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PLP-067 Admitting My Mistakes And Thoughts On The Current Real Estate Market

PLP 67 | Financial Instability

PLP 67 | Financial Instability


When you are in the spirit of full disclosure, you release everything without any limits or boundaries. Today, I am in the perfect shape to let everything out in the open, and a lot will relate to the topic of financial instability. As I own up and admit that I’ve gotten myself a little behind the eight ball, financially speaking, we will dive into the flipside of credit and why you don’t need to put yourself in that constant worry. On the other side, we review the current real estate market and another podcast you need to check out ASAP.

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Admitting My Mistakes And Thoughts On The Current Real Estate Market

How I Became Complacent With Personal Finances Again

I’ve got to own up and admit that I’ve gotten myself a little behind the eight-ball, financially speaking. I tend to do this every few years. Now, I have to go into defense mode and clean things up and get back right again. I’m trying to prevent this from happening again, but I decided to bring it up to share it with you. It’s a little bit of free therapy for me to work through it, but also to put it out there and see if you are guilty of the same thing. Write to me and let me know how you deal with it and what you did to try to prevent these things. The other thing I would like to talk about is because of my situation, I attended a relatively inexpensive marketing seminar in Dallas, which helped turn a switch in my head. It was very transformational in terms of thinking about how marketing and business and etc. It’s very worthwhile. What’s even made it cool was during one of the breaks, there was this real high-end estate agent, you can tell the high-end realtors.

How I Got Myself In A Bad Pickle

Sure enough, that was her niche, it was high-end in Houston, which is like a bungalow in California, price-wise. She and I had a good conversation where we give our opinions on where we thought the market was from a retail side and an investment side. It looks like we might have the April showers, it may bring some glorious May flowers. We’ll see if this market is back on the mend and in bull territory. Before I get on my soapbox and talk about my lack of financial stability. I’m grateful that you’re reading this blog. I do appreciate it. I need to get into the heart of the matter. I’m going to start off by, “What happened? How did I get myself in this pickle, to where I had to go into one of the contingency accounts?” I will answer that quite simply. I committed some very old and rookie mistakes, cardinal sins that I knew better, but these things happen. I counted my chickens before they hatched. I had a few pretty sizable deals that I was trying to put together, some real estate deals and two of them fell apart. It didn’t happen.

That’s part of the game. That occurs, but I thought I could rebound a little bit quicker. I counted on the money I didn’t have in that case. I did it again where I have negotiated some changes in my employment and income. Those plans have had to go on hold for a little while. While I thought January would be a much greener month financially, some of those things have gone on hold and it’s going to be a few more months. I can’t talk too much more about that, other than I made the mistake of counting some chickens before those eggs hatched. Here’s the one that I loved the most. I had done my planning assuming positive cashflow and profitability. Not so much profitability, but near profitability for the podcast. I’m not quite there yet, but I added some more expenses so I could buy some time.

I could get some time back for the kids and whatnot. Let’s say that what started as perseverance became stubbornness. I ended up sticking my head in the sand. I didn’t want to admit that I was wrong. I could do it to myself, but I didn’t want to the wife or anybody else. I figured, “Let’s start by admitting it to the three people who are tuned in. Anyway, that’s why I’m recording and releasing this episode to get it out as fast as I can because of the thing I need to do is to stop. I need to turn and look that fear in the eye and then run straight towards it and admit it to you guys. I’ve realized that with the self-awareness I have, I’ve done a pretty good job of playing offense. I pretty much remove myself from the game of defense for about a year. That will never get the job done. You’ll never get anything accomplished if you do that in the long run.

If you can't afford something now, you can always make payments.
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Why You Don’t Need Credit Cards

It’s a good point for me to say, “Let’s pump the brakes.” I’m not going to lose the house, but I see a trend that I want to reverse. What do I do? The trend is more money is going out than coming in. That’s a pretty quick fix. I go full Dave Ramsey and do the baby steps and start it over again. I’ve done this before. Before I got introduced to Dave Ramsey, I got into a bad pickle where I didn’t have any contingency plans, contingency accounts, any way to absorb things, any insurance policies or anything in place. I had no stable floor back then. That is a big difference now. I took the cheapest debt that I had. It was all credit card debt back then and I started paying it off. I got sued by Chase. My truck was repossessed when my wife was pregnant with our first kid. I can’t recommend that experience and that feeling enough to anyone who thinks that they get their financial crap together so to speak. I worked it.

