This week Marina sits down with real estate expert, Julie Bratton, to delve into the intricacies of building wealth through real estate investments with a focus on 1031 exchanges.

Learn what it means to defer taxes through 1031 exchanges, including common mistakes to avoid, crucial timelines, and property identification rules. Julie offers expert advice on selling old or dilapidated properties to reinvest in newer, high-value constructions for better estate planning and rental appreciation.

The episode also touches on the impact of the pandemic on commercial real estate and various financing strategies for investors. Julie sheds light on the importance of starting the property search early, the process, costs involved, and the nuances between residential and commercial exchanges. Whether you’re a seasoned investor or new to real estate, this episode offers invaluable advice to optimize your investment portfolio and defer taxes.

Julie Bratton

E: jbratton@or1031.com

Marina Tolentino

https://www.marinatolentino.com/

IG: @marinattolentino_

YT: @marinatolentino

Newsletter: https://marinatolentino.myflodesk.com/opt-in

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Transcript:

Julie Bratton [00:00:00]:

So let's say your mom got this property and it was worth 300,000, like, 100 years ago, and now she's maybe getting up there in age, and she's like, you know, honey, why don't I just give it to you? You can take care of it. And now it's worth, like, 1.4 prices today versus the prices in three years from now are going to be very different.

Marina [00:00:20]:

Do you have any advice for someone that's trying to time the market or, like, trying to really find that special property? Like, what do you tell them?

Julie Bratton [00:00:26]:

First of all, when somebody puts a property on the market, you should start really looking. Then take that listing period in that escrow period to really go shopping. Only real mistake. Two mistakes, I guess. And I don't know if this is the first one's a mistake. They don't start looking early enough.

Marina [00:00:40]:

Okay.

Julie Bratton [00:00:40]:

They really get stressed out.

Marina [00:00:41]:

Yeah.

Julie Bratton [00:00:42]:

And secondly, when they identify property, they have to put the correct addresses down.

Marina [00:00:54]:

All right. Today I'm so excited because I have the dear Julie Bratton here on the call, and we're just gonna talk about 1031 exchange. I initially met Julie, and I know I've known your name, but it was at the Nahelle presentation with Doctor Horton where you were talking about 1031 exchange opportunities. And as a realtor, I was like, I know a lot of this, but I forgot it, or, like, it's just not relevant sometimes when you don't think of it all the time. And it's such an incredible tool to use as a homeowner in the future. So we're going to do some myth busting and just a little bit of basics, but, Julie, hello. Welcome. Hi.

Julie Bratton [00:01:27]:

Thanks for having me.

Marina [00:01:28]:

I'm so excited to see you. Real quick, before we dive in, how did you get involved with 1031 exchange? Like, what was your career path to doing this?

Julie Bratton [00:01:35]:

Oh, my gosh, that's so funny. Well, I don't. I've done a lot of things, yeah. But I have a degree in interior design from San Diego State, and I moved to Hawaii years ago. And I thought, long story short, I could get into real estate. You know, I have the vision or whatever. So I started selling real estate, I think, in 95, the beginning of 94. So I started my career doing that.

Julie Bratton [00:02:00]:

And, you know, the market was up and down. I was like, what should I do? So I, at that point, became a transaction coordinator for the top producers at the company that I was working for. So I learned a ton there. And then a type an old republic title scooped me up we need a program like that. So I did that for a little bit, and then exchange came out, and I was like, I can do this because I knew how to sell real estate. I know title and escrow, so I kind of fell into it. And that was 23 years ago.

Marina [00:02:28]:

Oh, my gosh. Yeah. So you've been. You're the pro. You're the island pro. Guaranteed. Like no one else knows it. Like you.

Julie Bratton [00:02:34]:

I hope so. It's a lot. I mean, everybody has a story, but the rules are still the same. So it's just interesting how to gather information and get people on the right track.

Marina [00:02:44]:

Yeah, for sure. And I think one of the biggest assets you have is that experience, because every situation is going to be different, and you've helped so many different families navigate those differences. And so when you're an emergency, it's like, who you gonna call? You're gonna call Julie. She's gonna help you, but hopefully we catch it before it's an emergency.

Julie Bratton [00:02:59]:

Yes. Yeah. No emergencies. If we can help.

Marina [00:03:02]:

Okay, so give us the rundown. What is 1031 exchange.

Julie Bratton [00:03:06]:

Okay, so an exchange is a way to defer paying capital gains tax, and it's just for the sale and purchase of properties held for investment or for productive use in a business or trade. I guess that's the textbook definition. So, for example, personal residences don't qualify. It has to be investment for investment. And you have to do this within, you know, a specific period of time. But I do think a lot of times people say, okay, I'm going to do an exchange, sell my investment property, and buy a property I'm going to live in. When you can't do that right away. So it has to be investment for investment.

Julie Bratton [00:03:41]:

I mean, no one says you have to hold it for investment forever, but, you know, upfront, your intent needs to be to hold for investment.

Marina [00:03:47]:

Yeah. Okay, so run us through that timeline. Let's say we're ready. Is it when we close it, the clock starts on selling the home or when you start.

Julie Bratton [00:03:54]:

Yes.

Marina [00:03:55]:

Okay.

Julie Bratton [00:03:55]:

Yeah. So an exchange needs to be set up before the escrow closes. Like, put it this way, nothing can close without an exchange being set up. So, you know, what do I do? I got a copy of the contract and the title report, and I draft exchange documents. Escrow gets everything set. But the day of closing is critical because escrow is going to disperse money. I mean, if they give the money to the client, the client's toast. No exchange.

Julie Bratton [00:04:20]:

They're gonna pay taxes. They're gonna do an. Yeah, if they're gonna do an exchange. The funds come to us and we hold them until they're ready to buy the replacement property. So, yes, the clock starts ticking the day they close.

Marina [00:04:31]:

Okay.

Julie Bratton [00:04:32]:

And here's the clock. They have 45 days from the day of closing to identify in writing what they're gonna buy.

Marina [00:04:39]:

Okay.

Julie Bratton [00:04:40]:

And 180 days to close on it. So the 45 days is included in the 180. They don't get 45 and then an additional 180. Yeah. Day counts. So, for example, a 45 day lands on Easter Sunday. They still need to identify by midnight of Easter Sunday. If the 180 days lands on a holiday or a weekend, let's say Christmas, they might have to close on the 179th day or the 178th day.

Julie Bratton [00:05:07]:

So there's no extensions unless we're a victim of a natural disaster.

Marina [00:05:12]:

Okay. Okay.

Julie Bratton [00:05:13]:

That the government. The government recognized. Like the Lahaina fires.

Marina [00:05:16]:

Yeah.

Julie Bratton [00:05:17]:

They put out, they gave them an extension.

Marina [00:05:18]:

So let's say we mess up and we miss the timeline. They have to pay capital gains tax.

Julie Bratton [00:05:23]:

Yep.

Marina [00:05:23]:

That's what it is. Okay. Your ten, a lot on your neck. Like, what is the capital gains tax for someone selling?

Julie Bratton [00:05:30]:

So it depends on their tax bracket. But you have federal, that's 15, 20% depending on your bracket. You have the state tax, seven and a quarter and above. Then there's depreciation recapture, that's taxed at 25%. And then the 3.8 affordable care tax, if that applies to you. So it adds up quickly. So that's probably the number one reason why people do exchanges. They just do not want to pay.

Marina [00:05:52]:

Yeah. And so I think the roadmap of this is to use this over and over and over. Maybe you're starting with a condo, but then you can get up to a multi million dollar, if not multi gen, property. And that's cash flowing major over the years. But then eventually you're going to have to pay capital gains tax. So what does that look like at the end of the road? Do people put it in?

Julie Bratton [00:06:11]:

Well, okay, that's a good question. A little bit. Yes. There are a lot of variations in an exchange. So you can sell one property and buy three, you can sell two properties and buy one. I mean, there's a lot of very. I'm just using those numbers. But you can.

Julie Bratton [00:06:25]:

There's so many variations. But again, it's a deferral of tax, not a getaway from paying tax forever. So you can continue to defer, defer, defer until you pass away. Then your kids or whoever is inheriting your property, inherits it at a step up in basis, which is great. They don't inherit the capital gain burden, they just pretty much get these properties. But some people do exchange, exchange, exchange into something they eventually want to live in. If they make it their forever home again, fine, you pass away, your kids inherit it. Or you can prorate, you could take advantage of the personal residence exemption and your investment property after a certain amount of time.

