Confronting Real Estate Expert on The Housing CRASH | OneRentalatATime

well welcome back to another episode of

the meet Kevin pod this is uh where

we're going to talk about real estate

today we've got the creator of the

channel one rental at a time here uh

we've got that up on screen right here

one rental at a time which I think is

actually a great way to get started you

are also the author of two books which I

have right here one of them is one

rental at a time the journey to

financial Independence to real estate

which actually has incredible reviews

4.7 Stars here 1344 to great uh and then

there's a newer book that you just

released and that is 15 conversations

with real estate millionaires presented

by one rental at a time welcome thank

you for being here thank you Kevin this

has been uh this has been something I've

been looking forward to for a while so

thank you for the opportunity my

pleasure so tell us tell us about what's

on your mind should we start with crash

or how you got started or what do you

think would you tell me what's important

to the audience because I crash

everything everything's crashing right

you you said you called the crash what

crash did you call so about a year and a

half ago

you know we were sitting at about 6.2

million transactions existing home sales

Jerome pal came out at Jackson Hole and

said basically I'm going to kick the

rich people in the nuts and he said

these things about housing and

everybody's like the crash is finally

coming right the crash has been called

every year since

2010 this is true this is true double

dip back then it was supposed to be a

double dip recession the banks were

going to release the shadow inventory of

foreclosures because they're trying to

screw the little guy yes yes yes

um I didn't believe it but I went back

and did some research because we

actually had a time in history my

lifetime not yours where interest rates

had gone up 500 600 basis points from

1978 to 1981 rates Paul Paul vulker

right after Arthur Burns Paul vorker

comes in and does it so I said what

happened to housing yeah so actually if

you go back and look at housing from

1978 this is a very interesting

statistic that people need to realize 78

1978 we did roughly 4.2 million existing

home sales okay guess what year we broke

that number because after 1978 we went

lower because rates were going up right

so some kind of recovery you know

probably before the Savings and Loans

crisis so what mid 80s yeah it was

actually uh 18 years later 18 1994 wow

so think about that yeah because I would

have guessed like okay maybe seven eight

years or something 18 years 18 years

until the transaction volume

exceeded 1978 wow now I ask myself what

happened to price yeah because again if

if prices or if rates go up 500 basis

points price are supposed to go down 10%

for every one point right that's it's

buying power that's not value it's

buying power right and they didn't wow

on a nominal basis for every all that

time only one year was nominally down it

was fractally less than 1% down every

year was up and that's like 81 or 82 or

something they like 85 or 86 oh back

there okay wow that was the one year was

nominally down interesting so so in

other words during the vulker era uh

that recession was nowhere near

effective enough to really cause any

kind of housing pain people were able to

look through that pain almost well I

don't know if I don't I don't know that

I think it's very similar to today if

you're in the housing business yeah it's

a depression oh my gosh well if you're a

lender you're screwed you're screwed

you're an agent you're screwed you're an

appraiser you're screwed so in which

again if you look at housing as a part

of GDP it's a significant portion

somewhere between 8 and 12%

that's in a depression it has been

negatively adding to G GDP for five

quarters wow so again it's a drag on GDP

so it's a depression but everybody wants

to talk about price and just like the

80s people fought to stay in their homes

interesting right and oh by the way what

do we have today we have people fighting

to stay in their homes we have interest

rate lock in I like to say the FED broke

housing not because they kept rates too

low at all but for too long not only do

we have all of those purchases in 2020

and 2021 we have all those refi oh my

gosh yeah so if you look at everybody I

don't know you know depending on what

Black Knight number you use something

like call it 90% of loans or sub 5% yep

it's not going anywhere and if you don't

have to sell you're not listing and by

the way if you really want to break it

down a lot of people's payments today

are less than rent yeah no kidding yeah

because the rent's going up because of

inflation but people are locked in on

these it's almost like the 30-year

mortgage saved American housing would

you I would totally agree the fact that

we have fixed rate lending is why we're

okay and Canada's not that's a good

point UK is not New Zealand is not right

there's a lot of folks that most of the

world doesn't have the 30-year mortgage

we are very uniquely position usually

you're just like 10 year you know then

you have to refinance it's five usually

in most places wow wow I think in

Germany I think somebody was talking to

me about 10 but most of the countries

are five that I've heard of that's

incredible so so if it's the 30-year

mortgage that saved us then uh are do

you just get do you ever look at the

seasonality of okay well now some prices

are going up in the spring and they're

coming down in the winter like do you

ever look at an a year and say Here's

the best time to buy or what do you like

to look at so I've been buying for 22

years right one until at of time started

in 2001 when we bought 181 18 North

Drive East you can look it up on Zillow

wow it was 107

Grand what was it uh 18 18 Norris n o r

r i s Drive 93703 it's in Fresno

California so when you pull it up and

you look at the values I'm the buyer

that paid 107 Grand oh that's awesome

now this estimate I mean it's estimate

for what it is but it's like 307 but

let's play this out because if you pull

it up for folks a I buy it for go feel

free to show that up on screen I got it

up on so I buy it for 107 about a year

and a half later I do a cash out refi

and I buy more properties with it and

then about a year and a half later I

sell it for 26 something yeah but look

at the next transaction uh 75 in I

invested through right so I started

before I sold at the peak because I knew

there was pain coming and I 10:31 into

apartment end of 05 that was the top of

the market because the market started

turning at the end of 05 very slowly

through 0607 and it wasn't until 0809

you actually had the drop like the full

drop wow that was great timing good job

yeah so we sold Eight houses we 1031

into 80 units so we were in multi family

when the crash happened wow wow wow okay

well that also got hit uh to some extent

did not rents rents went up we actually

had better quality tenants because

people were losing homes oh my gosh yeah

that is interesting yeah you you almost

rarely it seems like something my in-law

said too it's like they didn't really

see rents come down in ' 0809 because of

the short sales and foreclosures people

were forced into renting so it's almost

like you're your pool of tenants

actually uh dramatically increased

correct uh and it just it made the

survivors capable of frankly being

wealthier it it created and gave birth

to almost The Invitation Homes oh no

question 20 9 10 11 I remember the day

so I was buying out of I only buy in

Fresno it's my only Market okay I was

buying out of the MLS because there was

a process every Friday there'd be a load

from the banks that would publish Monday

morning and it was just a routine that I

did for year and a half wow every every

Monday I'd write more offers and then

one Monday no inventory wow I'm telling

myself it's a blip right data corruption

you know all that stuff next week goes

by nothing so I'm calling people because

again I'm I'm a known dealmaker and say

Michael these guys out of out of you

know the East Coast they're buying the

entire book not only they buy entire

book they're paying list price I never

paid list price for anything of course

yeah so they're buying it at list I'm

like the world just changed wow when

Wall Street showed up wow yeah because

that's that's back when what Invitation

Homes was like 2011 or something like

that and that's when Warren Buffett's

like you know if I could home I'd buy

every home I could yeah wow invested

through that yeah that is really

incredible okay so so what's your take

now then I mean like how long can you

you go with a transaction crash I mean

at some point people have to sell or

maybe institutions sell maybe do they

have to we don't know uh do do we ever

get any kind of actual price Discovery

because that seems to be the difference

between us and these other markets that

are crashing is sure prices came down