I started with the smallest debt and paid it off and then took that money. I did the snowball on the compounding effect that Dave talks about and does so well. The sooner I do this, the sooner we’re back on track and the sooner I feel a lot more comfortable about things, particularly the future and the costs that are coming up ahead. I have kids driving in college. As I said, 99 first world problems and I’m grateful for everyone, but this is where my mindset is at. I’m cutting back and I’m not going to any more seminars, big expos or on anything like I did last 2018. I won’t be going to Podcast Movement. I might do a few things digitally for a few hundred bucks, but I’m cutting way back on that stuff for now. I’m still going to spend money, but I want it directed elsewhere. I won’t be sponsoring some of the things that I normally do. I’ll still be sponsoring 713 REIA. I won’t have a booth at the Quest IRA Expo, unfortunately. I intend to sponsor in some form, shape or somehow someway.

I’ve got to chat with them a little bit, but I certainly will be there all three days, so please come on out. That’s going late August, around the 25th. I do the Dave Ramsey thing. I’m currently reviewing the situation. I want to put myself and the family in a better position before the next downturn because I’m not so sure when it’s going to be, when the real good buying opportunities are going to be. What that does mean is I want to put myself into a place where I don’t need credit. I get the mortgage paid off. All the credit cards down, which most of them are just one. I do have one I admit that has a rather high utilization, but the rest of them are there for emergencies. I try to pay the big one off as much as I can and keep a small balance. I’m an American. I was raised by people who said that patience is a virtue, but if you can’t afford it you can always make payments. I don’t want to need credit because that’s when you can get as much credit as you want when you don’t need it. It doesn’t make sense but it’s true. When you need credit, nobody’s going to give you. If you need money on a house and I smell that desperation, I’m not going to loan to you. I want to put myself and my family in a position where we don’t need credit.

That’s a personal goal, which doesn’t have much to do with private lending. I’m putting myself out there so I might as well admit and put the words out there as well from time to time. I don’t know if it’s a challenge or something. It’s pretty idiotic but I got to do what I got to do and get to a position where I don’t need credit. I have such a low personal and business credit utilization score that the bank’s throw themselves at me like gold diggers at a funeral or Homer Simpson man-child when he gets around an attractive lady. The takeaway from this, the number one point ladies and gentlemen is as Keith Baker says, “Do not follow my path to extinction.” For you fans of the B generation, you’re screaming that I stole that from Allen Ginsberg and you are correct.

PLP 67 | Financial Instability


Where The Real Estate Market Is Nowadays

Let’s get on to point number two. A little marketing seminar I went up to Dallas. It was a great conference by the way. You’ll hear all about it. It was some marketing seminar. It was real how-to hands on. Not like, “Just build your list and then you can solve things.” It was more about building brand, transparency, where social media is going and advertising and whatnot. The realtor I spoke with during break, we found out we were both from Houston and she does the higher-end stuff. I asked her, “What’s her opinion.” I told her what I think about where the market is. I say on the retail side in my neighborhood, I see the days on the market go up. My house is over the median home price for the greater Houston area. It’s not like I’m in an exclusive neighborhood by any means. I’m certainly not in a war zone though, there’s your spectrum. You figured out where I lived there.

I said that’s what I see in my neighborhood. As far as from a retail perspective, I see days on market increase in my neighborhood, which is not gated. It is a masterplan. Before you sneeze and wipe your nose, you’ve got to ask the homeowners association’s permission. They do try to keep the values up, etc. It’s suburban, Westside, exclusive. That’s what I’ve seen from retail and then the houses by my office are older. They’re getting torn down. I got decent size lots that are getting torn down and then mansions are going up. These houses are selling $400,000, as the old ones are selling for $400,000 and they tear them down and build new mansions. They’re on the market for $1.2 million to $1.3 million.

