Podcast Interview—A Creative Purpose with Naomi Geidel
Alejandro Szita - Mortgage Broker for Artists & Creative Entrepreneurs
Alejandro Szita is a California & Florida mortgage broker for artists and creative entrepreneurs. Alejandro has been a real estate and mortgage professional in Southern California since 2005. His clients range from household names to people working behind the scenes on all kinds of artistic projects, from musicians, producers and film composers to fashion entrepreneurs, audio engineers and video game designers.
Visit A Creative Purpose with Naomi Geidel Podcast’s official website.
Podcast Transcription:
Naomi Geidel: Hey friends, I'm Naomi, and I'm glad to have you here listening to A Creative Purpose. This space is here to encourage and support creatives bring their ideas to life. I believe we each have our own brilliance to share with the world. And when we lean into that, we have opportunities to live an adventurous life. I have some great conversations with other creatives where they share their journey and the lessons learned along the way. I'll also share my story and what I've learned and am learning on this beautiful, sometimes difficult road to living a life I love. Welcome back friends, to another episode of A Creative Purpose. I'm excited to have Alejandro here. He is going to talk to us about housing and getting into the market of buying your house and how that works for the creatives, because I know it can seem like an overwhelming task at times, depending on where you are on your creative journey. And so, welcome, Alejandro. Thanks for being here.
Alejandro Szita: Thanks, Naomi. It's a pleasure for me to be on your show, and thank you for having me.
Naomi Geidel: Yeah. So can you tell us a little bit about yourself and like where you're located in the world and all that good stuff?
Alejandro Szita: Yes. I come from Chile and I'm located in California in the United States, in a city called Irvine. And I have been here for a long time, since about 1994. And my interest in finance, it's from the age of seven, that's where it began for me.
Naomi Geidel: Wow, that's a long time. So, I love hearing people's stories, especially when they have a strong interest and they follow it through for kind of a long time. So what was it about finance that really caught your interest? Were you just good at numbers or what did that look like?
Alejandro Szita: No, actually, I never considered myself good at numbers. And I've always wondered when I was in school at how my friends seem to like, be like what I call math whiz. You know, they could like, have these formulas, you know, and answer the teacher's questions. And I was always lagging behind. And to me it's, some of those things that didn't make any sense. So I always had a sense that I was not good at math because I wanted to know why we were doing something. I was not good at doing something without knowing why, what was behind it. So that frame of mind sort of stopped me from being a math wizard. It all started when I saw one day my dad reading the newspaper, and I saw that he was very worried and I said, dad, why are you so worried? And he goes, oh, it's because the interest rate went up. And I thought to myself, that's weird. He doesn't owe any money. I knew that because, you know, I talked to my dad, we were very good friends. And I said, but Dad, you don't owe any money. Why are you worried about the rate? And he looked at me and he said, you know what? You would not understand it. And that's, that piqued my curiosity. And I went, what is it about this rate thing? Because also when I was growing up, you know, in my country, in Chile, the inflation index was published every week. Every week you saw big red headlines. Inflation now is so, so percent, you know, interest is so and so percent this is something that you talked, that I saw in the news constantly on the newspaper constantly.
And for some reason that I cannot explain it attracted my attention because I didn't understand it. So that piqued my curiosity. And then through the years, you know, I remember this other situation that, my dad was a wealthy person, so he had a, his bank manager, you know, when I was 12 or 14, one day he invited me to talk to him, he said, Alejandro, you can come to my office anytime, just talk to my secretary, make an appointment and come and see me. So I took him up on his word and I made an appointment with the secretary. I went to see him. I sat down, you know, I was just a young guy. I didn't know anything of anything. And my, and he says, what would you like to know? And so my first question was, where does money come from? And this is the guy that is the bank manager. He's the top dog, you know, he's in his fifties, like impressive desk, you know. And then he gave me a speech for half an hour. And through the middle of that, after 10 minutes, I started to realize to my horror, that he didn't know. And the more he talked, the more I came to realize that he didn't know. And I thought, wow, if this guy, the branch manager of this huge bank doesn't know where money comes from, and this is his daily job, what's behind this thing, you know? And then later on growing up, you know, obviously I had all these money problems. You know, money didn't seem to be enough, you know, and it was always a mystery to me. You know then I read all these books by these motivational speakers, all these books that you see, you know, how to make money.
