HOLY $#*T | complete turmoil....

wow there is complete and utter turmoil

and that turmoil is also going to lead

to an apology from me so let's talk

about these in order and number one ever

since we heard Jerome Powell yesterday

suggests that we might essentially have

higher rates forever we have seen a

complete dumping of Treasury bonds we've

seen the 10-year Skyrocket about 13

basis points we're over four and a half

percent on the 10-year now real estate

mortgage rates just skyrocketed over

eight percent leading a lot of people to

believe that real estate is about to

actually hit the toilet or take a

massive poopsie-doopsy this winter Black

Friday this year might not be about

getting a cheaper TV it might actually

be about getting a cheaper house

this Christmas might be the opportunity

to buy the best deal in real estate ever

and this turmoil that's happening in

real estate where people expect now the

fed's certainly not going to bail

anything out this year they're going to

keep hiking until they break something

and that break by the way might not be

another bank you know what that break

could actually be the entire housing

market it could be the housing market

which that's where then people are

speculating oh Jay Powell and the fed

put will come in next year because you

know by March or the summer of next year

we'll be able to confirm that yes indeed

inflation has trended towards two

percent we're on the path to two percent

already there or they pull out flexible

average inflation targeting and what do

we end up having we have a j-pal bailout

of real estate and all of a sudden you

start seeing rates fall and people

getting really excited about real estate

again that's all speculation who knows

but that's what people are believing

right now that could happen and we're

seeing exactly that in the real estate

market I mean we heard Lennar and uh

well Lennar the home builder talk about

Boise and Austin hitting the complete uh

poops and their real estate market

essentially hitting a wall uh buyers all

of a sudden are gone active listings are

plummeting in terms of price relative to

sold comps that's a scary mode when all

of a sudden actives are selling for less

than sold and when we were in those

markets we felt exactly the same thing

real estate is all about people and

being local and we're seeing it in

almost every single market now we're

starting to see it in NorCal we're

starting to see it in SoCal we're seeing

it in Florida the actives are starting

to come in softer than the pendings

that's probably because of the normal

back to school buyer demand being gone

and now the active listings are sitting

they're not selling and people are like

oh crap winter is coming

but that turmoil is also leading to this

apology that I have to make because I

think because it's becoming very clear

that there could be massive

opportunities in real estate this winter

since the j-pal meeting we have gotten

absolutely destroyed with emails from

people asking us about their investment

and their ability to invest and the

timing of their investment and

everything related to their investments

into house hack now obviously you should

read the prospectus slash offering

circular that's available at

househack.com it's a fundraise that

we're doing for my real estate startup

at a one-to-one valuation keep in mind

they're obviously processing fees and

other things that go into raising money

so net of that but outside of that it's

a great company and a great valuation

it's my expectation but I think what's

happening is more people are getting

interested in diversifying in real

estate so much so that now our payment

processor can't keep up

that is we're so inundated with people

trying to get in that our payment

processor is like whoa whoa whoa this is

way more than we expected we can't

handle this and so now we're we

basically just have to apologize and ask

for time to get back to you so we expect

to be able to get to everybody's

situation within the next week but it's

not going to be within the next 24 hours

it'll certainly we'll be able to have

whatever questions you have resolved

within the next two weeks we don't think

we're going to close the round or

anything for probably at this rate for

at least the next 30 days that's the

goal so we can make sure we get

everybody's inquiring processed but it's

really interesting because we're seeing

these crazy market dynamics actually

translate directly into this demand for

investing in house hack that's at least

what it feels like I can't know with

certainty but we are here's what we do

know we know that certain markets in

real estate are hitting a wall we know

and therefore markets are fear saying a

Paul volcker because what do we know we

know that there aren't going to be any

cuts no Cuts soon obviously we should

put a little asterisk here because the

asterisk is unless break right if

something breaks

then we might get cut soon but then you

have bigger problems TS Lombard our

famous bear what are they saying they're

saying the best thing for risk assets is

a slow decline in rates next year the

worst thing for risk assets is oh crap

we broke something in some kind of

recession

this is very interesting since they're

sort of your resident bear the resident

Bayer was saying you don't want quick

and Rapid Cuts well now we're feeling a

wall hit in real estate people are

seeing that as an opportunity to finally

buy real estate but you have to be able

to buy real estate and frankly most

people don't want to pay eight percent

on a mortgage today we just ran the

numbers on a 780 000 house which is like

a regular three and two in California or

maybe like a four and two in Austin or

whatever we ran the numbers on this uh

we used a one percent 1.2 property tax

rate but we ran the numbers on a 780 000

house and we wanted to find out what

would your payment be on this and how

much money do you have to make to

qualify for this at a 30 front end 35

front end ratio ignore some of that but

assuming 10 percent down

assuming a half point in mortgage

insurance which means your rate is not

eight percent it's actually eight point

five percent again assuming 10 percent

down and a 1.25 uh 1.2 ish percent

property tax rate people are gonna have

to pay somewhere around six grand a

month just to be able to buy this kind

of property there's no way you can

Finance this right now people who are

financing or financing this and they're

underwater uh with their payments on a

monthly basis if they're renting out

these properties which you're not

supposed to anyway unless you're putting

20 25 down

and I think what people are doing is

they're speculating on the cuts but

right now the Market's going uh-uh don't

plan on Cuts right now we're dealing

with basically Paul volcker over here is

when it feels like that's the sentiment

right now so we're getting people saying

you know what Hey Kevin you do it that's

what it feels like again I don't know if

that's exactly what's happening that

this turmoil is leading to all of these

emails and inquiries but we're getting

blown up obviously learn more at