from May of 2022 to December but they're

basically already year-over-year even

again uh so so when when do we get this

real Discovery or does it take real

layoffs like what does it take well we

need the whole key to how is you need

Supply right A lot of people look at the

supply demand curve of Housing and

everybody who's a crash bro talks about

demand yeah guys affordability sucks I

get it it's not a record though a lot of

people like to talk about it being

record 1981 is the record wow if you

really want to look and we still did 2.2

million homes so again most unaffordable

ever we don't never do zero there's

always death divorce cash buyers All of

That So my answer to a lot of folks is

unfortunately

I believe what happened is we had in two

years we had all the appreciation for

the decade oh yeah yeah just the last

yeah 2021 2022 yeah so we're GNA have

eight years of flat yeah it doesn't

surprise me actually so again

affordability is bad yep how does it get

better yeah wage inflation little little

by little it takes time thank you it's

we are not having a repeat of the Great

Recession I am so sorry it's not coming

yeah well I actually agree with you but

it's also interesting because it

essentially you're also saying we're not

having a repeat of the 2021 22 and I

think there are a lot of people who had

sort of the like the fomo of like oh I'm

missing out on real estate that they're

like all right well this will be my

chance if prices fall 30% then I'll buy

and then we'll get all this appreciation

in two years I mean real estate turned

into a meme stock it did uh so it was I

remember it was 2022 was like March you

know drone po drops rates to zero first

thing I did is I called my lender I go

refinance everything yeah everything

right uh and then we took Capital out

out and um and we we thought okay is how

is this going to affect real estate and

we're looking at the week by- we

transactions and we're like well things

are still selling prices are going up

and everybody's like there's going to be

a big crash and I'm like well the why is

all the numbers going up you know the

numbers are not going inventory is going

down prices are going up right and rates

are down that was 2020 so uh I bought a

bunch of properties in 2020 but it

wasn't until 2021 22 everybody went nuts

because you had the convergence of low

rates Airbnb

uh like everything that just said go buy

real estate it can never be wrong it was

crazy it was the closest thing I have

seen a repeat of 2005 wow and that's

when you got out in 05 I got out in 05

in 2005 you would go to I live in the

Silicon Valley and everywhere you went

people were talking about the last house

they bought it was housing never goes

down this is pre- Crash housing never

goes down it always goes up and people

were flipping contracts that was the

closest I saw was 2022 early 2022 was it

it just couldn't go wrong yeah and I

start screaming right I was like guys

real estate investing is not easy you

all are financial speculators and you're

going to get spanked yep and I actually

think the most pain is coming to those

poor LPS limited partners and

syndications lot of bridge debt well

because yeah they have these shorter

term loans because you're not getting

Fanny Freddy loans no you're getting

short-term interest only bridg debt dfcr

loans yep and but that's how they pump

the cash flow you know that's that's how

you get the syndications like like I

look at of these syndication documents

and they're like oh yeah yeah yeah we'll

give you a 6% cash flow and then you

look at it and they're like oh we'll

charge you a 1% management fee per year

on the asset value but we're going to

defer that management fee until we sell

the property which basically temporarily

pumps your net income on these projects

on these syndications but not only that

uh you're uh you're you're looking at

these interest only loans you're not

paying down any principal you're going

to have that refinance risk at some

point

in I mean you're doing 200 units you're

trying to do value at are you kidding me

moving tenant vacancies there's no value

add in these multi like my opinion like

these institutional investors are are

plowing down like pension fund money and

they're getting paid based on

Acquisitions and uh and basically

deploying the capital they're not

getting paid it's like you're not

getting a bonus because you added value

now can you do value at a multi of

course you go and find a low rent

property raise the rents whatever right

but realistically like I think of Grant

cardo and his value ad is putting his

name on the buildings that's his value

something yeah yeah yeah is 10x living

is is what he does and like to some

degree it's very like almost trumpian

it's like all right this this property

is worth 200 mil but now that it has the

Trump name on it it's worth $1.5 billion

which then you go okay like maybe Trump

is bringing in a lot of revenues because

he's doing events and stuff like that

but going to Cardone because that's a

little less complicated

that's what he does he puts his brand on

it and now it's worth more well also

he's on record of bragging about buying

at three and a half caps and all of that

now that you have a 10 year roughly 5%

what's the point what's what's a three

and a half cap that's you know redo the

value of that it's it's not there yeah I

just in my in my email I have this I

have this email from from JP Morgan and

uh they sent me oh boy it's it's one of

these first ones a bunch of mores came

in uh oh here it is okay uh quick update

our treasure our JP mortgage treasury

market fund yields have bumped again now

up to

5.33% same day liquidity no holding

period stable value $1 in $1 out 5.3%

you do nothing no risk 100% liquidity

exactly it's insane it's insane and now

you're you now if you're a syndicator

trying to refine to that you're going to

go get seven and a half 8% so you're

massively negative massively negative

you can't afford The Debt Service the

pain is real so you have to sell then

you the bank's going to take it

back you have to sell you may not have

Choice the bank's going to say give it

to me you're right you might be right

well so isn't that possibly going to

lead to this this price Discovery over

time or is that are you saying those

sort of sales are what are going to keep

a lid on prices we have to separate

commercial and residential okay fair yes

yes commercial real estate repeated the

sends of 05 residential what do I mean

by that go back and look at 2005 the

ventages of mortgages 51% were arms oh

adjustable rate mortgages not only

adjustable rate mortgages but I think it

was 14 or 13 or 14% were pick a

payment remember those they're illegal

now well of course it's so the the the

neams that's one other pick a payment

negam oh okay I hadn't heard that

version of that pick a payment was and

everybody picked the payment which added

debt to the end ah okay okay that's okay

got it same deal you did the same thing

in commercial so the pain that is

transpiring right now is going to be

concentrated in commercial it's just

starting the first inning residential up

until this year 98% of loans were fixed

the Blended or What's called the

effective interest rate is

3.6% it's nothing right your payments

less than rent you're not going anywhere

this is going to be like 1980 for

residential I was my family not very

rich fought to keep their home in like

8384 Dad was unemployed mom was always

stay at home it's always unemployed in

84 it's a bad time in the valley we're

one day away from being foreclosed on

and we do everything we can to fight to

stay there because we know if we have to

leave we're screwed oh gosh because

anything anywhere we go is smaller yep

and cost more yep because it's just

where we were at the time so that's what

people don't understand this is not 0789

10 where you're walking away from a

payment cuz it tripled yeah yeah exactly

these are people with 3% mortgages where

the payment is less than rent it's a

third maybe or whatever where we live

it's the opposite right it's like it's

0809 happened because people's the

people who were in their homes saw their

payments go skyh high where they're like

I could rent this same place for a

bargain so so of course you're walking

away you're you're please like they

would do I remember these the short sell

incentives it was like the bank if you

agreed to do a short sale with them they

would give you 10,000 bucks to as as

like compensation for going through the

process 10 or 15 grand for moving

expense says they would just give you

money to not have to go through the

legal process because it was cheaper for

them in the long run so you were getting

paid to go from a high payment to a low

payment yeah exactly that's such an

interesting point because now you're

actually locked into a very low payment

and a low rate you are basically being

paid to stay no and that's what people

who are calling a crash in prices don't

