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Lizy Hoeffer | The State of Real Estate and the Future of the Market

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Hosted by
Mike Ayala

On this episode of Investing for Freedom, Mike is joined by Lizy Hoeffer. Lizy and Mike discuss the world of real estate and Lizy explains her opinions and advice on a series of topics including interest rates, affordable housing, multi-family financing and much more.


Ranked No. 1 female loan officer in the nation for most closed loans (Scotsman Guide, 2019) and as the No. 1 Hispanic loan officer in the nation (NAHREP, 2019). Senior Loan Officer Lizy Hoeffer proves every day that “passion changes everything.”

With over 17 years of mortgage industry experience, Lizy works for CrossCountry Mortgage, a leading independent mortgage banking company. She started as a receptionist in the mortgage industry and has worked her way to become a top 1 percent originator and closed over 980 loans in 2019.

“Our passion for our clients, the process and our business partners has set us apart from the competition,” she said. “We create raving fans through client education, finding the best products for our clients, outstanding service, competitive rates and on-time closings. We are dedicated to proactive communication. Which helps give our clients a smooth mortgage experience and our business partners the tools and experience to grow their revenue.”

An active, caring participant of her Phoenix, AZ community, Lizy volunteers her time to St. Mary’s Food Bank Alliance and works with homeowners regarding foreclosure prevention. She is also the creator of the White Envelope Project, which is a homeless awareness campaign that gives people the opportunity to help those in need.

Lizy is married to best-friend Skyler and they have three beautiful children, Anabelle, Penelope, and Calvin.


0:00 – Intro
2:52 – Mike asks Lizy who has had the greatest impact on her life
4:54 – Lizy speaks about the impact of being fired from her job
5:36 – Lizy talks about the piece of advice she finds herself sharing the most
7:44 – Lizy speaks about her real estate investments
9:28 – Mike asks Lizy to explain the term “break-even”
12:41 – Lizy discusses affordable housing
13:53 – Mike asks if it’s a good time to buy into real estate
15:55 – Lizy mentions that it takes a long time for a market to shift, however, it is currently shifting as an average person can’t afford the average house in Phoenix
19:15 – Mike asks Lizy if she thinks there are going to be a lot of opportunities or if she thinks it’s going to continue to be an insider game
21:15 – Mike asks if there are still a lot of people in forbearance and if Lizy thinks those people are going to end up losing their homes
25:39 – Mike prompts Lizy to talk about her three-year outlook
25:55 – Lizy discusses an interesting viewpoint on student-loan debt
31:28 – Lizy speaks about multi-family financing
35:34 – Mike and Lizy discuss interest rates compared to the rate of inflation currently
38:01 – Mike asks Lizy to speak about her app and new program coming out
42:29 – Lizy states that she thinks the economy overall is strong at the moment and speaks about some positive trends we are seeing
45:16 – Lizy discusses interest rates and does not think they are going to skyrocket any time soon


Instagram: @LizyIrvine


Mike Ayala: Thank you for joining me on the Investing for Freedom podcast. I’m actually really excited about this show today because we have Lizy Irvine in studio with us and she is the top-performing female loan officer in the country. She’s going to get mad at me for saying that, but it’s really cool. And actually the first time I heard that I had to actually ask her because she won’t toot her own horn, but we’ll dig on that a little bit, but what makes that so important and impressive, we all know all the changes that are going on right now in the markets and the real estate world and financing and lending. And everybody wants that crystal ball, like what’s going to happen. And I love bringing on different viewpoints, but more importantly, Lizy’s on the front line of lending and she sees what’s going on out there. And so, I highly respect her opinion. We had a little conversation before this started and I think she’s just going to bring a lot of value to us. Plus she’s launching an app and we’re going to get into the personal finance side of this, but who better to teach us about finances and what we need to do then one of the top-performing people in the industry. So Lizy, thank you for your time and thank you for joining us.

Lizy Irvine: Oh my God. It’s such an honor. I’m a big fan of the podcast and a huge fan of yours. So, thank you so much for having me.

Mike Ayala: I’m glad this is going to; it is going to be a lot of fun. So, Kara and I met Lizy through Chris Harder’s mastermind and we’ve been able to get to know her and see the ins and outs of what she does. And it’s just pretty impressive. And here’s another interesting thing. I don’t think you know this, but I’m surprised at your reach. I don’t know why I’m surprised, but I’ve met so many people that know you and they’re like, Hey, I see you’re a friend of Lizy’s and that’s the beauty of social media now, because like, you can reach so many more people, but you’ve really made your mark here in this market. So that’s cool.

Lizy Irvine: Well, I’ve worked here for 17 years, so I hope that I have by now.

Mike Ayala: I like it. So, we’ll dig into the four questions and then we’ll get into the meat of it. So, who’s had the greatest impact on your life.

Lizy Irvine: I’m going to say my mom. My mom was a single mother with four children and she really taught me how to work hard. And then also like to just figure it out, like she literally got two jobs, never asked for handouts. I had never seen anyone work harder in my life. And because of watching her example, I’m very resourceful. I’m super hardworking. I also don’t think I’m too good to wash the dishes. You know, I’ll do whatever I need to survive.

Mike Ayala: That’s awesome. That’s cool. If you could narrow it down to one thing, that’s had the greatest impact on your success, what would that be?