I see a lot of days on the market on that end as well. From the middle to the upper Houston area, I’m not talking River Oaks, Medical Center Museum District or anything like that, but that’s what I see from retail. I see fewer and fewer wholesale leads coming through the mailbox. In full defense, that could be spam filters as well. I have a special account that I use for keeping the emails from wholesalers and whatnot. The deals and margins are getting thinner. At least that’s what I’m seeing. I do not see a whole lot. I’m not that active as I have been in the past from an investing side, more obviously lending and podcasting. That’s what I’ve seen. I felt that Wall Street had that little 10% correction a while back. I felt like I wasn’t so gloomy and doomy anymore thinking that if we are in a correction, I figured it would be a little worse and a little direr, especially as prices are dropping down.

She concurred that at one point, they had bidding wars on every house and that dried up. She says, “Now there are few things that we have seen the correction in Houston real estate market, especially in the higher end.” It’s going to be some sunny skies ahead for a little while, which could be good news for a lot of people, especially if you’re in it for the long haul on the equity side of things. As someone who lends against values of property, I’m all in favor of that. As someone who invests, I do want the occasional correction. I know that seems vicious, but to me, this is all part of the system. It’s a natural cleansing. That’s where the money’s made. I found it very interesting that this lady from an investor, I look at tons of zip codes and this lady works with a handful in the good spots of Houston. She said that her last three listings that closed, that they had bidding wars push the sales price above the asking price. I said if the high end is doing that, maybe that’s a sign of things turning around here in Houston.


Old habits die hard, especially when you get a little bit ahead.
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I don’t call the shots. Unfortunately, I can’t look forward and my crystal ball cracked. There was an article from the Houston Chronicle that came out in January of 2019 talking about how 2018 was a banner year in the Houston area as far as sales. It looks like there’s a stall on with 2019, but hopefully, as the typical regular press is, they are a little bit behind on this. By maybe August we’ll say, “It’s doing pretty good.” We’ll see what the summer sale season and everyone moving for schools and all that. We’ll see what happens. A quick recap. Number one, I got myself in a bit of a pickle and I’m mad at myself because I don’t have more money to loan. In addition to not handling money correctly and thinking, “I can get away with it.”

The problem is and I know my audience know this. I’m not talking to any Millennials, but when I turned sixteen, I grew up. I learned how to float a check until payday. You’re old enough that you learn how to float a check. I’m talking like as soon as I got a job at the movie theater and I got a weekly or biweekly paycheck, I go to the bank and cash it. I pluck all the money out that I could. I go buy things that I needed like, cigarettes, music, drum heads and important things. I got paid every Friday, but I knew I could write a check as late as Tuesday night. I can write that check and my paycheck would be in the account before my check went to the convenience store, to their bank, to my bank, to my account. Unfortunately, old habits die hard, especially when you get a little bit ahead. I’m so bad, I get a little bit ahead and then I party a little too hard. It’s like if you win district, you don’t act like you just won the Super Bowl.

The Monday Morning Podcast

Complacency is something I fought and saw a lot in the oil field. It’s just part of being human, but there are no excuses. I’ve taken it upon myself. Thank you for being here because it’s going to help me in the end with who and what I want to be. The other thing, let’s look at this market. I remember flying back from Philadelphia after Podcast Movement 2018. The guy’s talking about, “We’re going to do just like what this guy did in Philly.” I was like, “I wonder if it’s time,” but we’re in interesting times. It’s another way of saying, “There’s another sign. Maybe it means something, maybe it doesn’t.” I don’t know, but I figured I’d share it with you, especially if you invest, loan or lend in the greater Houston area. A couple of episodes ago, I introduce you to Andy Frisella and the MFCEO Project.

I’ve got another cursing freak for you. It’s a guy who, I don’t know when I got turned on to his work or found out about him. He was always there and to me, he’s earned a spot on the Mount Rushmore of comedy. He’s got a spot firmly not only in my heart but my wife’s as well. It makes it a little more special. It’s something we share together. I love this guy. It’s rare that my wife and I find something because I want to watch Shark Tank and she wants to watch Real Housewives or something. I want to get straight to the hate and there were plenty of reasons for me to have an extraordinary amount of first world white on white hate between this comedian and me.

