For most first-time home buyers, their biggest challenge isn’t in qualifying for a loan or securing a down payment. These steps are a part of a larger, lengthier process, one that often intimidates buyers and prevents them from taking their first step towards personal wealth.

Welcome back to the Author Hour Podcast. I’m your host, Hussein Al-Baiaty, and I’m joined by author, Ed Parcaut, who is here to talk with me about his new book called, Financial Freedom: Building Personal Wealth Through Homeownership. Let’s flip through it.

Hello friends and welcome back to Author Hour. I’m your host Hussein and today, I’m really excited because flipping through this man’s book, very intrigued. I’m very much into that mentality of trying to get another space to rent out, but this guy talks about the financial freedom of building personal wealth and how we do that through home ownership. It’s literally the title of his book. Ed Parcaut, thank you for joining me today, I really appreciate your time.

Ed Parcaut: Well, thanks for having me. I really appreciate it.

Hussein Al-Baiaty: So, before we get into the book and you really bring your wisdom to it, I want to start by giving our listeners an idea about who you are, your personal background, what’s your story growing up, and if there’s one or two people that influenced you in a positive way and really helped you shape the direction that you’re on today? So let’s jump into that a little bit.

Homeownership: Is It Obtainable?

Ed Parcaut: I was born in Burlingame, California, and then my dad worked for Mabel. So we went back and forth from California to Colorado pretty much my whole life. I got stuck in Turlock, California through high school, and I realized I did not want to live in the valley. So I joined the Navy to see the world, and I got to see San Diego. It was great actually, I got stationed at Camp Pendleton, which is a Marine Corp base.

I was at the hospital and that’s where I was able to go through and get my bachelors and masters while I was in. I utilized the Navy like you should, learn from it and not just go, and I also do — I don’t know if it’s okay, but I do another podcast called Helping the Brave, which is helping veterans once we take the uniform off, and it’s because what I learned from being in and getting out and the transitioning is not as easy.

We have a purpose, you get out, you don’t have a purpose. It’s pretty hard. So one of the reasons is, if you look back at my life, my dad died when I was twelve of hairy cell leukemia, and it was from Agent Orange. He was in Vietnam; he was in the Air Force. But what it was is, it took us from middle class to dirt road poor and the reason I say dirt road poor is that’s the best way to describe how poor we were.

A couple of pair of pants, a few shirts and then one pair of shoes. So I learned at an early age, I needed to go do something if I needed money, and so I worked for my grandfather on his dairy farm during the weekends and in summer, and it was such hard work, I knew that’s not what I wanted to do for my whole life and that’s why I joined the Navy, to get out. And then from that, there is not a lot of people in my family who went to school past high school.

So I got my bachelors, I went on for my masters, and it was in international business and marketing. And so when I got out of the Navy, the first thing I got into was real estate, and it was a bad time when I got out. It was right at the start of the recession. I didn’t know how bad it was. So I kind of went back into what I knew, which was computers.

Even though I was in the navy as a Corpsman, that’s a medic, I ended up working my first two years in medical mobilization, in planning, and did a lot of computer work and a lot of stuff. And then when I transferred to my next duty station, I was supposed to go to, I ended up getting the physical therapy and coming back to Camp Pendleton, which allowed me to go to school, get my degrees. But what’s important of all that kind of stuff is that it’s shaped me where I wanted to go. And when I got out, I thought, I knew I wanted sales.

Everything was in real estate, that I knew. It was just a bad time, so for about two and a half years, I worked in the computer industry and that didn’t really work out for me, and I ended up falling into the mortgage industry, and that’s where I love numbers. I love helping people get into homes and I found that most people don’t save for retirement, but buying a home does that for them and it’s going to appreciate over time.

You’re going to pay down the mortgage, there’s just a lot of stuff you can build from that, and it changes the trajectory of a family who has never owned a home, always rented, to buying a home. And then therefore, that change is for their kids and their kids and the grandkids and great grandkids and going forward. And it’s just, it’s like the first time people going to school, it changes the trajectory of that family and wanting people to go to school.

Hussein Al-Baiaty: Man, I can’t agree with you more. I’m so excited for this, to talk to you about all of this because I recently purchased a home in the last year or so and that was hands down, one of the best decisions I made after going to college and marrying my wife. Really, it’s one of those decisions that I couldn’t wait to make, but I knew it took time but man, there’s a lot of fears around it.