understand people will fight too the

nail to stay like my mom and dad did in

' 84 they're not going anywhere they

will get roommates before they lose that

house they will lose their car before

they lose that house interesting and

that's what people don't understand

about residential residential is pretty

St and I think it's going to have like I

I I'm a big believer that we're going to

have like this weird volatility over

this next decade like I don't I don't

know if it's I certainly don't think

we're going to see a 21 22 for a very

long time maybe ever again because that

was insane the Confluence of of money

Printing and low rates and everything I

don't know that that we'll ever see that

I hope I'll be clear I hope we don't see

it again that was unhealthy it was UN I

agree with that I just let speculative

Mania it's crazy uh it I think it's

going to leave a lot of people with a

sore taste for Real Estate now too

especially people you know I went to I

was in Vegas the other day and I go

through an open house and I'm like so

why are they selling they're like oh

it's an Airbnb and I'm like okay oh they

just banned airbnbs here and I'm like

New York did the same thing yeah rip so

uh and we should definitely talk about

the Airbnb bubble but in this price

volatility it is interesting because I

don't know if it's because there's so

few sales or what it is but this summer

I'm out in markets and I'm seeing

everything's multiple offers almost

everywhere so I think there's I actually

think there's three markets going on

right now I look every day yeah yeah

please so for the folks watching this if

whatever Market you're in I suggest you

do the following draw a line called

media home sales whatever that is for

you okay right in Las Vegas I think it's

like 440 Grand yeah just use pretty in

line with America almost pretty pretty

much so anything that's 2x the median or

above is really slowing down 2x the

median so 440 time 2 is 880 mhm crickets

for that area if you're 200 and it's 700

then it'd be 1.4 got it okay so wherever

the median is for your buy box or your

area double it that's the luxury Market

crickets slowing down stay out of that

stuff if you want a deal like if you're

happen to be lucky enough to be shopping

for a luxury home yeah go do what

Patrick B Davis says and write

disrespectful offers right go get 30%

off seriously you probably could in this

yeah if they got a sell he's not wrong

they got to sell yeah okay now take that

that same line and go the other

direction okay so if you're 75% of the

median okay and you're a clean property

which means passes FHA passes VA

inspection there's none of that stuff

they can't build them no that's where

you get your multiple offers so you're

getting very noisy indicators but that

said that's 525 on 700 by the way there

you go so if you so you know this Market

go find a 525 oh it's multiples ex there

there I like this metric this is good

but here's what you do right you the

wedge deals okay go find a 525 that

doesn't pass FHA right right then you

can go get disrespectful I did this last

year when everybody was saying you can't

do it like Yahoo finance 87% of the

people last October said it's a horrible

time it just pissed me off oh yeah I

mean what did they say be be greedy when

people are yeah so I said I called it on

my show right I said I'm going to go

find I'm going to go find one and I'm

going to buy it out in the MLS wow I

bought two 30% off fixed them up flipped

them made 90 grand total away I did flip

them

wow you're like it's too much I did too

well I it was what I called I had you

know I had somebody I wanted to pay a

little finders fee and all of that but

it was just just annoying okay but what

you're trying to do with house hack yeah

because you have the cash it would have

worked last year it's going to work

brilliantly this year because your

competition is less oh interesting thank

if you're competing with owner rocks

yeah you shouldn't be like if you're

going for the pretty stuff ignore it no

if I see something in owner is okay

buying out yeah just don't even bother

showing up yeah you're right but I mean

what did I buy I bought one on again

which people can go look at the pictures

it had a shake Roof oh my gosh you

bought a wood Shaker I did because well

it's funny because the buyers can't even

get insurance on those suckers it's

brilliant so I I knew I was going to rip

it off the first day I owned it of

course yeah put it on for 12 Grand also

it had a four car garage I've been in

the market for 21 years it's the only

fourcc car garage I've ever seen in the

city is it weird like no it's two car

it's a two-car and a two car a hot rod

guy owned it oh okay okay so he added on

another he added on another two car

behind his and you have larger Lots out

there uh it was a corner lot so it had

easy access off the alley so it was

still like a 10,000 but the point was it

had something that nobody else had four

car garage the house was built in the

50s so it was a ho h 31 yeah right just

just classic but it was listed for 230

we bought it for 170 I put 45 in we sold

it for 270's go in 93 days good for you

and see you got the time frame down I I

keep I I tell everyone I want these

projects done in 45 days they're never

going to be done in 45 days 90day FHA

rule well again if you're going to keep

them for flipping for flipping yeah yeah

okay okay well but that also can include

your escrot time you know all that but

this is interesting so so I like this

stat because I agree with you uh and

that's interesting what you're saying

about all that fear last year so you're

saying that you're seeing that similar

fear now absolutely we are repeating Q4

of 2022 oh tell me people are leaving

the market tell me they're leaving in

droves buyers are hearing it can't work

last summer we were hitting seven now

we're hitting eight buyers are pulling

away

transaction are going down I expect

September existing home sales to be 3.85

million which will break the low of 4.02

million wow we're going sub four even

though red fin CEO says we're at the

bottom he's wrong well he says that all

the time he's clearly wrong but we're

going stocks at the B

oh but here's here's the deal there will

be more opportunity in Q4 and q1 than

last year so uh q1 M you think they'll

so last year we had a miserable Q4

stocks were also horrible and then

everything started booming again in q1

why do you think this q1 it wouldn't

boom in like Q4 will be painful but q1

it'll be on rates so again last year I

do this every day so until the end of

January it was rough okay rates came

down you saw people like we if you

actually go back and look at the

transaction volume we had a bump in

February because of all the flipper

inventory was left over interesting and

they sold yeah so so rate sensitive I

mean Christian you could throw up on

screen for a second here this is and you

could see it here uh this is what if I

throw in a 740 credit score which it

always tries to default a 700 but I go

for 740 uh and uh the 30-year fix not

only broke eight it is now at8 and a3d Y

which is insane and then looking at the

like I'll go to the 10e treasury I'm

going to zoom out here for a second on

the 10year treasury uh so I want to go

to let's go to the beginning so oh so

like this sort of drop so as soon as you

got that drop and rates the first

quarter this is a downtrend this is and

this will this will happen again this is

what you have to watch mhm we are

building pressure in a pipe yeah that

pressure is called demand uhhuh

everybody is sitting back waiting for

rates how many people are waiting for

rates to come in oh everybody says as

soon as rates are 3% again I'm buying

well I think a lot of people are saying

it's 6% again they're are you serious I

do I talk to agents every week okay

across the country yeah and right now 7%

is the barrier oh my gosh 7% eight

because again I've been studying the

consumer cuz I have an econ degree for

30 years nice yeah the consumer

psychology is rather repetitive we get

used to things a lot quicker than we

used to you can go back and look at the

mortgage chart we hit 6% last August

crickets nobody shows up to everybody's

like oh my God comes down goes back up

6% went through like a hot knife through

butter six and a half pulls back seven

pulls back now we're at 8 it's going to

build up tomorrow's an important day as

you know as I'm sure you'll be live

streaming 530 if we get a number over

170 mhm we get an unemployment rate

ticking down to 3736 rates are going to

rip oh yeah of course but I think a lot

of the economy is slowing down we get a

155 we get a 38 39 yeah participation

rate whatever it is yep it's going to be

a sign the fed's done I personally think

the FED is done yeah I also think the

FED doesn't cut next year so I'm the

higher for longer Camp W really right

it'll be the first time they haven't cut

for 15 months the record currently is 11

