 stock market is at an all-time high. Crypto is at an all-time high. And going starting off the earnings season, corporate earnings are at an all-time high. That is until Snapchat reported their earnings here recently. But ladies and gentlemen, also most importantly, real estate is at an all-time high. Everybody that knows and who owns the home or who's trying to get into the real estate market know that it's pretty hard for a buyer to be able to get a good pricey day these days and the seller is pretty much getting any price that they want. So with all this going on, even though we have stocks at an all-time high, real estate, and cryptocurrency, and corporate earnings at an all-time high, we also have high inflation. The recent CPI report, consumer price index report, reported a 5.4% inflation rate. With that being said, we know what timing is when it comes down to the Federal Reserve, Jerome Powell. Jerome Powell and the Federal Reserve were looking at them possibly raising interest rates, leaving a lot of people in uncertainty. What does it mean for real estate? But out there across the globe, people say, hey, whereas there's uncertainty, there's opportunity. That's what we're here to discuss today. Errors of opportunity in real estate with none other than my guest, Mr. Sean Sutton. He's a loan officer out in Halula, Hawaii. And ladies and gentlemen, he's going to be here live here in a second. But if you haven't done so already, go ahead and make sure you hit that like, subscribe, comment, and share button, and all those great things like that. But without further ado, let me introduce my guest, Sean. How was it going today, sir? It's always great to get admiration, right? Oh, yeah. Definitely. It's going very good, very good. I can't complain living out in Hawaii, enjoying this aloha sunshine. Okay, great. Now, let me just get straight into it, because I know I don't have a lot of time, and I definitely know the guys and girls that are tuning in, catching it live, auto playback, video, audio. Right now, where do you feel we're at right now in real estate? Because some people are saying, hey, we're in an overinflated market. We're waiting for that bear that's peaking his head around the corner. What do you think we're at in real estate? You think we're in an expansion? We're in a peak? Or you think that we're actually on a downturn? What do you think? I think right now, there's always a lot of talk about the inflation and what about that? It's going to hit. Really, it's area dependent. Coming into areas such as like Hawaii, you're definitely going to see where we're getting a point of saturation in terms of buyers. There's plenty of them, but as they hit this market and you start to realize that it's really, you're kind of outpacing the majority of buyers that are out there on the market. It's leaving a small area of opportunity for a few, in a sense. With that being said, and then with interest rates on the rise, you're going to see that demand to go out and purchase drop in my estimation. Okay. If you're somewhere, you're on the buyer's side of house, what would you do? Would you wait it out? Would you just jump right in? Or what will be your thought process with that? My thought process for that would be, if you're a buyer and you're looking to purchase a home right now, if you have the means to do so, go ahead and do that. Right now, with the inventories being where they are, trying to wait it out, it's a steady pace. It's not to say that pricing at some point or interest rate at some level is just going to make it more advantageous to, hey, all these homes are going to open up and we're going to be able to go out and buy on the market. I think if you can get in now, go ahead and get in there so that way you're able to achieve the objective, so to say. You have your property in hand, if you're looking to invest, or you're just looking for your home at this moment. Right now, the steady state is such a a slow down turn to where I think you should go ahead and make that purchase if you have the ability to do so. Now, going to the real estate market, we know there are different types of ways you can get into real estate. You've got land, you've got actual real estate, then you have these things called real estate investment trusts. If you were to go into the market, just those general areas that you were going to, which one would you go into, land, real estate, or real estate investment trusts and why? I would go into real estate. That's the way things, especially kind of being out this way. That's probably one of the more popular aspects of it is going through and people love to buy properties here because there's so many different, somewhat versatility, I should say. It turns to whether or not you want to be a renter or if you're doing air BBs in some particular parts of the island. The same thing may hold true depending on where you stay there on the mainland. Again, if you're in the area, a large area here, we don't have a lot of land, so if you can manage to go ahead and you have that money to only up to go and do that, that's always