My dad was very good at making money, but what I saw that the way he made money had nothing to do with what I was reading. You know, my dad had a factory. He made goods. You know, the more goods he made, the more he sold. He made money. I was lucky that I got to like wander around the factory, talk to the employees, you know, I was friends with the salespeople. And I'll never forget this one day, you know, I was in my, probably I was like 18. I was looking at the sales numbers of the stores. He had several stores. And there was one store that traditionally had very low numbers. That was not my job, but was just curious. By the way, nobody asked me to do this. I was just curious. I was looking at the numbers for this store, and I remember that this store always was a loser, and all of a sudden was making a lot of money. So I asked one of the secretaries, hey, isn't that store the bad one? She says, yes. And I go, how come that is not good? Oh, it's because so-and-so salesperson transferred and wherever he goes, you know, sales go up. So I said to myself, This is not luck, then. This guy is doing something. So I went to the store and he was, and I was lucky enough that he decided to talk to me. He was under no obligation to do so. And then after listening to him for another half an hour, I saw that that was a system. This was not luck. He, everyone, this is very funny because I asked about this guy from other salespeople. I mean, my dad had many salespeople. So I said, who is this guy? And everyone said, no, he has the gift of the gab.
He's lucky, you know, he was born with it, you know. But when I talked to him, I realized that that was not true at all. He had a specific system that he was following. He had all his clients written down on a book. He called them on a regular basis. And, and more and more, I mean, this is a whole thing that he had developed over the years. So this was a guy that was a true professional. He had found a formula, he tested it, and he did it. And then I thought to myself, wow, then that means that sales is not a lucky thing. It's not because you have the gift of the gab or anything. There is a technology to this. So, little by little, through my own personal experiences, I started like to sort of pull the string more and more, more and more to see what was behind this money thing. You know, how come some people made money? How come some people didn't? How come some people could afford things and others couldn't, you know? And so on and so on. And I love reading. So after like 400 books, I only know that because they were all around the house. My wife got upset with me one day. She says, hey, you know, this is not possible. I go into the bathroom, there is a book, I go into the kitchen there is a book, you have to tidy this up. So she gave me an ultimatum, you know, after many, many times. And then she goes, okay, how many books do you have? I said, I don't know. You know, I think I have about 400. And she goes, do you read them all? I said, no, but I read about about half of them. They all have to do with money.
And then after all this, you know, when it came to myself, when it came to me to having to choose my niche, my profession, I stumbled into real estate. I was in marketing, I was doing infomercial, you know, those long television commercials, and this is where the creative part comes in. I love editing, I love shooting, I love writing, I love scripting. And that's how I came into sales. And that's how I came into finances. Because one of my infomercial clients said one day, hey, Alejandro, would you like to come to a financial seminar? This was in the 2000s. And I said, yes. And then that led me into the direction of real estate, that led me into the direction of lending. And then I did a bunch of things I don't want to bore you to with a lot of background, but basically this has been a quest for me. How is this that you have some people that are lucky, quote unquote, you know, that make all of this money and how you have some people that are good, but unlucky that, you know, that's how I used to look at it before. And it's nothing of the sort, except that nobody teaches this to you. The only thing you can do is buy this quick rich book. But the quick rich book is not interested in telling you how to get rich. It's the author is interested in selling the book. So he entitles it, get quick rich, but he's not really telling you how to do it because his intent is not to share the information. His intent is to sell books. And that's really what's behind all of this. You know, you go to the university, I went to the university, I studied economics. But when you study economics, the teacher, he never ran a business.