months yeah cuz I think pow wants to

kill the Fed put I think he's tired of

Wall Street and they're gambling

punishing the little guy and he's going

to hold uh for 15 months wow so that

would put us 15 months would put us all

of next year so maybe it's 18 months but

no Cuts in 24 also 15 more months yes

okay okay okay 15 more months uh so

start hiking was what like March of 2022

end hiking maybe basically uh year and a

half later and then you think basically

a whole another year and a third of stay

of stay wow

yeah that would that's going to create

opportunities for just years I feel like

of people not wanting to buy no the

other thing you know this but for the

audience is we have a a unique spread

between the 10 year and 30 year it's

roughly 300 basis points historically

it's been 175 180 sure so we have 100

basis points easy that could come in

once the banks think the FED is done

until they think they're done they're

going to add the spread well it's also

all the speculation going on in shorting

bonds and stuff like that okay okay okay

all right but once once the FED has made

it clear they're done you're going to

see that come in which will mean rates

are in the high sixes okay and again I

think there's pressure in the pipe I

think there's demand behind that we'll

see but we will not I don't think we get

back to six million existing home sales

back to where this started for at least

five years and probably eight years

interesting so my my crazy theory is

that uh 10 years we're at 1.8% interest

again is that possible or highly unreal

what's your opinion so again just so 1.8

10 year 1.8 what are we talking mortgage

rate which is lower than what we've had

before I uh I would be afraid if that

happens why because something massive

would have to break really because I

mean like we have uh you know we had the

European sovereign debt crisis in like

2012 13 or whatever but I mean right

before the pandemic their mortgage rates

were like4 sure which is insane yeah

yeah well because you you're basically

you can't you can't get inflation I mean

right before Co our inflation was stuck

at 1.75 a long time yeah they were

thinking about lowering the target so so

what's to stop that from coming back I

mean over time I don't think you know

like over the next year or two obviously

10 years is my 2033 is what I'm saying I

yeah so again one guy's opinion course I

think the natural interest rates for

mortgages are somewhere between five and

6 and a half% the natural wow so you

think like that long-term average back

to that not this because the the

counterargument is well the the 40 Years

of basically disinflation from the early

0s right to now is is the trend that

we'll just go back on that you know

we're on that disinflation path and then

oh we printed too much money and then

okay we back I think we've I think we

tested QE H and I think QE led to the

fed put oh and and I want the fed put

killed well so maybe you want it killed

but or I should say Powell I believe po

wants why would he want to though

because I think deep down he doesn't

like the fact that Wall Street wins

either way interesting right okay Wall

Street takes on overl leverage no risk

management it gets a bailout we pay for

it yep yep I think he's tired of that

interesting so punish Wall Street look

look at billionaire or Barry uh stern oh

yeah dude he's getting hammered well

yeah cuz he bought a bunch of real

estate in the bubble of 21 or whatever

and now he's dumping it well that and he

has bad debt he's he's ill he's a real

estate guy yeah he's got a bad debt

structure he sold 2,000 homes this is

back to your question about will the big

institutions sell yeah so a

if you look today they are net sellers

yeah but what does that mean yeah right

they bought 400 they sold 600 but

they're net sellers right if you want to

create a cash crash headline yeah they

sold 200 more than they bought I mean

that's a good point yeah it's nominal

relative to would you say 4 million

transactions or whatever noise but

factually correct noise M then what

happens if Wall Street wants to sell

thousands at a time do you think they're

going to call their local agent and list

all a thousand uh yeah you're right

probably not no they're going to call

five buddies on on Wall Street yeah sure

and say who wants them Barry did this he

called everybody around and Invitation

Homes gave them the best bought it

that's interesting so they're not going

to be dumping in mass and they have

different structures and they're paying

dividends they reats now it's like a

dark pool in stocks where they they

trade it in the you know off exchange

off exchange they'll sell onesie twosies

we want out of that market we want out

of this you know whatevers but the time

it would take to sell a thousand can you

imagine the walkthroughs and the

inspections oh my gosh or the even the

light no they're going to sell it to one

guy you know one team yeah at one stroke

of a pen wow yeah so then no price

Discovery stay rentals so what about

okay well what about the Airbnb bubble

then something's got to cost what's

going to cost prices to come down if you

happen to be shopping in a market like

around Dollywood okay you're going to

have a good time to buy oh interesting

because again there are some markets

that got a flood of out of state out of

area money well that happened in O too I

mean Florida Vegas these were like your

bubbly of bubble Market the towers right

everybody was buying flipping condos

until they weren't so anytime you had an

outpouring of external Capital that was

overpay because the beauty about real

estate you know this traveling around

the country is every Market you go to

there are investors that are killing it

oh absolutely because they know their

Market they Fresno go let's go so they

know their buy box they know their

Market yeah but if you come in with

external money and you're arrogant oh my

gosh you overpay oh you get

screwed over well because all the

contractors know oh out of area here

they know the phone number right they

see the 408 whatever your area code 949

or whatever well then they think you're

not going to check on the work and

you're not going to sharpen the pencil

oh yeah right oh yeah right so um I do

think there's some Airbnb pain but it's

going to be very localized it won't be

big enough to impact the country wow

it'll impact a couple of little pockets

and if your area happens to become

illegal get ready you know what they're

going to do though they're going to flip

to midterm oh yeah they're going to go

midterm furn is there enough demand for

that that's the wrinkle I don't know I

don't know that either because I've been

very tempted by that because obviously

you can get a higher yield uh it's not

that much harder to manage it's more

intensive obviously than longterm but

compared to shortterm it's a joke easy

uh

but I mean let me put it this way I've

never needed a midterm rental you know

like who has I don't know like traveling

nurse but okay how many traveling nurses

can there be right it's like at what

point does a hospital have all traveling

nurses versus just like two or three you

know yeah it it I will agree with folks

that there's a need cuz traveling nurses

construction workers they do exist right

Oil Workers whatever long-term contracts

I don't know how much I don't know it's

not where in my area is it's not where I

I don't think if I put a rental ad up

and I I going to try it but we'll put a

rental ad up and be like you know

available for long or Med like at the

bottom of the description you put also

available for medium to rental but

here's the here's the wrink interest it

has to be furnished right right right

like will furnish or whatever we could

advert I I would guess if we advertise

both possibilities longm I'll rent it

longterm in a day and the medium-term

will take me months correct that's my

guess as well unless you have to be

right next to a hospital right yeah good

point good point that's really

interesting okay so that's Airbnb that's

uh that's race yeah because we said what

we had 88.3% now so what about a

first-time home buyer I mean like how

did you get started and how should a

firsttime home buyer start today because

people look at this they're like this is

insane I feel for first-time home buyers

today it it is it's remarkably tough

today affordability is horrible yeah um

you can't get around it yeah that said

um you can make a choice you can make

your landlord Rich keep paying rent you

can live with your parents I mean there

are options okay that line is really

funny I have to interject when I first

became a real estate agent I uh printed

like the sleaziest uh like landlord

picture I could find uh he was like on a

sofa or something like that and uh

smoking a cigar uh and what I did is I I

put some text under it and I'm like

thank you for paying my mortgage and uh

then I uh I stuck that up in uh laundry

rooms of apartment buildings nice I I