advantageous. Now, if you're someplace as big and a lot of land there such as Texas, things of that nature, then yes, if you can get your hands on it and go ahead and do so. Okay. Now, let me answer this question here. Going into, I think the first quarter, maybe second quarter next year, the Federal Reserve, they have their fingers on the interest rate button. The interest rates are extremely low. They lower the interest rates at the beginning of last year because of the pandemic. Now, we're in a very low interest rate society in general, generally speaking. Now, we just seen the weekly jobs report come out today. Jobs unemployment is starting to drop. We see housing market is doing well. Stop market is doing well. The economy looks like it's on an upswing. May not feel like it, but look at the numbers it is, but we also have some inflation running at 5.4%. Do you think the Federal Reserve will raise interest rates in Q1 or Q2 next year, and what effect would they have on real estate? I think they're probably going to want to raise those interest rates. We're having what I would call like a downward trend right now where the cost associated with the rates, we're all accustomed to seeing these historically low interest rates. I know that sometimes is an overused term, but I could definitely see that trending in that direction. They have to do something to, I guess, to offset what's all just transpired over the last year and a half. With that being said, it kind of feeds into this idea of disinflation. Nothing going forward if you look ahead even further, you're going to see where your interest rates go up, and then you're going to see a reverberation of seeing them drop back down, perhaps maybe like in 2023. Okay. Now let's look for someone who already owns a house like yourself, who's out there in Hawaii, who's built up all this equity. For people who don't understand what equity is, you purchase a home for one price and the value of the home goes up, the market right now. So you have that little cushion of what you owe on the house versus what the house is worth. Some people have so much equity right now. Some people have $100,000, $200,000, half a million, whatever. What can I do with that equity? Shall I leave my equity there? What are some options I can do with this equity that's built up into my house? That's a good question. I could ask that a lot. When it comes down to the equity within your home, especially right now, again, rising costs, you see things all over the place. In terms of just the equity alone, you can use that if you want to go into investing properties. If you're looking to expand your portfolio in a sense, if you want to add in real estate and pick up like a small condo and apartment or another home like that to rent out, that's one way of looking at it. If you want to increase that equity margin within your own property, renovations are a very, very popular item at this moment. But as I was stating when I first started, the cost of lumber, things associated with renovating your home makes that a little bit of a slippery slope because it's costing so much and you're draining all your equity out of it to try to get that done. So just have to be careful in that aspect. But again, to answer that more directly, when it comes down to renovating the home, investing in the future properties or other properties, those are the main two tickets that I see so far. I'll answer this question. You brought up a very good point about the rising costs of materials, which is connected to inflation. Inflation, price of services, goods and services goes up. So it only makes sense that lumber and bricks and concrete, I don't know the whole recipe to build a house, but those things seems like that's what happens to the price of it goes up. So you say, hey, if I go out and renovate the material, I could be buying at a premium meaning the higher price versus what if I just took a HELOC or took out a HELOC loan and maybe that's the only way I can look at you getting your equity out of your house. And when it purchase land, because land, just vacant land right now is benefiting from inflation. What do you think about that concept? That's one way to take a look at that. You mentioned before about pulling equity out of your home. You can do it through your HELOC or you can do it through a cash out and finance as well. So that way you're able to That's a good question. I want to ask you a question when you cut you off there. What are some ways that I can use or take out the cash or take out the money that equity in my house? What can I do with it? So with that, what can you do with it? Again, once that money comes out, depending on what loan product you select, let's say this a VA cash out, that money's going to be yours. Same thing was conventional and so far. So you can do what you want with it. Once that money's in hand. So if you want to go out, again, use that money to assist to purchase a secondary home or an investment in can to land, you can also do that as well. Also going in any other different type of investments that are out there, but those are those primary