Building Wealth Through Homeownership: A Conversation with Drake Riley
Building Wealth Through Homeownership: A Conversation with Drake Riley
In this episode, Richard Berman sits down with local lender Drake Riley of Omega Mortgage Group to unpack the questions we hear the most from buyers right now: Should I wait for rates to drop? Are online mortgage calculators actually accurate? How much money do I really need to buy a house? And why does working with a local lender matter? Drake brings straight answers, real math, and a few myth-busters that could change how you think about buying in the current Reno-Sparks market.
The Numbers That Matter
Homeownership Is a Forced Savings Account
Drake's core case is simple: a house is one of the only assets most people ever own that forces them to build wealth on autopilot. Every monthly payment chips away at your principal balance while the market appreciates around you — a double-whammy that renters simply don't get.
"If you're paying rent, 100% of that is going in the trash can, and you're paying that landlord's mortgage while they get wealthy," Drake put it. "The number one way to accrue wealth in this market — or any market — is through homeownership."
Richard shared a personal example: his second home in Damonte Ranch, purchased brand new in 2015 for $380,000. Friends told him he was overpaying. He sold it last year for just over $800,000. That's the compound effect of appreciation on a leveraged asset — and it's why homeownership out-earns almost any stock position dollar for dollar. You control the whole asset with only a fraction down.
The Real Cost of Waiting for Rates to Drop
Roughly half the buyers Drake talks to are sitting on the sidelines waiting for rates to return to the 2s or 3s. His honest answer: that's not happening for quite some time. The national average over the last 100 years is in the 6s. What we saw during COVID was an extreme — not a baseline.
Here's the math on waiting: on a $500,000 purchase at 4% annual appreciation, you're potentially leaving $20,000 on the table every year you wait. Wait five years for the "perfect" rate, and you've missed roughly $100,000 in equity growth.
And when rates do drop, buyers flood the market, inventory tightens, seller credits disappear, and prices jump. Richard and Drake both remember 2020: buyers offering $30,000–$40,000 over asking, all negotiating power gone. That's what a low-rate environment looks like — not a bargain.
As Drake summed it up: "Most people build wealth by owning assets, not by timing the market."
Why Online Mortgage Calculators Miss the Mark
Plenty of would-be buyers rule themselves out because of a scary number on an online mortgage calculator. Drake sees this all the time — and the numbers are often wrong by $300–$400 per month.
Here's what those calculators typically get wrong:
- Property taxes: Nevada's system is unique — the county assessor sets rates that are typically well below what national calculators assume.
- Private mortgage insurance: Estimated on the high end and doesn't account for your actual credit score or debt-to-income ratio.
- Homeowners insurance: Estimated generically instead of based on your specific property's age, size, and location.
- No seller credit modeling: Calculators can't factor in rate buy-downs, closing cost credits, or the incentives that make real offers work.
A local lender can pull your actual property tax data, quote real insurance for the area, and run a soft credit check with no impact to your score to give you a real payment picture — not a worst-case estimate.
Seller Credits: The Win-Win Most Sellers Misunderstand
Right now, more offers than not include a seller credit request — and most sellers push back on principle. But Drake and Richard broke down why a seller credit is often cheaper for the seller than a price reduction, and dramatically better for the buyer.
Here's a real example from the conversation: on a $500,000 purchase at the current ~6.625% average rate, a $10,000 seller credit can buy the rate down to 6% — saving the buyer a few hundred dollars every month for the life of the loan. That $10K credit costs the seller far less than dropping the price by $50,000 to get the buyer to the same affordable payment.
Seller credits can cover closing costs (prepaid interest, taxes, insurance, title fees, recording fees, inspections) or buy the interest rate down — and often both. On a conventional loan with 5% down, buyers can request up to 3% of the purchase price in interested-party contributions. The seller nets close to what they wanted. The buyer gets a payment they can actually afford. Nobody leaves the table unhappy.
FHA Loans: Better Than Their Reputation
FHA loans get a stigma — mostly from sellers who don't want to deal with the property condition requirements. But for buyers, Drake calls FHA "an awesome loan." Here's why:
- 3.5% minimum down payment — government-backed, government-insured.
- More flexible debt-to-income requirements than most conventional programs.
- Often lower interest rates than conventional loans.
- Down payment assistance programs available to cover the 3.5%.
- Stricter property condition standards — which actually protects the buyer. Peeling paint, wood-to-earth contact, and other issues have to be addressed before closing, meaning the buyer inherits a home in solid condition.
The main drawback: mortgage insurance stays on for the life of the loan (unlike conventional, where it comes off at 20% equity). But refinancing out of FHA once you build equity is straightforward. Richard shared a story of buyers in Golden Valley earlier this year who used FHA with a seller credit and came into closing with just $1,200 out of pocket. First-time homeowners. Overjoyed.
How to Get Started (Even If You're a Year Out)
"How soon is too soon to talk to a lender?" — Richard's question. Drake's answer: "Tomorrow. Now. Even if you're a year out — especially if you're a year out."
Talking to a local lender early gives you a real roadmap. Omega's quick online application takes 5–10 minutes, includes a soft credit pull (no impact to your score, doesn't report as a hard inquiry), and their credit software can tell you exactly which debts to pay off in what order to move your score into a stronger range.
If you're not quite ready yet, that's fine. But the sooner you have the plan, the sooner you're in the game — and every year on the sideline is real money in appreciation you're not earning.
Connect with Drake Riley
Key Takeaway
You don't need 20% down. You don't need to time the rates. You don't need to trust an online calculator with numbers that are hundreds of dollars off. What you do need is a local team who knows the Reno-Sparks market and can hand you a real plan — whether you're buying next month or next year.
Ready to figure out where you stand? Reach out to Drake for the lending side, or connect with The Berman Group for the home search. We'll get you there.
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