He never sold anything. So you are getting information that is only theoretical. You're not getting information from somebody that really did a business. I remember in Chile, when I was in the university, we had to study the theory of Karl Marx. You know, what was his economic theory in, not in political ways by the way, but in economic terms, what did, what did he really say economically speaking? And then I came to realize that after I studied a little bit of the bio of Karl Marx, he never worked. He was a journalist, a very well paid journalist by the way. He was a loser. He kept mismanaging his money. He kept putting his family through a lot of hardship. And the only way he survived is because he had a friend who had a business. And he gave them the money, although he made very good money himself. But he never had a business. He never really, he really never created anything. So again, all of this theory from someone who really never was in business. So all of this, just to let you know, that even though the subject seems complex, even though it seems difficult, there are solutions. And the solutions are pretty simple. Actually. The solution comes from the definition of the word economy, which is a Greek word. It comes from a Greek, economos, I think is the Greek word, which means the management, the good management of a household. And believe it or not, in the definition of the word, therein lies what to do.
Naomi Geidel: Yeah. So much there that I want to pull out, like the learning, the curiosity because I, you know, I'm, I'm glad that you're a creative too. So we do have that curious spirit to find out how things work. But then also the creative mind where sometimes it's hard to focus on something or hard to make sense of money because we are led more by our inspiration or beautiful things and stuff like that. And so I like that you said you just got curious and saw, kind of broke it down how things work. And so I think if we apply that to our finances as well, if we're feeling like stuck financially, or I'm never going to get lucky, I can never make money. Like the starving artist idea, that there is formulas, right. That you can kind of use to help your situation improve. So like some of those solutions, what do you think is the top one or two key things that we should think about when we're talking about finances or wealth or like you moved into real estate? What are some of those things that we, simple things that we can like focus on to move us to where we want to go?
Alejandro Szita: I will tell you what, in my opinion, is the one thing that will move you in that direction. I remember when I lived in England, I went to a seminar. By the way, at that time, I didn't have any money. So the seminar cost 50 pounds. They were my last 50 pounds. And then after I pay them to go to the seminar, I thought, oh my God, what I did, you know, that was all my money, but that was the best 50 pounds I ever spent. So I'll go to this seminar. And to make a long story short, this is what the speaker from Germany said, he said, when we don't have money, what do we do? We focus on money, we get into debt, we ask for a loan because we need the money. We go after the money. And he says, that's why you, we always get into a problem. Because money is a consequence. Money is a product, money is what comes after, after what, after you have provided something, either a service or a product to someone that found it valuable. And now you created a credit on that person to you, and that's how you get money. So he said, if you are lacking money, it only means that you're not delivering, exchanging or giving out to someone what they want. Because if you did, and if you, if you structure it correctly, you will get money in return, or you will get the promise of money, or you will get something valuable in return. Because we always, because the equation works. And we don't have to only concentrate on money. I'll give you an example. I have a, I work with an actual lawyer, we are very good friends. He's attorney and I have a bunch of money that I need to pay him, and I'm a little behind. And today, morning, we were having a conversation, and really good with numbers. So he has a client that he needs some work to do for a client. And then he said, Alejandro, can you do this work for me? I need someone to, to talk to the client, get all the numbers, put them properly so I can present it in court. And you are the best one. Can you do it? And then we work something out and you owe me less. And I said, no problem, I'll do it. So the exchange, what you do for other people doesn't have to be apple for an apple doesn't have to be, okay, I do this for you, you give me 20 bucks.
No, I'm not talking about that. I'm talking like, you have to be able to exchange. And when I say exchange, I mean produce or deliver something to someone else. For something valuable to you. And you could say, well, if you're an artist, you could say, well, I did all these songs, I did all these paintings, but nobody wants them. That then it's a problem of marketing. But the basic, the basic, basic thing is this, you need to find your niche. Whatever the niche is. Like in my case, for instance, I did everything you can imagine in real estate. I sold houses. I represented buyers. I worked on the residential side, I worked on the commercial side. I even raised money for real estate projects. But none of those were my niche. I made a little money here and there, I could pay my bills, but I did not really excel. It was only when I went into loans that I started to excel. So we all have a niche. We all have something that we can do in our sleep or that to us it's simple, but to others it's valuable and they're willing to exchange something valuable in return. So the first thing to do is not be, not not be in your how can I say this? The solution is to expand to other people, find out what they consider valuable, produce that, and exchange it. And this is the problem. This is the problem, is that in our minds, and by the way, if you need to ask me any question, just stop me. I don't want to be like on and on. This is the problem. The problem is that there is a, there, there is an actual lack between what we think and what happens in the, let's call it physical universe.
