Saad explains his passion for real estate and how Storii Time came to be.
Hi, everyone. Welcome to Storii Time, where we talk about all things real estate. I’m your host, Saad Munir. I’m so excited to be kicking this off! What better way to start off the first official episode of Storii Time with the story of my first real estate purchase.
Let’s paint the picture.
It’s 2018. My wife and I had been living with my parents for the first year and a half of our marriage but for good reason. We were just determined to buy a place as soon as possible. My wife had just moved to Massachusetts and had an entry-level gig at a local tech company.
I was an account executive at a tech startup. All we knew was that we wanted to live somewhere close to Boston. Now, I could throw some stats and such at you about the Boston market at that time, but honestly, that’s not going to help you. What matters when buying property is you and your situation. 90% of the factors that influence property appreciation–whether it’s a good time, a bad time, a seller’s market, a buyer’s market, interest rates, et cetera–you and I have zero control over.
So, what my wife and I tried to do at that time was focus on us: our numbers, our situation, what fit into our plan, and what made us happy. So, I’m going to go through a few different pieces of our decision-making process: what was happening during that time, like the research we did to give you guys an idea of what our experience was like.
Now, why were we buying a property now?
I personally didn’t want to spend money on rent, and both my wife and I wanted to be closer to the city for work. We wanted easy access to city life: the restaurants, walkability, proximity to the airport, given we like to travel, etc. And let’s face it, we needed our own space finally, right?
My parents weren’t charging us rent, but we wanted to keep our mortgage to $2,200 a month or so. Again, that was based on our calculations at that time. As far as the process and what it was like as first-time home buyers, remember, this is before I became a realtor or developed my passion for real estate. I had no idea what I was doing.
Of course, our realtor at the time was indeed helpful.
I mean, there were a lot of facets that she was involved in and that helped us a lot. But there were also other facets I barely remember. I’m pretty sure my realtor introduced us to the attorney we ended up using for the closing, but I don’t even know if we got an inspection. I don’t even know if we were recommended to have one. It was never brought up to us, at least not that I recall. We know no one had ever lived in the unit before we did. But still, again, you still have the opportunity to get an inspection, right? So the fact that I don’t know whether or not we got an inspection should tell you a lot. I did all the research on lenders and financing myself and I remember I kind of had to roll the dice on some things.
Daunting, also, because my parents didn’t really support the decision. A funny fact is that my dad actually wanted me to take the money and build a house in my parents’ backyard. Obviously, that wasn’t going to happen, right? So, our realtor was a referral from a financial advisor we knew and trusted. That certainly helped.
We probably saw five or six places.
It wasn’t a huge amount, but location and opportunity were the two most important factors for us. Location, for both of us, but opportunity, especially for me. Location, because it was important for us to hit as many of the things I mentioned earlier as possible. Things like accessibility, proximity to work and to the airport, et cetera. But opportunity because we wanted to see appreciation and growth from our investment. This was both a home and an investment for us.
My wife and I, we were aligned on that fact. But more than checking out listings and kind of scrolling through Zillow, Redfin, et cetera,
I was doing research on locations.
What’s up and coming, where is their plan development, and lots of it. Public transit plans, all of that. So this was both a home and an investment for us. More than checking out listings, I was doing research on locations. I wasn’t really scrolling through Zillow or Redfin or anything like that. It was more important for me to look at the locations we were potentially buying in, what’s up and coming, what’s in the works for their plan development, public transit plans, any extensions, access and proximity to them, all of that.
As far as the property itself, we wanted something modern and relatively new, something that came with an easy and guaranteed parking option. Something close to a train stop. As I mentioned, something with one bedroom was fine, but a place with more than one bathroom was a must. We didn’t want to share the primary bathroom with guests and things like that. We weren’t necessarily looking for a loft with 20-foot ceilings, but that’s what we ended up with and we’re grateful for it.
But the one we ended up buying was probably a nine out of ten for us, if I had to put it on a scale and that was perfect for us. The one drawback was the higher-than-desired condo fee, but we were willing to roll with that, given all the other pros I mentioned.
Now, what was the market like?
I honestly don’t recall it being overly difficult. I do remember in terms of options within our budget, there were a decent amount of properties. Part of that was interest rates–they were over 5% at the time. It didn’t appear we were facing crazy competition. We were content actually continuing to look. But it was our realtor who encouraged us to put an offer in on a place we knew we liked.
Again, like I said, if I were to put it on a scale, it was an 9/10 for us easily. It was actually the first place we saw during our search and we saw a few others, but nothing really compared. Again, we were willing to wait and see more options, but our realtor convinced us and helped us to make the move on that unit, which we still own, by the way. It’s now a rental property for us.
The trust we had in our realtor was critical here.
She helped us and guided us towards making the biggest purchase of our lives, up to that point.
And that’s a really important fact for, I think anybody to keep in mind as they’re going about their search is that trust, that foundation of trust between you and our partner, if you have one, or if you’re purchasing with somebody and of course your realtor who is your guide throughout the whole process, is absolutely critical.
Now, what was it like getting a mortgage?
Again, this was back in 2013, but it was daunting. I had no real idea to help me through the process. I had no idea where to look–my parents didn’t really want me to go about this so I got a little bit of help from them in terms of where to go, and what to do, but not much.
There were lots of conversations I had to have with various lenders just to learn what to keep in mind, what questions to ask, and all that kind of stuff. Rate shopping sucks, as does comparing closing costs and credits and such, but that’s what we had to do. People to this day need to do those things. We were very price sensitive, especially being at the top of our budget, so it was quite stressful doing all that bouncing around. The conversation is largely centered around rate and those closing costs.