Being in debt, dude, I grew up in a refugee camp. I was a byproduct of war, sadly, ended up in the refugee camp and then we came to America. I was at the age of eight or so. So yeah, these things, you’re going to buy a home, getting to college or whatever, it’s not that my parents had encouraged that, it’s a little further than you would think of someone not knowing the language, all those kinds of things.

However, determination, resilience, a lot of support and push I was very grateful for, I got to college and then after that, I built a small business. But all of these little things really contribute to something that you talk about in your book, which I loved, is confronting that fear and really sitting with it and figuring out, “What’s the best thing I could do here for not right now Hussein but future Hussein?” And you’re right, the purchasing of a home is really about the future person that you’re trying to build for.

So we’re going to get into it a little bit. Can you talk a little bit about how your book caters this unique financial positioning and the challenges that both faced Generation Z and Generation X into getting into home buying? Because I know I kind of fit that parameter, but what are the things that financially people tend to think about as soon as they start thinking or wanting to purchase a home?

Ed Parcaut: Well, I want to add a little bit to that before we get right in there.

Hussein Al-Baiaty: Yeah, please.

Ed Parcaut: All right, I started a radio show five years ago in 2008 called Real Estate Jerky, we give you something to chew on and the reason, when they came to me about the radio show, because there was a local show that people talk about real estate, but I wanted to start an educational show on weekends. It was at noon, for an hour, because I saw a lot of people who watched their parents lose their home during 2008 through 2014.

I started the radio show five years ago, so it wasn’t in 2008 but what I’m trying to get at is in 2008, through probably about 2014, a lot of people were losing their homes through short sales and other stuff, and the kids growing up during that period of time saw the stress that their parents went through and was like, “I’m not ever going to own a home that’s just because I saw what it did to my parents.” And I started the radio show to educate people on why you wanted to buy and that’s the reason, the next step for me was the book.

I wanted to educate people the way that I talk to people when I qualify them for a home loan, and how to go through the whole process, so that they understand how easy it is. So you want to do it and you want to do it again. As you’re building, you get your first home you get your second home, how all that works for you. So people don’t want additional homes but at least, owning a home you’re in, you now own that.

That is your place, you have total control over it. As long as you make the payment, nobody can tell you to do anything with it, except for the government, but other than that.

Hussein Al-Baiaty: No, that’s really powerful man. And then starting this educational path, you obviously work in that industry but heavily, the idea of confronting and looking at those fears and those anxieties around what we experience watching parents go through those really difficult times and losing homes, but what’s different today? You talk a little bit about how the approach is different.

I guess it is a recession but it’s not like how I remember it. And perhaps it’s going to get worse or it’s going to get better. For me, I’m an optimist, I always think things will improve and get better, but how do you see the lay of the land? Can you provide any tips or advice on building these components that we need in search of a home?

Ed Parcaut: Yeah, I can get into all of that. First, I want to address what you’re thinking about where we’re going. First I want to say, we were in a pandemic, and then rates dropped so low because we didn’t know what really was going to go on. We didn’t know if anybody was going to live, we didn’t know any of that stuff. So the rates got so low because of that fear.

We’re probably never going to see 2 percent interest rates again in our lifetime or at least definitely my lifetime. I’m not saying we won’t be in threes and fours again. I’m just saying, to see them as low as they were as during that period of time, it’s because of what the fear was out there and what was going on and we’ve never been in a situation where we had eighty-nine million people quit work in the last three years.

We have ten million jobs available that aren’t being filled, wages are at the highest they’ve ever been and we have wage inflation. We’ve never been in this situation. Even during 1920, that flu situation, we didn’t have the same things we have now where, and I’m not trying to get political, I’m just stating what’s going on. You have a government who has been spending and I know Trump’s era that spent, but this current administration has spent so much money to further the economy, is what they’re stating, and other programs.

That is what caused the inflation so much and because of that, now we have the Federal Reserve coming in late trying to slow down the inflation and raising short-term interest rates, which are the rates that are overnight rates, the bank, credit cards, second loans, those kinds of things, but not mortgage rates. Mortgage rates were already up because of the fear that was going on with the inflation.