Julie Bratton [00:07:07]:

So there's a formula. So if you outright sell the personal residence, you're not going to get 100% of your 250 or 500. It's a prorated formula, but at least you can take advantage of a little bit of both. But you'll have to pay taxes on the difference. And if you just outright sell, you're going to pay taxes. So let's say you did exchange, exchange, exchange, and then now you have this one property and you're like, I'm going to sell it. I'm taking a loss, or I don't want to be a landlord anymore. I'm tired of this.

Julie Bratton [00:07:36]:

I'm just going to sell. If they outright sell, then they're going to go back to the first property they did an exchange with because that followed, that just follows them around. Some people think, oh, I'm just getting out because I'm not. This is, you know, not so great right now, or I'm taking a loss or, I don't want to be a landlord. They have amnesia. They forget that they did five exchanges into it.

Marina [00:07:59]:

Okay, and you're paying the tax on all five at the end. Yeah.

Julie Bratton [00:08:03]:

You're going back and calculating.

Marina [00:08:05]:

Okay, so this is why.

Julie Bratton [00:08:06]:

Well, not you and others, but I.

Marina [00:08:09]:

Mean, there is strategy to this. It's not just like Willy nilly, whenever I feel like it or whatever, like you do need to know your numbers and have an exit plan at the end of the road. What is the best situation? It's to have it be inherited to your kids. You don't have to.

Julie Bratton [00:08:24]:

Well, yeah, so if you. I. It's my understanding, and, you know, the law can change and I can't get tax advice, but it's my understanding it's better, obviously, to inherit property because you get it at a new basis. The step up. If you give the property to your kids while you're alive, they have your basis. Okay, so let's say, you know, your mom got this property and it was worth 300,000, like a hundred years ago, and now she's, you know, maybe getting up there in age and she's like, you know, honey, why don't I just give it to you, you can take care of it. And now it's worth like 1.4.

Marina [00:08:58]:

Okay.

Julie Bratton [00:08:58]:

So now she gives it to you, it's worth 1.4. She passes away or you want to sell it, your basis is really her. 300.

Marina [00:09:06]:

Wow. Yeah.

Julie Bratton [00:09:08]:

So you get the step up.

Marina [00:09:10]:

Yeah.

Julie Bratton [00:09:10]:

Yeah. So it's step up if you can, in my opinion. But, you know, everybody's financial plan is unique.

Marina [00:09:19]:

Can you take two investment properties and then roll it into one exchange for a bigger property or it has to be.

Julie Bratton [00:09:25]:

Yes, absolutely. People do that all the time. So you can sell two properties to buy one. Okay, let's say you are selling two properties, 500 each. The replacement property would need to be equal to or greater than a million dollars if you want to have 100% deferral. And when you sell two to buy one, you go off the clock, the timeframes of which the first property sells.

Marina [00:09:46]:

Got it. Okay.

Julie Bratton [00:09:47]:

So you'll start the 4580 days. So the second one just needs to close in time. The 45 days isn't really going to matter because you know what you're going to buy because you identified it in the first 45 days, but it has to close in time to make your closing date.

Marina [00:10:01]:

Yeah.

Marina [00:10:02]:

Hey, ladies, real quick. If you are looking for a mentor, I just wanted to remind you that I offer mentorship to entrepreneurs. So if you're someone who has a never ending to do list and you're smiling out of control and feel like your business doesn't have a track plan, I want to work with you every single week for a month at a time. It's super simple, but I come from over ten years of experience doing this myself, and now I'm willing to give that information back to people. So I've mentored real estate agents, I've mentored wedding photographers, I've mentored other business owners, and they've come from a place of overwhelm, mostly. And they really just needed clarity and a couple of action steps to move the needle. And we've seen gigantom leaps and bounds in their business. Like, I can't even tell you.

Marina [00:10:43]:

So if you're interested and you want to know what that looks like, I want you to go to marinatolentino.com and there's a calendly link there to do a 15 minutes discovery call with me just to see if we're a good vibe check to make sure we're on the same page. And I would love to work with you one on one to really boost your business to the next level.

Marina [00:10:59]:

Let's dive back in. As far as people worried about finding the replacement property, like, 45 days is kind of a tight timeline, especially if you have a high criteria list. Do you have any advice for someone that's trying to time the market or, like, trying to really find that special property? Like, what do you tell them?

Julie Bratton [00:11:15]:

Okay, well, I do have a little bit of advice on that because recently, I'm changing my stories up a little bit or my examples. So, first of all, when somebody puts a property on the market, they should start really looking then. So take that listing period and that escrow period to really go shopping. You know, weed out the areas, the properties, the projects, the islands, the states they like and they don't like. So when they're in there 45 days, they're not really stressed out, because, yeah, if you wait till day 145 days can be really super stressful. So, you know, start shopping early and look around. The other thing I am noticing that kind of gets in people's way is they're looking for perfect.

Marina [00:11:59]:

Yeah.

Julie Bratton [00:12:00]:

And remember, it's just an investment property. Okay? You're not going to live there. You're not going to marry it. You're not stuck with it. I mean, of course, disclaimer, don't buy a piece of junk. But if you had to make a lateral move just to defer paying the capital gains tax, do it, you know, hold on to it for a year or so, and if you still don't like it, you can always sell it again and get into something you really want when it becomes available or when things calm down. But, I mean, I have people every once in a while, be like, I'm just gonna pay my taxes. I can't find anything.

Julie Bratton [00:12:28]:

And I had this one lady say that. She said, I'm so picky, I can't find anything. And I said, well, why are you so picky? You're not gonna marry the property. She wasn't planning on living in it.

Marina [00:12:37]:

Okay.

Julie Bratton [00:12:37]:

Eventually down the line, and I said, you know, make a lateral move. Don't pay taxes on 200,000. She was like, okay, I'll think about it. And then on the 45th day, she called, and she identified something, and she bought it. Like, she was kind of getting in her own way. She was looking. She didn't realize she was looking for perfect. What does she care as long as it, you know, works for her? It pays for her.

Julie Bratton [00:13:02]:

It. It serves its purpose. It's great.

Marina [00:13:05]:

Yeah, yeah. Don't get in your own way, okay. I feel like there's so many people who are sitting on these properties and they want to move, but they just don't know how to make the move. What advice do you have for them? Where they're just like, they've had it for 20 years. There might not even be on the island. Like, why should they sell? Or, you know, whatever.

Julie Bratton [00:13:22]:

It's just getting up, you know, is it an old property? Is it dilapidated? Does it need a lot of maintenance? Is it still working for you the way it used to?

Marina [00:13:30]:

It's 20 years old condition.

Julie Bratton [00:13:34]:

Yeah. I mean, I. For me, I could look at it as doing estate planning. You know, sell that old property that you've owned for 20 years and buy a few new condos or buy a few new houses, one for each kid or something. I mean, do some estate planning.

Marina [00:13:48]:

Yeah.

Julie Bratton [00:13:48]:

I mean, your kids probably don't want that old and dilapidated property anyway.

Marina [00:13:55]:

Yeah.

Julie Bratton [00:13:55]:

So, you know, it's giving your investment properties a facelift and hopefully your pocketbook. And then. And also because you're not paying any, for any more deferred maintenance, you're getting into something that's newer and fresher and more desirable and people pay more rent for that.

Marina [00:14:11]:

Yeah.

Julie Bratton [00:14:11]:

People take pride in. In their properties.

Marina [00:14:14]:

That's true. And let's kind of roll into that. So if you were to buy new construction, you have one year builder warranty and then a lot of other things are covered for a while, too. So you're getting nothing. No repairs needed. Usually in the first couple of years, the rental value is way, way higher in new construction. Appreciation value is way, way higher in new construction. Like, it's just win on win on win.

Marina [00:14:33]:

So it's like, silly, but I just feel like for some reason everyone's sitting on the bench. Like, I don't feel like anyone's making the move to do a 1031 exchange to new construction, or at least I haven't heard of it, so.

Julie Bratton [00:14:43]:

Well, I think the problem. The problem with that is the new construction. If it's not, if it's new right now, then, yeah, they should just do it. But if it's like one of those new projects that are going to come up in 2025 or 26 or 27, all of those, they're probably timing the sale of their relinquished property. So they sell that and they can close on that new project in 180 days. But I think they're stuck on. They have to put the down payment down today.

Marina [00:15:11]:

Oh, yeah.

Julie Bratton [00:15:13]:

So, you know, they get that down payment back in an exchange. So let's say I put down my own out of pocket deposit today for a new project.

Marina [00:15:22]:

Okay.

Julie Bratton [00:15:23]:

And now down the line, it's going to be done at, let's say, the end of 2026. I'm going to get my loan by the project. I can be refunded for my out of pocket deposits as soon as my relinquished property sells. I'm good. You're going to take those proceeds, do an exchange, replace your out of pocket money. You get that money back. I feel like people think the money's just going to be gone.