Lizy Irvine: In 2014, I got fired from my job and it definitely had the most impact on my life.

Mike Ayala: You know, that’s so crazy. I’ve heard that so many times. And I think a lot of times, those situations move us into that next level. And, but I think a lot of times people fold up on that. So how did you keep from, tell me, like, what was the progression there?

Lizy Irvine: So the thing is that I mean, I think there’s two types of people in the world and I know that this is like, you know, there’s, people are going to disagree with that, but I mean, I feel like there’s people who let things happen to them and people who make things happen. And, you know, I was a person that is primarily motivated by fear. And you know, when you grow up with nothing, right. So, I grew up really poor. Like I said the fear of losing things is just always in the background of your mind. And so, I was running a team and trying to be a top producer in my industry. And whenever somebody would make a mistake, it literally would have rattled me to my core because I was so afraid of everything falling apart on me, I would just lose my mind on people. And so, getting fired from my job was this huge, like, you know, mirror, right to, Hey, you can’t be a work terrorist. People have to like you, the more people that like you, the more people that do things for you, the harder they work for you, the less the stakes they make and my intentions were never poor, right? Like my intentions were always to do what was right by the client was right by the real estate agent, you know, but I was never good to my team. And so, it really just made me reevaluate the type of person I want to be, the type of leader I want to be. And then also, I just didn’t want to go down in history as that just pre-Madonna that couldn’t get her together. I got fired and then decided to just, you know, blame everyone else, but herself. And so, taking ownership was really humbling. And honestly, it’s like, I couldn’t be where I’m at today had did that not been such a huge event in my life.

Mike Ayala: Wow. I’m going to circle back on that because there’s probably a lot there that you could help us unpack. What is the piece of advice you find yourself sharing the most?

Lizy Irvine: You know, it’s learn how to live off of 70% of your income. That’s probably the thing I tell people. And then also you can’t make chicken salad out of chicken shit. Like you cannot have as anything either give it your all or don’t do it at all.

Mike Ayala: I love it. So, let’s dig in on the 70% and I promise, keep listening with us audience, because we’re going to get into some good stuff on the real estate, which I know is everybody’s question. I’m interested in the 70% of the income. What do we do with the other 30?

Lizy Irvine: Yeah. So, the reason 70% is because you need money to be able to do other things with like pay down your debt, to be able to invest, to save for a rainy day. And if you’re living on a 100% of your funds, you’ll never have the opportunity to capitalize on opportunities. And so that’s one of the reasons that both of my parents were poor. They never figured out how to live below their means. They were just always at their means. I never could figure out cash flowing investments or ways to bring in more money. And so for me, I know that if you can live off of 70% and you focus on increasing your cashflow through debt consolidation or from cashflow investments, you will always be fine in whatever economy, if there’s a furlough of pandemic, like people who learned to live off of 70% when they had to then go on unemployment, they weren’t as in big of a financial crisis, as people who’d just been spending on their credit cards every month. So, it’s just, there’s so many benefits to learning to live below your means. I can’t say enough about it.

Mike Ayala: I love it. And I remember having the conversation with you at the first mastermind that we were out with Chris, and you were talking about retirement planning and all that, and this is what really drew me to you because you’re not. And I don’t mean to, if you’re a mortgage broker out there or a real estate, I’m not trying to pick on anyone, but a lot of times they don’t speak at the caliber that you do. You’ve done a lot of work and you’re a very intelligent person. And for our audience, you actually invest as well. Correct?

Lizy Irvine: I do. I have invested a ton in real estate, you know, and I have different ideas about investing than other people do. You know, the one problem that I find with a lot of real estate agents and a lot of mortgage people is that they speak to whatever’s going on in the market and they never really understand the numbers. They’ll talk about super-low interest rates and they won’t do the math behind people’s break evens, or, you know, what it would cost them just to apply the additional principle. And I found that like, by really educating people on how to just be debt-free, I have more opportunities for myself, right. To help them with other investments, other purchases versus just doing their one home.

Mike Ayala: I love what you said there too. And this was one of the questions that, I was having a conversation the other day around Airbnb, and it seems to be like, you know, the new cool thing. And I realized that every, you know, with the shutdowns and people not traveling and no plane flights and all this stuff, the Airbnb might be doing very well right now. But the thing that I keep finding myself, telling people is, listen, if you’re going to buy an Airbnb, and I’m just going to keep this super simple, and I want your opinion on it. But if you’re going to buy an Airbnb or any property, you were talking about doing the breakeven, and I love what you just said there, because so many people are like, Oh man, I can rent this Airbnb for $500 or $600 or $700 a night. And my question is always, how many nights a month do you need to do that? Five and I can easily do that. And I’m like, okay, great, for how long? And until when, and when you say break even, I know this is going to sound crazy to you, but I remember in my first business when I didn’t understand what breakeven was. And so, as newbie real estate investors, which some of the listeners have not even invested yet, but they want to explain breakeven to us. Like, what’s your, because I love that wisdom.