The mortgage-backed securities and the MBS said, “We know you’re not doing enough Fed, we know you’re not doing this, you’re not getting to the party fast enough.” And they started raising before that happened, and so a lot of people think they’re tied together. Sometimes they go on the same road and sometimes they are on two totally different trajectories, and they have nothing to do with each other, but sometimes they do.

So going forward here, we have been in a recession. The question is, are we in another one coming up, is it going to get worse? I don’t think anybody really knows. Right now, you have a fifty-fifty chance of being right more than any other time in history because nobody really knows. We are going to see rates improve over the next couple of years because inflation’s going to come in to check each month.

It’s getting better. It’s getting better because at last people are buying a lot of goods and the companies are now starting to layoff. As that happens, rates will come down because the Fed will have to stop doing what they’re doing because they’ve already caused the pain to slow down everything. But the biggest issue I’m trying to get at is, we’ve never been in a situation where we had so many people quit work and not work anymore and have all these jobs and have all this other stuff happening.

Unemployment is so high right now, and all of this is happening. Right now, it’s so low and it’s just because people aren’t looking for work for some reason, and what I’m trying to get at is, it doesn’t matter when that’s happening or what’s going on out there, you still need to buy a house when it works for you because you can’t do it just because now is the best time when you’re looking to buy.

We always get asked, “When is the best time to buy?” I said, “The moment you think about it.” You start that process. “Well, what do I need to look at first?” Well, as in the book, the first thing I talk about is your credit and how to look at your credit, and what you can do to help fix your credit if you have little issues on there and that. And so, what I do in the first couple of chapters of the book is the three major things that we look at, credit, income, and assets. I explain all that.

And then the rest of the book is, well, I break down each part of the process of buying a house. What does it mean on each one? It’s important to understand the process. And I even break down loan programs, but not majorly, because it’s not for you as the person going to buy the house to know what loan program works best for you.

That’s the loan officer that you’re going to or the broker. That’s their job. That’s what they should do for you. Find the best program that’s going to work for you, and I always say it’s like playing poker. We need to know the hand we’re dealt in order to help you on this process and how to play those cards.

Hussein Al-Baiaty: I feel like for me, as a young person who, in the last few years, probably understands the power of real estate and how to get involved and how to get into it. And like you said, just started putting the ducks in a row and then was able to finally purchase a home here in Arizona. But yeah, all of these things that you’re saying it’s, you got to get out there and learn it. You got to get out there and seek it out.

Let’s be honest, you’ve been in this boat. If you are living in an unprivileged area, I guess you could say or place that’s less desirable, the poverty is not just financial, it’s mental as well. And it’s like, people around you, if they’re not buying houses, it’s like you don’t know who to go to but today, it is phenomenal with the amount of information that’s out in the world.

Now, not everything is right and not everything should be pursued but with enough research, you can find the right people to help you do X, Y or Z. Which brings me to my next question, how do you see the real estate market and home buying process evolving in the coming years, technology and all those kinds of things, to meet the needs of younger generations?

Ed Parcaut: It’s weird because I thought for sure younger generations would definitely not want to see me face-to-face, but I have more requests from younger generations to come in and talk to me face-to-face and see me. It’s almost like the baby boomer generation, they don’t trust anybody so they want to see you face-to-face. And now you have these young kids who have been tracked their whole life by their phone or other things and now they don’t really trust what’s coming through their phones, so they want to come and see you face-to-face.

They go, “I don’t care if I’m being tracked,” but then when they want to do something financial or whatever, they want to come in and talk to you because that’s how they want to deal with it, which I was really shocked because it’s a totally different generation right now, eighteen to twenty-six right now than what it was ten years ago.

Hussein Al-Baiaty: Would you say they’re just more cautious, more educated, just more —how would you describe that experience?

Ed Parcaut: I would say yes to all of them. They’re more educated, they understand some of the process and most understand all the process, but they do and they’re cautious because they don’t know who to trust. Like I said, they’ve been tracked the whole time. It’s really, and I tell people, find somebody who did this. If you work for someone, go talk to them and ask them, “Hey, who helped you buy your house?”

