BLACKTHOUGHT
Welcome to my dinner, where we're gonna uncover some of the secret ingredients to becoming a home buyer and talk about something that's really important to me, creating generational wealth through homeownership. We have this beautiful meal presented to us by Chef Omar Tate of Honeysuckle here in Philadelphia. There's also a secret ingredient. Can any of you guess what the secret ingredient is?
COMMON
I'm gonna say creativity.
ROCSI DIAZ
I mean, you can't cook food without putting your foot in it and having love.
BLACKTHOUGHT
Exactly. Love and legacy.
ROCSI DIAZ
I love that.
BLACKTHOUGHT
That's what this meal is about. It's about legacy. We're here today courtesy of our friends at Progressive Insurance, and I'm not here alone. I'm also joined by actor, legendary rapper, Academy award-winning artist, and now real estate developer Common.
COMMON
Thank you.
BLACKTHOUGHT
And I'm also being joined by actor, legendary radio and television host, Emmy award-winning host, model, the beautiful, brilliantly gifted and talented Roxy. We're not alone, Rocsi. Who else we breaking bread with?
ROCSI DIAZ
No, we're not. Dr. Lynn, this woman right here. Lemme tell you something. She helps me right now trying to create that generational wealth that I knew nothing about. Dr. Lynn is our expert on all money moves that we're gonna be making. Thank you for being here.
BLACKTHOUGHT
Welcome, welcome, welcome.
ROCSI DIAZ
And we got this food. Y'all hear my stomach cause I'm so hungry.
BLACKTHOUGHT
Speaking of ingredients, Dr. Lynn, what are your, you know, let's say three ingredients for building wealth in homeownership?
DR. LYNN RICHARDSON
Wow. Well, the first ingredient that I would say, and this is so important for everybody to understand, is that everyone has wealth through proper estate planning.
BLACKTHOUGHT
Ok, ok.
DR. LYNN RICHARDSON
Number two is to take care of that wealth. Just like we take care of our health, we go check our teeth, we go check everything else. We want to check that house. We want to make appropriate upgrades as we go along, so we want to improve the property. We want to put some tender loving care into it, and we want to see that property or that wealth grow over time.
BLACKTHOUGHT
How do renovations work? Like, when you purchase a property, do renovations immediately add value to the place? What would you suggest a new homeowner do, like, right out of the box?
DR. LYNN RICHARDSON
The renovations that will add value relatively quickly are adding a bathroom or bedroom. So, any additions, if you can increase the quantity of something in the house, that's going to be great. Painting, carpet, those kinds of things are always going to add value. And I'm gonna say, I do not want to minimize curb appeal, especially when you've got competing properties in your neighborhood or new development happening in your community. You want your property to look nice. It's also important to know that the value, property value, can decrease.
BLACKTHOUGHT
Oh. Well, what makes the property value go down?
DR. LYNN RICHARDSON
If you don't take the proper assessment, just like a physical exam, you could end up losing your financial health if you are not paying attention. As it relates to appraisals, guess what? Progressive has appraisal tools at progressive.com/openthehouse.
ROCSI DIAZ
That's a big thing.
BLACKTHOUGHT
That's a jewel.
ROCSI DIAZ
That's crazy.
DR. LYNN RICHARDSON
Then I would say the third ingredient is really important, and that is don't fall in love with the walls. Don't fall in love with the walls.
BLACKTHOUGHT
Which it's very difficult not to.
COMMON
Yeah, yeah.
DR. LYNN RICHARDSON
Don't get so attached to it that you ignore the wealth that you've tried to create.
ROCSI DIAZ
But I think that's something important to say, to not start so big — you could start your investments small.
DR. LYNN RICHARDSON
People are emotional, but money is not.
ROCSI DIAZ
That's a whole word. People are emotional, but money is not.
BLACKTHOUGHT
I just wrote a song on my head.
DR. LYNN RICHARDSON
Yeah, let's do it. And I'll do a bar or two on there too. But money is not emotional. And so one of the other things that happens to us is we start to get emotional about the investment, the property, and so on and so forth. You're thinking, I want the big dream property. No, you got to live somewhere. And if you're paying rent, you're paying some mortgage. You're just not paying your own.
BLACKTHOUGHT
What was your earliest experience? Like, how old were you when you, you know, discovered the importance of home ownership?
ROCSI DIAZ
Interestingly enough, I was born and raised in Chicago. My grandmother had an eighth-grade education, still one of the most brilliant people I've ever met. You learn all these things from Big Mama, like wear clean underwear in case you get hit by bus. Why is it hit by a bus? Like, wow. Long story short, I get married young. I was married at the age of 24. My husband and I, our credit was bad, but I got over it. We scraped up the money, like literally our last penny to get into the house. So, we were both first generation home buyers. It was a struggle, but I knew that that's the path that we needed to be on starting a young family. So that's really what I'm passionate about, helping us understand not just how to get the home, but to keep the home and then pass it on for generational wealth and legacy.