Marina [00:15:45]:

Yeah. But it's just.

Julie Bratton [00:15:47]:

It's not going to be gone.

Marina [00:15:48]:

Yeah.

Julie Bratton [00:15:49]:

And like you said, there's, like, zero carrying costs, and yet you have built in appreciation.

Marina [00:15:56]:

Yeah. What's crazy with those build is you're getting the price of 2024, but you don't, like, own it until 2026. What do you think the market's done in those two years? That property value has already gone up. I think that's a huge home run for people. Yeah.

Julie Bratton [00:16:08]:

Yes, I know that. And actually, I'm delving into that myself for the first time, buying into a new project. And I'm like, you know, the prices today versus the prices in three years from now are going to be very different. Yes. So getting into it now was really important to me.

Marina [00:16:28]:

Yeah.

Julie Bratton [00:16:30]:

Cross my fingers. I'm sure it'll be fine.

Marina [00:16:32]:

That's exciting. Yeah.

Julie Bratton [00:16:34]:

But I think people don't pull the trigger because they don't want to spend the money today, but they're going to end up spending the money later and it's going to be more expensive. So it's hard.

Marina [00:16:44]:

Yeah. You're going to be kicking yourself. Okay. Talk to me about the cost of a 1031 exchange. What's, like, the closing transfer fee, all of that, like, from title and exchange.

Julie Bratton [00:16:53]:

So it's fairly easy. I mean, you're going to have your normal 1031. I'm sorry. You're going to have your more. Your normal escrow fees. And usually when you go to escrow, fees are usually about 1% of the sales price. And I think the escrow company gives you a 30% discount on title and escrow if you're an investor. So that's always nice.

Julie Bratton [00:17:10]:

But my fee is the 1031 fee is usually $950 when you sell the relinquished property.

Marina [00:17:16]:

Okay.

Julie Bratton [00:17:17]:

And $575 when you buy the replacement property. So you pay as you go. For example, if you don't find anything, obviously we're not going to charge you. So that's like, nothing compared to what you're going to pay in taxes. Like, yeah.

Marina [00:17:31]:

Okay. Do you see any common mistakes or like whoopsies that people are making with 1031 exchanges?

Julie Bratton [00:17:38]:

The only real mistake. Two mistakes, I guess. And I don't know if this is the first one's a mistake. They don't start looking early enough.

Marina [00:17:44]:

Okay.

Julie Bratton [00:17:45]:

So they really get stressed out.

Marina [00:17:47]:

Yeah.

Julie Bratton [00:17:47]:

And secondly, when they identify property. They have to put the correct addresses down. I'm not kidding. If they put the wrong address down. They can't make any changes to their identification notice after the 45 days.

Marina [00:18:01]:

Yikes.

Julie Bratton [00:18:02]:

So if the address is wrong and it's after the 45 days. I cannot fund it. And they'll pay taxes.

Marina [00:18:11]:

Yeah. That sucks.

Julie Bratton [00:18:13]:

I mean that's. It's just so weird. But it happens.

Marina [00:18:16]:

Yeah.

Julie Bratton [00:18:16]:

It happens once in a while. And you know the IR's does not have wiggle room for mistake on that.

Marina [00:18:22]:

Yeah.

Julie Bratton [00:18:23]:

They just don't.

Marina [00:18:24]:

Okay. So we're shopping for properties. Hypothetically. We're just emailing them to you. As we are looking at them and considering them. Or how does it work?

Julie Bratton [00:18:31]:

Okay. So I give you guys an identification notice.

Marina [00:18:34]:

Okay.

Julie Bratton [00:18:35]:

And you're going to list the addresses. The complete addresses. Including the unit number of what you think you're going to buy. You don't have to have an accepted offer when you identify. But it has to be on your list. So I'll give you the identification notice. And I need it by midnight of the 45th day. And so there's two ways to identify on that list.

Julie Bratton [00:18:54]:

There's the three property rule. Where you can identify just up to three.

Marina [00:18:58]:

Okay.

Julie Bratton [00:18:59]:

You might only want to buy one. But a lot of people put backups down. Just because they're not sure what they're going to get. So just because. Which is fine. I think that's the most common way. If you wanted to identify more than three. So four or more you can.

Julie Bratton [00:19:13]:

But the fair market value of all of them combined. Cannot exceed double or 200%. Same thing of what you sell the relinquished property for. So if you sell something for a million. And you want to identify four or five or ten. That whole list cannot exceed one penny over 2 million. It's like you can't go crazy and identify all of couple and pick one later.

Marina [00:19:34]:

Yes. Got it.

Julie Bratton [00:19:36]:

So identification. I mean, there's a lot of gray area and exchanges. But there's also some black and white. And identifying timely and properly is black and white.

Marina [00:19:46]:

Yes.

Julie Bratton [00:19:47]:

It's really important that it's done timely and properly.

Marina [00:19:49]:

Yeah. Good to know. Hey, I'm sorry to interrupt.

Marina [00:19:52]:

And I hope you're enjoying this episode of the work like a mother podcast. Real quick. I just want to remind you guys, if you are worried about missing an episode, you don't have to worry anymore because we are creating a weekly email that's going to go out automatically every single time there's a brand new episode. And this email is going to have everything you need to know about this week's featured guests. It's going to have all of the.

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Marina [00:20:42]:

Do you find that when people are buying the next property that they're just bringing in cash to make up the difference in the new price? Or are they doing loans? Like, what do you see most commonly?

Julie Bratton [00:20:51]:

It's a combination. I think if people have cash, they're probably using their cash because, you know, the lending environment is a little bit sticky right now. But if they can get their loans, they'll get their loans. Which is a good comment for you to bring up because in an exchange, when you sell the relinquished property, everything you read online, even my brochures, the. The. It says you need to replace the mortgage that you had on the relinquished property in the new property. And that translates into, you have to get another mortgage. You don't have to get another mortgage.

Julie Bratton [00:21:30]:

You can replace it with cash. Yeah, but I think a lot of people take that for face value, that it needs to be a mortgage because it says you need to replace the mortgage. You don't get debt relief.

Marina [00:21:41]:

Yeah.

Julie Bratton [00:21:41]:

So people are like, I can't get a mortgage. Or maybe I'm retired and I can't afford, you know, I can't get a mortgage now. Well, okay, well, you can go to the bank and bring in cash if you want. You just have to replace it.

Marina [00:21:51]:

Got it. Okay. That's helpful.

Julie Bratton [00:21:55]:

One other thing. One other thing that I could have brought up earlier is like kind when you do an exchange, and remember I said investment property for investment, it also needs to be like, kind property. And like, kind property is any combination of real property that also translates a little bit funny to the client. It translates as. It's as if it needs to be condo for condo, single family. For single family. Vacant land. For vacant land.

Julie Bratton [00:22:20]:

And although all of those examples are perfectly fine, it's any combination of real property.

Marina [00:22:25]:

Got it.

Julie Bratton [00:22:27]:

So you can sell a condo and buy a commercial building. You can sell a commercial building and buy houses if you want. As long as you're using them for investment, you're good.

Marina [00:22:34]:

Yeah, I mean, the world's wide open. You can get into so many fun things. Like, I feel like could be where it's at. Do you do a lot of commercial ones?

Julie Bratton [00:22:43]:

I do, yeah, I do a lot of commercial.

Marina [00:22:45]:

What's like, pros and cons of switching from residential to commercial? I don't know anything about the commercial world.

Julie Bratton [00:22:55]:

I don't know. I think you just look at the numbers a little bit differently. But it's still real estate as far as the exchange is concerned. You're still deferring the capital gains tax just like you would a residential one. But commercial, there's a lot more avenues you have to look at than I thought.

Marina [00:23:10]:

In the commercial zone, like, is the appreciation just as fast as residential?

Julie Bratton [00:23:16]:

You know, that's a good question. I don't know the answer to that, per se. But on a commercial building, you want to make sure all your spaces are leased out. So the world has changed since the pandemic.

Marina [00:23:30]:

Yes.

Julie Bratton [00:23:31]:

So does that lessen the value and the. Of the commercial building? Probably, but I'm thinking the cap rates are really important. Yeah, but if you can. If you have a good house or a good condo, and it's making, you know, making a lot of money, you know that it's going to be rented.

Marina [00:23:49]:

Yeah, yeah, that's true. Like, commercial space and wine, I. And there's like a tire shop for sale. And I'm like, I wonder what that would be like. Or there's another one that's, um. It's an auto body shop, but people are looking for those all the time because so many warehouses don't allow car areas. And so it's just interesting to think.

Julie Bratton [00:24:05]:

Well, that would be good.

Marina [00:24:06]:

Yeah.