got a phone call I bet you did from the

property manager very I bet you did uh

take this down son yes we're going to

rip that off the wall never show up on

our property

Again In fairness looking back I'm like

okay I get it now but then it was funny

it was funny but yeah it there's no

question it's hard um there's no

inventory yeah there's competition

you're you're bidding against landlords

that are buying because again

everybody's kind of fishing for that sub

median that's moving ready ready to rock

and roll um it's hard if I had to start

over

the first thing I would do is house hack

yeah and I would probably house hack

units Y and just yesterday so we're

recording this on Thursday just

yesterday Fanny May released some new

guidelines that you can get into a

Triplex and a fourplex with 5% down

which we were saying used to be what 20

something us to be 20% yeah now it's sad

because you think homeowner occupied

should be five but then you go what

three units four units and I have to put

that much down yeah so it's brand new

guidelines goes into effect six weeks

that's what I would do I would house act

that it's a really good idea it's not

for everyone I understand is it harder

to get a wedge on multi family for for

most people or can they find those low

rents so you can find them there's just

less of them way less yeah okay way less

um also what you can do what you did

right that second book you talked about

at the opening has your story in it

because the 203k loan oh my gosh the

renovation loan it's a pay in the ass

but it's great I mean for your first

home yeah you go you got to go through

you got to work you got to do what you

got to do to get in yeah yeah you got to

get on the property ladder somehow some

way so there are lots of ways to get in

it's real estate investing in buying

home is never easy I've been doing this

22 years that's why there's money if it

was easy there would be no money to make

I I and I tell this to everyone I work

with I go look what buying homes and

renovating them you it's going to be a

headache you're going to have to fire

contractors you're going to have to

refine your contractors you're going to

have to work hard to find new ones uh

there going to be material problems

there going to be tenant problems

there's always something M but that's

why there's money to be made correct and

that's why you should buy it so okay so

how do you get started so you get

started how I can rent out rooms or rent

out other units yeah okay and um so I'll

go back to my story how I started right

so it's it's really weird um so I'm

Generation X right Gen X I was raised

with the belief that you go to school

you go get a good job you go back to

school you get a better job and you

climbed the corporate ladder I believe

that until I was 30 years old okay right

so I went and got a degree so you were

on the path for a while I was on the

path okay um I happen to be investing

cuz I'm that old in the Doom crisis so I

turned s Grand into almost 200 Grand oh

wow right so much like the crypto stuff

but just stocks right so um you start

getting cocky and then I lost 80% oh in

like 10 or 11 days oh no 10 or 11 days

days so it took me three or four years

to build it I lost it all in you know a

weekend seemingly oh right terrible so I

come out with 40 Grand you know it's

more than seven but I always I remember

the 200 of course everybody everybody

does so then I go um and I read the

purple book which is Rich Dad Poor Dad

oh yeah and I'm embarrassed to say this

Kevin I have an advanced degree I'm an

accountant I have an MBA and I knew no

one that had rental properties I didn't

know it was a thing wow oh my gosh so

then I spend a year cuz I live in the

Silicon Valley they don't teach it at

school they don't teach it at school

nobody in my family talked about it and

I was looking for cash flow yeah it

didn't doesn't exist in the Bay Area I

didn't know that you you Snicker but I I

wasted 52 Sundays man 52 Sundays my head

against that wall so ultimately I find

Fresno California 2 and a half hours

away I buy I buy that's why you moved to

Fresno I cash here cash I invest there

do you live in the Bay now I I've never

yeah I live in the Bay Area oh hours I

thought you would you lived in Fresno is

well Mountain View California oh That's

you that is a beautiful area

that is so nice Okay very nice very nice

I'm jealous yeah it's a very you're

coming down to venturo you're what is

this poverty town I flew into s Gage

beautiful good one all right all right

yeah so um so we go to Fresno we buy

that property and but where I'm going

with this is I was always an employee I

always have an employee mindset the

thing that impressed me about you and

why we did our first interview is I look

at you as an entrepreneur born that way

just freaking wired differently okay but

most people I talk to were

employees and they don't understand

getting on the property ladder they

don't understand that inflation is a

feature not a bug you know cash flow day

one I think you can fundamentally change

your retirement by getting to four that

was my goal after reading Rich dead hes

if I have four rental properties and I

bust my ass until I'm 65 my retirement

will be better than most that was my

vision how many how many retired people

does anybody even watching know that has

more than four rental properties

crickets I bet 1% maybe not many not

many not many but when you get it's so

attainable too every few years buy a

home one every two years that was my

goal that was my my grand plan there you

go after reading one every two years wow

and then you get in you start doing the

work you start understand how to

leverage Capital you get you go from you

know I had my 40 Grand was gone after

three houses wow I never put another

dollar in everything was Cash Out refire

1031 exchange oh good for you we built a

portfolio of 170 some odd units it's

amazing from from three houses that's

amazing and now you have a multi family

building as well I have part of that I

guess yeah no it's probably 100 units in

50 units and homes and some duplexes and

quads W that's amazing yeah wow so you

managed all this no I I've had a manager

I've two and a half hours away brother

yeah I know I had a PM since day one

yeah my job took I was often in three my

last 10 years I traveled almost every

day oh it's so airplanes so I did every

I bought everything out of the MLS yep

no door knocking no none of this stuff

out of the MLS my job was fine deal

secure Capital but people get mad when

you say MLS you're not allowed to buy

MLS and go on YouTube and say MLS oh I'm

sorry that's what I did I mean I think

people think there are no deals to be

had on the MLS there plenty of deals to

be had on the MLS yeah and again I think

today you just today if you what am I

doing today yeah I in my market if it's

over 30 days on the market and it's in

my buy box I write an offer oh nice

you're lowballing of course love I'm

looking for a motivated seller yeah

here's what people understand yeah the

22 years of I doing this this is the

second best year to find a motivated

seller oh I love this second best year

2010 was better sorry 2010 was great

because everything was short sale and

the sellers didn't care no buyers dude

that's what it was that's also true

because nobody get a bank that's so

funny you say that because I got in the

industry in 2010 and

uh I remember asking the community the

real estate Community like so how did I

get started and they're like find buyers

yes exactly yeah that's what I don't get

about everybody says the price crash we

get a price crash I'll buy yeah no you

won't yeah no they won't no you'll be

scared and keep going lower yeah so

again right you can look at North Drive

you had it up earlier I buy for 107 sold

for 265 or 263 whatever it was it

ultimately goes to 300 yeah and then it

crashes all the way to 75 jeez Lord

there were nobody buying at 75 I was

buying properties the whole the way down

the cheapest house I bought was 23 Grand

or 28 grand 28 grand did did you lowball

it then I tried to buy that one for 55

somebody I'll oh oh oh Norris Norris

Drive oh I tried to buy back cuz it was

the first one and you know all of that

interest want to look at the comps now

like what's the market doing now out

there are are things sitting or like

what do you see same deal for so Fresno

California's median is roughly 400 395

okay if it's five if it's 600 and above

crickets okay if it's 300 and below and

moveing ready sells like hot Cas

interesting yeah see like here's one for

$479 just dropped 46,000 bucks if it's

below if it's above it's it's very

repetitive here's one that looks new 667

77 days on the market crickets wow yeah

you're right oh that's really

interesting I look every day and uh and

so what's what's your hit box over there

so my buy box is uh single family cuz

I'm buying single family home oh but you

can't scale single family yes you can if

