1 00:00:00,240 --> 00:00:04,680 Speaker 1: From UFOs to psychic powers and government conspiracies. History is 2 00:00:04,800 --> 00:00:09,119 Speaker 1: riddled with unexplained events. You can turn back now or 3 00:00:09,200 --> 00:00:12,079 Speaker 1: learn the stuff they don't want you to know. A 4 00:00:12,240 --> 00:00:26,240 Speaker 1: production of I Heart Radio. Hello, welcome back to the show. 5 00:00:26,360 --> 00:00:28,920 Speaker 1: My name is Matt, my name is Noel. They called 6 00:00:28,960 --> 00:00:31,360 Speaker 1: me Ben. We are joined as always with our super 7 00:00:31,440 --> 00:00:35,879 Speaker 1: producer Paul Mission controlled decond. Most importantly, you are you. 8 00:00:35,880 --> 00:00:38,880 Speaker 1: You are here, and that makes this the stuff they 9 00:00:38,960 --> 00:00:42,680 Speaker 1: don't want you to know. Today, folks, we are returning 10 00:00:42,720 --> 00:00:47,080 Speaker 1: to the world of real estate and corruption and big 11 00:00:47,120 --> 00:00:52,440 Speaker 1: business and inequality, and some would argue conspiracy. In Part 12 00:00:52,520 --> 00:00:55,720 Speaker 1: one of this two part series, we dove into the 13 00:00:55,760 --> 00:01:00,400 Speaker 1: allegations that large financial institutions are buying up homes or 14 00:01:00,520 --> 00:01:04,240 Speaker 1: entire neighborhoods and pushing out would be new homeowners in 15 00:01:04,360 --> 00:01:09,480 Speaker 1: favor of creating long term rentals and therefore guaranteed income 16 00:01:09,560 --> 00:01:14,080 Speaker 1: streams for shareholders. If you have not heard part one 17 00:01:14,520 --> 00:01:18,640 Speaker 1: of this series, we do do urge you to check 18 00:01:18,680 --> 00:01:21,080 Speaker 1: that out first. It's going to answer a lot of 19 00:01:21,080 --> 00:01:24,560 Speaker 1: your questions about the evolution of this situation that again 20 00:01:25,160 --> 00:01:28,360 Speaker 1: has been called a conspiracy or at the very least 21 00:01:28,400 --> 00:01:31,760 Speaker 1: a problem, but For now, we're going to give you 22 00:01:31,920 --> 00:01:35,720 Speaker 1: a brief recap, just a high level look at what 23 00:01:35,760 --> 00:01:40,920 Speaker 1: we explored previously, before we move on to the next issues, 24 00:01:41,040 --> 00:01:43,360 Speaker 1: the nuts and bolts of the process, the present day, 25 00:01:43,640 --> 00:01:46,959 Speaker 1: and the dangers this may present for millions of people 26 00:01:47,240 --> 00:01:52,160 Speaker 1: in the future. Here are the facts. Uh so, big 27 00:01:52,200 --> 00:01:58,760 Speaker 1: surprise we we found that not everyone agrees about this issue. 28 00:01:59,480 --> 00:02:02,520 Speaker 1: There are a lot of competing viewpoints. There are a 29 00:02:02,640 --> 00:02:05,360 Speaker 1: lot of people saying, actually, don't worry. There are a 30 00:02:05,400 --> 00:02:09,280 Speaker 1: lot of people saying, we are absolutely up the wrong 31 00:02:09,360 --> 00:02:14,160 Speaker 1: creek with zero paddles. There's a single metric that you know, 32 00:02:14,720 --> 00:02:17,040 Speaker 1: there's a there's a lot of talk of inflation that 33 00:02:17,160 --> 00:02:20,399 Speaker 1: is occurring, because it is occurring at ridiculous levels right now. 34 00:02:20,720 --> 00:02:24,160 Speaker 1: But one statistic, one metric that we looked at in 35 00:02:24,360 --> 00:02:27,960 Speaker 1: episode one was the median home price, which in nineteen 36 00:02:28,000 --> 00:02:31,640 Speaker 1: sixty was around ninety eight thousand dollars the equivalent of 37 00:02:31,720 --> 00:02:34,560 Speaker 1: ninety eight thousand dollars today it was only eleven thousand, 38 00:02:35,360 --> 00:02:39,440 Speaker 1: not like twelve thousand dollars basically in nineteen sixty, but 39 00:02:40,440 --> 00:02:43,320 Speaker 1: today the median home price, depends on what you look at, 40 00:02:43,720 --> 00:02:48,080 Speaker 1: is around four hundred thousand, uh some sometimes three