Julie Bratton [00:24:06]:

But, like, the first one that you mentioned, like, why isn't it surviving? Is it the business itself or is it the location? Is it the property? You know, what's the maintenance fee? You know, what's all of that stuff? All matters. And I think on commercial financing, the lending is different. The lending requirements are a little bit different.

Marina [00:24:26]:

Yes, for sure. And the rates are way cheaper too. But the income requirements are different. Yep.

Julie Bratton [00:24:32]:

Yeah. So, you know, you have the smaller or the newer or the younger, if that's what you want to call it, investors moving up into commercial, and then you have the commercial people maybe doing some estate planning and getting into residential and 1021 exchange is a great way to do some estate planning.

Marina [00:24:48]:

Yeah, that's awesome.

Julie Bratton [00:24:49]:

Also, besides building wealth, you're building wealth for your family or you're building wealth for you. I mean, it goes both ways, so it's pretty interesting.

Marina [00:24:57]:

That's true for the people who want to live in it eventually. What's the rule? How long does it have to be an investment until they can actually occupy?

Julie Bratton [00:25:05]:

There is no rule or law on how long you have to hold investment property for investment. So just know that it's all about your intent. Did you intend to hold it for investment? And if you were audited, you should prove it. I mean, I like to say at least a year. Yeah. Because you can clearly show on one year's tax returns your intent, how you reported one year of income to the IR's. How are they going to argue that? But really the writing, and I only like to say that the right answer is the longer the better. So it's not measured by days, weeks, months or years.

Marina [00:25:31]:

Yeah.

Julie Bratton [00:25:32]:

So, okay. Yeah.

Marina [00:25:34]:

That's helpful. Yeah.

Julie Bratton [00:25:36]:

Yeah. I mean, I have people that say, oh my gosh, my life changed. I had to move into it. Okay.

Marina [00:25:40]:

Okay.

Julie Bratton [00:25:41]:

That's between you and your CPA. But upfront, it needs to be held for investment.

Marina [00:25:47]:

Yes. Yep. And same thing for the VA loan or whatever. Like, you have to have intent to live there for one year. Life can happen. But that makes sense. Okay. I feel like this is really good.

Marina [00:25:56]:

Do we miss any area that you feel like common faqs or people might want to know? No.

Julie Bratton [00:26:01]:

Well, one thing that seems to be very popular right now, again, everybody is stressed out about finding a replacement property because of the inventory that we're in. There is a reverse exchange.

Marina [00:26:13]:

Oh.

Julie Bratton [00:26:14]:

Where you buy first and then sell.

Marina [00:26:16]:

Yes.

Julie Bratton [00:26:17]:

It's more expensive to do it and you have to have cash on hand to do it because you have to be able to buy it. There's a lot more involved in it. But you can buy first and then sell. It's called a reverse exchange. And that timeframes are in reverse also. So you would have to sell your relinquished property in 180 days. But some people are liking or warming up to the idea because they're so stressed out about finding a replacement property.

Marina [00:26:44]:

Yeah.

Julie Bratton [00:26:44]:

They rather just find one first because they always know they can sell a relinquished.

Marina [00:26:48]:

Yeah.

Julie Bratton [00:26:48]:

So as long as they don't mind the fees on that, they can do it. It's just, you know, if from a fee perspective, if you can sell first and then buy, you should do it.

Marina [00:26:56]:

Yes. Got it. It's more like if you're a worrywart, then you can buy first. We get it. This is a dumb question, but you can do a 1031 exchange in between states, right? It doesn't have to be like, I have to sell Hawaii to buy Hawaii.

Julie Bratton [00:27:09]:

Yes. Good question. Anywhere in the US. The US. Virgin Islands and Guam.

Marina [00:27:16]:

Cool.

Julie Bratton [00:27:17]:

Just not Puerto Rico. And I don't know why they left that out, but. Yeah. So foreign sellers can do exchanges, but all the properties that they sell and buy still need to be within the United States.

Marina [00:27:28]:

Got it. Okay. Yeah, no, I think this is really good to, like, trigger some thought provoking ideas for people who maybe have heard of the term but never knew exactly what it was or how to do it. We'll make sure that the editors will throw in here your contact information at the end, too. So we'll get your little picture up and all of that. But I think people just need to have the conversation. They need to call you and say, hey, Julie, this is my property. What does it look like to do 1031 exchange?

Julie Bratton [00:27:52]:

Yeah. I mean, there's no. There's no harm in asking about it, learning about it, planning for it for the future. I mean, you just don't know. But it is one of the last tax loopholes we have, and it's. It's good. It's really good. And everybody wants a piece of Hawaii.

Marina [00:28:08]:

Yeah.

Julie Bratton [00:28:09]:

Like, maybe you have clients that own property here, but they have family members on the mainland that are dying to get here. Okay. They sell that property or their investment property, buy, doing exchange, come into Hawaii, rent that out for however long, and then, hey, they move here one day. You know, there's just so many.

Marina [00:28:26]:

Yeah.

Julie Bratton [00:28:27]:

So many ways to make that happen. But I do like the new construction situation.

Marina [00:28:32]:

Yeah. I think it's a home run. It's just people got to be open minded to it, so.

Julie Bratton [00:28:36]:

I know. And I remember when I. When I talked to you at that. That presentation, my. My light bulbs were going off, too. I was like, oh, my gosh. Yeah, you have a lot of. You have a lot of great ideas.

Julie Bratton [00:28:46]:

I was just like, I came home and I was like, we should do that.

Marina [00:28:51]:

Yeah. Literally right after that we put ours for rent, our two bed with a bonus room, and we had five applications within three days and it rented at 3600 for a two bed. I was like, oh, that's just. Yeah, easy. Crazy.

Julie Bratton [00:29:05]:

I mean, those stories, you have to tell that story more often.

Marina [00:29:09]:

Yeah.

Julie Bratton [00:29:09]:

Because I don't think people realize how easy it is. I shouldn't. I'm using that word life lightly, but easy it is to build wealth with real estate.

Marina [00:29:21]:

Yep.

Julie Bratton [00:29:22]:

It's really easy.

Marina [00:29:24]:

Anyways, we just need the right people to link arms and we're going to take you to the finish line.

Julie Bratton [00:29:28]:

Exactly. Yeah, exactly. Sounds good. Well, thanks for having me.

Marina [00:29:32]:

Yes, absolutely. This was fun. So again, we'll push out all your information so people can get to contact. I think you also just share so much. You have these brochures and you have information. So when we have listings, I'll make sure that we get little flyers from you. That'll be really helpful, too. Thank you.

Julie Bratton [00:29:49]:

Thanks. I look forward to working with you.

Marina [00:29:50]:

We got to get together. Okay. Bye.

Join hosts Shivani Peterson and Marina on the 'Work Like A Mother' podcast as they delve into the challenges and triumphs of entrepreneurship in the ever-evolving real estate industry. From navigating market uncertainties to building a successful team and balancing personal and professional life, these insightful discussions offer valuable insights and practical advice. Explore the importance of financial strategy, community building, and personal branding in achieving business success. Dive into inspiring success stories, expert tips on investing, and empowering conversations on breaking through mental roadblocks. Tune in for engaging conversations, actionable strategies, and a dose of motivation for mothers on their entrepreneurial journey. Discover the secrets to thriving in the real estate world and creating a recession-proof business in today's competitive market.

Mentioned in this episode:

This is How It Always Is, Laurie Frankel

Shivani Peterson

https://www.shivanipeterson.com/

IG: https://www.instagram.com/shivpeter/

Marina Tolentino

https://www.marinatolentino.com/

IG: @marinattolentino_

YT: @marinatolentino

Newsletter: https://marinatolentino.myflodesk.com/worklikeamother

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Transcript:

Shivani [00:00:00]:

Having a team, though, has, like, been the hardest challenge of being an entrepreneur for me. What about finding the right people and scaling? When you build a business in real estate, it's a lot of blood, sweat, tears. Time away from your family to create those relationships and then to trust other people with your business is really hard. I continue to struggle, I think, with having a team because if you are an entrepreneur, you have a different commitment to your work and to your business. It's somebody who wants to be an employee, right?

Marina [00:00:27]:

100%, yeah. It's a really tricky delegate balance of, like, sharing behind the curtain so they understand why you do what you do. But it's so challenging because we know as the owners and like, the leaders how hard it is and, like, the weight that's on you back here. But I think with our team and stuff like these agents that I'm mentoring, you've got to want it.

Shivani [00:00:44]:

If you want to be an entrepreneur, you need to think about why you're doing this and what the end goal for you really would be, because you'll be able to map the steps out to get there so much better than you think you can. If you're not sure what your next steps are, I think it's because you're not really sure what you really want.