For instance, I, in my mind, I can create a whole thing, but to put it in practice, it's going to take days or weeks or months or maybe a year. And at the beginning, I don't know if, if you're going to show the video of this or is just sound, but at the beginning, this is what happens. You work, you work, you work, nothing happens, nothing happens, nothing happens, nothing happens. And worry you are about to give up, is when it starts to happen. And then it happens like this, it happens exponentially. So you have to put a lot of effort at the beginning, in the exchange, in the delivery, in order to, to create like a, an inertia or a movement into the physical universe. I don't know how else to call it, into the things, into the material things. So now the ball starts to grow, starts to roll, and now the exchange can occur. Because exchange is not going to happen overnight. If you are a musician and you create a wonderful piece of music, the studio is not even going to want to talk to you. I mean, or a producer is not even going to give you the night or day. Your email is going to go like to spam. If you're lucky. You know, it's not even going to be read. So what do you do then? You know? And then the secret is, so it's delivering a product and then it's connecting with people. Connecting with people. And when I say connecting, it's like this conversation that we are having, it's not just sending emails. It's not just sending text. Because if you don't know anyone, that's not going to work. You need to get out there. You need to relate yourself with people. You need to like establish physical contact. You need to have some kind of contact.
Because that's where we as human are, are built for. We're not built to be, to be interfacing through a computer. You know, Facebook is famous. And I'm not saying that Facebook is bad, but if you think of it, Facebook is a product to somebody that could not talk to people, unless it was through a computer. So I'm not saying that it's bad, but, but you know, you do a Facebook event and people say, oh, I'm sorry, I'm not going to be able to attend. And you go, what? This is a computer, all you have to do is click and you are, you are sending me an email that says that you cannot attend. Isn't that the same effort as clicking and just looking? So sometimes we tend to lose perspective of these things, you know, or what we are, what we're doing. But to answer your question, it is the delivery of something that the other person, not just you, the other person considers valuable. And then that deliverance has to be in volume. Like my wife, she's a songwriter. She did one cd and then she discovered that one CD was not enough. She needs to make 10 for anybody to take her seriously. So it's not just, I know one of my clients is a very successful, very, very successful bass player, but he's done 4,000 songs. If you want to be a writer, you need to be able to crank up a 2000 word story in half an hour. So the numbers also on the, this is another thing that I noticed on the creative space. The numbers that you need to produce are usually way over ahead of most people. Because you go to the university, you go to a literary class, and you are lucky if in the whole semester you produce 1500 words. But 1500 words are not going to take you, that's three pages. It's not going to take you anywhere. You need to be able to produce a hundred thousand words in a semester just to, just to have somebody look at you. So you see the creatives, were saddled in the sense that not only has to be good, not only has to be creative, but it has to be massive. And then even, and then after we produce this massive output, then we need to find, if we are not naturally good at marketing, we have to find someone to market this stuff. That's what I've seen. All my clients that are creatives, they're successful. They do that. Number one, whether whatever they do, whether it be like a musician or a songwriter or a writer, number one, whatever they create is flawless to begin with.
So that's a given. The fact that the musician has to be flawless is a given. That is the beginning. But that is no, won't take you anywhere. Now. You need to be massive. Meaning you need to produce tens of songs, over a hundred songs, you know, to be anywhere you need to write thousands and thousands and thousands of words before anybody will even look at you. So you have to be perfect, you have to be massive. And then you need to be good at marketing. I know it's a tall order, but if you are able to do that, and if you survive the two or three or four years that will take you to do all that, you will be successful.
Naomi Geidel: Yeah. Yeah. So what I take away from that, and what I've noticed on my journey as well is being visible, right? Like we can be creating in our own space and feeling really good about it, but if nobody knows about the work that we are producing, then that doesn't help us. And I know when people are starting something new, they might not feel confident in the work that they're doing. And so giving yourself time and space to kind of lean into that more, like you said, you know, we have to be at a certain level to even get noticed. Well, that only comes with putting in the hours, right? The practice, the 10,000 hour rule or whatever you have. You know, so the visibility, the putting in the hours without reward just yet. And so that perseverance and that belief, and that's what I work with, with the people I work with, is really what is your purpose and what is your why and why are you doing this to begin with? If it is only the money, then you are going to stop way before you ever see it, because that's not going to come in six months sometimes. May not come in a year, you know? And so we are sold, a lot of times, get rich quick. It happened overnight. And in reality, if you look at any story, it was never overnight. They had hours and hours of maybe a YouTube video, songs out there whatever it is, works of art that nobody saw until, you know, it was years down the line or, you know, whatever. Like, I don't want to discourage anybody because it, it can seem overwhelming
Alejandro Szita: And it is overwhelming.