aspects that I see more people doing now than ever really. And the cash out option has really been a very popular one considering that equity within your home is really this is just exploded. So every time you turn around there, your home is becoming more and more valuable, which is also feeding into that mindset of the average buyer. As they see that taking place and when we thought that was going to stop, it hasn't been steady throughout. And I think that's really been what's been a driving factor why you keep seeing more buyers come out to the market. You're not being so afraid of what those higher costs and price they're being asked to sell. So like how does that really work? Let's say the cash out option and the HELOC option, how does that really work? What are those things? So for your cash out, essentially what it is is they're going to come out and evaluate your home and they're going to give you what they call like an appraisal value for your property. Based off of that value, you'll be able to go through and effectively complete your loan at that said value amount. So for instance, if I have my home currently, and let's say I owe $400,000 on my home, but I've had it for several years and I want to take out a cash out refinance and I get it appraised and it comes back at $600,000. So I got $200,000 there of equity within my house, depending on whatever loan product that you're using will give you a percentage of how much of that money you can take out. I use VA because a lot of folks out here do that, you can go up to 100% so that $200,000 is fair gain. Now with that cash out option, you're going to have to income qualify for that. So whatever you take out, essentially whatever you're making has to make up for it. You see how that works? Where you're taking that money out, I have my $200,000, but my loan amount will now be $600,000. So I need to qualify for that $600,000. For your HELOC, your HELOC will establish itself like a line of credit, much like a credit card. So the equity is there, it'll come out as revolving and it'll just sit there. You can use that money for whatever you want to do, whether it be a renovation, whether it's the payoff, a vehicle or a debt, sort of things of that nature, but it does not go away, like how cash would just be spent in the so long we're there. It sits there just like a revolving line of credit for what it is. And then you have at some point, you need to repay that off, take it down to a zero balance to which you'll still see, which you'll still sit and be there, or to close it out, you can take out on a refinance such as a cash out to close it out, essentially close the loop. But yeah, HELOCs are very popular in a sense that people can hold on to it for over as long as they want, really, and be able to utilize it for different reasons. Okay. So look at those two concepts. Would you even look at that as an possible vehicle for investing? Or you just say, you know, just doing the math, just leave it along and go find another way to finance your future investment endeavors. How do you look at it? I definitely look at it as a vehicle for investing. HELOCs have several methods about going out and using that particular method to go and increase like your real estate portfolio, you're able to go out and get different investments. It's just required a disciplined mind. So once you're using it, it's just like a credit card. So as you spend on that, you have to be disciplined in terms of how you're using your debts and the money that you're making that way, whatever you're spending, you're able to replenish or put back. So that's one popular method. People love to use that HELOC to, again, kind of set themselves straight and move themselves forward. The same thing with cash out refinances. Again, that's not a line of credit, but at the same time, people are using that vehicle to, again, purchase investment properties or, you know what, maybe it's time for me to take out this equity within my home. I can rent out my current property and go buy a new primary residence someplace else. That's something that I encounter a lot here as well. And many people can use it across the nation. I mean, right now, it's probably being used or thought of more often because there's so much equity being added to the whole space off the current market. Okay. Well, I could, I could see there's a popular move or things like that because, you know, you have a lot of people who are currently in their homes and they're saying, Hey, you know, I built up all this equity due to the rise of, you know, home values, things like that. Maybe they had it for a couple of years, maybe looking for some other ways to get inside of it. Now, people who are sitting back saying that they're anticipating a downturn, you know, in the economy, what are some ways you will prepare, you know, from, let's say you're a homeowner or maybe you're a real estate investor, or some ways you will prepare your portfolio, your real estate portfolio or to prepare yourself for a potential downturn. Well, if you're going to be hitting towards a downturn, like I said, I believe