That’s a good way to find it because like you said, if you go to the people around you, most of them don’t own a home. If they don’t own a home and they’re giving you advice on how to buy a house, don’t listen to them because they don’t really want you to better yourself. Why would they want you to do better and them do less? And so I always tell people, just go through and read my book, of course.

But you know, that’s beside the point because I’ve never been in this situation. This is so new to me to write a book. It’s the same thing I say all the time to people in my book, and I go through the process but for me, to put something together to help people, it’s normally I help them one-on-one, and I realize that I can’t help enough people without doing the book or doing other stuff that I do on the radio show.

It’s one of the issues. I’m in California. So 70 percent of the people in California will not be able to own a home, they’ll have to rent and that’s coming in about another five to ten years and that’s huge, and everybody was talking about how many people have left California in the last couple of years, 750,000. If we didn’t have those people leave, we’d have no houses for people to buy because of the inventory.

When you put all these people in the low interest rates, they’re not putting their house on the market unless they have to, right? They’re not moving up because their payment doubles. They’re not doing this, they’re not doing that, where before they were doing all this stuff. So we’re going to have issues going forward where people are handcuffed to their current mortgage and their house, and they don’t want to sell because it’s going to cost them so much more money.

Normally, they would upgrade their house for another bedroom or two bedrooms because they’re having kids and then they will scale back years later. Now, they’re going to go, “Well, I have this low interest rate,” and this is people already in the market. This is not talking about people here going forward because if you’re buying right now, you’re going to refinance that loan over the next couple of years because rates are going down, and you’re going to get a low rate.

Then you’re going to be handcuffed like other people will be, right? Why do I want to go from my 1,800 square foot house to a 2,500 square foot house with extra bedrooms for these extra kids when they’re going to be gone in 18 years from now? People are looking at all this stuff totally differently than they used to look at it. Every time there’s a life change, they would change their house, and now I see that going forward.

Instead of 85 percent of sixteen home sells being on the market, I see thirty-five to fifty. So it makes it harder to buy a house going forward. We need to build more homes. We’re right now 4.5 million homes short nationwide, and I’m going to throw a number, 30 percent of it will be in California because 30 percent of all stuff is in California, because they’re such a big state.

Hussein Al-Baiaty: I mean, those numbers are huge, man.

Ed Parcaut: It’s huge. And the problem has been, we were building houses over the last couple of years, and we were taking away from that deficit about 200,000 houses a year, which is not a lot. So the way we’re building houses before they just stopped recently, it was going to take us twenty years to get caught up.

Well, they’re not building right now because rates went up, people were scared, they thought, we’re having a bubble. We’re not having a bubble, we’re in a situation where we don’t have enough houses. Yes, rates went up for a short period of time. In 2024, it’s going to get crazy again. It’s going to be like 2021, 2020 because there’s just not enough inventory. We need to build more homes. That’s how we fix this. Well, the problem is it takes twenty years to build more homes, it’s probably going to take twenty-five.

Well, if you look at the pandemic, that birth rate that happened during the pandemic was just about the same as the baby boomer generation. So in about twenty-five to thirty years, we’re going to have this huge influx of more people wanting to buy homes. If you want to own a home and you’re not worried about owning a home, it’s going to appreciate and build wealth for you over time. Buy now because now is the best time, and I don’t know if this is where I was going with this conversation, but it’s kind of how I got there.

Hussein Al-Baiaty: No, I appreciate that. It brings things back actually full circle to how to think about real estate, and you’re 100 percent right. There’s not necessarily a wrong or bad time. It‘s just, the time is now and I can’t think about the past, can’t think about all these things, you got to just think about, “Okay, what actually happens when I buy real estate just in general, as a structure? Why has this worked?”

It’s obviously built wealth for over 90 percent of extremely wealthy people. Like, there’s a reason why real estate does that, it’s a mechanism in our economy. So to understand it, to take away the fears a little bit, get to know people that have purchased homes, that’s so powerful. And I love all these stories that you brought to in the book, but I want ask you now a little bit about the book writing process.

How was that for you? What was that journey like? What did you find that you had to learn or relearn to put that pen to paper?