Naomi Geidel: But if we break it down and just look at, okay, this is the next season we're going to be working on this, you know, keeping that long vision in mind, but then breaking it down of what I'm working on next, I think we can get to where we want to be. And so how does that look like for those that are wanting to get into the real estate, you know, like buy a home or maybe buy a studio. How can we apply those same principles to our art, to the purchase of a place that we want to call home or whatever? How does that look like in that arena?
Alejandro Szita: I will start by saying that if you can pay rent and I don't know, since your program goes all over the world, I don't know exactly where they're located, but if you can pay, let's call it a medium, a medium amount of rent for your area. Like I give you an example where I'm located, a medium amount of rent is $3,000 a month. But in your area it could be $2000, it could be a thousand or it could be four. So whatever the number is, if you can consistently pay, let's call it the medium amount of rent for your area. And when I say consistently for at least two years, you can get a home. You can get a home. Then after you pay that amount of rent, you have to be consistent on your income. Why do I say this? Because a bank is going to lend you based on your income. Now your income, if you're in the creative world, could vary a lot. Could be like one month you get all of your income for the whole year and then the rest you don't get any income. That's fine. Because there are different programs for that. So there are two scenarios. There is the scenario that you have some income and there is the scenario that you have a big chunk of income. And that's pretty much it. Who knows up to when, you know, there is also a program for that. But I would say generally speaking, if you are able to pay rent, the medium rental for your medium area, you, we can help you, I can help you to buy a home. That would be the rule of thumb. If you can pay $3,000 a month, you can get a home. Not a mansion, not a shack either, but you can. Now why would you want to buy a home? That's another thing, you know?
Naomi Geidel: Yeah.
Alejandro Szita: You know, because I have out of curiosity for myself, researched pretty much every single investment program there is. And after doing this for many years and watching my clients, I can tell you that if you are able to buy a home, that is your best savings programs, that you can possibly have. Another great philosopher and financial expert who didn't have a business, by the way, because now I pay attention, whoever I read, I want them to have a business and I want them to be successful at the business, not because they sell books, you know? He said, in order to save, you have to make the savings a necessary expense. Because if not, you can choose, oh, well this, you know, this, I should save this $200, but this month I'm not going to do it because I need to, I don't know. I need to buy some reeds. I need to fix my clarinet. I play the clarinet. That's why I'm using the example of the clarinet. You know, you can spend a lot of money in reeds and fixing it and taking it to the shop and so on and so on. But if the savings is a necessary expense that you have to make no matter what, and that's what a mortgage is, you are going to, even if you don't get appreciation, appreciation is when your home goes up in value. Even if you don't do anything, even if that doesn't happen, just the fact that you pay this mortgage every month, just the fact that at the beginning about a third of the money comes back to you right away. And then very soon that becomes half and after a few years that becomes 75% and then eventually all of it, that in itself, I've never seen any other saving program that can do, that can give you this.
Yes, all these financial gurus will tell you, well, don't do that. You know, put the money here if you do this, if you do that. But all of this is theoretical. All of this is theoretical. This is what I've noticed. People that have a good job or that have a source of income can buy a home and that with a retirement pay. People that are wealthy, they do those things that you read on the book. But those things that you read on those books, in my opinion, they are not really for the regular person. They're only for wealthy people. Why? Because wealthy people don't make money monthly. Wealthy people make money in waves. They do a deal, they have a big wave, like a few hundred thousand dollars, then they just parcel it out and they put a little bit here, put a little bit there and put a little bit there. They don't have like every month a certain amount of money that they have to live with, you know? But that's not the reality for most of us. Most of us have a certain amount of money that comes every month, and that is a completely different dynamic than the wealthy person that gets to do a deal and then boom, gets an avalanche of money and then probably doesn't get money for two years. But that's not the reality for most of us. So buying the house is not just putting a roof over you over your head, but it's creating forced savings. And then on top of that, you have the possible appreciation. Whatever appreciation you get, an appreciation means that the overall prices creep up. And that means that you go up with the boats, you know, you go up with the tide. That's another source of income, is sort of a phantom income because you didn't do anything. But that's how rich people make their money. They make their money because they have assets. And those assets appreciate in value even if they don't do anything. And you get a little bit of that when you are a homeowner.