you buy enough of them and then you 1031

exchange into Apartments you scale just

fine nice nice yeah with all the pain

come into commercial that's what I'll be

doing again oo going from the single to

the multi I did it once wait so are you

saying buy singles now and then as the

pain comes for commercial flip

over I will repeat what I did in ' 056 I

will sell everything that's residential

and 1031 into Apartments okay and so

what do you think about um uh like is is

do you like threes and twos like what's

your favorite my favorite uh rental is a

preferably four bedrooms four bedroom

rental okay because they stay longer

they stay longer okay let's turn over

turn okay I like that yeah I'm just

looking at sort of the the the Fresno

Market out here seems like yeah I mean

three and twos all day long for like the

low 3es or whatever and so what are

these things renting out for are you

getting good like so depends on what

part of town but you'll get anywhere

from like 1900 to 2500 okay okay and and

like who rents this I mean are do you

rent by credit score what do you like

yeah so I have credit score and 3X uh

the rent for income and no evictions

that's your rule of thumb as long as you

have that you're good so no evictions 3x

credit and you're running this through

what software uh I have a property

manager so I give them my rent box they

give you the report done and you pay

them what8 n% six 6% because you have

volume got it yeah and and then you also

have the building that they're managing

with the units and okay and I have big

unit so it actually has on site and

right there's a salary for that or

discounted rent or whatever it might be

got it got it got okay okay that's

fantastic uh and so the goal then is are

you you're still buying right now

because you flipped to but you're still

buying now and absolutely you'll buy

these and how long when when do we flip

to commercial so my guess is the

commercial pain is in the first inning I

think most of the pain will be on the

really big stuff which I don't play in

you may have the opportunity to play in

I'm targeting 20 to 40 units 20 to 40 so

I'm thinking 18 months is because again

what people don't understand again I say

this was experience they think

residential and multif family operate in

the same cycle they say real estate and

they think it's all the same yeah yeah

it is not the same I mean I guess to in

in some regard if well it has to do with

rents though because see if if rents

like let's say values on the multi

family fell because rents were going

down well then it would be more

desirable for people to rent an

apartment versus a house maybe and then

you could affect housing prices but

you're saying no no no rents aren't

going to come down it's just the price

is because of the loans and you don't

have the Locking effect protecting you

like you have on single families correct

this is very complicated or

rigged yeah the the beauty I mean just

do the math right you buy a building

let's say at a three cap yeah and now

you have to sell it at a six cap yeah

yeah what kind of haircut do you take

yeah 50% all the equities so all the

equity's gone yeah right because the

bank takes a hit yeah cuz you probably

put 50% down you prob put 25% down 30%

down that's true Equity gone bank takes

a haircut I step in as a new buyer at

50% off oh yeah yeah that is so that now

you're going to have some but and and

the interesting thing I think people

forget too is that even if you have that

I think a lot of people are worried that

oh it's the banks that are going to take

most of the hit it's actually the owners

of the buildings who take the equity

yeah the equity WIP out first let's

always but let's play 06 let's play 09

whatever year we want to take to today

in the great reset or the Great

Recession or whatever you want to call

it the loans averaged 99% some were 103

you know this right yeah cuz it was

residential products in 90 97% was a lot

down yeah so any haircut the bank took

MH commercial loans which I have some

got so loose that you could put as you

could put as little as 25% down but

always 25 right because on some houses

you could even borrow up to like 110%

yeah it's crazy but you can't do that on

Commercial because the debt service

coverage ratio right one quarter

whatever whatever right one and a

quarter one 1.3 whatever they say so

what people don't understand about

what's coming is the equity which again

in a world where syndicators were over

their skis doing fees and having teams

and having deal flow to pay the bills

that's I would not want to be in

syndication I wouldn't want to be an LP

in a syndication yeah their Equity their

money's gone and they don't know it wow

really you think it's that bad gone wow

gone I mean read the real deal so you

could make videos like housing crash

except here it is not there you would

say real estate crash real estate crash

okay I would say real estate crash not

housing okay see I I need I need the

title here yeah it's real estate but

yeah there is a real estate crash we've

had a transaction crash in residential

we will have a value crash in multif

family and office you think that'll

insulate office I I think everybody's

like oh yeah yeah yeah we know that the

multif family that's that's very

interesting and you don't think that

that will have much if any impact on the

single families again I think rents on

multif family will come in not single

families people want to live in single

families yeah they want the backyard

especially today what did the pandemic

teach us space is good optionality is

good I want to put something in my

garage I want a backyard for my dog

space is good I have I can only think of

the thousands of tenants I've had how

many people moov from the house to an

apartment it was usually a divorce good

point once you're in a house yeah stay

in a house well and the turnover on

units is going to be a lot higher

because people are trying to get to that

house my average my and I've done the

math several times my average on

apartments right which are you know just

like w next to each other is two years

roughly two years that's actually really

good yeah just it's just under two years

like 22 months my houses are over eight

years oh my gosh eight years four

bedroom bath that's why I like fantastic

eight years yeah because the expensive

part is the turnover but correct

apartments are obviously less expensive

to turn because carpet and paint quality

stuff yeah yeah exactly wow so uh so

you're writing offers on uh on on on

single families correct what's the

competition like on these over 30 days

are they like oh screw you I've already

had offers like this or so um I run a

very simple process okay so I find a a

property I like my offer usually is 30%

or more below listing you just take the

price and take off point yeah I I run

the math I only write deals that produce

a great yield okay right cash flow yield

cash flow y

basically invested Capital down payment

repair cost cling cost numerator is

expected cash flow what do you want

what's I want I so my average is six I

only want nine wow I'm only doing great

deals and every Market's different San

Diego might be 2% this or that right but

that's a problem like how do you how do

you justify that why is San Diego 2% of

Fresno you could do seven or whatever

well some people only want to live in

San Diego some people only want I'm not

going to I don't justify markets right

CU if you want to go get a double digit

go buy in Detroit right correct yes

you're can grow broke broke buying cheap

my market where I know I will only get

9% so I write offers that will produce

9% but what's the difference between uh

bu cheap go broke your market then and

like like where's the line well here's

the deal I you and I live in California

yeah I'm sure you have heard the

following statement I can buy a house in

said City in the Midwest for less than

the cost of my Tesla oh yeah Yes you

heard of course but who wants to live

there no jobs whatever schools whatever

even worse why is that a good deal yeah

right yeah that's the problem why so

it's cheap but so what maybe there's a

reason for it's cheap yeah they give

them away in Detroit just pay the tax

yeah pay the back taxes but here's

here's the problem we get a lot of folks

at least I do in the Silicon Valley so

I'll speak of my experience that have

money from stocks or options or

companies going public what they buy

along the highway like crazy like look

at Hayward yeah exactly right exactly so

what they do is they they find these

prices they pay cash so they think they

think they're okay and and what they

don't realize is they're being arrogant

they're trying to jump the line because

they have money you have to learn the

market like we talked earlier every

market across the country there are

experienced investors yep and I hate it

when I hear a brand new investor say I

just bought something and pick a city

Midwest yep and they tell me I paid L