Marina [00:01:03]:

All right. I am so excited for today's show because I have a really cool woman, actually, that I've been following for quite a while. So I officially discovered Shivani at the forward event a couple of years ago, which I don't even know if she knows this, but she got on stage and she talked real, real, like, she talked motherhood and she talked, you know, this successful career and how do we juggle it all? And we really just needed a couple of key pillars to do this thing called life. And I think she comes from this place of experience and that's really why I wanted to bring her on the show today. So she's been a mortgage advisor for eleven years. She's the founder of the mind over markets coaching program. She's a mom to three kids, so she's got her hands full. A nine year old, a six year old and a two year old.

Marina [00:01:41]:

And she's also a speaker. And so I'm so excited to bring you to the show. Shivani, welcome.

Shivani [00:01:45]:

Thank you so much for having me. How fun. I did not know that it was forward. Put me on your radar, but that was such a cool experience.

Marina [00:01:53]:

Yeah, absolutely. And you were nervous and it was so authentic and it was like, hey, we're just going to do this thing and then look at you since then. So you post a ton of video content, which your instagram has been really awesome to follow along with. And I think it's just a good. You're a good pillar of inspiration to people. Like, if I could put it simply, it's like you're showing up on the daily. You have figured out this batching concept that you don't have to, like, literally film every day, but you just film once every couple times, and then you get it out for the season. And that's the same way I rock and roll.

Marina [00:02:20]:

Like, there's no other way to do it. But one of the questions I asked you on our pre show was, are you living how you thought you would five years ago? So take me back to 2019. Like, what did you think was going to happen in 2024?

Shivani [00:02:31]:

So, in 2019, I was applying for grad school because I. And I'm in it. I'm four years into a two year graduate program to get my master's as a marriage and family therapist.

Marina [00:02:41]:

Okay.

Shivani [00:02:42]:

But in 2019, I'm applying to grad school. I'm thinking, okay, people fight about money in my office all the time. You know, um, realtors deal with it, lenders deal with it, but we're basically giving unqualified therapy all the time. So I thought, okay, I know that people have a fucked up relationship with money, and I want to try to help them get past it. So I apply to grad schools. I get in, and I am scheduled to start march of 2020. Pandemic hits and loan volume explodes. But I was able to do it because all social commitments were gone.

Shivani [00:03:19]:

All taking realtors to coffee or networking lunches or happy hours or after work events, all done. Workouts, gone. I was teaching bar classes at the time. Done. Studios closed. So if I had, you know, all I had to do was be ass in seat from 08:00 a.m. to 06:00 p.m. and I was able to close, like, 40 to 50 loans a month, take two classes at a time for grad school, and spend more time with my family than I had been before because there was no other commitments.

Shivani [00:03:51]:

It was amazing. The pandemic was a really tricky time for a lot of people, and now I'm learning a lot about the mental health impacts that we'll all be dealing with as a society for a long time. But me and my husband are always careful when we talk about it because it was actually a really amazing time for our family because he traveled a ton for work, and that got shut down immediately. And he was home with us, and we had an amazing nanny that was another anomaly. And she stayed in the house with the boys because we only had two back then, 40 hours a week. And I kept going to work and had, like, some pivotal years in my career.

Marina [00:04:25]:

Totally. And it's not you. You have a whole team, right?

Shivani [00:04:29]:

I do have a team. Now this, having a team, though, is, like, been the hardest challenge of being an entrepreneur for me. What about struggle with finding the right people and scaling and, you know, it's multifaceted in that you, when you build a business in real estate, it's a lot of blood, sweat, tears, time away from your family to create those relationships and then to trust other people with your business is really hard.

Marina [00:04:54]:

Oh, yeah.

Shivani [00:04:55]:

Sacrifices you made to earn that business, but also know it's only humanly possible for you to do so much. So I waited way too long to start a team. I continue to struggle, I think, with having a team because if you are an entrepreneur, you have a different commitment to your work and to your business than somebody who wants to be an employee.

Marina [00:05:15]:

Right. Yeah.

Shivani [00:05:16]:

Your mentality is so different. A lot of times I find it to be very lonely being in this position, and I can feel even disconnected from the people that I employ because they don't have the same level of pressure and they'll never know what it's like to be in my shoes. And I also feel like. Like I'm always here serving them. But at the same time, you need their help so much. Like, you need them to step up to the plate, too.

Marina [00:05:41]:

Yeah. It's a really tricky, delicate balance of, like, sharing behind the curtain so they understand why you do what you do, but then also keeping that, like, mom face on, right. Of, like, nope, we're charging ahead. This is this. But you can be freaking out behind the curtain, but your team can't know that, right? You gotta always charge forward. So I've helped manage a real estate team for the last four years, and I'm just currently, like, in this transition of going solo. Uh, but I, that's how I learned in this industry. I, like, got thrown into it through my leadership qualities and just being an entrepreneur.

Marina [00:06:09]:

And my guy was like, hey, you should lead the team. And I was like, okay, I'm not prepared, but just throw it into the fire. But it's so challenging because we know as the owners and, like, the leaders how hard it is and, like, the weight that's on you back here, but to keep everyone else inspired and motivated. It is like having more children sometimes.

Shivani [00:06:27]:

Uh, how do you do it? How do you keep them all inspired and motivated? And, I mean, this is one of the most difficult markets we've had. Yeah, I mean, it's for sure the most difficult market in my career. I have the unique, like, advantage of. My brothers have been in this for 22 years, so I saw them go through 2008, which was worse than this. But when you talk to veterans in the industry, they say these are the, you know, this is the second hardest period to that that they've ever seen.

Marina [00:06:53]:

Which is insane to me. It hasn't been that bad. Like, I've had the same number of transactions both years. So I'm like, okay, we're just going to keep going. Like, stay consistent.

Shivani [00:07:00]:

That's for you. Yeah, that's badass.

Marina [00:07:02]:

But I think with our team and stuff, like these agents that I'm mentoring, you've got to want it. That's what I keep telling them. Like, only you can show up every day. Only you can do the things. I can't force you to do anything. And so if I have a weekly mentor meeting and only one guy out of the six shows up, guess what? He's getting all the attention and everyone else, I'm like, I don't know what you're doing. So if you're going to make it right now, you have to want it and show up. That's all I can say.

Marina [00:07:25]:

We can't force anyone to do anything. Um, and the people that can be.

Shivani [00:07:28]:

A little bit too hard on people, though, for what? Like, you gotta want it. And, like, I'm pushing you. And I think the reason that I struggle so much as a team lead is I can push too hard. Like, come on, just do it. I don't know if you ever feel like this, but, like, when I'm, like, mentoring these younger loan officers who don't yet have a spouse and don't yet have kids, I, like, have to stop myself from saying, listen, do you know how many times a day I get inspired or have an idea and want to do something and have to tell myself, nope, Shivani can't do that. You can't take on one more thing. I'm like, and then I look at you and there's you. The world is your oyster.

Shivani [00:08:08]:

Just go do the things.

Marina [00:08:10]:

Yeah, no, it's so true. And it's almost like, you gotta hire people with kids because then they have that, like, I gotta get this done during these 2 hours. And that's my only time for the rest of the day, whereas when you have no other commitments, you're just like, do do.

Shivani [00:08:24]:

You're so spot on.

Marina [00:08:25]:

Yeah. Well, let's kind of roll into myth busting a little bit because my audience is mixed. So we have some people that are in the real estate industry, some that are just entrepreneurs or even want to be entrepreneurs, but lots of moms. And so let's kind of go into, if you're not in the industry, right. What is a big myth that a lot of people ask Los, they think that you sell interest rates, right? That's like a huge one. So talk to me about that. Like, how does the market work? How do you get your Pricing? Tell me more.

Shivani [00:08:52]:

Yeah, so I think a lot of people come to us thinking that they've already figured out most and they just need us to offer them an interest rate. And in reality, we have to find them a financing strategy. Like, we have to analyze the way they're spending money. We have to help them with their relationship with money. We have to organize their finances so that they could be approvable for a mortgage in the first place. One thing I've seen is that we may be doing a lot of deals, but every deal is harder than it's ever been before. It's harder to qualify people because people have made different choices with their money, post pandemic and in light of all this inflation. So I would say the biggest myth is that you think you're coming to just get an interest rate, but you're actually coming to like, get your finances, get, you're coming to get a financial colonoscopy.

Shivani [00:09:35]:

And at the end, hopefully you'll be better for it because we'll have figured out a lot of ways that we can optimize your finances and put you on a path towards some bigger goals.