cash is your friend. You have things set aside and you're preparing for any type of downward turn that could be disadvantaged to yourself. One of the things that we always talk about, even when we're doing our seminars and we're talking to people reported with the homeowners is, you know, you always have a plan or an ex-fail as we would say if you're in military terms. So that way you're not over-invested into something. And then when it doesn't turn out to be what you think it's going to project to be, you're not in over your head because nothing can make you feel like you're underwater or drowning worse than being in a home that's either too expensive or you're over-invested to where your money that you got coming in is just being siphoned out of you because you're trying to take care of multiple properties. So you have your ability to forecast and know that you need to have, again, a plan in case something goes wrong or have you money on hand to be able to get you through those rough times. Okay. Well, ladies and gentlemen, we're going to take a quick break. And I mean a quick break. We're going to take a quick break. And I want you guys and girls to stay tuned as we come back more here live from Haululu, Hawaii. Of course, well, I'm from Denver, Colorado, but we're coming live from Haululu, Hawaii. I want you guys and girls to stay tuned. We'll be right back. Hi, I'm Rusty Kamori, host of Beyond the Lines on Think Tech Hawaii. I was the head coach of the Punahou Boys varsity tennis team for 22 years. And we were fortunate to win 22 consecutive state championships. My show is based on my two books Beyond the Lines and Beyond the Game, which is about leadership, success, character, and creating a superior culture of excellence. Please tune in and watch my show every Monday at 11 a.m. on Think Tech Hawaii and on YouTube. Aloha. Ladies and gentlemen, we are back here live from Haululu, Hawaii. Well, Denver, Colorado via Haululu, Hawaii. I don't know why I keep getting that mixed up, but pardon me tonight. It's been a long day. But if you have missed the begin of this episode, I definitely would tell you to go back and look at the beginning of it. We spoke about some of the things you can do with equity that's built up inside of your house via from a cash payout or a HELOC. The current state of real estate, real estate versus REITs versus land versus single family homes. Well, ladies and gentlemen, we got more to get into. We're here live here with a loan officer from Hawaii, Mr. Sean Sutton from Align Mortgage. We're glad to have you. How are you doing today, sir? Fine. How are you doing? All right. Now, you spoke about educating people there in Hawaii via workshops and webinars. Can you tell us more about that from Align Mortgage? So certainly. So what we do every month is we put on seminars that are free and online. So we encourage anyone who's either thinking about a home, investing in property to attend these seminars. And we're going to become very advantageous to the everyday buyer is that we cover everything from the actual product itself through interest rates, closing costs, loan process. That way you have a fully educated buyer once you head out there. So we offer these every month and they're twice a month. We do the one that's twice a month. It's for VA Pacific. And then we also do one that covers FHA, USDA, conventional loan, and it also touches on the VA as well. So we try to keep it to where every point of any loan that you're trying to go out there and capture, you learn a little bit about it. Also, when it comes down to things like specialties, like your key locks or things of that nature, even though our company doesn't provide those, we still touch on those bases. And we also offer a live Q&A. So if you have those questions there, again, we're all loan experts with it. You ask me far away. You get an answer right then and there. Okay. So how can people sign up or figure out more? Do these go to the website? Yes, they can. Our website is at www.alignedmortgage.com. Once you enter that website, you'll see up top it'll say seminars. You click on it. There's different states that you can sign up through. Of course, with us being why you select Hawaii, it will give you the dates to which you can attend. And that's where you will click and then sign yourself up. It's pretty laid out there and self-explanatory from that standpoint. Okay. So we're here now on the website there. We just walked through it at alignmortgage.com to get more from webinars and things like that. Right. So now I want to ask you the next question is we go into the current state that we're talking about when people say, hey, let's look at some different opportunities that are going on right now. When you look at the world of refinancing, we just seen a recent dip in interest rates for houses. Am I correct on that? You're correct. So refinancing, even though it's a better interest rate, is it good to refinance? How much money do you need? How much is it going to cost? Tell us all about their refinancing market for people who already currently own a home who want to take