Naomi Geidel: Yeah, I owned a townhouse in Denver and it's one of my biggest regrets of letting go of that. But I think the thing is too, looking at what kind of property you're buying. Like I was unable to rent it out because of the, you know, bylaws and stuff like that. And so when I moved overseas, what was I going to do with it? You know? So I think being smart about your investments as well so that it does fit your life. Like it was good for seven years, but then I moved and I, you know, unfortunately had to get rid of it. But yeah, I do see now like looking back like, oh, I should have hung onto that any way I could have or reinvested in another way. So people that have gotten out of the market, how do you suggest they get back in? Maybe life has happened. Is it like, you know, how many years do they have to kind of plan to get back into the market or even into the market in the first place? Nowadays with things happening?
Alejandro Szita: You know, I would say that if you, if you start planning on a year's preparation, that should be more than enough. The longest that we've worked with someone is nine months. We worked longer of course, but I would say a year, give yourself a year. When I say give yourself a year, it's not that you don't do anything with the year. Within that year, we'll tell you what to do. We'll create a, based on your particular situation. We'll, we will create a roadmap in order to get your credit and get your finances and get you in a way that when we go to the lender, everything will fit their box. Because lenders have these boxes and you have to fit in in those things. And that's a little bit difficult, but that's our job. Our job is to translate your life into boxes that the lender can see and says, approved. And I would say give yourself a year. If you are, if you're starting from like scratch, absolute scratch, give yourself a year. If you already have some stable income, give yourself at least six months.
Naomi Geidel: Yeah. So like what does, what are lenders looking for? Credit score, a down payment, what does that kind of look like nowadays? Because I know there's like a lot of different programs and things out there that can support people. So what are some of those options?
Alejandro Szita: I will tell you. So usually, and I say usually because then I'm going to tell you what, what we also do, usually a lender wants to see that there is an income, an income that has occurred for two years, whatever that income is. They want to see in the United States at least, they want to see a minimum credit score. And that's another subject that we can talk about it. They want to see that, that you have a down payment to buy this home, 5%, 10%. If you're not buying a mansion or if you are buying something, let's call it normal, I would say even though you can do it with less, have at least 10%. If you don't know how you're going to get that 10%, we have many ideas to help you how you can figure this 10%. Yes there are, there are programs that don't allow you to put any money, but everything is in balance. When I, when I'm talking about income, credit down payment, some work where you've been doing it for a number of years. All of those things are in balance. What do I mean by that? I mean by, if we remove the down payment, let's say we go after no down payment loan. Now to restore the balance, now we have to move the other pieces. Now we have to increase the payment. Now we have to increase the credit score, we have to increase other things to compensate for the fact that we're not having a down payment. So all of those, all of those no payment programs have side effects, have repercussions, have things that now you have to counterbalance. Because there are programs with no down payment. Now you may say, well I don't have the credit. Are there programs that where credit is not important?
Yes, there are programs where credit is not important, but then again, if we get rid of the credit factor, now we have to overcompensate on down payment. We have to overcompensate on income. Okay, what about if I have the down payment, I have the credit, but I have no income, I have no stable income, I just have money. Which by the way, we're doing a loan like that right now. So the answer is yes, we can also do that, but now we have to overcompensate on the down payment and we have to overcompensate on the credit to account for the fact that there is no income. So usually you would need a down payment, you will need a certain credit score, you will need a certain income and you will need to show that you have been doing this activity for five years. Now if we had the five of them together, you can get the cheapest lowest rate and your loan will close. Our record has been 11 business days. Now if you say I don't have one of them, that's fine, we can work with the other three, but now we need to beef up the other three in order to compensate for the one that you're lacking. So we can have, we have programs that have no income and they don't even ask you for income. They, they also don't, you don't even have to say what you do or where you work. Isn't that great? But now you have to have more down payment, you have to have a higher credit. You have to have higher closing clause. Now you say my credit is shot, I have money, which is the case. You know, we do a lot of self-employed people and entrepreneurs and you will not believe this. These are wealthy people, but their credit is bad.