Lizy Irvine: Totally. And I have a really good graph on my Instagram for how to calculate this, but essentially you need to understand the outgoing costs and expenses. For one acquiring the investment and the monthly expenses to maintain it and the monthly expenses to borrow for it. So, you have your mortgage, your maintenance, and then the closing costs. So, all of those things. I don’t typically include down payment when it comes to break even, because in a normal market, you would have that return to you if you sold the property. So, we’re just talking about costs and expenses. And then what you do is you figure out the return on investment, and then you divide that by the number of that it costs you. So like if you’re going to save $200 a month on your refinance and it costs you $3,000 to do that, you’re going to divide 200 into 3000 and then it’ll tell you the number of months until you break even on that cost. And so, on an Airbnb, like you can make a lot of money on an Airbnb, but you just want to remember that a lot of people buy them at high interest rates with the minimum downs. And during the very beginning of this pandemic, just remember when people were not able to travel and people weren’t paying their rents, people who did that on an Airbnb and couldn’t cash flow personally, couldn’t afford to pay those mortgage payments were asking for forbearances. You know, like an Airbnb is just as risky as any other kind of investment that you do if you’re not smart about it. And it sounds like the greatest thing since sliced bread, but like holding onto that investment for a long time, you really have to calculate all of the risks, how long you’re going to have it, what happens if all of a sudden people can travel again and nobody wants to go and stay at your house? You know, like there’s just a lot of things. I tend to be afraid of investments that everyone wants to do.  But that’s just me.

Mike Ayala: No, I agree. And even right now I’m super bullish on our space. And a lot of listeners know, I mean, Kara and I own single family and we own some small duplexes, triplexes. We have some commercial buildings which are doing fine because they’re in a gold mining market, which Gold’s as high as it’s ever been. But all that being said, like I’m super, you know, all asset classes when it comes to investment, I’m looking at everything through like, not my Rose-colored lens. And I want to share this with you really quick. When I joined a mastermind a few years ago, the real estate guys mastermind part of the application process, they said, what’s your greatest weakness? And I had to think about that. And I said, well, I think my greatest weakness, which also could be my greatest strength is I’m the eternal optimist. So, I used to see everything through these Rose-colored lenses. And I’ve learned as I’ve gotten a little older you know, we really have to, I feel like in some respects that I might be missing out on some opportunity, but at the same time, that missed opportunity is not outweighing the risk for me in certain areas. And so back to the manufactured housing space, we’re in the affordable housing space. And I think affordable housing is going to be a bigger and bigger problem long-term. And so, we’re optimistic about it.

Lizy Irvine: So, there is a curve of affordability when it comes to housing. And so essentially what the average person earns is somewhere between $56,000 and $62,000 in Arizona. We’ve already peaked at what the average consumer can afford in Phoenix for the average home price. So, like, it is now a problem now, is it a problem in the short run, which is what most mortgage lenders and real estate agents are going to be talking to? No, they’re going to talk to you about how aggressive the market is, how many homes are listed for sale. They’re going to talk to you about all of those metrics. But I mean, it isn’t a sustainable trajectory just based on affordability.

Mike Ayala: Well, and the challenge that, so even in our space, the manufactured housing space, we want to buy, I’m bullish on it long-Term. But I’m seeing mobile home parks traded at three caps, a four cap, like it’s insane. And what scares me. Well, I’m not even going to go into what scares me, because I want to hear your, I want to hear your take on this. So, let’s break this down into two parts. Because there’s the concept of having your personal residence. And I want to ask you, is it a good time to buy? And you can go wherever you want with that. And then there’s the concept of investing. So, we’ll break this into kind of two conversations, two chunks.

Lizy Irvine: So, I believe that any kind of real estate purchase is an investment. And how I look at that investment is your initial cash outlay. And what the return on that investment is. So, for most people, they will have more than a 100% return on their initial investment if they own a property for 10 years or more. So that means if you put $7,000 down on a property, which is like three and a half percent on a $200,000 house in 10 years, you will at least walk away with $14,000. Now that probably doesn’t sound like a lot, but I will tell you that it is rare for any kind of investment to have a 100% return. Like it is a great investment if you can get that. And in many cases, real estate will have a 3% to 5% increase on the total cost and value of the home per year. So, you’re earning way more than a hundred percent often, like many times. There’s sometimes where I’d had like a, I mean, like I put down on my first FHA home, I literally put down, I think it was $9,500. And I walked away with 80, like that’s nuts. That is nuts. So that’s what I, I think the power of real estate does for the average person. But it is a long-term investment. Like if I was to buy a property now, I don’t know what it will be worth in six months, a year or two years, primarily because I do think that we’re in a market that is shifting. Now, like just when I talk about a shift to, just because historical references are the easiest way to explain like future trends. But back in 2005, at the last quarter, that’s when we actually saw the shift in the market when there was the real estate crash the first time. That news didn’t make headlines until 2007, and it wasn’t even considered a crash until 2008. So, it takes a long time for the market to shift like this. But I know that it’s shifting because the average person in Phoenix can’t afford the average house. So, I know that that trajectory can’t sustain itself. So, you know, I think that in a year to two years, I think the market will be softer. Do I think there’s going to be a real estate crash? No. And the reason for that is one people have more than 50% equity in their properties. You don’t foreclose when you have equity. We have way more sustainable lending products nowadays, interest rates at 2%. I mean, it’s just not that kind of market, but I do think that it’ll be a lot more consumer friendly. So, if you’re somebody that’s getting bid out in this marketplace, don’t despair, there’ll be an opportunity for you and also for investors. But I do get asked this question a lot. Like, does it make sense to buy in such an aggressive market? And the thing that I tell people is that if your budget says it’s ready, you bought. Like, if your budget says that you can afford a payment. So, I tell people you live off of 70% of your net, take home income and of that budget 30% to 50% can go towards housing, depending on how much money you have. So, if your budget allows for it, I think you absolutely buy because you’re going to hold onto it for 10 years. So, I bought my first property in 2006, literally at the worst possible time. The market had shifted, prices were still going up. I bought. If I had that house today it would be almost half paid off and believe it or not, it would have almost, I think I would have a $100,000 in equity. So, like the thing is I ended up selling it a couple of years ago, but it was, it’s one of my biggest, most painful financial mistakes because it went against all of my principles. Sometimes we do things in marriage, you know, to please our spouses, but I did not agree, and we definitely lost. And so, but that’s like my big prime example, if I would have won, had I kept it. I lost because I sold too fast. So I just, I want you to know, like, if you are somebody that needs a place to live, you’re going to pay a mortgage, regardless of whether or not you choose to invest now, or later. It’s either you pay your own mortgage, or you pay your landlord’s mortgage. It’s just, you know, now for investors, what makes it really tough is I’m all about cash flow. So, I don’t invest on capital gains and there are people that completely disagree with that. You know, they like love capital gains. They love flipping properties, wholesaling, you name it. That’s not my game. So, I’m a strictly cashflow investor. And so, I don’t think that the cashflow is there right now for me. So, I am just waiting on the sidelines. Now it’s not to say that there aren’t opportunities, because there are people in financial distress that need a more flexible negotiation, you know, like somebody that’ll let them stay in their property for three months, rent free a year. And so, I have actually, I’ve pulled out a bunch of cash to be able to, you know, capitalize on those opportunities. So, I think those opportunities will be more prevalent this next year, but nothing on the open market is anything that I’m really considering.

