In Episode 3 of Get Rich or Rent Trying, Richard Alvarez, Ohizua Russel and Sergio Lopez talk about the money habits that decide whether you ever get to buy, keep and pay off a home: the car payment, the coffee run, the seasonal paycheck and the credit-card balance that keeps coming back. Each host puts his own mistakes on the table.
Getting rich, Richard says at the top, is only half the equation. The other half is what you spend, and in a commission business where December through February are light, spending like every month is July is how people lose their shirts. Sergio has watched friends in the mortgage business make $500,000 a year, buy the luxury cars, and end up in foreclosure.
Three takeaways
- Keep your expenses flat and save in the good months. Richard’s rule for a seasonal income: bank the summer, keep monthly spending the same all year, and plan for the quarter when fewer deals close.
- The car and the coffee are where the money goes. Ohizua’s loan-officer rule of thumb is that a $1,000-a-month car payment makes little sense under about $200,000 a year, and Sergio priced his household’s coffee habit at roughly $5,000 a year.
- Refinancing to clear credit cards is a treadmill, not a plan. Sergio sees the same clients every three years, and each time the mortgage payment ends up a little higher.
Richard’s car story
When Richard got into mortgages in 2019 he drove a paid-off Toyota Corolla: about $25 to fill the tank, about $100 a month to insure. Business was good, so he bought the first Mercedes he saw without price-checking it. Then rates climbed, business slowed, and he was commuting from Port Jefferson to Nassau County, filling a GLE twice a week at $150. The engine failed two years in a row, $5,000 each time. He traded it for an Acura.
“I always like to say I would rather be cheap than broke, you know?” — Richard Alvarez
Be your own accountant
Ohizua’s answer to rising grocery and gas bills is to treat your own books like a forensic accountant would. One hack he uses: paying cash for everyday purchases, because handing over money you worked hours for makes you more conscious than tapping a phone.
“You have to be the steward of your own ship. No one is gonna come and save you.” — Ohizua Russel
The coffee math came up more than once. Richard paid $7 for a medium pumpkin spice latte and did the comparison: a box of 150 pods from BJ’s runs about $40, or roughly 30 cents a cup, so a $5 or $7 coffee costs about 15 times as much. Sergio ran the numbers on his household’s every-other-day Starbucks trips and landed near $5,000 a year. “That’s a whole vacation,” Richard said.
What a lender actually sees
Both Sergio and Ohizua have pulled credit reports for a living, and the application tells the whole story: the car payment, the income, the assets. Sergio pre-approves people earning $300,000 to $400,000 a year who are putting 3.5% down and asking for seller concessions, and sees clients tap their home equity every few years to wipe out credit cards, then run them back up.
“By the time you pay that phone off, now you have another payment. Same thing with leasing on cars. It’s like you’re never, you know, you’re never getting ahead by doing that.” — Sergio Lopez
Richard’s closing thought: live below your means, keep investing, and treat the future as closer than it feels, because people are living longer and nobody knows whether pensions or 401(k)s will carry this generation.
FAQ
Will my car payment hurt my mortgage approval?
It can. Lenders count your monthly debts, including car payments and credit-card minimums, against your gross income (your debt-to-income ratio), so a big car payment shrinks the mortgage you qualify for. Sergio and Ohizua both say the car payment is the first thing they notice on a file.
I earn commission or run a business and my income is seasonal. How do I qualify?
Lenders generally look at your income history rather than a single strong month, usually averaging the last two years, which is exactly why the hosts say to keep expenses flat and bank the busy season. A documented, consistent pattern qualifies more easily than a spiky one.
Should I refinance to pay off credit cards?
It can lower your total monthly payments, but Sergio’s warning is that the same clients come back every three years with new balances and a higher mortgage payment each time. Without a change in spending, you are moving debt onto your house, not getting rid of it.
How much do I need saved to buy a first home on Long Island?
Less than most people think for the down payment: SONYMA’s Achieving the Dream program allows 97% financing with 1% from your own funds. The harder part is the habit. See our First-Time Home Buyer Guide at https://teammodernx.com/first-time-home-buyer-long-island/ for the programs and the closing costs to plan for.
Watch the full episode: https://www.youtube.com/watch?v=yloO8JqYT18
Thinking about what a sale would free up, or what you could afford to buy? Start with your free home value estimate at https://teammodernx.com/how-much-is-my-home-worth/, then contact Richard Alvarez at Team Modern X, West Hempstead: 631-316-3654 or https://teammodernx.com/contact/. English and Spanish.