hundred 41 00:02:48,200 --> 00:02:51,320 Speaker 1: forty thousand, depending on the area of the United States 42 00:02:51,360 --> 00:02:54,440 Speaker 1: you're living in. But just thinking about the difference between 43 00:02:54,919 --> 00:02:57,680 Speaker 1: less than a hundred thousand and then three hundred thousand 44 00:02:57,840 --> 00:03:01,600 Speaker 1: or more. Now, like you, just as you, what's happened 45 00:03:01,600 --> 00:03:05,040 Speaker 1: to the average person, like individual or family that's attempting 46 00:03:05,040 --> 00:03:07,799 Speaker 1: to purchase or own a home right now? And this 47 00:03:07,840 --> 00:03:10,640 Speaker 1: is outside of inflation. I mean, certainly, you know, the 48 00:03:10,680 --> 00:03:12,640 Speaker 1: cost of a home in the sixties is going to 49 00:03:12,680 --> 00:03:15,000 Speaker 1: be significantly less than it is today. But this is 50 00:03:15,040 --> 00:03:20,400 Speaker 1: ballooned beyond just standard inflation rates. This is outpaced inflation. 51 00:03:20,480 --> 00:03:22,640 Speaker 1: That's a growth rate of a hundred and twenty one 52 00:03:22,720 --> 00:03:27,320 Speaker 1: percent from eleven thou nine hundred dollars to around uh 53 00:03:27,320 --> 00:03:30,480 Speaker 1: eleven thousand, nine hundred dollars to UH which the medium 54 00:03:30,560 --> 00:03:34,240 Speaker 1: was met kicking it around four hundred thousand, uh maybe 55 00:03:34,240 --> 00:03:36,680 Speaker 1: a little US, but let's let's say three to four 56 00:03:36,800 --> 00:03:41,240 Speaker 1: hundred thousand. There we go, and that is a life 57 00:03:41,320 --> 00:03:44,840 Speaker 1: changing amount of that's a life changing margin, right, that's 58 00:03:44,840 --> 00:03:48,680 Speaker 1: a hundred thousand dollars US. But another thing that's important 59 00:03:48,720 --> 00:03:51,200 Speaker 1: to point out, whenever we talked about a median over 60 00:03:51,240 --> 00:03:54,600 Speaker 1: this large of a sample size is that, Yes, there 61 00:03:54,640 --> 00:03:57,560 Speaker 1: are many of us listening along today who are thinking 62 00:03:58,920 --> 00:04:02,680 Speaker 1: three hundred thousand, that's crazy, that's a mansion where I live. 63 00:04:02,920 --> 00:04:05,560 Speaker 1: And that's true. But that's the danger of medians because 64 00:04:05,640 --> 00:04:08,720 Speaker 1: as you know, anybody who's lived in San Francisco versus 65 00:04:08,760 --> 00:04:14,240 Speaker 1: Tulsa knows that home prices vary widely. And the rule 66 00:04:14,360 --> 00:04:19,320 Speaker 1: typically is the more densely populated in area is, and 67 00:04:19,400 --> 00:04:22,440 Speaker 1: the more urbanized it is, the higher the price will be. 68 00:04:22,560 --> 00:04:26,160 Speaker 1: You'll pay more for less home. Yeah, so in Atlanta, 69 00:04:26,320 --> 00:04:29,400 Speaker 1: you're like, three is a super low price for a 70 00:04:29,440 --> 00:04:33,280 Speaker 1: house in Atlanta. It's honestly a fixer upper um in 71 00:04:33,320 --> 00:04:36,000 Speaker 1: certain parts of the city. And uh, you may not 72 00:04:36,160 --> 00:04:39,440 Speaker 1: want to ask too much about the asbestos or the lead, 73 00:04:39,880 --> 00:04:43,599 Speaker 1: so you'll it's true. It's true. After you know, we 74 00:04:43,680 --> 00:04:46,680 Speaker 1: all read a lot about this. I broke my brain 75 00:04:46,760 --> 00:04:49,880 Speaker 1: on some things here, and it's true that some folks 76 00:04:49,920 --> 00:04:54,000 Speaker 1: are perhaps being a little bit alarmist because as of now, 77 00:04:54,200 --> 00:04:58,240 Speaker 1: as we found an episode one, financial institutions aren't buying 78 00:04:58,320 --> 00:05:02,200 Speaker 1: up all the houses. Ever, if you look at the numbers, 79 00:05:02,480 --> 00:05:06,920 Speaker 1: these institutions, actually, even the big ones, the Big four, 80 00:05:07,120 --> 00:05:11,039 Speaker 1: like invitation homes, here in Atlanta, they actually control only 81 00:05:11,120 --> 00:05:15,560 Speaker 1: a small slice of the one and forty million what 82 00:05:15,640 --> 00:05:18,760 Speaker 1: are called housing units throughout the US. Again, a housing 83 00:05:18,839 --> 00:05:23,760 Speaker 1: unit is everything from an apartment complex to a mansion 84 00:05:24,240 --> 00:05:28,320 Speaker 1: to a you know, a single uh family home detached, 85 00:05:28,880 --> 00:05:33,719 Speaker 1: three bedrooms, two bathrooms. But yeah, in addition to that, 86 00:05:33,839 --> 00:05:38,719 Speaker 1: we found it's not so much the size of the 87 00:05:38,800 --> 00:05:42,240 Speaker 1: pie they're eating. It's not so much the absolute number 88 00:05:42,279 --> 00:05:46,400 Speaker 1: of housing units they're purchasing, but it's the type of 89 00:05:46,600 --> 00:05:49,760 Speaker 1: units they're purchasing. Kind of like how in a pan 90 00:05:49,839 --> 00:05:54,760 Speaker 1: of brownies, the crust side right, the edge of the 91 00:05:54,800 --> 00:05:59,680 Speaker 1: brownie pan, I think everybody can argue is a different 92 00:05:59,720 --> 00:06:03,200 Speaker 1: type of brownie experience. So they're not buying the entire 93 00:06:03,640 --> 00:06:06,919 Speaker 1: brownie pan, right, That's not their goal. Their goal is 94 00:06:06,960 --> 00:06:10,679 Speaker 1: to get what they see as the delicious crust parts 95 00:06:10,720 --> 00:06:14,640 Speaker 1: they're looking. They're targeting. They have a strategy, they absolutely do. 96 00:06:14,800 --> 00:06:18,640 Speaker 1: I mean, they're targeting certain types of demographics, certain types 97 00:06:18,680 --> 00:06:23,839 Speaker 1: of neighborhoods. Uh. And we've certainly seen evidence that shows 98 00:06:23,880 --> 00:06:26,440 Speaker 1: that this was not something that had been happening um 99 00:06:26,600 --> 00:06:30,640 Speaker 1: all all along is a relatively new strategy. Um. And 100 00:06:31,000 --> 00:06:33,000 Speaker 1: you know, ben I was going to bring up, you know, like, 101 00:06:33,279 --> 00:06:36,520 Speaker 1: what about the housing crash when everyone was underwater on 102 00:06:36,560 --> 00:06:39,320 Speaker 1: their mortgages and the prices of houses you know fell 103 00:06:39,360 --> 00:06:42,479 Speaker 1: and the value of houses fell. Um, how do we 104 00:06:42,600 --> 00:06:45,240 Speaker 1: claw way back from that where we are now? And 105 00:06:45,240 --> 00:06:48,839 Speaker 1: And as you found, ben Um, not only is it related, 106 00:06:48,920 --> 00:06:52,039 Speaker 1: it maybe was as a result of you know where 107 00:06:52,040 --> 00:06:55,040 Speaker 1: it was like, you know, measures being put in place 108 00:06:55,720 --> 00:07:01,960 Speaker 1: intending to stave off that happening again for closure crisises 109 00:07:02,000 --> 00:07:04,280 Speaker 1: of in the like. But these measures may have had 110 00:07:04,839 --> 00:07:09,800 Speaker 1: severely unintended consequences, or maybe not unintended. I don't know, 111 00:07:09,920 --> 00:07:13,960 Speaker 1: what do you think? Yeah, it's it's a good question. 112 00:07:14,120 --> 00:07:20,840 Speaker 1: And my dear strongly anti regulation friends in the crowd today, 113 00:07:20,880 --> 00:07:24,080 Speaker 1: you're gonna love this. Uh yeah. So. So first, the 114 00:07:24,160 --> 00:07:26,800 Speaker 1: step back, to put it plainly, the argument is that 115 00:07:27,680 --> 00:07:33,960 Speaker 1: were these financial institutions not buying very specifically targeted homes 116 00:07:33,960 --> 00:07:38,720 Speaker 1: and neighborhoods, first time would be home buyers would finally 117 00:07:38,760 --> 00:07:41,400 Speaker 1: be able to escape the rent trap. But with those 118 00:07:41,440 --> 00:07:44,360 Speaker 1: things removed from the market, they no longer have that 119 00:07:44,440 --> 00:07:47,200 Speaker 1: option for their first step home. As far as the 120 00:07:47,320 --> 00:07:49,960 Speaker 1: roots of this phenomenon, we trace them back to the 121 00:07:50,080 --> 00:07:52,960 Speaker 1: two thousand eight crash at least. And here's what you love, 122 00:07:53,040 --> 00:07:57,400 Speaker 1: fellow conspiracy realists who are against regulations in general. The 123 00:07:57,480 --> 00:08:03,880 Speaker 1: FED stepped in and some incentives, right they and they 124 00:08:03,920 --> 00:08:07,320 Speaker 1: had good intentions like you're saying. No. They wanted to 125 00:08:07,480 --> 00:08:13,120 Speaker 1: stave off the specter of massive homelessness, right and and 126 00:08:13,600 --> 00:08:20,400 Speaker 1: continuing foreclosure crisis by saying, hey, institutional investors, come in here, 127 00:08:20,720 --> 00:08:24,640 Speaker 1: get some of your sweet, sweet green bucks into this, 128 00:08:24,920 --> 00:08:29,480 Speaker 1: and help us create a situation where maybe people can't 129 00:08:29,520 --> 00:08:32,360 Speaker 1: afford a mortgage, right, maybe they can't afford to buy 130 00:08:32,360 --> 00:08:35,760 Speaker 1: a home, but set it up such that they can 131 00:08:35,840 --> 00:08:38,920 Speaker 1: rent until they have financially recovered to the point that 132 00:08:39,000 --> 00:08:42,960 Speaker 1: they can, indeed one day by a home. Now. Of course, 133 00:08:43,000 --> 00:08:46,760 Speaker 1: when I say that, I'm sure hundreds of thousands of 134 00:08:46,840 --> 00:08:50,400 Speaker 1: us just groaned and said, come on, Ben, everybody knows 135 00:08:50,720 --> 00:08:54,200 Speaker 1: that mortgages often end up being cheaper than rent, and 136 00:08:54,200 --> 00:08:58,080 Speaker 1: that is absolutely true in many parts of the country. 137 00:08:58,160 --> 00:09:00,720 Speaker 1: So shout out to everyone who who just thought of that. 138 00:09:00,760 --> 00:09:03,520 Speaker 1: I'm with you one. Also, once you open those floodgates, 139 00:09:03,559 --> 00:09:06,160 Speaker 1: I mean, it's hard to close him back up, you know, 140 00:09:06,320 --> 00:09:09,200 Speaker 1: when when when the benefit is clearly uh In the 141 00:09:09,400 --> 00:09:13,280 Speaker 1: camp of the the investors, and then the developers. They're 142 00:09:13,280 --> 00:09:15,680 Speaker 1: not just gonna willingly give that back to the people 143 00:09:16,200 --> 00:09:19,520 Speaker 1: unless the government makes them, which they're not. I want 144 00:09:19,559 --> 00:09:22,559 Speaker 1: to talk about strategy really quickly. Again. I don't think 145 00:09:22,559 --> 00:09:24,920 Speaker 1: we hit it last episode. If we did, I apologize 146 00:09:24,920 --> 00:09:28,040 Speaker 1: to everyone listening to this one immediately after the first one. 147 00:09:28,280 --> 00:09:30,320 Speaker 1: But I want to jump to an article in the 148 00:09:30,320 --> 00:09:33,640 Speaker 1: New York Post by Larry Getland titled how corporations are 149 00:09:33,679 --> 00:09:36,720 Speaker 1: buying up homes robbing families of the American Dream. He 150 00:09:36,800 --> 00:09:40,000 Speaker 1: references a book titled Underwater, How Our American Dream of 151 00:09:40,000 --> 00:09:44,440 Speaker 1: Home Ownership Became a Nightmare by Ryan December. And in 152 00:09:44,520 --> 00:09:49,360 Speaker 1: this article and through Ryan's words, uh, it talks about 153 00:09:49,400 --> 00:09:53,000 Speaker 1: a company called Progress Residential, and it's a company that 154 00:09:53,040 --> 00:09:55,240 Speaker 1: buys up homes what we're talking about right now and 155 00:09:55,280 --> 00:10:01,000 Speaker 1: specifically is targeting a segment of the population. And I'm 156 00:10:01,000 --> 00:10:03,720 Speaker 1: just gonna read you what it says in this article. Uh, 157 00:10:03,800 --> 00:10:08,320 Speaker 1: Progress Residential, which owned around twenty homes. I believe that's 158 00:10:08,360 --> 00:10:13,720 Speaker 1: in h sought to provide quote an aspirational living experience 159 00:10:13,760 --> 00:10:16,600 Speaker 1: for tenants who were typically about thirty eight years old 160 00:10:16,920 --> 00:10:20,400 