Dave Boye live from Boulder, Colorado with his brother, Erik Boye.
Dave: We both went to the University of Colorado and we’re standing here on campus. Black Diamond Mortgage is on the road. When you and I went here, what did it cost?
Erik: Well, 30 years ago tuition was about $3,000 a year.
Dave: Now one of your kids is about to go to college. How much does it cost now?
Erik: It’s painful. It’s about $30,000 a year – 10 times what we paid! I have 3 kids, so it’s going to be $120,000 at least.
Dave: That’s hard to think about. My brother is a real estate legend. Up in Montana we have University of Montana and Montana State University, and I thought what Erick does here is incredibly interesting for the families I connect with who are going to send their kids to school in Montana. What do you tell college kids and parents that are going to attend the University of Colorado and potentially take on $120,000 in student debt about an opportunity in real estate that you’ve been able to show them?
Erik: The big thing is, along with appreciating values, rents are going up. Parents over the course of 4 years are going to spend an astronomical amount in rent, so they could purchase their own property and be their own landlord. In Boulder that could be from $300,000-500,000, but when you look at the cost they are going to pay for rent, it really pays for itself.
Dave: We were talking in the car and if our parents had bought a house when we went here, what would the price be?
Erik: The same place that you would be looking at today for $300,000, when I was going to school would’ve been about $30,000-50,000.
Dave: So a lot of real estate appreciation?
Erik: Over the course of 4 years, even 5-10% appreciation, you’re looking at $100,000-150,000 in appreciation over those 4 years. Now, I have 3 kids and let’s just say those 3 kids are going to cost me $120,000-150,000 in tuition, that’s astronomical. But the appreciation in a home could offset that.
Dave: So you’re sending your kids to school. In your mind, you’re getting ready to spend a lot of money. It might sound counter-intuitive, but you (Erik) have actually showed parents in Colorado that they could actually buy a place, and after the kids are out, the house probably has appreciated enough in value that they’ve made enough money to pay off the college experience?
Erik: Yeah, and it’s a way to not find yourself in further debt down the road.
Dave: So to do that, you need a good realtor and a good mortgage lender. I was going to talk about student loans and how they pertain to mortgages, and we were in the car and it was so wonky, we just couldn’t handle it. Erik is always talking about how parents can improve the lives of both their college students and themselves by getting a place while their kids are in college, and I thought that’s it, that’s what we’ll talk about! Thanks! If you’re ever in Colorado, call AG Real Estate, Erik Boye.
Erik: Up in Montana, Black Diamond Mortgage.