Not terribly bad, but it's bad. So what happens if I have money and my credit is bad? Yes, we also can do it. But again, to overcompensate for the credit, now we have to push these other values higher. We need to show that you really have a high income. So as long as you have two of the four, you can do it. Even with one. But if we only have one factor, we really need to push it up a lot in order to compensate for the other three things that you don't have. So that's why in the United States, you know, in my country where I come from in Chile, I don't think this is possible. In the United States, buying a home, in my opinion it's much easier than in Europe. It's much easier than in my country. And I haven't seen any other country maybe, maybe in Thailand, I don't know, but, but I've never seen another country where buying a home is so, is as easy as in the United States. People complain here, but they don't know how good they have it.
Naomi Geidel: Yeah. That perspective, right. And I always have to remember that because you know, from America for a while you just hear what's on the news. Rental prices , and that's why I started to buy. Because I was like, why should I be paying the same rent when if I buy my own place, I actually, my mortgage was lower. You know? Is that the case nowadays? You know, with the rising cost of rent and all that stuff. Is it still possible to get a mortgage that's lower than rent?
Alejandro Szita: You know, in most, in, I would say that in most of the states, in the United States, it is possible. Where I live in Southern California is usually not possible. But even then, in most of the cases that I've done, you're better off doing it. And I'll tell you why. Let's say that you're renting something for $3,000 a month and let's say that to buy the equivalent home is going to cost you $6,000. That is more or less the relationship. I'm talking about a real relationship. You know, actually I'm helping a couple who are renting now for $3000 and to buy an equivalent home, by the time you add everything, taxes, insurance, and so on is going to be 6 Gs. So you might think, well, if they're renting for three, why should they buy for six? And this is the reason why, when you pay $3,000, all you are buying is the right to remain in the unit for another 30 days. That's it. None of that money comes back to you. The $3,000 is a complete loss. It's a complete loss in the sense that it's like renting. It's, it's getting you the right to be, but it's not building anything for the future. Actually, it's a decreasing future because you're buying 30 days of future and every day that goes by, you have less and less and less future. So that's what you're getting for your $3,000. When you pay $6,000 for your own home, to begin with, at the beginning, $2,000 of those dollars come back to you right away. And people go, what? What do you mean they come right away? Because after one month you owe $2,000 less of the $6,000, $2,000 go against the principal. So technically speaking, if you were to sell the home in month number two, you have $2,000 that you didn't have before.
I want to keep it simple. People will say, well, but with the closing cost and everything, you're going to lose. I don't want to go there yet. So because I want to make the concept clear. So number one, you get every, so now of the $6,000, 2000, you didn't lose because they're coming back to you, right? So now you have four. What happened to those four? With those four, one of them, you're going to get them back as a tax deduction. Why? Because in the United States, that's why I say it's so cool to buy a property here. The government will give you a tax deduction for about, you know, that other thousand dollars. So that leaves you three. I say well, but I'm, but I'm going to waste the $3,000. I say yes, at the beginning you are the same thing that you're doing now, you're going to waste them. But what are those, if you think about this, those $3,000 that you're quote unquote wasting now are buying you the right that if there is any appreciation, you will have it. So even on those $3,000 that you're going to waste, you are having an opportunity that by paying those $3,000, you're never going to have. Because if your apartment building or your house that you're renting appreciates, you're not getting anything, your landlord is getting it. On the other side of you owning the home, truly at the beginning. And I said at the beginning, because as the years go by, the portion of the payment that comes back to you is greater and greater and greater. So I'm just talking about the first year, which is the year that quote unquote, you lose the most. So this other $3,000 now give you the right that if your property the first year appreciates, even if it's 5,000, you know, I'm talking about a house that costs 500,000.
