Hi guys! I would like to introduce you all to my God-sister, Sherell Jefferson! I’m so happy to have her as a guest on the Joie Journey Blog to co-write this post. She will be spearheading a blog called “Wealth Talk with Sherell” in the near future. Stay tuned!
Note:
Sherell is a Vice President at a Regional Bank. She was raised in Lousiana and graduated from Louisiana Tech with a B.S. in Finance. At the age of 24, she was a single mom of a six-year-old and fairly new professional in the banking industry. She’d just started her new role as a branch manager and recently relocated to Shreveport, LA.
LaJoia is a Reliability Engineering Consultant at one of the largest, global Chemical Companies. She was born in Louisiana, raised in Texas, and graduated from Lamar University with a B.S. in Mechanical Engineering . At the age of 24, she was a recent college grad, vocalist, and had recently relocated to Houston, TX.
We may have different backgrounds and realities, but we share a unique accomplishment of becoming homeowners before the age of 25. We’re both passionate about empowerment, education, and inspiring others.
Now that you know a little bit about us, let’s start with the statistics. #CauseNumbersDontLie.
Millennials are 9% behind prior generations in home-ownership.
So, what are the myths about home-ownership that are deterring us from purchasing one of the largest assets within our portfolio?
Myth #1: “I don’t have enough money.”
Myth #2: “It’s too expensive (i.e. maintenance, taxes, upkeep.)”
Myth #3: “It’s cheaper to rent.”
Myth #4: “I want to wait until I get married.”
Myth #5 “I’m stuck to that location.”
Myth #6 “I don’t know where to start.”
NOTE: We will be addressing these myths throughout this post.
Don’t believe the hype (the myths.) Buying a home is a valuable transaction of adding an asset to your portfolio that could still be liquidated - if needed. Both of us decided that if we were to ever move, we would lease our property to progress in building equity. The other option was to sell. (Myth #5)
Our goal in becoming homeowners was to build equity and own a piece of the Earth. After calculating the cost of renting versus buying, it was a no-brainer! We would be accumulating wealth through purchasing instead of spending money that we would never get back, if we continued to rent. (Myths #2 & #3)
“It’s not about how much money you make; it’s what you do with it.” (Myth #1)
Preparation
Once we realized home-ownership was our best option, we started preparing immediately.
We assessed where we stood financially: income, debt, cash reserves, etc.
We leveraged experts such as realtors, mortgage offices, financial advisers and additional experts in the industry. (In addition, LaJoia’s father was a Real Estate Investor.) This gave us an idea of what we needed to save for a down-payment, emergency savings account, funds for closing costs, homeowners insurance, and taxes.
We never cut God short in our giving.
We developed and implemented a weekly/monthly budget. WE SACRIFICED. No, it wasn’t fun or cool. However, we could accept the idea of temporary sacrifice for long term rewards. (Myth #1) Here are some ideas/examples:
a. Get a roommate or two!
b. Minimize those Starbucks visits!
c. Use the seven-day wait rule to make major purchases. Is it a necessity or want?
We were intentional and disciplined. We spent less money on depreciating commodities (i.e. clothing, entertainment, excessive travel, eating out, etc.)
We used best practices to build our credit (i.e. diverse trade-lines: loans, lines of credit, and institutions.) It is recommended to work with a banker to establish credit.
We managed debt to limit ratios .The rule of thumb is to be less than 30%. (If your credit card limit is $1,000, keep your balance less than $300.)
We kept our vision in front of us to ensure success.
Myth #6 officially Canceled!
Execution
Obtain a Loan Pre-Approval. It is vital to begin working with a Mortgage Officer prior to the process. We would hate for you to be looking for a home that costs $300k when you qualify for $200k #heartbreak #KnowWhereYouStand
Sherell’s experience - Factoring the previously mentioned steps, she identified what she wanted to pay each month versus the bank telling her what she was approved for. This was important for her to be comfortable in her cashflow while still being able to save while being a homeowner.
Hire a Realtor. It is normal to interview several realtors to ensure they are the right fit for you. They should be an expert: not only in showing homes, but knowledgeable of the area and community. Be honest with your realtor. Remember, it’s all about location. Note to self: They should be willing to coach you throughout the contract process and great in negotiation.
Manage your expectations. The home that you buy doesn’t have to be your dream home. However, you should be in a place where you are happy to pay on a mortgage each month.
LaJoia’s experience - There was a particular location that she wanted to be in. For a while, no opportunities in that specific area were available. She wouldn’t accept anything less than what she wanted. Through patience and unwavering commitment, she was able to get exactly what she wanted - including negotiation of the final offer versus the asking price.
We know that this is a ton of information, but we wanted to share what worked for us! (Myth #4) We hope it helps you.
Trust God, do the work, and deliver on the commitment to YOURSELF.
'Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things.” - Matthew 25:23
Much Love,
LaJoia & Sherell