Mike Ayala: Yeah. So how prevalent do you think, and I know again, nobody’s got the crystal ball, but do you think there’s going to be a lot of opportunity or is it going to be still more of an insider game?

Lizy Irvine: You know, it’s really hard to say because stimulus plays a big part in this, you know, the fact that they let everyone do, forbearances kind of kick the can down the road. I think that, you know, people are making more money on unemployment than they made at their jobs. So that’s also an interesting thing. So, I don’t know, honestly, I don’t know. I mean, I happen to have a leg up because I work with a ton of real estate agents and I have like helped hundreds of people with their home loans. And so, for me, like I probably will come across deals more than other people might. But I mean, I do, I think there’s like this second, I mean, coronavirus is a real thing. I mean, it’s going to be impacting businesses. It’s going to be impacting the holidays. It’s going to be impacting, you know, everybody. And I still, I think 2021 is definitely going to feel, you know, the penalties of that. So yeah, I mean, I pulled the cash out because I think I will be able to make some investments this year.

Mike Ayala: So, I’m going to add, I’m going to try to figure out how to condense this into an easy… No, no, this is actually really great. I love, when I said, I’m going to try to condense this. I have like five questions that I’m going to try to put into one. So, I have a lot of thoughts around just everything that’s going on. And I mean, interest rates are an all-time low, supplies low. We’ve got people moving to certain markets from other markets, which this is one of those. And so, I guess like, I mean, you’re in Phoenix, I’m in Phoenix and my listeners are everywhere, but I think what we’re going to talk about with Phoenix applies to a lot of markets. So, do you, I mean, I don’t see a day coming where the supply drastically catches up unless this is the curve ball. Is there still a ton of people in forbearance? And do you think that those people are going to end up losing their homes? And what number is that?

Lizy Irvine: I don’t think people in forbearance are just going to foreclose on their homes. I just don’t. But I do think that people in forbearance like need a place to go and because the rental market is so crazy right now too, giving them a solution that allows them to live rent free for a couple of months so that you can purchase something is a very creative way of doing it. And that’s something that I’m looking into. You know, there’s lots of people that own land that I’ve been talking to about buying manufactured homes and putting them on there. That’s a simple way. Truthfully, I just think that in Arizona, there needs to be another like metropolitan city that pops up. So, I think it is really going to make a play for this. And I think that’s going to help us with inventory. And then also I think that once this Coronavirus stuff settles, I think people want to live in cities. Truthfully. I just do. There is something that I was worried about a couple of years ago, and this is going to make me sound like such a creepy guy, but just know that I’m a numbers person. And so, I’m a five on the Enneagram, so I’m an investigator. So just, and I also have a six wing, which means I’m a worst-case scenario person. So now that this makes sense. But there is a very large number of homeowners that are baby boomers right now and late stage what was the other one? The group before that, right. But in the next 20 years, there’s going to be so much real estate inventory just because the fact is, we have not procreated to the rate to fill that real estate void. Like there’s places like sun city, that’ll be ghost towns. It’s called the silver tsunami. Look it up. I’m not the only one worried about it, but it was a huge fear of mine. Like literally a year ago I was like, oh my God, what happens? And then this happened and I’m like, well, couple of years from now, we will have so much inventory. What do you do?