BLACKTHOUGHT
Exactly. Common, we've known each other such a long time. I remember when we were young people, you were, you know, one of my friends that I recall having, you know, owned property when we were still kids.
COMMON
Yeah, we was kids. Yeah, sure.
BLACKTHOUGHT
Yeah. Why was that so important for you as a young person? Like who sort of instilled that within you?
COMMON
Man, my mother, she was like, she was the one. When I first started rapping, we living check to check, if you don't move your feet, then I don't eat. So we like neck to neck. I wasn't making a lot of money, but my mother was saying, man, you need to save up and invest in a home. Like, look, this will pay off for you later on. But my father too would say, get the land. Get the land. He would just say it in a slick way. The combination of that really drove me, and eventually I bought a building, and I actually created a place, an apartment for me to stay in the basement.
BLACKTHOUGHT
Yeah, no, I remember.
COMMON
You remember my spot? I felt like I was worth something when I first got that property. Yeah.
ROCSI DIAZ
Do you still have the same building, your first building that you purchased?
COMMON
No, no. I actually just sold that one last year.
ROCSI DIAZ
Oh, wow.
COMMON
I didn't want to give it up to be honest, but I was like, it's time. It just was time. I had to pass it on.
DR. LYNN RICHARDSON
And it's good to look at things like that to say, hey, I got out of this what I wanted and now I'm ready to take this and move on to something else.
COMMON
Which one was your first home?
BLACKTHOUGHT
The first home I purchased was in a suburb outside of Philly called Cheltenham. I didn't know about purchasing a property and putting it into — like creating a trust, for example. Maybe, Dr. Lynn, could you explain? Could you explain it to us?
COMMON
Yeah, because I want to know more about that.
DR. LYNN RICHARDSON
Homeownership is the foundation for building wealth and because it's a quick appreciation in terms of equity and allows you to use that equity to either move up, you know, start your business, and do other things. When we do proper estate planning, we do something very simple. We create a trust. It's a two- or three-page document. The real estate is listed in the trust, and when you pass on, everything that's listed in that trust passes on to the beneficiary, just like an insurance policy. When there is no estate plan, then the government has an estate plan and it's called probate, and so the property then has to go into probate and all these things have to happen.
BLACKTHOUGHT
That's like a sort of limbo, right?
DR. LYNN RICHARDSON
Yes. Costs lots of money, and then people can contest the property. So, you may be your mother's only child, but if the property is not in a trust passed on through an estate plan, anybody could come up and say they were her anything. They could contest it for any reason, and the only way to get through that process is to sometimes go through years and years and years of probate.
BLACKTHOUGHT
Oh, wow. Well, so if you create a trust, then the property isn't in anyone's name.
DR. LYNN RICHARDSON
When you create a trust, it's in the name of the entity that's created. And then the assets in that trust, most notably the real estate and some other things that you may find of value, they literally pass on with a signature, no probate, no fees. And you're able to then pass on generational wealth.
BLACKTHOUGHT
Yeah. This isn't the sort of thing that's common knowledge though.
ROCSI DIAZ
They don't teach us that.
DR. LYNN RICHARDSON
So, people say, oh, I have a will. Wills can be contested. Wills have to go through probate. We want to create a sense of urgency around this. Placing the home in a trust can happen at the closing table. You go through the closing table, you sign all these papers, everybody's so happy. There's one extra document to sign.
BLACKTHOUGHT
One more thing to sign.
DR. LYNN RICHARDSON
One more thing to sign. Your estate plan essentially is the business plan for what happens not only after you pass on, but while you're alive.
ROCSI DIAZ
I have a question for you. Why do you think that everybody thinks when you hear, 'Do a trust,' you know, the paperwork.
DR. LYNN RICHARDSON
It's not a lot of paperwork.
ROCSI DIAZ
What is the intimidation there for a lot of people to not want to go through the process?
DR. LYNN RICHARDSON
Well, I think it's a step before intimidation. It literally is lack of knowledge. Having the conversation is probably 95% of the battle.
COMMON
But I do have to say, Dr. Lynn, some of it feels intimidating. They act like you're supposed to know everything.
BLACKTHOUGHT
It seems like by design, right?
DR. LYNN RICHARDSON
So, there's a lot of myths out there. They tell you, if your credit score isn't 800, you can't get a good interest rate. That is false. The person with a zero credit score can get the same rate as someone who has an 800 credit score. There are multiple programs to do that.
What we do is we create a residential mortgage credit report. It's called an RMCR. So, you find what they do pay. Oh, I pay my rent every month. Okay, we take that. I pay my cell phone bill every month, we take that. We take those and add it to the credit report, and now the person has a credit report just like you with your credit card, bank statements, and things like that.