Connecting the Idea and Process of Homeownership

Ed Parcaut: Because I came through Scribe, it made it so much easier. I wouldn’t have been able to do it without my team here at Scribe because the way they worked with me was what made it easier for me. I’m not a writer. To be honest with you, I hate writing. I did horribly in high school with English and in college and that was not my thing. I can talk all day long, yes, occasionally say, “So and um,” that’s just something that happens, but I just enjoy talking.

Where writing just wasn’t my thing or reading books is not my thing, I’d much rather watch something if I have to or listen to it. That’s why I love Audible now, I can listen to it at 1.9 and listen to the whole story that fast and just be able to get through a book in almost no time. So the writing process for me, if it wasn’t for the team I had, this would never have been done and so I just want to thank them again for helping me.

But it’s remembering how important a story is, right? And that’s the biggest thing on writing this book is each chapter starts with a story, and we explain it. So it makes it easier for you to understand what I’m going to explain, right? That’s what was different about writing is the story part, and how important that is while you’re doing the chapters and everything, and that so sometimes, we’d write the chapter and come back with a story. And every story in here is a past client. Names have been changed to protect the innocent.

Hussein Al-Baiaty: Yeah, no. I love that part, I’m glad you brought that up because it’s so important to connect viscerally to these people. Because you can almost see yourself in their shoes, you can always imagine if you were that person. I love that because you really brought in a variety of people that you’ve obviously worked with and helped in some way, shape or form. But it was also, you started off, right at the beginning of the book, you started me off with, “Here’s a $70,000 mistake.”

And I’m like, “Man, how many of those have made?” You know what I mean? They’re like instantly, I connected, and I wanted to read more and I love that about a really powerful book and how it draws us in with the story. Let’s get a little bit—I want to talk a little bit about one or two common misconceptions that you see facing Gen Z and Gen X home buyers and how they can overcome these challenges?

Ed Parcaut: The biggest one I hear all the time is, “You need 20 percent down to buy a home.” When in reality—

Hussein Al-Baiaty: That’s a big one.

Ed Parcaut: You can buy it with no money down if you could do USDA or you’re a veteran, or 3 percent down or 3.5 percent down. You don’t have to have 20 percent down. USDA is a rural program that’s done in a lot of areas and it’s 100 percent financing. It sounds like you’re talking about beef, USDA, but you’re not. It’s a program, it’s a great program, it’s 100 percent financing.

VA for veterans is amazing. It’s so great now, it’s a totally different program. It used to be a totally different program where nobody wanted to take it. It’s just like a regular loan and it’s so great for veterans but that’s the biggest thing, “How much do I need to have down?” And the other issue I see a lot of is, and I don’t want to come off wrong here, but I’ll have people come to me who think they can buy a home and they don’t have either—they don’t have the credit, they don’t have a down, they have one of the three things they’re missing, right?

But they think that they can buy a home. That’s okay, that’s a starting point. But then I have a lot of people come with me who have saved money, they have an amazing FICO score, an amazing job and they’re like, “Can I buy a house?” It’s that whole process of understanding that if you have good credit, if you have a good job and you have money for down payment, not that we’re going to use all that money, but you have saved some money or you have a family member who can gift it or you can do 100 percent program. It’s amazing what you can do.

Because when you’re buying a home, it’s all about leverage, and what most people don‘t realize is if you find a stock, right? So you’re going to buy two shares of TESLA and it’s a thousand bucks a piece, you have to give them two grand, right? Or do this, if you’re buying $200,000 worth of stock and it’s Tesla stock, you’re getting twenty shares, you got to give them all that money.

If you’re buying a house at $200,000, you only have to give them a small percentage down, so that leverage is what builds for, over time, the wealth for people. And that’s what people don’t realize is, it’s always better to buy a house than rent because rent, you’re throwing that money away every month. But when you buy a house, yes, it might cost you $500 bucks more, even $1000 more a month than what your rent, is but that’s now an investment and you can write off a lot of that stuff off that investment where before you couldn’t write anything off.

A lot of people think that, “Well, that’s going to cost me more money a month.” They look at it as a cost, not as an investment. So that’s the other thing, that it is your investment and your future, and this is why I tell a lot of people, even my kids is, “I wish somebody would have told this to me.” But from twenty-one to thirty, if you put in the match you can put in your 401(k), 403(b), whatever it is, the match you can put in each year for that period of time and then from thirty-one on didn’t touch it, you’d have more money than somebody who starts at thirty-one and puts in the max every year for the rest of their life.