Marina [00:09:43]:

Yeah, no, absolutely. And you guys really are that, like financial advisor to say, what do you want, like five years from now? What do you want a year from now? Because the first purchase or the second purchase isn't going to be it. Like, it's going to be the starter, it's going to be the entry point and the delayed gratification to just get something in. Like I always say, you just kind of plant the flag and then we have leverage after that. But right now, I'm seeing it all over. TikTok is like this affordability factor that it's the most expensive it's ever been to qualify for a home. Cost of living like in Hawaii, they just came out for 25. 2023 was $300,000 a year for a family of four, which is insanity.

Marina [00:10:18]:

Like, the average person isn't going to be doing that. Even if you have two full time spouse and spouses working, maybe multi generational, it's still so hard to hit 300. So I want to say affordability isn't fixed because your spending is flexible. And I think that's a huge part of what we see is just like, where is that fluff money going? People don't even know. Do you have any advice for that? Or, like, myth busting on affordability?

Shivani [00:10:41]:

Yeah, I really think that you got to look at where your disappearing money goes because I have met with, and I'm sure you have, too, so many people who didn't want to be house poor, they didn't want to buy in 2017, they didn't want to buy in 2020 because they wanted to still live their life. They still wanted to travel and go to music festivals and, you know, enjoy life. And I want that for you, too. I'm not Dave Ramsey. I'm not going to tell you to cut your starbucks to buy a home, but I think some of you guys should have been house poor. Like, I think you, the entire trajectory of your life would have been different if you missed a couple music festivals. Yeah, because.

Marina [00:11:14]:

Hey, ladies, real quick, if you are looking for a mentor, I just wanted to remind you that I offer mentorship to entrepreneurs. So if you're someone who has a never ending to do list and you're smiling out of control and feel like your business doesn't have a track plan, I want to work with you every single week for a month at a time. It's super simple, but I come from over ten years of experience doing this myself, and now I'm willing to give that information back to people. So I've mentored real estate agents, I've mentored wedding photographers, I've mentored other business owners, and they've come from a place of overwhelm, mostly. And they really just needed clarity and a couple of action steps to move the needle. And we've seen gigantic leaps and bounds in their business. Like, I can't even tell you. So if you're interested and you want to know what that looks like, I want you to go to Marina Tol and tv, and there's a calendly link there to do a 15 minutes discovery call with me just to see if we're a good vibe check to make sure we're on the same page.

Marina [00:12:07]:

And I would love to work with you one on one to really boost your business to the next level. Let's dive back in.

Shivani [00:12:12]:

Sure, a mortgage payment that's a couple hundred thousand dollars more than your rent feels like a nightmare. But let's sit down and let's analyze the money you get every month. And if we need to do it bi weekly, we can get that nitty gritty. Let's talk about the money you take home after contributing to your retirement and after paying taxes. And then let's look at the fixed expenses that I get to see on your credit report. Then let's look at the ones that I don't get to see, like childcare. What are you spending on that? What are you spending on groceries? What are you spending on gas? And then what's left, typically, is a couple hundred thousand, a couple hundred dollars a month. And when I ask them, where is this going? They go, it's the money that's disappearing in restaurants on the weekends.

Shivani [00:12:50]:

And I'm like, would you be okay with maybe diverting some of that to a higher housing expense if it could get you this kind of return on investment? And then you show them, and that's usually when I see the light bulb click for people is like, oh, this is much, much bigger than a place to live.

Marina [00:13:05]:

Mm hmm. Yep. And I would say one of the big myths, too, is, like, people think, okay, I'm going to buy this house, and I'm committing to 30 year mortgage. Like, it's forever going to be 30 years, and then I'm just going to refi. And it's going to be 40 years or whatever. Like, it just seems like we're never going to pay this freaking house off, but you have to switch and, like, put on the investor hat to say, actually, I'm not going to keep this. Someone else is going to pay the rent. I'm going to have two and three and four and five, and then those other properties help pay off my actual house that I'm living in.

Marina [00:13:30]:

And it's just, we have to keep painting the picture of, like, there is so much potential in this industry as an investor, as a homeowner. It's not about the home you live in. It's about the homes you collect, kind of. So I know you work with a lot of high powered females. Like, what would you say is, like, a good, like, how can we describe that woman who's doing that for someone who thinks that it's impossible? Or they're like, control freak. Like, I'll invest when or once I do this thing, then I'll invest. Like, how do we paint the picture that someone today can do it. What does it look like?

Shivani [00:14:00]:

It's so fun, because I have this group called the future is FEMA, where we empower women as real estate investors and we get to feature women doing so many on different, so many different journeys and so many different points in the journey. So I have a client who's 22. She bought her house last year in, you know, a very challenging market. Home prices were high, interest rates were at the highest they've been in a decade. And she bought a condo because she's a nurse and she knows that traveling nurses would rent the shit out of this place down the line. So she bought a condo. It wasn't hugely expensive. It works with her income.

Shivani [00:14:36]:

And then she moved into it. She's done some work on it, and next year she's going to start traveling and she's going to put traveling nurses in this thing as a short term rental. And even though the interest rates in the sevens, the cash flow on a short term rental, it's going to be amazing for her. And then she'll buy, when she's done traveling, after a year, she'll have the money for another down payment because travel nurses make more. And then she'll decide where she wants to take another, like, long term job as a nurse, and she'll buy a property there as a primary residence with the minimum down payment. Again, she'll already have one property in her rental portfolio, which you, a lot of times people only look at for the cash flow opportunity monthly. But a nurse is a wage earner and they don't have really any tax shelter. So the next best thing is to get into the tax advantages that will come from having a rental property.

Shivani [00:15:25]:

And if she gets really savvy about it and starts taking the real estate professional designation, she could take active losses against her active income from her rental portfolio. And I think that's the real american dream, is to live tax free. You know, the tax, the entire tax code was written for real estate investors. But I have a question for you. In that we know this, we work inside this and very intimately with people, but when we say it, I think everyone thinks we're just trying to sell something.

Marina [00:15:52]:

Yeah.

Shivani [00:15:52]:

Don't you wish that people could just, like, experience? Like, if there was a way that they could understand this from the inside, to know that this isn't a sales tactic, this is pivotal. This is life changing.

Marina [00:16:03]:

Yeah. Like when my clients walk away from owning a home for three years with 50,000 cash or plus, like Hawaii is the number one equity state in the nation. So by just holding something for three years, that's like insane leverage for the next property and the next one or whatever. Like, if you could, I would say, never sell a property in Hawaii, which isn't good advice as a listing agent. But I'm like, yes, you have to move sometimes and sell things, but if you can keep them long term, like, our market doubles every ten to twelve years, so it's insane. The opportunity is huge, but so often people are hung up on the monthly payment and they just don't see past that. Um, and so we've taken that, like, advice personally. We own two condos right now in the last two years that we purchased with the VA loan, which has been incredible.

Marina [00:16:44]:

Um, lived in each one, you know, each period. We moved three times, but it's like, it's a little bit of sacrifice. It's not going to be ideal. We squeezed our family of four into a one bedroom for a year, but we put the flag in the ground, right. We knew. Um, and so I think the more that we just share these stories that it is happening. Females are buying real estate today in 2024. They are doing it young, they are doing it with not a ton of experience, but it starts with asking questions from professionals.

Marina [00:17:12]:

Like, we see this all day, every day. So we could tell you a dozen stories of success, but if you're just scrolling and you're seeing a lot of negative Nancy news, then you're never going to take the first step and get off the bench. Like, that's the biggest thing. And you have to surround yourself with people who can actually get you there. So I remember in, like, 20. When was this? 2015? 2016. We were with the coast guard station in San Diego and we wanted to buy a house, but we just looked around and everything was 500,000. And we thought, this is impossible.

Marina [00:17:40]:

So we didn't even talk to anybody. We talked ourselves out of it, even though we spent months and months on zillow scrolling and, like, dreaming about it. We just didn't know what we didn't know. And it took us moving home to Hawaii, getting super frustrated with the housing market for me to actually get my real estate license, because I thought there must be some secret behind the curtain that I don't know about, and I'm going to figure it out to buy a house. And then, sure enough, it's not at all, but it's all the things in our head, all these roadblocks that we put up ourselves, so it's so true. Yep.

Shivani [00:18:08]:

Not just as men or women or as a certain generation. I think mental roadblocks are, like, the biggest challenge so many people face that they just. And when you do these. When you get stuck behind these mental roadblocks, I always explain it as, like, you're stuck in this figurative cul de sac, and you just keep spinning there. But the thing that sucks is when you're trapped in one of these cul de sacs, you waste so much brain space that could be used to get inspired about something that could change your life, or the most obvious solution could be right there, but you keep spinning around in indecision analysis. Paralysis, they call it crippled by indecision. And these mental roadblocks do so much harm. Like, people don't realize the ways they're holding them back.

