Building Wealth by Keeping Real Estate: Tips from Dedric and Krystal Polite | Ep. 305

You know what it is. That's right. It's time to talk money with your

money nerd and financial coach. Now tighten those purse

strings and open those ears. It's the money talk with TIFF

podcast. Hey, everyone,

and welcome to another episode of Money Talk with TIff. I am super

excited because I have Dedrick and Crystal polite, and if those

names sound familiar, it's because they have a show on Hulu called

50 50 Flip. But I wanted to bring them on to talk

about not selling Big Mama's house, y'all. So, hey, Deidrick

and Crystal, how are you today? We're doing great. Thanks for having us, Tiff. Good

morning. Thanks for having us, Tiff. Yeah, no problem. So thank you so much

for coming on. I know you all are busy, busy, busy working on the

show and all types of cool things, but this topic is

super important and especially for our community. So let's just hop

right in when we say, don't sell Big

Mama's house, for those that are not

familiar with the reference, what are we talking about? So what

we're talking about, Tiff, is in our community, we own a lot of property and

a lot of land, and typically, it's in the central business district. If you

think about it, a lot of African Americans have properties close to downtowns

and major cities around the US. And a lot of these areas have gone through

a lot of poverty and the drug crack

epidemic and things like that. But now a lot of these areas are being gentrified

and cleaned up, and the property value has skyrocketed. So when we say,

don't sell Big Mama's house, we're trying to tell people to hold on to those

assets that you have in your family. And we're trying to educate people on how

they can hold on to those. You gotcha. Now,

I'm glad that you mentioned that, because gentrification is so real, and

I'm actually experiencing it here in Greensboro because they've

been building up quite a bit. A lot of new companies are coming in.

They've been doing a lot of work and things like that. And my area,

my house has gone up pretty much by

100,000 or so in the past few years.

Right, exactly. Now, this is very tempting

for people to sell. Like, I was even thinking about selling,

right? I was like, can I cash this in real quick?

But I decided to stay because of the

reason that you're talking about. I'm a firm believer that

the land is wealth. Like, if you own the land, you can

control things. So how did this play in you all

story? So did you end up selling big mama's house and then you were

like, oh, no, we made a mistake, or did that ever come up?

No, we didn't sell Big Mama's house,

but we see it all the time. Not only we see it all the time,

but I know in my family we were trying to buy,

actually big mama's house. So it was my great great

grandmother's house where my mother was born and raised. And we were trying

to buy that one from a family member. And

it came about somehow. We were, okay, we'll make sure we sell it to

you. Next thing I know, my mother just so happened to be

looking online and something told her to look at the address of the property,

looked it up and saw that it had been sold maybe two months

prior. So no one in the family knew that it was

pennies on the dollar. And had

we been kept in the loop and communicated with us,

of course we'd have paid it. We weren't someone who was going to turn the

property into tear it down, building up

new construction, but that's exactly what ended up happening

to what's called our family home. It was tore down

and new construction was built up. So it hurt my family

deeply, because that's where not only did my

mother was she born and raised, but the rest of

her family as well. She had about,

probably eight to ten aunts and uncles that lived in that house

as well, and her grandfather is the one who built it. So

from that, and then seeing so many who come to dedrick and I to

purchase their home, and we've stopped. And I mean, yes, we're investors, so can

we buy it? Absolutely. Is it the right thing to do? No.

Every time. Not every time. And when we know that this is someone who

has a family that can benefit from this, we want to educate

them first. And if they still say, hey, listen, we understand

everything that you guys have communicated to us, we still would like to sell it,

then we'll go ahead. But if we know that you have grandchildren, great

grandchildren, children that we know can benefit from this house,

this is what we mean when we say generational wealth that can benefit

from this house, then we're going to educate you when we can. Yeah. And what

we're teaching people, Tiff, is that there's value, like you said, in the land,

there's value in these old homes. Right? It may look like an old, dilapidated home

to us, but if this house is owned free and clear. There's no

mortgage. What most people don't do is we're not that financially educated. That's why we're

so excited to be on your podcast. Where you're teaching people financial intelligence.

Is that they can go to the bank. And get a home equity line of

credit. Or they can get a loan to reconstruct or

rebuild that house. And really keep that equity within their family.

Yes, that's so true. And I'm glad you brought that up. Because

I go through different areas of town here. And

seeing the huge, nice houses

in the quote unquote dilapidated areas. But

I'm like, these houses are gorgeous. And they just need

a little bit more work. Yeah, just a little

TLC. And people would be vying for these houses.