Mike Ayala: Well, I have, I don’t remember what episode it was, but the audience can go back and listen to it. But I had Jean Greeno on probably first 10 episodes, and he’s been a mentor of mine and he does assisted living. He trains around assisted living. And he’s been talking about the silver tsunami for, you know, 7, 8, 10 years more from a standpoint of investing in homes to, you know, for affordable housing. But it was interesting when we had him on the podcast, it was early pandemic and, in his mind, had kind of shifted even further. Put my little tinfoil hat on here a little bit, but when we’ve got, so I don’t think what you’re wearing is a tinfoil hat when it comes to the silver tsunami and the amount of inventory we’re going to have, but what Jean was pointing out and it came to fruition. When you see what Corona, virus is doing. I mean, it’s accelerating. Is that what you’re saying?

Lizy Irvine: Yes. I’m saying that a hundred percent. I’m like, there’s places like Sun City, green Valley. They’re going to have to figure out what to do with those places. Like I think age restricted cities right now make no sense. And there’s a lot of them. And like, if you look at, so it’s funny. So, if you’re looking for inventory, there are still places there’s houses that are sitting on the market in those areas. That’s a really good indication. But when people are talking about like where this inventory is going to come from, that’s where it’s coming from.

Mike Ayala: Yeah. Interesting. So, I’m going to take you a little further off into the weird end of the spectrum.

Lizy Irvine: My husband thinks I’m such a cream for that. Oh my God. Don’t say that out loud.

Mike Ayala: I think it’s; you know what I think, you know, it’s kind of expect the best, but plan for the worst. I mean, if we have these conversations and people can go decide on their own, I don’t want to make you sound too crazy. But here’s a question. There’s been a lot of talk around like a great financial reset. You’ve been listening to this, like, do you think that we’re going to go into major loan forgiveness everywhere? Or do you think we’re going to like get our wheels underneath of us and people are going to come out of forbearance and we’re going to get jobs back and like, what’s kind of your, what’s your three-year outlook?

Lizy Irvine: You know, I don’t know. Because if you had told me that we were going to do loan forbearances and give all these people an employment, I would have said you’re crazy. But I don’t know. I mean, my personal opinion is that student loan debt is like the biggest rip off in America. And so, I think that people would have more money to invest in spend in the economy if we just forgave them for their Ponzi scheme investment. You know.

Mike Ayala: That’s an interesting take because I’ve always just been like, well, I won’t tell you what I think about like, but that, what you just said is very interesting because if you forgive them and then they’re spending that $500 a month or whatever, their loan payments are somewhere else like that just stimulates the economy and it’s going to happen anyway.

Lizy Irvine: The thing is that like most, what sucks about that is that most of our debts owned by the federal government. Do you know what I mean? But like you do not get any return really like, think about it. You pay hundreds of thousands of dollars to earn $60,000 a year. Like what a rip off. And the thing is the only way for them to even sustain their models is just to charge the new people more and more money. It’s kind of nuts. I mean, so like, I mean, I think that’s the, like, people paid more for their student nowadays than their mortgages. Like their biggest debt is actually their student loan payments. So, I mean, I don’t know. I mean, I think if they’re going to do anything, that to me makes the most sense.

Mike Ayala: It’s an interesting thought too, because, and I agree with you on the education piece and you know, COVID accelerated that too. I mean, the way we do education period is drastically changing. And it’s funny because most of us are fighting it, but at the same time, it’s what needs to happen. But here’s my question/thought on that. The reason why higher education is so expensive is because in my opinion, the universities can charge so much because it’s cheap, free money, right? And so if we forgive all this student debt and then people, if we wipe out trillions of dollars of student debt, I really doubt that banks or the government is going to line up to continue financing everybody’s education, which in my opinion is probably a good thing. But then the cost of education is going to come down to where it needs to be in my mind. And a lot of universities are going to go away. So, what’s your thoughts on that?

Lizy Irvine: I think that people don’t need education the way that we needed it before. You know, so every recession brings on new things. And so like, you know, this last recession brought on the entrepreneur. And unfortunately, I have thought in my mind for a long time that not everyone should be an entrepreneur. Like not everyone should be an independent contractor charging whatever they want. And so, like the cost of education to become your own boss is super prevalent because you needed to have that credibility. But then as the internet started, you know, becoming better and better and education became free online and people started learning in other ways like mastermind’s education was really kind of gone. Like, I mean, it’s just so, it’s just not that relevant anymore. Truthfully, like you don’t really learn the things that you’re supposed to learn. And what’s crazy is now trades, due to supply and demand have now become the high paying jobs. Like you can graduate law school and make $55,000 with a kazillion dollars in debt, but your electricians making $150,000.  Like, and so I think that there needs to be a return to trades. I think that there needs to be a return to corporate America. Truthfully, I know people are going to hate me for all this, but I just don’t think that everyone should be a business owner. And I think that this economic shift will teach people that.

Mike Ayala: I love how you just speak your truth. You’re like, everybody’s going to hate me. But I think my audience will actually resonate with a lot of what you’re saying. Did you know I was a plumber?

Lizy Irvine: I didn’t. But I love it.

Mike Ayala: Yeah, I was a plumber. I went to a four-year trade school and that was mine and Kara’s first business. I left after four or five years working in the field and started my own plumbing and HVAC company. And so, it’s near and dear to my heart.