advantage of current interest rates, especially for veterans. I don't know a problem. And I think when it comes down to refinancing, in this particular market, ever since the pandemic started, I think, as we would call it, you're chasing that rabbit in a sense where interest rates, they kept falling and they kept falling and people are watching and saying, you're receiving things in your mailbox telling you to refinance. The one thing you want to do is always speak to an individual like myself and find out if there's advantages to do so. So just because something does exist, doesn't mean it always comes with a good cost. So with that being said, for example, if I'm sitting at a 3.25 interest rate and I receive something in my mailbox saying that, hey, I could make your interest rate 1.75, well, that sounds absolutely extraordinary. Who wouldn't want to jump at that? But sometimes you have to look about, okay, what are the costs? What are the fees associated with that? And that's the dangers that you come into once you're refinancing. It is a good thing to do is just make sure you're not adding too much to your loan. That way, all that hard work and money that you're putting into your home, you're just not simply adding more and more back on it. Meaning you don't want to end up further back than where you started. Is it advantageous? Is the money that I'm saving every month equitable to the amount of money I spent to get the interest rate? Okay, so give me for example, what would be a good price? Let's say currently me and myself, I have a 2.75, right? I get something in the mail that says, Prince, we're going to give you a 1.75. My house costs 4.36, well, no, 4.45 I think it was. And it said, hey, we're going to give you an interest rate of 1.75. What are some key indicators? Of course, I'm going to call you and say, you know, hey, Sean, what do you think about this? What is a good rate to take? And for veterans, what advantages are things that are out there that veterans could take advantage of? So for the veteran standpoint, the VA URL, which is interest rate reduction refinance loan is a great loan to go out and conduct and complete really your refinance on it. Because it's no charge in a sense for you, just no closing costs associated with it. That's do it signing. Well, he said, well, he said no closing costs. There's always closing costs with the loan. It's just with that particular one, it can be rolled into your loan amount. And with government loans and interest rates, they typically come, again, with low interest rates and good pricing. Meaning that you're more likely going to receive a lender credit or have a very low buy-down. And when that term buy-down, you hear it a lot. People may not understand exactly what that is. It's where you have your closing costs with your loan based off your loan amount, to say, like you mentioned there, it's $4.30. So you're probably looking about, let's say, $6,500 in closing costs, something along that line. Well, if there's a buy-down cost that's $1,500, you're going to add that $1,500 to that $6,500. $8,000 would be your closing costs because it's an URL. It can then be placed within your total loan amount, thus being no cost. Okay. So that's how that would work. And that's one thing that's advantageous there for VA borrowers is that VA Earl. A lot of times, though, those lower interest rates, though, we use the example of 2.75. So if we're going at least a half a point more, 2.25, especially early onset of this year, that particular interest rate would have probably came with $2,000 or $3,000 of rebate or lender credit from an entity like myself. That's what you're looking for. So to answer that question of like, hey, what money should I be looking for? Really zero. You want to make sure, one, it doesn't cost you anything to get the actual rate and it's minimizing the amount of money being put back into your loan. But at the end of the day, if you're reevaluating like, hey, am I going to keep this property? Most homeowners keep a property about eight years. If I'm going to stay here, like for myself, I'm going to live in Hawaii for, you know, foreseeable future. And okay, I can take a little bit of a stretch and put a little extra money into that loan because I know for a good part of my 30 years, I'm going to stay right here. But if I'm just looking short term and three to five years, I'm just going to go back and say, hey, I'm going to assist you sell this home. And obviously you want to watch how much cost that you're putting into your actual interest rate, how much money again is being spent towards that loan. So that's the things you want to watch out for. And then also my last point here for those flyers that you get in the mail, you definitely want to make sure you're checking for little things. They try to trick you a lot of times with like big numbers, large fonts that catch your eye because everyone looking at the sparkly thing in the sky, which would be the 1.75. So at a small date, sometimes it's indicated on those flyers. We'll tell you as of, meaning that with interest rates, you're gone. The day