So let's dive into that a little bit more. Because if someone's

listening to this right now. And they are currently in that

situation. Where they're having to make this decision. Should we sell

or should we not sell? What are some things that you all

think they should consider before they sell.

Or make sure that that is in their decision making process?

I think what they should consider is, if we remodel the

house and we renovate it. How much will the value increase by? So even

you said in Greensboro, your house, where it sits, you probably didn't do

any repairs to it. But the values increased over 100,000 in the last two years.

Is that accurate? Correct. Exactly. And that's happened nationwide.

Like houses since COVID have. Real estate values have gone up 40% to 50%

nationwide. With no improvements. Because of the lack of inventory and the prices

skyrocketing. So what that means is maybe the houses are owned

free and clear. You inherited from big mama. And if you put $100,000

into repairs into it, it'll now be worth $300,000. So

now you've three x that investment. Where do you get the 100,000 from? You

go to a local bank. You go to a local credit union and say, hey,

I'd like to take out a home equity line of credit. To do some home

renovations. You do the renovations with a qualified contractor. That can force

the value up. And typically, our model is 50 50, which goes along with our

tv show. But we flip houses in 50 days or less. Or less. But,

again, you find a reputable contract to have them do the work. And that's going

to increase the equity in the home. And you can actually keep the house instead

of selling it out. So I know a lot of people will ask like, oh,

I don't have, really don't need

100k for every house, which is why our show

is so popular, because we're showing people that for 50,000 or

less, because we do some of these houses for 35 or

40,000. Depending on how much work it needs. You can add to

it and you still will get great value, a great value

increase in these homes. So a great way or easy way to do

that is what we call pulling comps. And I know a lot of people will

say, hey, well, what's pulling comps? Yeah, basically pulling comps is, I mean, you can

go on Zillow and Zillow. Sometimes the values are accurate, sometimes they're inaccurate, but a

lot of times they're in the ballpark or you can even talk to a local

realtor and they can give you the value of the house. Hey, once I fix

up this property and I put 50,000 into renovations in it, how much will it

be worth? So how you pull comps is give them the

easy way if they want to just do a ballpark. So you go to

Google, you put in the property address, and when you put in the property's

address, zillow.com is going to pop up. Realtor.com is going to pop

up. Redfin, Trulia, all these different real estate websites that compile data

on house values, and you can look at the value on each one. It's going

to give you a ballpark of what your property may be worth. Oh, that is

good information. I know. I'm very familiar with Zillow. I check mine kind of

often, probably more than I should. There's no point in

me checking it like once a month. I'm not selling anytime soon. But

I didn't even think about just putting the address in Google and

checking all the other websites because it sounds like there's a ton of them

out there. Yeah, there's a ton. There's about five to ten go to

websites that are going to give you values and there's also software. So we

have a site called politepopertydata.com that people can

subscribe to and they can get a little bit more accurate comps. Oh, perfect.

And so if they subscribe to this website, the service

that you all offer, can you search any house in the

US? Absolutely. Nationwide. So it's called

politepopertydata.com. Any property nationwide, you put in the

address and it's going to give you the comparable homes, what they've sold for. So

it's going to give you a ballpark of what that subject property might be worth.

Nice. And do you all help people get this

process started, or do you offer

resources around that? Yeah, absolutely. So we figure that

most people like us, when we first got into this, we didn't have backgrounds in

construction. We're not real estate agents. We're investors. So we have to get educated

first, just like anyone else. So what we do now is we teach classes on

how anyone without a ton of cash, without a lot of credit, and with no

real estate license can learn how to invest in real estate and

truly build wealth. Interesting. Okay, so let me back

up just a little bit. Just a little bit. And I want to go back

to the whole 50 50 flip premise. Like

50,000 or less in 50 days or

less. I'm just over here. The math is not math. How

is this possible?

Because what we're doing is not what typical investors are

doing. Right. We're not coming in doing full gut rehab. So we're not taking

a majority of these homes down to the studs. We did do a couple of

those this season, which cost more than 50,000. Which cost

more than 50,000. But we're typically going in and we're doing

cosmetic rehabs. Right. Which is why I say you don't need

100,000 to really go in. Renovate, update

your home. We're coming in. We're doing kitchens, we're redoing

kitchens. We're redoing bathrooms. We're typically redoing the flooring. So if there's