Lizy Irvine: Well, see, I come from like a really like working-class family. So, like I totally get it. I think what’s weird about this economy is that so many people have gotten used to working for themselves and the thought of going to corporate America, which seems so evil right now is like, what makes that topic so controversial. But like, I mean, I swear to God, it felt like everyone I knew to got a PPP loan. Did it not feel like that to you? I didn’t even realize how many of my friends own businesses.

Mike Ayala: Yeah. It’s crazy. It’s interesting too, because even like my son, Dylan, I mean, he got, they said him like, you can get PPP and he’s, you know, he’s been in business for, I think it was less than a year. And I mean, they just given it to everybody that owned a business too. It was interesting. It’s crazy.

Lizy Irvine: Well, what’s so nuts about this stimulus is that it’s really hard to predict what will happen as an investment opportunity or in the economy or real estate, because all of those things are being, they’re manipulations to prevent a crash. And so like, we’re literally just kicking a can down the road, how big that can becomes, we have no idea.

Mike Ayala: So, I have a question. I’ve always said that a great beginner home slash investment would be a duplex or triplex or fourplex. I love the model I always have. And I’m interested in because you do, you can do multi-family financing up to a certain number of doors. And do they have to live in it?

Lizy Irvine: Yeah. You have to, so if you buy as an investment, no. But if you’re planning on taking advantage of minimum downs, you have to occupy one of the units.

Mike Ayala: I love that strategy. And like you’re saying, even in, it’s interesting because Kara and I built a house here in January. Well, we moved in January of 2018, but when we built it, when we decided to build it, it was eight months prior to that. And I told Kara, I said, listen, if we’re going to live there for 10 years, because I thought we were at the top of the market then. And, and this is that Rose colored lens. And this is why I love having people like you on, because in my mind, I’m looking at everything through my lens, as it’s really hard for me to find deals and cashflow. But that doesn’t necessarily equate to our personal residence. And I love your take on that. And it’s funny, because when you were talking about that, I remember having the conversation with Kara and I said, we’re at the top of the market. As long as we’re going to live there 10 years or longer, we’re always going to want a house in Arizona, no matter what, like let’s just do it. And I look now and my house like, I have like 50% equity in my home and Kara and I were talking like, we almost sold a few months ago because of the amount of equity. But then it’s like, well then what? Like you’re going to go rent. And I’m like, what are you going to do? So, I love that advice, but flipping it back to the duplex, threeplex do you think, could somebody find a deal here still that made sense for them, if they were going to live in it?

Lizy Irvine: Yeah. Especially now because every, so what’s awesome about FHA financing for multifamily homes is that you can get them with 3.5% downgrades or in the two’s, and you can essentially live for free. The other thing to think about is like, if you find a house, you can do the same exact thing. You live in the main house, it’s called house hacking. You can also rent out rooms in your house. There’s so many ways to accomplish a primary residence as an investment also. I love it. It’s actually how I started investing in real estate. So, when you’re talking about your roots, I’m like, these are my roots. So, I love it. I think it’s the best way to do it. And I’m also a house upgrader. So, like I live in a primary residence, you know, two to three years then move into my next residence and had that one as my rental. At one point in time, my husband and I owned like 12 rental properties that we were able to sell and buy our dream home. That we never could have afforded it let me tell you, have we not invested in real estate and use the capital gains to purchase. Like, so it’s super cool. And I think that like every primary residence is an investment like even so, because I did the same thing as you, I bought a home in 2018 again kind of capped the market, but we’re putting a large percentage down and we’re investing in and planning on living for 20 years. Now, fun fact, if you owned a home in 2000, your house doubled in price. 20 years, your house doubles, like that’s what’s so cool about real estate is that it doubles. But money in general doubles every 10 to 20 years.

Mike Ayala: That’s interesting.

Lizy Irvine: Only if you have invested, so not in your bank account. In your bank account, it loses money, but if you have it in the stock market or in real estate, you will double your money in 20 years.

Mike Ayala: I was listening to a guy that I’ve known for a while. His name’s Jason Hartman. And he’s got a podcast, one of the original podcasts, I think, around the real estate world. But he said something the other day that houses, the price of houses right now in terms of monthly payments are cheap.

Lizy Irvine: Less than they were in 2018.

Mike Ayala: And it’s so, I would love to get your, take a little bit further on this because again, like my brain goes to like real estate’s expensive, it’s hard to find cashflow, but he was talking, it blew my mind. Interest rates are at 2% or whatever you’re closing, I don’t know what your number is.

Lizy Irvine: No. I mean, they’re like mid twos to high twos. Not two.

Mike Ayala: Sorry, go call Lizy. She’s got 2% loans. No, I’m just kidding. So, he was talking about, you know, let’s call it 3% and inflation and you know, with all the money we’re printing and everything else, he’s like the interest rate that you’re paying…

Lizy Irvine: Is less than inflation.

Mike Ayala: And so actually.

Lizy Irvine: You have a negative loan. So I don’t talk a lot about this to my clients because this concept is so, it’s too much I think, but in a market, like the one that we’re in today, you want to borrow as much money as possible and you want to invest as much money as possible. And what’s crazy about it is like, it goes against my personal philosophies of cash flowing, you know, but essentially you could get a negative loan right now. Because your home stays constant wherever the time value of money is. So, wherever the value of the asset. But the loan is constantly worth less and less. It’s like the only type of investment to be able to do that on. And now is the prime time to borrow.