Marina [00:18:52]:

Yeah, no. And you'll just. You'll be waiting two years and then watch the housing market continue to go up, and you're like, wait. If only I could have bought yesterday. Like, just take the first step. That's the biggest, like, push today. Um, okay, let's roll into, like, career wise. So I want to talk about who should become a loan officer if they're considering, like, lender versus realtor.

Marina [00:19:10]:

Like, I know you see the whole spectrum of lenders out there, and I see the same thing, like, who should. Who makes a good lender today in this market?

Shivani [00:19:19]:

You've got to really want it. Like, you've got. You've got to believe in what you sell, because otherwise, it's too hard. I coach loan officers all the time who believe they're just an interest rate. Well, then it becomes really hard to sell yourself when interest rates go up three points. If you believe that, you're really just your bank, like, I am just the face of this bank, this retail bank that's not going to work. You've got to believe in home ownership the way you and I do, that you get this hyped up talking about it. You got to believe in real estate investing.

Shivani [00:19:51]:

Like, the loan officers that I meet that don't personally invest in real estate, that invest in crypto instead or do the stock market. They're not as successful as the ones who can relate to their clients, who have drank this Kool aid and are playing it out every day in their own practice. That's when you should go into real estate, is if you believe in it yourself. And if you're considering being a lender, you've got to be financially responsible yourself. So clean up your own act before you can tell anyone else how to do it. And you've got to be a problem solver. You've got to want it so bad that you will find a needle in the haystack type of solution because almost every file is requiring that now.

Marina [00:20:32]:

Yeah, well, that's such a good point. And even once you've got the accepted offer, it's still like a lot of puzzle piecing going on behind the scenes that people don't understand. And so it's not just you, it's the processor, it's the underwriter. Like, there's this whole village that makes a loan go from acceptance to closing. And so I think, again, you gotta, like, surround yourself with people who have the experience and, like, find a really good mentor. If someone is looking for a mentor, do you have advice on how to find that in their local area? Like, it's so hard today. I feel like.

Shivani [00:20:59]:

I think it is, too. And I wonder what the shifts are going to be like. I wonder what you think about this coming out of the NAR lawsuit. Like, how do big boxes brokerages keep their hands in realtors commission so much when every dollar of that commission now is going to have to be, like, earned and outlined? And the realtors value proposition, very little of it comes from the big box brokerages brand, right?

Marina [00:21:24]:

Yeah.

Shivani [00:21:24]:

So I wonder how that changes the culture of our industry, especially for realtors looking to join bigger teams. Like how do those, how do those structures where there's so many hands in the pot of the money last the next few years when the pot's shrinking?

Marina [00:21:43]:

Yeah, I think they won't last. That's the issue. We're going to see a big fizzle out if the commission's getting split, split ten ways, and then all you have left is crumbs at the end of the day. Like, it just doesn't add up anymore. So team leaders are going to have to get super strategic. They're going to have to get super strong on their value. Add. Whatever they're offering them has to make sense.

Marina [00:22:01]:

It can't just be like, oh, we're going to plug you into zillow leads and you get our CRM. Like, that's not cutting it anymore. I need coaching. I need this. I need that. Like, I need a lot more. Hey, I'm sorry to interrupt, and I hope you're enjoying this episode of the work like a mother podcast real quick. I just want to remind you guys, if you are worried about missing an episode, you don't have to worry anymore because we are creating a weekly email that's going to go out automatically every single time there's a brand new episode.

Marina [00:22:25]:

And this email is going to have everything you need to know about about this week's featured guests. It's going to have all of the links and the resources that we're going to talk about in this episode so you don't have to go around and fumble through the show notes. But it's going to be served in your inbox every single week. So if you guys want that access, be sure to click below one time in the show notes today, sign up for that email and then you'll never have to worry about it in the future. And bonus, if you really love this, we'd love it if you share this with a friend, give us a review on whatever platform you're listening listening to and will continue to bring new episodes and new information that's going to help you level up your life every single week. And then I think on the value proposition, this is where, I mean, you've done a great job of it, and I'm doing it too. Building the personal brand is that you are not your company, you are not your commission structure. You are you because of your experience, because of the stories that you can tell, because of the problems that you've solved.

Marina [00:23:16]:

So tell me about that. Like, when did you start building your personal brand and what has that done for your career?

Shivani [00:23:21]:

It was in 2017 that we started doing this as a family because I work with my brothers. We're all in the mortgage space at the same branch. We were tired of realtors being so mean to us and treating us like trash, like their meal ticket. Because, you know, I've, I've been to college, I'm in grad school, I'm cultured, I've traveled. I care a lot. I invest in real estate personally and I'm really smart. So why do I have to be the bottom of the totem pole here? Yeah, I really care about the people I help, so I just kind of want to go straight to them and start attracting people who would like me instead of relying on realtors to fuel my business and having to buy them coffees and lunch. And so I diverted my value proposition to go direct to the consumer and the easiest way to reach them was putting out content because you can cold call all day and I couldn't for a year and I would get nowhere near the reach that I'm getting by putting out a 32nd video.

Shivani [00:24:18]:

And sure you have. You take the risk of giving away your advice for free. And I've been copied by loan officers all over the country will take my words as their own. But it's okay with me because this way is working so much better of reaching more people who I want to help and who would like working with me. I knew it was working. Not when, like, it was the number of leads I was getting from Instagram, but when people were calling me and saying, I feel like I already know you.

Marina [00:24:43]:

Yep.

Shivani [00:24:43]:

I was like that. Okay, done. This is worth. Yeah, because there, it's a warmer lead from, from the get go.

Marina [00:24:51]:

No, it's true. And it's same thing on a real estate side. It's like, sure, I can pay for a lead, but then they're already talking to five agents by the time they talk to me because they sell our information to other people. And then this is like a YouTube lead or something. They literally are like, can we take a selfie? I can't believe I'm meeting you. And I'm like, okay, I'm not a celebrity. Like, let's talk this.

Shivani [00:25:10]:

You are. You are.

Marina [00:25:11]:

It really is. It's like they have watched hours of your content by the time that they reach out. So they really do feel like we've had all this conversation. It's this backlog. So I would say the person that's going to succeed in 2024 is the best marketer in the sense that they're providing value. Not just like they're on the Safeway car everywhere, but they're literally providing value to the marketplace. And so if you're not, you know, camera friendly or whatever and you're not willing to take that sacrifice, it's going to be a lot harder because I feel like just those conversions with paid leads and cold calling, it just takes more now because the consumer doesn't trust it either. So they want to see your face.

Marina [00:25:46]:

They want to hear your story, they want to connect with you, they want to see you, you know, that you have kids and you do things in the community. And even as lenders, like, you are the little mayor of the city as well, it's not just realtors anymore. So I think that's a huge, huge point of it. Yeah, that's good. And then building a community, when did you start getting this group of girls together? Or women, I should say. And, like, what has speaking on stage done for you? Tell me about that.

Shivani [00:26:09]:

I love the community building aspect, and it's something I teach in my mind over markets course, because it helps you remain relevant through market cycles. It makes your business recession proof because, you know, in 2023, when things were really hard, I had two communities that I had to keep showing up for. I had my futures, female community. And I've created for realtors in Reno, mortgage and mimosas. And so they rely on me to show up with these events twice a year and with a Friday update every single week, telling them what happened in the market and how they could have smart conversations about it over the weekend. And so when you position yourself at the center of this type of community, because all eyes are on you all the time, it's your job to show up. Whether the news is good or bad, whether it's the right time to buy or sell, you have to keep showing up as the source of calm for everybody, and that means you stay relevant. And if you stay relevant, then you stay in the business.

Marina [00:27:03]:

Yep, that's so true. And I think that's true in my business, too, now that I think of it. It's the Friday newsletter that I put out every single Friday. And it's just, I'm just repurposing links that I see through my other email chains of, like, what's going on and like, da da da da da. But it's like, it doesn't matter if my business is slow or busy or whatever, people know to look forward to it and they send it to their friends and whatever, and it takes me 15 minutes to put it together like, it's the simplest thing, but you're in front of them consistently. And that's like, such a huge thing to drive home so good. And I think we could all do better of creating community and getting involved. Like, have you heard about this loneliness epidemic that America is experiencing? Like, it's crazier than ever.

Marina [00:27:41]:

That's like, we just got to get out of our houses. Like, we are just little potato couches and, like, I need an invite to get me out. So more people like you who can host the events and, like, pull me out of my comfort zone would be huge. So we just need more of that, for sure. Okay, well, tell me more about mind over markets. Like, what is the coaching program? Who is it for? What does it look like?