price yeah it was on the market 90 days

yep and um they think it's a deal I'm

like there's every every local investor

kicked that rock three times yep and you

paid list price cuz

are arrogant or lazy or both yeah you're

going to lose your ass and most of the

time they lose their ass wow you got to

know the market man 100% so uh okay so

that's really interesting so how and and

uh how many deals are you striking right

now in these levels I mean is it is it

still too early or what do you think

it's probably still early so I I expect

because winter people have to sell all

the time I did two last year I expect to

do one or two this year I'm only trying

to do one or two a year it is my Capital

no Partners all of that oh Partners yeah

no Partners um do that so yeah I try to

do one or two a year most of my deals

are between Halloween and New Year's Eve

yep yep November December I'm playing

I'm playing the winter I'm playing

everybody's on vacation yep right

Thanksgiving weekend for whatever reason

it's a great time for me to strike a

deal Black Friday Black Friday

everybody's shopping yeah um so I expect

this year to be no different so I expect

to get one or two deals okay what are

your favorite markets outside of Fresno

is that it that's the only Market I know

in detail I happen to have just bought a

big ass house in Vegas okay so I'll be

spinning up Vegas next year prove I can

is this your your uh um personal

residence it's a personal residence it's

a second home Curr now your income taxes

are going to zero state state yeah of

course yeah um okay so uh why I mean

you're going to go from the bay area

which I I want to be very clear about

this if you were going from San

Francisco to Vegas yeah different good

for you yeah okay that's a good trade

yeah that's a great trade okay Mountain

View to Vegas yeah what part of Vegas uh

Henderson Black Mountain okay okay all

right all right okay so so this is why

congratulations than well thank you I've

been retired for six years now okay I

don't have to work so why do you care

about the state income tax I don't okay

and that's why I didn't move okay my

vice more specifically my wife and I's

Vice is eating out we eat out 10 15

times a week we're spoiled lunch dinner

the place for this but even worse we had

all our spots in the bay we've been here

we've been together 30 years in the bay

so we had all our favorite spots over

the last p is crushed that yeah sure

gone you can't afford it over there or

the service is gone or the quality is

gone so you have a choice between

Chipotle and speaking of Chipotle is

there a Chipotle over there did you get

a Chipotle I didn't but that's okay but

I'll take mine if you have it oh look at

that so at the end of the day I'm

spoiled I love to eat out I love good

food and now I can have great food we I

spent a month in Vegas cuz I didn't know

and um we had two meals a day for 30

days and only one bad meal oh my well I

mean that's thank you for that uh is it

uh maybe you guys you guys figure it out

um but uh yeah I'm starving I need like

a bite of something but um yeah so I

mean I'm a big fan I I would love going

out to dinner with but like do you ever

run out of things to talk about with

your wife like I know this is more

personal like because Lauren and I we

sat down at a Macaroni Grill uh boy we

were together for like maybe six months

and there was this couple probably in

like their 80s uh and they're like oh we

um well we're watching them they didn't

say a word the entire time and I looked

at L I go I never want to be like that

and so every time we go out we just talk

the whole time we're like we were here

for two and a half hours what like we're

together at dinner alone more than like

when our company goes out to a dinner it

feels like uh so so that's good that's

aw yeah you have to you have to work on

it relationships are just like health I

know you wear on a health kick you lost

a bunch of weight running and all that

you got to work on your relationship you

have to you have to be focused otherwise

it'll it'll go the wrong way and you

have a daughter I do that's awesome any

other children nope just one she's 32 so

32 that's awesome she's uh yeah she's

and you going to get her into R State I

did it wrong okay so we so she was um 10

or 11 when we were buying all these

trash foreclosures okay so we we drove

to Fresno with her in the car to see

these dumps she's scarred I suggest

never taking your kids to see ugly

properties only taking them to the

pretty ones I made that mistake don't

repeat that mistake so she's but she's

had a good life I mean her education was

paid from it she's an artist she's

having a good time she's happy that's

all that matters to me she's happy oh

that's great this is really cool so so

advice to first timers now is just get

in a is is that your suggestion first

advice is don't over complicate it I

have this saying create a buy box okay

so what is a buy box it is a uh set of

criteria that produces between 20 and 40

active listings that is it yeah you

don't need more than that then you look

at that every day for 20 minutes and

track and you track you track the

changes yeah you don't need that many no

in in 90 to 100 days you will be able to

tell me or you or your wife or husband

what an average deal is and then you

just change the math for a great deal I

had the same buybox in Fresno California

for three freaking years wow a buy box

is two things permission to focus and

permission to ignore oh well gosh

because if you're looking at everything

you you can't focus no you go backwards

and then you add other cities it's

impossible come on man no like uh you

know one one two cities at a time is

what we're going to do with house act a

real estate startup uh otherwise it's

just impossible because you need to how

do you scale construction how do you

scale the management it's insane yeah no

you you've got to certainly new

investors again and the other Beauty

about today is real estate is slowing

down yeah yeah there's no rush there's

no rush patience I keep saying that

patience you can learn you can learn and

then the last thing is like I said

earlier in this market is the second

best Market to find motivated sellers

yeah so people are saying you can't do

it try try it doesn't cost anything to

try yeah write an offer makes sense for

you yeah the seller can call you all bad

words could say nothing they could

counter or they could say yes boy you

know I what do you make of this so I'm

going to find like this volatility we we

don't have to put this on screen just

because I don't want to piss these

sellers off but um I I was in uh a city

in NorCal and uh so you've got a fixer

upper that comes on um 450 okay multiple

offers uh you know people are like

clawing like stepping over each other to

try to get this thing matches formula

the 75% right and uh then you've got

comps in the neighborhood that justify

that place is probably worth about 5.90

to 6 okay okay so it's that looks like a

wedge deal that's great right because

you could put 40 into it hey that's

that'd be about a 100 right if you put a

little more in okay oh it's an 80k wish

that's still fantastic that's free money

basically then uh so then what happens

is I'm watching this I'm watching this

market like you say it's in the buy box

I'm watching the market and I see a deal

come up uh model model match same this

is why I like track Toms model match has

a pool as well same square footage was

like 1,700 feet or whatever and hits for

590 and I'm like okay well that's what

we thought it was worth like okay 59

let's see if it sells so I'm really

impatient when it comes to real estate

like I'm just impatient in general but

that listing hit the market uh on a

Friday morning I called the agent at

8:00 on the Friday night because having

been an agent I know that if that's a

good deal she's got agents either she

has offers in her inbox or text saying

one's coming Bingo exactly so uh I call

her up Friday hey do I have time to to

get a client to the open house this

weekend and oh yeah plenty of time

plenty of time so go to the open house

and uh or or uh you know she has the

open house whatever she um she I don't

call her again she calls on Sunday hey

uh is your client still interested calls

back a week later hey is your client

still interested I'm like that place

isn't moving they're going to have a big

price drop sure enough they did price

drops 40 K now you're at 550 so the

question is what do you do when when

you're in that kind of Market where all

of a sudden just it seems like real

estate hit a wall in a certain Market

where you're like wait the sold comps

are 590 we now all of a sudden the sold

comps are going to be like

530 and you know what was 100K wedge is

now a 20K wedge what do you do in a

market like that like what you've seen

this I'm sure in Fresno how do you know

when the bottom hits what are your

metrics so what I I don't know that