Mike Ayala: I agree with you a hundred percent. I said it like this a couple of months ago, borrow as much fake money as possible and invest it in as much cash flowing assets as possible. The challenge is, and this is why, you know, you’re probably not talking about it much is where do you put that money. And that, so, I mean, it’s great to a point on a, like a micro level, if you can put it into a home or something like that, but finding, finding real estate at scale is challenging.

Lizy Irvine: So, I think that commercial properties and multi-families on a big scale are that’s actually where I’ve been looking more in general. You know what I mean? So, I don’t think that small apartment complexes or like, you know, six to seven-unit multifamily homes, like they’re just not as easy to sell. So those are kind of what I’ve been looking for. You know, I also invest in the market, so I love dividend paying stocks. You know, so that’s something that I do. You know, I personally have been paying down my principal mortgage just because I had a challenge of figuring out like what to do with the money. It’s kind of a weird time, but I agree with you.

Mike Ayala: So you have as you guys can hear, just listening to, I mean, we could probably go on for days and months and years and I appreciate the conversation, but you have, you’re obviously very passionate about helping people around their financial knowledge mindset, but also the execution side of it. You’re in a position to help them finance and all that. You were mentioning, you have an app coming out and a program. Let’s talk about that a little bit.

Lizy Irvine: Oh, thank you very much. So, one of the biggest challenges that most consumers have when they come to meet with somebody like me is that they base their entire financial process on what I think they can qualify for. So very rarely. And I mean like maybe one out of every 20 people come in with a budget, like they just have no idea. They’re like, why pay this now? So, I could maybe pay $200 more, but they have like no real idea. And they have no roadmap for saving their down payment, closing costs, you know, what maintenance will cost, you know? And so that has been one of the things that has made me really different as a loan officer is really discussing those types of things with clients and then teaching them how to have wealth in the future. And so, I created this thing called smart steps, really just to give them a basic roadmap and acronym that they could remember. Cause it spells out smart. Just to analyze one, the pathway to wealth is one controlling your spending. Like that’s the number one easiest, fastest won’t cost you anything way to increase your cashflow is control your spending. Then it’s to look at all of the ways that you can earn money and not just through earned income through your personal job, but like ways that you can cashflow and ways that you can cashflow for free, like selling junk, you know bartering trading, you know, selling services, you know, starting a YouTube channel. Right. So, figuring out ways to cashflow then concentrating on reducing debt. So, I always tell people 20% of the net take home income should go towards paying down the debt you owe, right? Again, another easy way to increase your cashflow. And then 10% should go into savings. Once you have 6 to 12 months of savings in the bank and you don’t have any debt and 30% of your money should be going towards cash flowing investments like real estate investments, stocks, you know, dividends, royalties. I mean, anything that you can think of that’ll bring in cashflow. So that’s my personal plan is what I teach people. I also show them how to pay off their houses. Right. Cause that is something that I find that most people don’t know how to do. Like most people don’t know if you make one extra payment on the very first payment that you make, you essential can knock up to seven years of your mortgage.

Mike Ayala: Really?

Lizy Irvine: Yeah, it’s insane. Like what you can do with your equity, if you’re smart about borrowing and paying, you know, so that’s what it is. So, the ad basically just walks people through finances, tells them, you know, how much money they’re over under, you know, what they can be doing. And you know, as we keep improving it, it’ll do lots of cooler things in the future. But essentially that’s what it is right now.

Mike Ayala: That’s cool. And you were saying it’s in beta right now, but they can get on a list in order to get it when it’s launched.

Lizy Irvine: Yep. So, there’s a landing page on my website. My name is Lizy Hofer for business. So, it’s and you’ll see the smart steps website. You can just put your email in and then as soon as it launches, you can download it for free.

Mike Ayala: Cool. And we’ll put the link in the show notes and everything, but spell your last name, Hofer.

Lizy Irvine: I know. So, it’s Lizy with one Z too. So, L-I-Z Y H-O-E double F as in Frank,

Mike Ayala: And your Instagram page is pretty cool. So, tell us that.

Lizy Irvine: Yep. I Just do lots of quick money tips, lots of mortgage tips. I give lots of market updates on things that are happening with wrench trades or the market in general. You know, I try to break down and the economy and like really easy to digest information. So, and that’s Lizy Irvine. I just like to make it really hard to find me.

Mike Ayala: I love it. We’ll put all that in the show notes and obviously we’re going to promote it on our Instagram and everything else. So, a lot of stuff going on, but it sounds like generally speaking, if we’re smart with our money and we pay attention, we’re not running off a cliff?

Lizy Irvine: No, look there are going to be some people that lose just is what it is. There’s some people who haven’t managed that this was like the straw that broke the camel’s back. And I feel for them, they’ll learn so much from this economy. But no, I don’t, I think that there are certain industries that are really thriving right now. And unfortunately, if you’re in the service industry, like you’re getting beat up left and right. But I think the economy is strong overall and we’ve seen that with the reduction of forbearances. I mean, those numbers are going down and down. People are starting to pay their mortgages again, you know, the number of people like not paying the rent is going down. I mean, we’re seeing lots of positive signs. Unemployment is going down. I mean, we’re seeing lots of positive trends that the economy isn’t as you know, shaky. But I think that it’s kind of, it could go either way for the next like couple of years, like they’re planning on stimulus until 2023. So, I mean, it’s anyone’s game right now, but no, this moment in time, I don’t think we’re headed for catastrophe, but I mean, that’s like, literally it’s December 10th, 2020. Something happens tomorrow, I said this before then.