carpet, we're ripping all carpet up, going back with

LVP flooring, painting, painting the

house, and then at times, we're adding a wall. So

if we know it needs an additional bedroom or a bathroom, we'll come in and

maybe add one of those to really increase the value of the home. But

we're not doing full gut

rehabs. We're not taking it down to the studs foundation. Issues

that come up typically come up during filming. So you see it like we see

it. You find out what we find out. And it's typically going to

depend on the geography of what part of the country you're in. You're in the

triad area, as are we. The triad area, North Carolina, between Winston Salem and

Raleigh. In this area. The reason it's so attractive is because home prices are

affordable compared to the northeast and the west coast. You can buy a

house for 100 to 150,000 in the triad of North Carolina. That's

why so many people are moving here. So we typically buy houses for between,

I'd say 75 to 150,000. We put 50 to

100,000 in repairs into the property, depending on how much renovations it

needs. And then we sell them for between 225 and

325, making a nice, healthy profit in the process while keeping

the home still affordable. Got you. So do you all ever

keep the properties to rent them out or do you just sell them

all? Absolutely. Listen, my wife always like to say you can get

rich flipping houses, but you build true wealth by keeping and owning

real estate long term. So the only reason we got into flipping

was primarily because of the tv show, right? Yeah. We were doing something called

wholesaling, which is getting properties under contract and then assigning those contracts

to flippers. We did that to get cash to buy rental properties.

Our whole end game of getting into real estate is to build enough cash flow

to become financially independent. And we were able to do that in a few

short years. So initially, the homes we were renovating, we were keeping those as

rentals, either long term rentals or airbnbs. And then

a e approached us to do a tv show and they said, hey, we know

you guys aren't house flippers per se, but we want to document what you do.

We're like, all right, well, we keep a lot of these properties. We don't sell

most of them, so we kind of changed our business model a little bit to

fit with that. Yeah. But even on both

seasons, the properties that we buy and hold for

our portfolio. So you're not just going to see, hey, we're flipping properties, but

you're going to see we hold them. And then we're going to also educate you

on how we hold these properties, how we acquire them as well.

That is awesome. That is awesome. So let's go back to

what you said about just doing, like, cosmetic improvements and things like that,

because now it makes more sense because I was like, what you typically see on

an e, it's like they just knocking everything over and knocking down

all types of stuff. And I'm like, dang, how they doing that for 50,000?

Now that we got that cleared up, what have you all

seen was the most, like, what area of the

house should people focus on that gives the most bang for the buck?

Like, is it the kitchen? Is it the bathroom? I say three

areas. Number one is the kitchen. You can put in new cabinets, new

countertops, new flooring, and get that wow factor. The kitchen is going to sell the

house. Secondary is bathrooms. Of course. You always want to have that wow

factor. In the bathroom. So we gut all kitchens and bathrooms, make them look brand

new. And then the third is like crystal mentioned, adding a bedroom. So if you

could take a property from a two bedroom to a three bedroom or a three

bedroom to a four bedroom, sometimes it's as simple as turning an old dining room

that's not being utilized into a bedroom by putting up a wall for

$500 in drywall and wood, that

could add $30,000 of value to the property. So most people don't realize

that. I love that. I love that. So you all have dropped so many

gems. I hope that my listeners have been taking

notes, as I have because this episode is really good and

you may need to replay it back just so you can get all the gems

that were dropped. So thank you so much, you all, for coming on the show

today and talking to us about making sure we build generational

wealth by not selling Big Mama's house, but also if we're in

the process of, okay, thinking about should we keep this property or

not? Just some improvements that we can make and then also

knowing that it doesn't have to be expensive to do this. So

with all of that being said, if people were interested in finding out more about

you, your show, or anything that you all have going on,

where could they find you? Yeah, you can find us on all things be polite.

Tip. So if you look up, be polite. Be our last name. Polite

properties on Instagram, Facebook, YouTube, they can find out more

information. Also, next week we're actually doing a free live

training February 20 eigth on how anyone, like I said, without

prior experience, can get into real estate investing. So if they go to our

website, politewealthportal.com politewealth portal

really is the portal into building wealth. They can find our information on the free

trainings that we do perfect. Well, I will make sure I have

all of those links in the show notes for you all. Definitely check out the

training coming up. And I appreciate you so much for talking

about this super important topic here on the podcast. Yes,

ma'am. Thanks for having us. We're definitely going to consult with you about your family's

properties in Greensboro to see how we can help you guys keep those in the

sure, for sure. Well, thank you so much. Y'all have a wonderful rest of the

day. Thanks for having us. Thanks, tiff. Bye.

Thank you for listening, joining and being a part of the Money Talk with TIFF

podcast this week. You can check Tiff out every Thursday for a new

Money talk podcast. But if you just can't wait until next week.

You can listen to previous podcast

episodes@moneytalkwitht.com or

follow TIFF on all social media platforms at

moneytalkwitht. Until next time, spend wise

by spending less than you make. A word to the moneywise is

always sufficient.