Based on our situation at the time, we ended up going with Guaranteed Rate for that purchase based on reviews and based on the actual interest rate. They were responsive and the process was fairly easy, especially to upload documents. It was relatively easy to track what we needed to submit and how you would get alerts on what to submit based on what we have already submitted. It wasn’t easy getting all the docs together, but our lives were simpler back then, so all things considered, pretty straightforward. Their system did a lot of guiding on what was needed.
Now, how did we find all the people in the process?
So, I mentioned earlier, our realtor came to us through a financial advisor that we knew and trusted the attorney was through that realtor. Inspector–no idea. I’m pretty sure I didn’t have one. We did not get an inspection on that property. The financing was through research, as I alluded to, and looking at reviews and the same deal with home insurance.
So it was kind of a mix of different ways to kind of get to the professionals we needed to help us through the process as far as how we can trust people. Anybody I was introduced to, like the realtor and the lawyer, the attorney, we honestly didn’t question it that much because, again, we trusted who that referral was coming from and that meant a lot. But it was tougher to do the research with reviews, which obviously can make a huge difference. Other than that, we just had feel situations out with conversations, see what kind of vibe we get from people during calls, especially to determine who we wanted to work with and who we didn’t. At the end of the day, it was about who we felt most comfortable with and who we felt had our backs.
What conversations was I having with my wife? There’s a lot to unpack there.
We covered, obviously, like every couple does: budget for the home, furniture for our daily lives, month-to-month expenses. Frankly, we knew we were pressing ourselves and we would need to make some sacrifices. We talked a lot about lifestyle, that was a huge component here. We banked ourselves. Yes, we were going to live in the city. We really liked this condo, we liked this location, etc. We would sacrifice in the short-term to make it happen (assuming our incomes go up in). We talked about holding it, renting it out eventually, if/when we sell, family. Some tougher conversations than others, but these were important conversations to have given the decision at hand.
Given we were at the top end of our budget and the monthly payments we were comfortable with, we decided that we would hold on any custom closet work for a while. We knew that the closets were not optimized, so we knew that we wanted to do some work to really optimize the space, to ensure we had private storage, etc. But we knew, given that we were stretching ourselves, we knew we would hit pause on that and do the immediate work that we knew we had to do. Give up some time to save up before we went down that path. That was a really important conversation we had when we were going about our first home purchase.
Now, how did we make our decision?
At the end of the day, it came down to if it felt right to us or not. It’s funny that I say that because even to this day, every time my clients go out to see a property, I tell them: it’s not my job to tell you to put an offer in on a house or not. It’s yours. It’s you as the client that needs to decide on a scale of 1-10, where does this property fit. For us, it was around a 9. I can confidently say that. We tried not to overthink it. Sure, there could have been an even better option out there for us, but with the location and layout and the price was reasonable.
We did try to negotiate, but honestly, didn’t get much out of it. We were buying from a developer, who knew they could sell it quickly. We also knew that the developer was releasing 5 units at a time, and by design, were increasing price as the previous 5 sold. When we went into agreement, it happened at the end of 2012, so they were trying to get that last unit in on the sell side. So, we knew what unit we wanted and on which side. (We knew there was going to be some building happening on one side that might block the views and on the other side was a park that wasn’t going anywhere. That’s the side we wanted to be on.) We knew an offer would be quickly accepted if we went in at the asking price. Again, we tried to negotiate but not much happened there. If we were interested and wanted to jump onto the real estate ownership game, we knew we had a good opportunity in front of us.
Again, given the 9/10 and my wife and I being on the same page, it felt like a no brainer to jump it and make it happen.
What were the lessons learned and what would I potentially do over?
Having a network of trusted people, it makes a world of difference. For two subsequent purchases, after the condo, I didn’t us a realtor as they were both off-market deals. There was no consistency, in my experience. I had to do a lot of things on my own. While it was a great learning experience, it was stressful. You don’t have those trusted people that have your back along the way, it just creates a lot more work, a lot more anxiety, a lot more stress, especially on the amount of money you’re spending on these purchases. For the first time and for the two subsequent times, not having that same network, created some anxiety. But again, i learned a lot through the process.
When I purchased my first multi-family, about a year ago, having lenders, attorneys, and inspectors that I worked with and relied on (for my clients even), made my experience very seamless and easy. Quick answers to everything, everything felt like clockwork. If i had to do one thing over, it would be that. Again, the realtor was great. The attorney was great. But it wasn’t a complete team that I felt was backing me up during the experience.
Just to close out, everyone has a first time.
Everyone’s experience is different. Was mine perfect? No. But guess what? That truly doesn’t matter. I took the plunge and I can tell you without a shadow of a doubt that it changed my life forever. You can’t time the market. You can’t control 90% of the factors out there that will influence your investment. That’s not just a real estate investor mentality, that’s life. There are a lot of things you can’t control. But sometimes, you just have to do it, take the plunge, take that leap of faith and I will say this too.
I grew up playing the game of Monopoly – which taught me a very valuable lesson: If you don’t take risks, if you’re not intentional about building something, all you’re going to do is keep helping someone else and/or leave those opportunities for someone else who is trying to build something. The earlier you start, the better. If you’re able. Again, the numbers need to make sense. Better late than never. I’m going to leave it at that.
Thanks for joining me on Storii Time. I’m Saad Munir. Until next time.