that money into something different?" – [06:28] David Green

3. Evaluating a Multi-Unit Property with Damaged Units

Listener: Ronnie Urquhart, Detroit, Michigan
Timestamp: [09:42]

Question Summary:
Ronnie is considering purchasing a 12-unit property in Detroit, where five units have suffered fire or smoke damage. He seeks advice on the viability of the investment, given the property's current condition and its after-repair value (ARV).

David Greene's Response:
Greene delves into the complexities of commercial real estate, emphasizing the importance of understanding net operating income (NOI) and cap rates. He advises Ronnie to meticulously assess repair costs and financing options, highlighting the challenges of managing commercial properties compared to residential ones. David cautions about the risks associated with fluctuating interest rates and property values but also points out the opportunities for those with the right expertise and connections.

Notable Quote:
"When it comes to making money in commercial real estate, you've got two levers to pull on: NOI and cap rate." – [10:27] David Green

4. Understanding USDA Rural Development Loans

Listener: Ronnie Urquhart, Detroit, Michigan
Timestamp: [19:58]

Question Summary:
Ronnie asks for insights into USDA Rural Development Loans, particularly their benefits, limitations, and potential pitfalls for first-time homebuyers looking to use such loans for future rental opportunities.

David Greene's Response:
Greene commends Ronnie's thorough understanding of USDA loans and explains their advantages, such as zero down payment options. He also warns of the hidden costs associated with no down payment loans, advocating for options like 3-5% down to secure better rates and lower closing costs. David highlights the flexibility a mortgage broker can provide in navigating these loans, ensuring borrowers find the best fit for their financial situation.

Notable Quote:
"Sometimes the zero down payment options outside of the VA loans come at a cost you don't hear about all the time." – [20:53] David Green

5. Managing Debt and Property Repairs During Financial Hardship

Listener: Koya, Kentucky
Timestamp: [23:50]

Question Summary:
Koya and her fiancé own five properties needing repairs totaling $5,000 to $12,000 each. After recent job loss and accumulating debt, they're uncertain whether to sell properties, refinance, or continue holding and repairing them.

David Greene's Response:
Greene empathetically addresses Koya's financial struggles, acknowledging the broader economic challenges impacting real estate investors. He advises conducting a thorough portfolio analysis to determine which properties to refinance, sell, or hold based on their financial performance and repair needs. David encourages flexibility and resilience, emphasizing that it's acceptable to make tough decisions to stabilize one's financial situation.

Notable Quote:
"If you can hold on to something forever, do it. But if you can't, don't let shame hold you back." – [25:16] David Green

6. Clarifying Property Rating Systems

Listener: Kyron, North Carolina
Timestamp: [31:39]

Question Summary:
Kyron seeks clarification on the property rating system (A, B, C, D) mentioned by David Greene, wondering if it's an internal system or an official zoning classification.

David Greene's Response:
Greene clarifies that the A, B, C, D ratings pertain to neighborhood classifications rather than individual properties. He explains the subjective nature of these ratings and introduces his personal framework, which includes categories like luxury homes, step-up homes, and starter homes. David emphasizes the importance of understanding neighborhood dynamics and working with knowledgeable property managers to navigate the complexities of different property classes.

Notable Quote:
"When we give a rating like this is A class, B class, C class, or D class, we're not rating the property. We are rating the location." – [32:00] David Green

Additional Segments

Real News Report

David provides updates on the current real estate market, including rising existing home sales, median home price increases, and mortgage rate fluctuations. He discusses President Trump's proposed tariffs on imports, particularly lumber, and their potential impact on home prices and the construction industry. Additionally, he touches on new regulations from the National Association of Realtors (NAR) concerning broker commissions, outlining how these changes might affect home buyers and sellers.

Quick Hitters

In this segment, David responds to listener comments from social media platforms:

• Menard Tech Sampson: Praises the podcast for its realism and acknowledgment of the current real estate market's challenges.

  David's Response: "Thank you, Menard. I appreciate that."

• Kelly Rachel35: Highlights Las Vegas' growth and investment potential.

  David's Response: Discusses Las Vegas' favorable conditions for investors, including population growth, low property taxes, and a surge in rental demand.

• Curtis Foster: Seeks clarification on the SALT deduction changes.

  David's Response: Offers a detailed explanation of the proposed changes and their implications for taxpayers.

• Shay Marcella: Criticizes David's stance on Trump’s tariff plans.

  David's Response: Engages in a rebuttal, defending the rationale behind tax cuts for corporations and their broader economic impact.

• Virginia Brewster: Raises a cultural question about women's career prioritization over appearance.

  David's Response: Relates the concept to real estate, emphasizing the importance of understanding market value and providing value to buyers, drawing parallels to personal development and relationship-building.

Sneak Peek

David previews his upcoming book, Better Than Cash Flow, set to release on January 7th. The book promises innovative approaches to real estate investment, focusing on ten different ways to generate income through properties.

Notable Quote:
"This is your real estate analysis bible going forward, the 10 ways that you make money in real estate." – [Final Segment]

Conclusion

Episode 30 of The David Greene Show offers a comprehensive exploration of various real estate investment challenges and strategies. Through detailed listener questions and expert advice, David Greene provides valuable insights into financing options, property management decisions, and market dynamics. The episode also incorporates timely news updates and engages with the audience through interactive segments, ensuring a well-rounded and informative experience for all listeners.

Remember to subscribe to The David Greene Show on your preferred platform and leave a five-star review to support the podcast. For more personalized advice, visit davidgreen24.com and submit your questions to be featured in future episodes.