househack.com and again I apologize we

have to ask you for patience when you go

through the portal by the way we have

now removed all fees to invest so

there's no credit card fee there's no

ACH fee there's no wire fee nothing

it is if you want the credit card

rewards you can do that is cheaper for

house hack at the moment if you just ACH

or wire but that's your choice we'll

leave that on you if you want to Apple

pay you could literally Apple pay to

invest right now in housing it's kind of

wild uh a quick reminder though don't

press the transact button multiple times

people are getting a lot of like there's

some cases where people are hitting the

button multiple times to invest and then

they see on their uh statement they'll

see like minus 10K minus 10K minus 10K

uh and and then these will be pending

transactions we expect that these will

end up being failed transactions and

like only one will end up going through

but this will all get resolved and just

a quick little thing that we're finding

is some people are getting a little

excited to invest uh and uh if you if

you push the button too much you might

end up seeing a few more pendings than

you're supposed to be seeing but again

all this kind of stuff is resolvable it

is mind-blowing to us that a payment

processor that has worked with over 200

different funds or actually I think

thousands of clients they say they have

but I thought they've done over 200

foots I don't even know which number it

is but the point is it's surprising to

me that they're inundated to the point

right now where where we can't get all

of the answers but I want you to know

our entire staff is working on helping

everybody as much as possible and we

really think part of this massive surge

in demand is potentially because of

Market turmoil and I want to be clear

about this this is something else that

we've been talking about today is that

really what you want to do is and

everybody says this but nobody really

does it right

remember the phrase be fearful when

people are greedy be greedy when people

are fearful the fear is starting let me

give you an example we hit up a seller

because we saw the comps in the

neighborhood were somewhere around 570

to 600 000 so we're like hey maybe we

can pay around 570 for yours it doesn't

need that much work if it's worth six we

put 30k in it's 100K wedge you know we

were just spitballing and uh so I was

like okay yeah we'll take it and one of

the first things I usually do when I

when somebody's like oh yeah yeah I'll

take your offer as soon as I think that

I'm like hmm sounds like I'm overpaying

let's offer less which is just part of

the game right so that seller said you

know what never mind we had a closer

look at some of the active comps there's

actually some active competition that's

not selling at like the 550 level and

we're worried if they end up selling for

less and that really caps what our wedge

is on the deal and so that seller's been

reaching out going okay okay okay okay

how about uh we sell it to you well

that's the comp value so they come back

and they go how about we sell it to you

for 460. can we do a deal at 460. you

said 470 how about 460. no no no no like

we're like in the low fours like no we

can't go down that low but you know what

we can do for you 450.

didn't talk to him for a few days Kevin

how about 4 30.

and now like the agents reaching out

going should we write it at 4 20. it

sounds like there might be an appetite

to go for that I'm like this right here

has not happened since 2010 for me and I

remember this happening because we

actually had sort of a double dip

recession uh it was nominal but it was

basically you had your your that's not

really double dip it's more like that

there you go so you had your 09 0809

crash then you had a little bit of a

recovery and then all of a sudden an oh

like 10 you kind of start getting this

crash again which bottomed out in 11 at

least in our Market out here and that's

when I felt this kind of stuff where the

sellers are just like please I need to

get out of this property nobody else

wants to buy that's the time to buy and

of course you have to insulate yourself

with wedge right that's the beautiful

thing about the wedge is when you buy a

property that's in a 550 000

neighborhood let's say instead of six

let's call it 550 you buy it for four

you're into it for I don't know 4 30

because you could put 40 000 or thirty

thousand dollars into it let's say now

you have a hundred twenty thousand

dollar wedge right so you're into it for

430 you're in a 550 neighborhood now all

of a sudden the market drops I don't

know ten percent let's say that's 55k 20

that's a hundred and ten thousand

dollars well if the market drops twenty

percent twenty percent decline what does

that get you to that actually brings you

down to 440. look at that market could

drop 20 in that case and you are still

positive on the deal those are the deals

you want to be buying this winter unless

of course you think the pain of the real

estate crisis will last even longer and

this is where you also have to be

vigilant you know if I go into November

and everything's doing this you know you

don't want to catch a falling knife

either you don't want to go all in you

have to be patient all the cost average

but anyway uh that's our job we do this

on a daily basis if you want to learn

more you can email us at IR

househack.com but I want to be clear

this treasury market disaster where

we're seeing potentially the uninversion

of the yield curve I think we're only

about 59 basis points inverted right now

which is almost half of what it

previously was that's usually the

painful part by the way

don't worry about that if I lost you but

the point is

if you want to invest with us go to

househack.com learn more read the

prospectus obviously there are obviously

risks it's a startup but we're doing our

best to mitigate those risks we believe

this interest rate turmoil is leading to

this massive inundation of emails we're

getting a lot of people very excited

they're like Kevin Kevin I I want to

invest now I don't want the round to

close

we can take your breath we should

without a problem or without a doubt

have 30 days here so we're good we'll

get everybody resolved so I just want to

give everybody that confidence that

faith that yes this Market uncertainty

appears to be at least leading to some

more interest in house hack and I want

to apologize that we can't get back to

everybody instantly as much as we would

like to and there's a limit to how much

control we have given that we have a

payment processor involved and so we're

working with them we'll work 24 7. but

you know other companies are working

normal business hours so we're a little

bit strong uh or stuck or by the

parameters that they're working and

that's okay we'll get it all resolved

and we really thank you for your

interest in house hack and quite frankly

I wish you the best out there on the

market because it's a wild time and I'll

tell you it's Times Like These that make

you want to diversify anyway thanks for

watching we'll see in the next one bye