Mike Ayala: Right, right. You had said something earlier about the signs were happening in 2005 and nobody was talking about it until 2007, 2008. Were you saying that because you think that, I mean, the signs aren’t really there yet, and even when the signs are there, it’s going to take a few more years for that to roll out. Is that kind of…

Lizy Irvine: Oh, a hundred percent, because people talk about what’s happening right now. So, the fact that the average homeowner cannot afford or is barely affording the average home price, like that’s where we’re at. So, the average person can still afford a home here. So, what happens when that happens is as there’s less inventory in that price goes up and up and up, you have fewer buyers. Fewer buyers means that more homes will sit on the market longer, but unfortunately, it’s a lagging indicator, which means that home values are still going to go up. It’s still going to be a competitive market. It’s still going to be crazy for people trying to buy. And that’s what people will be talking about. And then when it has already shifted, then people start talking about it. But what’s crazy about it is like people started talking about it in 2007, the actual like literal bottom of the market was 2011. You can’t even predict that, you know, you have no idea how long it is. And so, where are you going to wait, you know, four years. And then even then would you have timed it correctly? Like, you know, it’s just, so I think the signs are already here. No one will talk about it because it’s just not what people are going through right now.

Mike Ayala: Well, and that’s why I think it’s so important to stay plugged in with people like you too, because we don’t want to sit on the sidelines and miss out on five or six or seven years of opportunity, but we also need to make sure that we’re being guided by wisdom along the way and not getting, you know, over our skis. The saying says that’s what I love about the 70% of income. It’s such an interesting conversation. So, one last question, and then I’ll let you go. What do you think about interest rates? I mean, they can’t skyrocket anytime soon, can they?

Lizy Irvine: No, they’ve already promised to keep them down until 2023. Like, no, they’re the one thing that’s keeping everything going. They’re not going to mess with real estate. So, I think that for the foreseeable future, they’ll be low. The last time they did it, they kept it low for six years. I mean, interest rates are fine, guys. I mean, they were still low, even in 2018, when we’re talking about, you know, 4.875, that’s still a fricking low interest rate. When I got into mortgages, they were like coming down from 9% was like, you know, the average rate. And then it was like 7% and 8%. And everyone’s like, we’ve never seen this before. And then six and a quarter was the rate to have. And I remember when it hit five and a quarter, people were like, Holy cow, this is never going to happen again. You know and I saw rates literally at 1.99 this year. I mean like, you know, I just, rates are going to have to stay low. I think if they go up, I think people, more people will be motivated to buy. I just, my one thing that I will say, and you didn’t ask me this, but I just really feel passionate about saying it is that you have to have a strategy for your money and stay consistent with it. If you’re the kind of person that chases squirrels you will lose. One of the best things about you, Mike, is that you have a strategy and are super consistent and you stay in your lane. You’re not trying to do all sorts of different things. You just consistently invest in the same thing with me. Like I, like, I know that it makes sense to borrow. The reason I want is because I don’t believe in leveraging myself, I believe in having cash. And I know that no matter what happens, if I own an asset cash, it’ll cash flow in any economy.

Mike Ayala: That’s great.

Lizy Irvine: You know and so you just have to have a plan and be consistent and stick with it for the long-term.

Mike Ayala: Yeah. Well, and that’s really why I appreciate you coming on and why I really wanted to have you here because you know, a lot of us real estate investors, we’re a lot more I guess, risky and having somebody that is a voice of reason, I think is, and you’re a real estate investor, so I’m not saying, but a lot of times real estate investors, Oh, you know, a hundred percent, there’s literally a guy right now that I know that’s trying to get a $2 million commercial building. He’s trying to borrow the money for the down payment. He’s trying to, you know, go in 80, and by the way, I’ve done all of that. I did that early in my career and I still think you could do some of that if you get the deal right. But when the real estate is as high as it’s going to get or close to and you go in a hundred percent leverage, that’s a problem. And so just, you know what you’re talking about, it brings a different viewpoint that is a voice of reason and sanity. If you’re going to get into real estate investing, I would lean toward Lizy’s world more right now. Because none of us know what’s going to happen. And when you said owning a cash-flowing asset that you have debt on, that’s the safest place to be.

Lizy Irvine: It totally is.

Mike Ayala: Well, anything else that I didn’t ask you that you feel really strong about?

Lizy Irvine: I didn’t but this was so fun and I’m so glad that we had this chat and I hope I brought value to your listeners. And it’s just so awesome to talk to you.

Mike Ayala: It is huge value. And I love your perspective and I’m actually pretty energized about the real estate market after this conversation. I’m like, yes.

Lizy Irvine: Good. Yeah, me too. I can’t wait. Someone’s going to bring me a deal here soon.

Mike Ayala: Well go check out Lizy on Instagram at Lizy Irvine and go check out Lizy at her webpage at I love it. I’m looking forward to your app and I appreciate your time.

Lizy Irvine: Oh my God. You’re so awesome. I hope this is good.

Mike Ayala: It was great. It’s fabulous.

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Episode 89