You Can’t Do That
The head Varsity basketball coach (I was an assistant) dwelled on what players couldn’t do. That approach went against the grain of who I was and am. I’m not interested in what can’t be done. I’m interested in figuring out a way to get it done. Keep reading. I’m going to tie this to real estate.
In early February the head coach took sick. We had an away game against the #1 conference team. I was now head coach for the game.
That night I played a 5’11 football player at center and moved our 6’8 center to forward. The football player had a “nose” for the ball and the center could shoot from 22’ out. I also provided playing time to a shooting guard who rarely got off the bench. We won by 20.
The head coach returned. We met that same team in a March semi-final game to see who would play for the State championship. We lost by 22. It wasn’t complicated. One coach dwelled on what couldn’t work and another on what could. The scores dictated the better process. The same holds true for real estate.
Buying a home is tough for young buyers today. What are some of the issues they face?
1. They have taken on 300% more student debt than their parents.
2. They are half as likely to own a home as young adults circa 1975.
3. Based on current trends many won’t be able to retire until age 75.
4. Wages have stagnated.
5. Salaries have stagnated and education, housing and health care have inflated. (u.s. census and college board trends research)
If people had the discipline to save (many don’t) I’d be less supportive of home ownership and would counsel many to rent. Home ownership is a forced savings account, a place to live and provides a capital gain exclusion up to $500,000 on sale.
Home ownership is a foundation to one’s financial future. (The U.S. General Accountability Office reported that 29% of households aged 55 and older had no retirement savings.)
Buyers need questions answered and information to figure the best home purchase for them. They don’t need salesmanship.
Buying a home without objective information won’t provide a financial foundation. What you buy and what you pay will determine the strength of your “foundation.”
In financial terms buying bonds is saving – but if all you own are bonds, it’s probably not going to help you meet your long-range financial goals. Bonds are the equivalent of renting or a bad/marginal home purchase.
So what are young potential home buyers to do?
One of my favorite coaches, Al McGuire, visited a player in the player’s dorm room. The player asked coach what it took to succeed. McGuire looked at the player lying in bed and said, “The first thing you have to do is get out of bed.” And so it is with home buying.
If you’re a millennial or know a millennial who wants to own a home but can’t “get out of bed”, I suggest a coffee with ex-coach Holloway or one of his Homebuyer Associates teammates. We have nothing to sell. Let’s not discuss why it can’t be done (losing by 22). Let’s talk about what can be done (winning by 20).
Over coffee, we’ll provide some insight and answer questions. The meeting typically takes 45-60 minutes.
We won’t contact you after the meeting (honestly) unless you contact us. To be frank, we only want to work with people who “get it” and want to work with us. That approach has helped over 1,600 clients purchase a home.
Next, (January part II) I’ll discuss how to deal with debt, stagnant wages and what limits young buyers today.
Thanks for reading,
Michael D. Holloway