that rate or you receive that flyer, that interest rate at that price, you see that they're promising, it's probably already passed. It changes every day as soon as the market opens and it closes. So that's one thing to be mindful of. And then with the fees and costs, the little words at the bottom, you have to make sure you're watching those things, watch for those empty promises that they're putting in there. And then you can always fact check them too as well. Hmm. Okay. That's a lot to look at. Now, what do I have to do, a veteran have to do to qualify for the Euro, the veteran refinance? You know, is it anybody that served, someone who kind of served? What do you have to do to qualify? Well, for qualification to be based on your eligibility, so you have a certificate of eligibility that you're receiving from the VA. And essentially what that is, is that's for any service member who has served for 90 days in a wartime frame within the military, or 181 days. This is for active duty personnel. If you flip over of your guard or reserve, it'll go from the same 90 days you're called up on Title X orders, which is anyone called up on federal active duty orders. If you go and you get deployed from your national guard unit or reserve unit, and you go to Afghanistan or Iraq or something along those lines, typically those are six or seven month deployments. So, as long as you're qualifying and you receive your certificate of eligibility, and that's something that any VA approved lender can do, they can go in the system, the VA portal, and open it up, and you'll have that eligibility there. You'll be able to have your VA Earl in place. Now, of course, to do the Earl, you have already had the native VA purchase. Okay, that's how that will work out. See, if you are someone out there who already has a home with a conventional loan, but you are eligible for the VA, then I would recommend definitely if you want to, to switch that out, because the VA typically has lower fees and costs associated with it. Because sometimes, there's people who bought many, many years ago, back when the restrictions were a little bit tighter. It wasn't as always as open and as available as it is now. They've changed a lot in terms of how they service and treat veterans now. But back then, they used to have time limits on stuff. And the eligibility just to be stricter and things of that nature, but they've relaxed things as we've gone through the decades. So, people who've owned homes for 20, 30 years, it's like, well, hey, I bought conventional back then, because no one really told me about my VA loan. I didn't even know I was eligible for it. Well, now, going back through it, if you know you're someone who served for that middle-time frame those 90 days or, hey, I was in it for two, three, four, five years, I want to go and check with my eligibility status, do so, and then use that product to your advantage. Okay. All right. So, pretty much active duty people, no luck. What's that? I said people that are active duty who's currently serving, no luck for them. They got to wait until they retire or separate. Not. So, for those active duty personnel, there's plenty of them out here who serve and they buy their home. So, if you're in that scenario, you've already purchased a home and you're active duty. By the time you sign up for your home, you're eligible to use your VA loan or your VA Earl, that is, at 210 days of seasoning and six payments. So, about the seventh month, you're ready to go in terms of eligibility. The only thing they're going to require is that want to be in that tangible benefit for you, meaning you're not adding so much to the loan to where it doesn't exist. And the fact that needs to be at least a half a point drop in your interest rate. All right. Well, Mr. Sudden, definitely glad to have you on. Definitely thank you for coming on. But for the people that want more from you or to hear more from you or to see more from you, where can they go? How can they find you? How can they follow you? Let us know. Well, I do have my handle there on Instagram. So, it's at Sean Sudden, L.O. You can follow me on Facebook. Sean Sudden, I have my MLS number, which is 146 201. It's my business page. If you can find me there. And also on the website there at alignmortgage.com. I'm under the Hawaii state. You'll see my smiling face there when you search for loan officers under Sean Sudden. Okay. Anything you want to leave the followers listeners out there across the globe? I'll leave you with this best for show. Great show. Love it. Keep tuning in. I'm so, so, so thankful that you're able to bring me on and be able to talk about this. I love helping people with their loans. I think what you do for everyone in terms of your financial advice and your business savvy is great. Keep up the good work. I appreciate you so much. All right. Thank you for being on. Well, ladies and gentlemen, there you have it. My name is Prince Sykes. This is The Prince of Investment. Until the next video podcast, cartoon or whatever it's crazy, you see me do around the globe. Peace, be safe, I'm out and thank you.