The only place where success comes before work is in the dictionary. So, if you're willing to do the work and put it in, then you can get to the success. That's what wealthy cultures do. They embrace conversations around wealth, whether we are successful, whether we are trying to get it together, and even when we fail, they have a dinner meeting like this. They bring everybody to the table, and they say, okay, how are we going to save Rocsi? How are we going to save? And what are we going to do to collaborate to get it to the next level?
COMMON
And that's why I think it's dope, what Progressive is doing, what you're doing right now, because I'm learning too. But I've had access to people who have way more money than me and they will share information, but I noticed when I'm sitting in the rooms with them, what they talking about, and then they'll be like, yo, you want to get in on this? I want to bring that to more people who don't think that we have the opportunity to do these things.
BLACKTHOUGHT
Some folks feel like it's expensive to establish all of those, you know, all these safeguards, right? It seems like it comes at a great expense.
DR. LYNN RICHARDSON
People pay for what they want. Building wealth and maintaining wealth is work. To whom much is given much is required.
COMMON
When you think about legacy when it comes to property, where do you see that landing?
ROCSI DIAZ
Well, I'll jump in on that because me and you talked about that before, you knew that I did an investment property with my brothers, where we all put our names on a mortgage to get a home, not only so that they could stop renting where they were living. Now you're not paying somebody else's mortgage because that's what you're doing when you're renting a home, and we took that opportunity to purchase another property in the family's name. All of our names are on it, and that's our family home, but it's also an investors property. So being able to create generational wealth by families getting together and purchasing a home, putting your credit together to be able to get that loan. Can you talk about that?
DR. LYNN RICHARDSON
Coming together as a family to own real estate and to create an ongoing family legacy. Every other culture does that. My husband and I have been blessed to be married for 30 years. We're not going to start out renting. We're going to start out with ownership and then watch the equity build.
ROCSI DIAZ
You said the E word, and I'm so excited too, being a homeowner now, to tap into that equity.
DR. LYNN RICHARDSON
Equity, yeah.
ROCSI DIAZ
And playing with that equity, but I don't even know where to begin. It sounds good when they say it, they say, I want to raise my portfolio. I want my portfolio to be like, what.
DR. LYNN RICHARDSON
Rocsi's Holdings.
ROCSI DIAZ
What?
DR. LYNN RICHARDSON
I love it. I love it. I love it.
ROCSI DIAZ
Holding and Holdings, period.
DR. LYNN RICHARDSON
Followed with an S. Multiple, multiple.
ROCSI DIAZ
Do you have to pay taxes on the money that you pull out from my equity?
DR. LYNN RICHARDSON
No, you don't. So that's the other benefit. You can also get a general home equity loan and just say, I want the cash. In most cases, when you sit with folks who have accumulated massive wealth, they'll tell you a time when they didn't have it, but they kept going and kept going and kept going and kept collaborating, kept connecting, and kept communicating so that they could break through, and they often take calculated, methodical, and well-thought-out risks. So, if they can do it, we can do it.
COMMON
The value of the property that I told you tripled this worth was an emotional buy for me. I was going through a tough time in my life. I was like, I got to make a step in my life to be better. And like, what would you say to someone who is coming from that perspective? Because I move off emotion.
DR. LYNN RICHARDSON
If it's right, if it's righteous, just put it to the test. Take the idea to two or three financial people that you respect, not that mom and dad and friends aren't going to say the right thing, get their opinion, but also get the opinion of someone who is an expert in that area. The emotional piece can be married with an intellectual plan. So, if the emotion says buy it, but the number say you can't afford it, well, then there's the answer, right. But if the numbers say, well, yes, you can afford it, but maybe you could do something else with this money, then I'm going to say, okay, let's figure out how to do that something else with this property. So, I think it's about definitely not shutting the emotions down, because clearly in this case you were right, which makes you dangerous.
COMMON
But that's what I'm saying. I'm trying to find my balance, man. When you got your first home, did you know all it took to get into it?
BLACKTHOUGHT
No. All the stuff that I'd have to do upfront was sort of, it was a gray area, but I mean, it'd be great to sort of, you know, to be able to receive all that information in one place. So, like, where does that exist, Dr. Lynn?
DR. LYNN RICHARDSON
The beautiful thing is at progressive.com/open the house, everything that you need to get in a home, stay in a home, and then also preserving and building wealth in that home. So progressive.com/openthehouse has all of those steps, all those upfront things that you need.
BLACKTHOUGHT
I can tell, you know, my family is gonna be thanking you for connecting us.
COMMON
Yes.
BLACKTHOUGHT
Well, thanking Progressive for connecting us. I'm gonna keep coming with the questions.
DR. LYNN RICHARDSON
No, this is good, this is how we change it.
BLACKTHOUGHT
So, thank you so much, Dr. Lynn, my new best friend. Thank you, Common. Thank you, Rocsi. It's great to see you all, had such a pleasure. Shout out to our friends at Progressive.
COMMON
Yes, sir.