PLP 67 | Financial Instability


He’s got a similar heritage to me. He’s a fellow drummer. He was completely miserable and had a temper like me. His wife is not white. I’m not going to say who she is, but it doesn’t matter. It’s just not one of our own, like myself. He didn’t marry a white woman. It’s a little interesting fact. He’s like me, he admits he’s a fan of the bottle, but unlike me, he’s doing the right thing. He’s taking a break and God bless him and more power to him. This is where it gets a little difficult for me. This is where it touches home. Unlike me, this gentleman is not a fan of the Dallas Cowboys, which is America’s team. This gentleman who has a podcast and I’m going to recommend you listen to and I suggest that you listen to him. He’s a Patriots fan. He’s a blankety-blank Boston fan and I still love this guy.

Why? Because on the surface and on paper you have to be logical about this kind of thing. That’s his hometown team. He comes by it honestly. I’m the world’s biggest Cowboys fan, but I was born and raised in Houston. That means I wrote for the Houston team, except when they play the Cowboys. I support them. I don’t dog them. I support the hometown team even though my grandmother who lived north of Dallas in Southern Oklahoma, on the other side of the Red River made damn good and sure that I was a Cowboys fan. The fact that this guy is a Patriots fan, you have to give him that because he’s from there. It’s not like he grew up in LA and he’s like, “I’m going to want to wear Gronkowski’s jersey because I want to look cool,” or something like that. I know for a fact, this guy remembers Raymond Berry’s second season as head coach of the New England Patriots.

He probably remembered Raymond Berry’s third-time arrest in 1990. Maybe he doesn’t, but at least I think I know for a fact that this gentleman whose podcast I’m speaking of, this comedian has the wounds from the 1985 season that ended with losing to the Bears in Super Bowl 20. That was in January of 1986 and yes, this is going to be probably my best and most well-researched show. It was in January of ‘86 and that’s the last time I ever felt bad for the Patriots or a Boston fan. Let me explain why because I know you’re asking, “Why Keith? You don’t have any empathy for them” I’m stealing this guy’s bit completely, but here we go.

In the early ‘80s, Houston Rockets lost against the Celtics. I think it’s ‘81. Then in 1986, I watched the Celtics won yet another NBA finals against the hometown Rockets. They swept the Rockets in four games on national TV. I was twelve years old and I felt so bad for those Rockets. I hated those players for the Celtics, Bird, Parish, and McHale. If you’re going to get swept, these are some good names to be swept by. I was devastated. Then a few months later, it was a very good year for me. It was the year I got my first drum set, but I had to go through this other stuff first. Rockets get swept by the Celtics in four games and then the Astros start making a little wave. They are making a little run for it after the all-star break. They are putting together the wins. They are playing like a team, all that kind of cliché stuff. They make it all the way to the NLCS that year. These are the Astrodome Astros and Nolan Ryan was on them. I saw Nolan Ryan go eight in a third of a no-hitter on a Tuesday night against the Phillies. Then Mike Schmidt gets up and he hits this decent shot. It wasn’t arth-shattering. In my head, it was this blooper bleeder BS of a hit.

He hit it over Bill Doran’s head, broke up the no-hitter. I’m twelve years old. If I have no emotional regulation, imagine what I was when I was twelve. I’m sitting with my dad. We’ve got the free tickets because my mom worked for the school district. One of those typical Americana nights. Nolan goes eight in a third of a no-no, but one out in the top of the ninth. I curse Bill Doran. I cursed his name. My dad drives me to New Orleans, go to the house of voodoo at twelve. It was one of those great moments, but I always held something in my heart against Bill Doran, until not too long ago I saw a replay of that very game and they showed Bill Doran on that play. I don’t think there’s a human being that’s ever tried to stretch his body as much as Bill Doran did that night. Bill knew what was at stake.

You can see it on his face. You see the angst and the desperation. Let it hit his glove, let it be an error, don’t let it be a legitimate hit. To you, Bill Doran, I owe you an apology. I’m sorry about that. Nonetheless, that was this year. It’s going on the Astros and make it to the NLCS. Then they get beaten six games by the New York Mets who go on to play the Boston Red Sox in the World Series who had not won a world series in 68 years and I could care less. That was my thinking. Your Celtics had beaten my Rockets. You traded the great Bambino to the Yankees, deal with it. Throw salt over your shoulder or whatever you got to do. This is where I’m coming from. Then I watched that little grounder, Buckner.