You know, 3000 buys you something that costs 500. So roughly very roughly. So if the house appreciates even, you know, 1% of 500,000 in one year, you see what I mean? So if we compare apples to apples, even the, even the money that you're wasting is buying you a potential appreciation that the other one is not. And that's why, and that's why when people ask me, I tell them, you know, if you can buy, if you're in a position to buy, buy it, even if you're going to pay quote unquote double, it's not really going to be double. It's going to be, you're going to be better off.
Naomi Geidel: Yeah. So it's really looking at it, like with anything that we've been talking about, the long-term gain.
Alejandro Szita: And let me say one more thing, but this is, this is where I live in Southern California, which is the worst market for buyers. But anywhere else in the states, it's not even like that. Everywhere else in the states, pretty much what you pay fully, you can buy. So if you can, if it can be advantageous paying double to buy, imagine how much more advantageous it could be when it's nearly the same.
Naomi Geidel: Yeah. I know because these numbers that you were using, it's just like coming from the Midwest is like big numbers, you know?
Alejandro Szita: They seem like unbelievable
Naomi Geidel: Yeah. That's, thank you for explaining all that because I think that's what I like listening to people when I was younger, like they gave a very specific formula and if you didn't fit that formula then there was no chance to get in the game. But then I realized like learning more, there's different programs. Like as a teacher there was a program for me that I could have used to get into my first home or, you know, different things. And so I think if this really is something that you want to take on and do, use that creative curiosity to talk to people like you and other people in your area to see what options are out there. Because I think more than not, something can really work for you and support you in what you want to do.
Alejandro Szita: One more thing I would like to say about what you just said is this. The problem in my opinion is that what we see on tv, what we see on the internet ,what the regulators, the regulators are the people in the office, in the government, that probably gave all these rules. What they focus on is on the, what I call the W2 employee loan. That accounts for like 90% of borrowers. But that's a very specialized type of loan for a very specialized type of people. We don't deal with that. I mean we do do W2 employee loans, but that's not what we specialize. We specialize on the self-employed and the artist. There is another universe of loans. There is another universe of lenders that cater to us. The thing is that they are not promoted, they are not advertised. The rules are not made for them. And why is that? It's because lenders make so much money with the W2 employee loan that they don't focus any effort, any advertising money, you know. To them, to them we are what falls through the cracks. They make all their big money the other way. So that's why you don't hear about these things. You don't hear about these programs.
Naomi Geidel: Yeah, yeah, yeah. That's good to know because yeah, I do feel like creatives kind of fall through the cracks in a lot of ways and so just being aware that it's out there and it is possible is very helpful. So I really appreciate you taking the time to talk us through all that and just even how money works, you know, like I do think that breaking it down can be helpful for our creative minds, you know, hold the vision but trust the process and just kind of building it out and knowing that it is a journey, right? It's like you don't get to the top without, you know, some struggle, but you do appreciate the views when you get there and so to keep going and make all that happen, if that's what you want to do.
Alejandro Szita: That is completely correct, Naomi.
Naomi Geidel: Yeah. so if people wanted to like, get in touch with you and kind of talk about what that might look like in their situation. I know that you're based in California. Do you work with other states or how does that work in the real estate industry?
Alejandro Szita: Yes. We are licensed in Florida too. And very soon, I would say by March of next year we're going to be licensed in Tennessee, Georgia, and Alabama. So it's going to be, it's going to be the south pretty much. It's going to be, it's going to be California, Tennessee, Georgia, Alabama, and of course Florida where we are already licensed. And the best way to get in touch with us is just send me an email at info@prosperitylending, like something prosperous prosperitylending.us. Info@prosperitylending.us. And that's our website as well it's www.prosperity lending.us.
Naomi Geidel: Okay, awesome. Yeah, I really appreciate all that you shared. Because, yeah, it's something that I think we need to talk about, you know, for own financial wealth in the future. And, you know, everybody's situation is different. Some people don't want to own a home because they want the freedom to pick up and move, you know, so there are other options. But I'm glad that you shared this one for those that Owning a home is part of that vision that they have for their life. So thank you so much for your time and sharing all your goodness.
Alejandro Szita: Thank you, Naomi. Thank you for having me.