Shivani [00:28:02]:

It'll benefit anyone in sales, any entrepreneur, but it's really designed for realtors and loan officers because I like to speak to what I know. And so I take the first half of the system I put together based on what I did in 2017 with going direct to consumer and building a personal brand and building out community. And then it got really interesting when I started grad school in 2020 because then I started learning about human psychology and emotional intelligence. And so that's where the second half of the system came down and gets really tactical on how you improve the one on one interactions you have with people, how you improve the one to many interactions you have with people, and how you start owning your authority so that people see you the way you want to be seen, the way you've earned to be seen, and so that you can really, truly become someone that people will seek your advice and trust you because you have earned that from them. You've unlocked that level of trust.

Marina [00:28:59]:

Yeah, that's huge. Okay, so that's like ninja secret sauce that no one else is really teaching because you're in school with the nitty gritty psychology tricks. That's really fun.

Shivani [00:29:08]:

I wanted to combine my experience as a top producer.

Marina [00:29:11]:

Yeah.

Shivani [00:29:11]:

With human psychology to help people be better in a new world of real estate. Because I don't think it's going to be the way it's been for the long. For the longest time. I think the need for human connection is changing. You started it. Exactly. With, like, this era of loneliness. People's relationship with technology is becoming toxic.

Marina [00:29:32]:

Yeah.

Shivani [00:29:33]:

People's level of trust with the media is gone non existent. And those are all huge opportunities for us to earn people's trust.

Marina [00:29:42]:

No. So good. And then is this, like, pre recorded? It's on your own time or. It's a monthly thing. How does it work? What's the routine?

Shivani [00:29:49]:

There's a self paced course that you can just pop online and buy and you'll work through the videos you have. I recommend doing one video a week and doing the homework. The worksheet over the week, twice a year, we'll do it with you live. We call those live sessions, and we'll run through the eight weeks course where we meet weekly on Zoom and do the do it together. But I also offer one on one coaching where you can sign up to work with me for six months. I don't believe in accountability coaching. I think that they profit from, like, keeping limiting beliefs in place so that you have to do your business that old way with door knocking and buying zillow leads and, like, just getting shit on and your capacity to succeed is your tolerance for being shit on. I don't believe in that.

Shivani [00:30:30]:

And I think that's what accountability coaches want you to believe is the only way they say it. They say it's not rocket science to be a successful loan officer or realtor. Just follow the system. You just have to have thick enough skin to follow the system and do the things. Yeah, but I don't think that's true anymore. I think the way the world is changing and the way people are going to choose to spend their money and who they're going to pay to represent them in these ways is going to be different. And you can start learning how to connect with people on a human level so that you don't work with everybody, but you work with the people you like, and that'll make your life enjoyable, and there's plenty of business to go around.

Marina [00:31:01]:

So true. Yes. There is more than enough. Like, I don't want all the people. I only can take so many. You know? It's like, I just want the ones.

Shivani [00:31:07]:

Who are cool, who are decent human beings, who like me, who we could vibe with, and we could go on this journey together. Mm hmm.

Marina [00:31:14]:

Exactly. Nope. So good. Okay, let's wrap this up with some action steps. So we shared a lot of good advice, not only about, like, lending in general, loan officer training, and, like, who should become one. If there's a mother listening that's on this entrepreneurial journey, what advice do you have for her?

Shivani [00:31:30]:

I would say, sit down and think about what you really want, not what you're supposed to want. Like, think about what would give you joy. Like, when I talk to realtors, they think they have to build out this team and do this thing, and then I'll ask them, like, what do you really like about your job? Well, you don't have to follow that model. Or when I talk to stay at home moms who feel like they've done a disservice to their family by staying home and being with their babies. But I'm like, does that actually give you joy? Has that filled your cup in so many ways? Like, when you think about if you would have gone to work and left your children with someone else, how do you feel? And they're like. Like, vomiting. I'm like, then I don't think you should feel bad. I think you did exactly the right thing by yourself.

Shivani [00:32:07]:

And so I think there's so much pressure on us to do it all. And people will look at me and they're like, I don't know how you do it all. And I'm like, I don't know if you'd like to live my life. It's not that great. You know what I mean? Like, I'm addicted to chaos, and this is how I get my self worth. But if you are not, then you would be miserable in my life, so you shouldn't be letting my instagram make you feel bad because you want nothing to do with the way I live my life. I think everyone needs to sit down. If you want to be an entrepreneur and you think about why you're doing this and what the end goal for you really would be, because you'll be able to map the steps out to get there so much better than you think you can.

Shivani [00:32:43]:

If you're not sure what your next steps are, I think it's because you're not really sure what you really want.

Marina [00:32:47]:

So, good girl. Preach. You could have just, like, stayed on the pedestal for ten minutes. I know. It's so, so true. So often we get caught up in, like, what everyone else tells us to do or how this looks to be successful, and every single family is so freaking different. And it doesn't mean that you have to make 500,000 or be a millionaire to be successful. It can come in all shapes and sizes.

Marina [00:33:06]:

So just example for this season, I'm in maintenance mode. I'm not in, like, let's be top producer. Like, we've been there, done that. I'm homeschooling my nine year old right now, which means I have to slow down and be face to face present with him. And I'm learning. He's a kinesthetic learner, which means we're playing basketball and doing math. Worksheets ain't working anymore. So it's like, I'm still having this successful career.

Marina [00:33:28]:

I have two other businesses, too. You can do it all. It's just, what capacity and what works for you in your life. Like, that's the biggest thing. It's not going to.

Shivani [00:33:35]:

What do you want to do? Like, yeah, what does all mean to you? Like, there's many people doing one job teaching school, and they feel like they're doing it all because they're fulfilled. Doing it all looks different to everybody.

Marina [00:33:49]:

Yes. No. So good. Okay, well, we end every episode with a fun rapid fire. So what is your Starbucks order?

Shivani [00:33:56]:

Oh, a flat white with a vanilla sweet cold foam. So then they'll go, oh, you want it iced?

Marina [00:34:01]:

And I'm like, no, hot, hot with the cold foam.

Shivani [00:34:04]:

Yum.

Marina [00:34:04]:

That sounds good. Okay. What do you make for dinner if it's last minute?

Shivani [00:34:08]:

I don't cook. I don't know. I can't. I couldn't even make you a quesadilla.

Marina [00:34:11]:

Do you preheat anything? You have frozen food ready?

Shivani [00:34:14]:

My husband, we don't eat. If my husband's out of town, my mom comes over.

Marina [00:34:18]:

There you go. Okay. What's your favorite. Go to department of target. Do you have a favorite designer?

Shivani [00:34:24]:

Oh, my favorite thing at Target is literally to just walk around, just get inspired. I love. Okay, so going to target reminds me of when I worked part time and I had my son, and so it always reminds me of being a new mom, because going to target was an adventure. So I love just walking around there, and now I'll take all three kids, and I will spend a ridiculous amount of money, because when you take three kids to target, you're gonna get hosed. But it gives me joy, because it takes me back to, like, nine years ago when I was, like, just walking around target trying to kill time and not sure if I had any idea what I was doing and having so much self doubt, but I was happy that I was out of the house with the Starbucks and put my kid in the front of the cart and got some fresh air.

Marina [00:35:09]:

Such a sweet time. Yeah. Taking back to those moments too, and, like, remember when it was so simple, it was just me and you? Like, those are the days. Okay. Give me a podcast or a book you'd recommend to the audience and why.

Shivani [00:35:20]:

My favorite book that I've ever read is not a self help book. So it's the worst answer to give on a podcast interview. But it's called this is how it always is, and it's about a family that has five boys, and the youngest ends up being trans and the whole family, like, it's the impact it is on the whole family. To get behind supporting this youngest kid, they move across the country. For poppy to go to a new school as a girl and just reading the whole book was like, wow. Like, the depth of the human experience. It's fiction, but the author does have a trans child, so. Wow.

Shivani [00:35:56]:

It's very realistic, very cool.

Marina [00:35:58]:

Yeah. Okay. TikTok or Instagram.

Shivani [00:36:01]:

I freaking love TikTok. Yeah.

Marina [00:36:03]:

Okay, awesome. I'm just getting back into mine and, like, reinvigorating it, but it's been fun. Okay. And then where can people find you online? What's your handle? Awesome. And they'll follow you on TikTok, where you like to hang out. Well, thank you so much. This was so much fun, and I feel like you're just authentic. You're you, and you're not bullshit.

Marina [00:36:22]:

Like, it's just tell it like it is. And that's the whole point. So thanks for being on the show, Shivani. And I look forward to following along and hopefully seeing you at another forward event soon.

Shivani [00:36:31]:

Yes, thank you. Okay.