there's specific metrics but if I was

hunting in that kind of Market yeah I

would not be hunting for the 450s

because everybody out there knows the

450 numbers price low and there's plenty

of room okay I would hunt and whatever

like if that Market's really quick maybe

it's seven days maybe it's 15 days I

would be writing disrespectful offers on

all the 590s and I'd be writing at 480

470 interesting right just to just to

find out which one of those sellers has

to sell before the end of the year right

if the Market's telling you where the

pain is and the pain is at 59 yeah fish

there interesting go fishing where the

pain is exactly be the shark where the

blood is there's blood in the water I

like to shop there I like that I like

again if you buy it right you can hold

until it comes back so ignore going for

the lower price because that's where

everybody the flippers are there and all

of that and the DCR loans and nonsense

so that's again in that market 450 is

everybody's there yeah but I would go

you know 10 days or more on Market at 90

which you call it the median and I would

do 30% below that and see what happens

see what's scary is I I was um in

Phoenix and an agent was telling me Oh

yeah you know I'm writing an offer with

a flipper on this and I'm looking at the

numbers I go they're going to make like

10 grand she goes oh that'd be great

yeah and she's like so excited about

that I'm like this is insane you're

going to go bankrupt what are you doing

like you can't buy real estate like that

what is is that like 2021 and 2022

conditioning or what's happening I think

I I don't know who that flipper is

obviously but I would think that would

be a new flipper I again I we repeating

last year I talk to Real Estate

Investors all the time on my channel

three of them come on every week nice

and the number of people who lost six

figures in January and February were

because of the deals they bought in

October and November wow they're doing

it again remember we talked about it

earlier the flip deals the bad flip

deals yeah they they they they did a

okay deal in October November oh it'll

appreciate in the spring because it did

before right and it sold fast right for

bidding wars and blah blah blah right

arv is higher and then they lost money

January February March we're doing it

again wow and it's just it's sad to see

and again it's probably a new flipper

would be my so you think eighty year

cycle like potentially as long as eight

years of just really slow it's going to

be a sideways Market it's not fun but

here's the problem a sideways Market if

you're just an owner occupant's lame

lame yeah cuz how are you going to helck

and get your boat you can't sorry but

again as an investor who wants wedge

deals to use your words

because it's slow well yeah all the

other people who want the pH the the

like the meming or whatever of the

pricing and they want pretty stuff they

want pretty FHA vaa stuff don't buy that

stuff you can't compete they got lower

rates blah blah blah I like it but

there's a lot of people who have to sell

who have Shake roofs who who are this

who are that mold and damage this that

whatever yeah yeah if it looks ugly I

mean I bought one that was functional

that had the green tile from the 80s oh

my gosh yeah I love that stuff love so

easy to fix yeah it's easy fixed so

again I think the wedge deals is the

right idea um I would be fishing again

not knowing that market up North but I

want to go where the pain is and right

now the pain is at the median clean

there's there's going to be a seller who

has to sell when I write disrespectful

offers I never get the first time no of

course I don't want to yeah well that

means you're overpaid it's so funny

everybody like when I get an offer

accepted I'm like damn it I overpaid if

it's not my third offer I think I

overpay yeah yeah like oh let me run the

comps again what how's that inspection

going what did I find yeah yeah exactly

but so I I write an offer expecting to

be called all kinds of bad words I call

back in a week or two weeks depending on

the market I expect to hear something oh

you're still there Blah Blah Blah by the

time the third time I follow up is where

we're really talking and one of two

things will happen they will either

agree to my price or be very close or

they will take it off the market yeah

right ex I win either way yeah yeah no

kidding yeah that competition's gone

what um let me silence this St watch

what um what else what else are you

seeing so what I what I hope people see

is real estate getting on the property

ladder yeah is the shest way to to

generate wealth totally agree I again

think I'm an employee not an

entrepreneur like you okay I want

employees to realize that getting on the

property ladder is possible whether

that's your owner occupied or becoming a

landlord inflation is a feature not a

bug maybe explain that maybe maybe

people won't understand that so how is

that just because of property values and

the fact that you're leveraging and

therefore you're Leverage is getting

basically well that and debt is fixed wa

we talked earlier about 30-year debt

right you got the opportunity to refy it

below 4% we now had inflation at nine

you know all of these things right um

inflation is here to stay inflation at

2% on 4% debt oh you don't think

inflation's going away oh no I well

we've had in I mean I think inflation

will be 2% probably for the decade wow

right it's it's still high now but yeah

it'll average out basically it'll

average out to 2% right we'll eventually

get it under control yeah but um yeah I

think I just think real estate for most

people most people aren entrepreneurs

they're not going to start a business

they're not going to do all the things

real estate is the most easiest thing to

understand simple best taxes just hold

longterm I think you get wealthy in 10

years wow what what else anything else

you want to add I mean this has been

amazing make sure to check out one

rental at a time on YouTube do you post

anywhere else on soci or mostly just

YouTube I everything I do is on YouTube

My Team puts it on IG and some other

stuff okay okay so find on YouTube I'm I

just prefer YouTube um what else would

actually so I want to talk about my two

books if you don't mind for a go ahead

yeah so I wrot chis yeah yeah so I wrote

One rental at a time for me oh right so

I retired I was depressed because I

didn't have anything to do all day I was

a type Aid you know employee um I wanted

to revisit reading Rich Dad Poor Dad and

how we got to Financial Freedom that's

what one rental at time is how we did it

it's not a how-to book yeah it's here's

all the mistakes and here's the things

that went right oh I love that that's

one rental at a time that's great I

wrote 15 conversations with millionaires

for the audience so I had a YouTube

channel at the time was 20,000 subs or

whatever had great interviews on it

yours was one so I picked 15 stories

because there's so many ways to get rich

in real estate I'll take that burit

careful that Lids open thank you so 15

15 different stories of how to get rich

because everybody's story is different

and that's that that book is more

important because what when I was in

this journey the first five years it's

slow yeah and by having you know there

was a book by Gary ker blue and white

real estate investor I read the book eh

okay but the last 20 Pages well I mean I

think his sales book was a little better

yeah but the last 20 book 20 pages of

the blue and white book are stories of

investors that did it oh that's good

inspiration I read that yeah every day

for five years oh wow cuz I wanted to

know it was possible nobody in my

network did this I want to know was

possible so I wrote 15 conversations

with millionaires 15 different stories

because there's so many ways to do it so

that book needs to be checked out see

that's really inspiring because I think

I think people oh there's no way they're

they're convincing themselves of failure

before they've even tried 15 different

stories 203k loone worked to Jamba Juice

as I remember the story y y right that's

awesome uh anything else no I appreciate

the time this is amazing thank you so

much make sure to go check out one

rental at a time on YouTube uh thank you

for flying down to this city from

Mountain s was

nice thank you so much pleasure than you

thanks y that was really fun

congratulations man you have done so

much people love you people look up to

you which I say yes meet Kevin where

does this mean we are in the economic

cycle should we be thinking about buying

real estate should we be thinking about

buying stocks I have a background in

real estate as a real estate agent real

estate broker real estate investor a

stock market investor and fund manager

why not advertise these things that you

told us here we'll we'll try out little

advertising and see how it goes always

great to have you on Kevin PA there

financial analyst and YouTuber meet

Kevin