And so that’s how this house thing works is the same way, by building your portfolio. And what I mean by building a portfolio is for most people, if you’re going to buy your first house, and I say this in the book, try to buy units. Buy a fourplex, a triplex, a duplex, then you have someone paying rent on the other side. Yes, you’re not going to live there forever, it might not be the best thing. It might feel like an apartment but it’s your apartment.

It’s going to get to a point where they’re going to pay for you to live there and then you go and go buy something else that you’re going to live in forever, right? But this is how you start because you can get in for these things for 3.5 percent down, right? FHA, on units, where if you go in on this units as an investor, you’re paying 20 to 25 percent for those. So it’s always best, I always tell parents to help their kids buy their first home if they’re helping them.

Help them buy units because that is the best thing you can do buying forward. I helped some friends of mine up in one of the counties I deal with. It’s also in the book, I helped their daughter buy her first set of units and then they bought another, a house, and they bought a house that they live in now and she makes enough money off of those other two investments, it pays enough for her current mortgage. Also, and that’s what happens overtime, that’s how that’s built overtime.

Hussein Al-Baiaty: It’s so powerful when we start to really acknowledge the thing that we fear and what we think we can or cannot do. And even if you can’t do it now, it doesn’t mean you should not have learned and figured out ways to do it. I love that, it’s so powerful, your book is phenomenal, I know I’ll be trying to finish it up. The next phase is definitely looking to buy a duplex or so.

So I’m excited to learn even more. It was amazing having you on the show. What do you think is the one thing you want your readers to know and, after they finish this book, what do you want them to feel after putting it down?

Ed Parcaut: I want them to feel that they can do it, that they’re able to go out and buy a home because that’s the most important thing. If they didn’t learn anything else, if you can’t do it today, it’s just a matter of, you can’t do it today. But how do you plan for the future to be able to do it? And I’ll tell a lot of the clients that come to me that have a job and I’m like, “Okay, you’re only making this right now. But if you make two bucks more an hour, you can get this home, go do that, go find a better job. Go better yourself, don’t get stuck in a place.”

And this is different than when I was raised as you go to your job, you stay there forever. Now, it’s about helping you build wealth so that you can live and retire early, the stuff that was not taught to me.

Hussein Al-Baiaty: I love that so much because it wasn’t taught to me either. Not because they didn’t want to, but because they also didn’t know. They came from a completely different country. So that stuff does happen, but it is our responsibility to learn and change and evolve. I totally agree with that, it’s so powerful.

Ed Parcaut: And one thing that you have now that you didn’t have and your parents bringing you here is, you have an opportunity in a country where you can buy real estate. Not every country allows you to buy real estate.

Hussein Al-Baiaty: Easier to do that, you’re 100 percent right. There are countries where the government just owns everything, and you just basically pay rent forever. So we are very blessed in that way for sure.

Ed Parcaut: Because you can come here, buy real estate and be wealthy over years. It’s about planning your future and what you want to do, and some people don’t want to have rentals. I get that, I understand that, but at least get your first house and then you know, you can—

Hussein Al-Baiaty: You can think about it later.

Ed Parcaut: Yeah, you can always get a second home somewhere else to visit and all that. There’s just so much you can do with this, and then have it paid for by other people.

Hussein Al-Baiaty: Ed, thank you so much for sharing your stories and your experiences with our audience as well. Thank you for just, really—the thing that, I got to mention this. The thing I like about your book and just discussing this stuff with you is, you honestly made me feel really comfortable and it’s actually fairly easy to navigate. Your book was really easy to read.

So for all of you out there that are writing a book or working on a book or simply looking for this kind of information, pick up the book. It’s called Financial Freedom: Building Personal Wealth through Homeownership. So besides checking out the book Ed, where can people find you?

Ed Parcaut: I’ve made it real easy over time, it took me a while to figure this out, but I can be found at or Ed Parcaut at anywhere you do social media. I’m Ed Parcaut everywhere.

Hussein Al-Baiaty: Love that, thank you so much Ed. I appreciate your time today brother, I learned so much, have a good one.

Ed Parcaut: Thank you.