These people lost the Super Bowl. They won the NBA finals and after 68 years, they got a chance to reverse the curse. They watched it dribble between Buckner’s legs. I feel so bad for Buckner. The man I’m referencing in this podcast is a Boston fan. I’m the one who needs to man up and accept him. I need to steal his bit a little more. I need to accept him. I need to look him in his crowd mic eyes and shake his little ginger hand while he’s wearing a Tom Brady or a Celtics uniform with a smile on his face. I have to do this because it’s the right thing to do and that’s how my parents raised me. Ladies and gentlemen, I’m talking about a native of the Boston area. I’m talking about an underrated writer and performer, a genuine comic genius.

I’m talking about Bill Burr and his Monday Morning Podcast. In my recent trip to Dallas, I had been in a few episodes of Bill’s podcast and on the way up that early morning, I got a real treat when I heard Bill introduced Les Claypool, who’s a bass player and a singer. He’s a founding member of the band, Primus. He’s one incredibly badass bass player. Geddy Lee is one of his idols, so Les is in my book and in my heart. He and Bill took an hour out of my mind-numbing interstate drive and it made it fly before dawn, which was great. I thought that was so amazing. Bill had the drum thing, but this was really a treat for me driving up. I remember seeing Primus back in 1991 right after Seas of Cheese came out.

On my way home, the following afternoon, I catch a new episode at the time. Bill introduced his guest, Stephen Perkins, the drummer for Jane’s Addiction, Porno for Pyros. The guy who wrote the drum part for three days, Been Caught Stealing and the Mountain Song. I’ve seen Jane’s once and unfortunately, that was after Eric A left. I never saw the original lineup, but the bass player they had filled in Navarro was freakishly good looking. I think he might be the 28th gender. There’s something about him. I don’t know. He whaled on it. It’s amazing. Perry was Perry. The point is it’s funny. You got to listen to it, go give him a listen. That’s all there is to it. I think you’ll laugh. You’ll find some things that he’s very honest.

He’s genuine. He admits he’s got problems. That’s why I came out on this one. I was like, “I put myself in a bind. I got to take my lunch to work for a few days.” Get out of it. Go check out Bill Burr. You can go to You’ll have the links and everything to his podcast and his website. For some reason, people write in and ask him for relationship advice. I don’t know when it became Dr. Drew, but it’s actually pretty funny. His ads are the best because he only accepts ads from people who let him talk smack about their coffee and make fun of them. You obviously don’t listen to it in lieu of my show, but I think you’ll get a kick out of it. The price I asked for reading the blog is that if you find any value in an episode or in any episode is to please tell someone different who don’t know about the show.

Introduce them to the Private Lender Podcast. I know it’s hard to do, but you can do it by leaving a rating on iTunes because iTunes is set up to where they don’t want people to leave ratings. Scroll down at the bottom of the phone, you can leave five stars. You’ll see the little five stars that are empty and you can do a review there. You can get us on Google Podcast, Stitcher and SoundCloud. Please help spread the word. Connect with me on social media channels at Facebook, Instagram, Twitter, LinkedIn, BiggerPockets and those ones. That’s what I’m on. All those links can be found at the While I’ve got my hand out, I wonder if you could loan me a couple of bucks because I have a feeling that, Bill Burr’s attorneys are going to call me with at least get a cease and desist letter email for using his bits. I’m not making any money off of it.

I honestly want to put it out there. I love him and my wife loves him. He seems like the guy, if you’re going to go into battle or you’re going to go into an Irish bar, it’s good to have someone like Bill Burr on your side. Start saving your money because I’m going to need bail money or lawyer money or something. You can go see Bill in concert and we taped a special, but go see him live. I want to ask you one more thing. Please keep reaching out to me. I do appreciate it and I’ll keep recording episodes and I want to wish everyone, happy and prosperous investing. We’ll catch you in the next episode.

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About the author, Keith Baker

My ultimate goal is to create an economy for Real Estate (and other) Investors where banks are no longer needed. An economy where every day people look to each other for leverage and support. During the day I am an insurance adjuster for the oil field, where I handle millions of dollars of other people's money (OPM), and by night I invest in Real Estate and host this podcast. I hope you have an excellent experience and find real value within this website and the Private Lender Podcast. Please leave comments or submit your questions on the Contact Page.

I wish you prosperous, safe and happy lending and investing!

Thanks for listening


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