Speaker 1: and married with a child or two. An annual income 161 00:10:20,440 --> 00:10:23,960 Speaker 1: of around eighty eight thousand dollars, less than stellar PICO 162 00:10:24,040 --> 00:10:28,960 Speaker 1: credit scores around six hundred and sixty five generally, and 163 00:10:29,160 --> 00:10:33,319 Speaker 1: a hobbling forty five thousand on average of debt on 164 00:10:33,360 --> 00:10:36,480 Speaker 1: some sort. Yes, exactly, if they wanted to live the 165 00:10:36,520 --> 00:10:39,880 Speaker 1: middle class lifestyle to which they were accustomed, they'd have 166 00:10:40,000 --> 00:10:43,440 Speaker 1: to rent. Like that's the concept. You you won't be 167 00:10:43,480 --> 00:10:45,800 Speaker 1: able to find a house that's affordable in that school 168 00:10:45,800 --> 00:10:47,560 Speaker 1: district you want to be in. You're going to have 169 00:10:47,679 --> 00:10:50,600 Speaker 1: to rent one of our properties. And the school district 170 00:10:50,679 --> 00:10:55,319 Speaker 1: is key because we're ultimately they're looking for places where 171 00:10:55,440 --> 00:10:59,520 Speaker 1: families would live rather than individuals. It's all well and 172 00:10:59,520 --> 00:11:03,800 Speaker 1: good if individual goes for it, but uh, the make 173 00:11:03,880 --> 00:11:07,520 Speaker 1: no mistake, the school district is a huge part of 174 00:11:07,559 --> 00:11:11,880 Speaker 1: the strategy here, and it's not just some folks sitting 175 00:11:11,920 --> 00:11:15,520 Speaker 1: around a boardroom looking at a map. Necessarily, that's part 176 00:11:15,559 --> 00:11:20,480 Speaker 1: of it, but there's a lot of very clever algorithmic 177 00:11:20,520 --> 00:11:24,400 Speaker 1: strategy being applied as well. Look, regardless of where you 178 00:11:24,679 --> 00:11:29,480 Speaker 1: may find yourself currently in terms of socioeconomics or in 179 00:11:29,600 --> 00:11:34,360 Speaker 1: terms of ideology, spiritual or political leanings, the truth is this, 180 00:11:34,960 --> 00:11:38,200 Speaker 1: not everyone agrees on how to approach the problem. But 181 00:11:38,400 --> 00:11:44,360 Speaker 1: it is increasingly difficult to pretend a problem does not exist. 182 00:11:44,920 --> 00:11:48,120 Speaker 1: We're gonna pause for word from our sponsors will tell 183 00:11:48,120 --> 00:11:58,200 Speaker 1: you exactly what we mean. Here's where it gets crazy. 184 00:11:58,920 --> 00:12:03,280 Speaker 1: Let's go back to one of the Atlantic articles mentioned 185 00:12:03,360 --> 00:12:07,240 Speaker 1: in part one of this series. To be clear, the 186 00:12:07,360 --> 00:12:12,800 Speaker 1: corporations and institutions evolved don't see themselves as fat cat villains. 187 00:12:12,920 --> 00:12:15,040 Speaker 1: From their perspective, they are the good guys here and 188 00:12:15,120 --> 00:12:19,480 Speaker 1: it's important for us to give space to that um 189 00:12:19,520 --> 00:12:22,200 Speaker 1: that understanding, so you get a sense of their perspective 190 00:12:22,920 --> 00:12:26,960 Speaker 1: their thoughts. As far as we can tell from public 191 00:12:27,000 --> 00:12:31,559 Speaker 1: statements and some internal documents, their thought seems to genuinely 192 00:12:31,600 --> 00:12:36,120 Speaker 1: be they could be better landlords, partially because they have 193 00:12:36,360 --> 00:12:39,760 Speaker 1: more capital to draw upon, and in theory that is 194 00:12:39,800 --> 00:12:44,920 Speaker 1: absolutely true. Uh. The Atlantic sites Diane tomb who's executive 195 00:12:44,960 --> 00:12:48,720 Speaker 1: director of a trade group called the National Rental Home Council, 196 00:12:49,040 --> 00:12:52,120 Speaker 1: was established inteen so not super old, but they've been 197 00:12:52,160 --> 00:12:55,640 Speaker 1: around for a while, a while after everything went to 198 00:12:55,760 --> 00:12:58,640 Speaker 1: pot in two thousand eight. I should note, Yeah, they're 199 00:12:58,720 --> 00:13:02,880 Speaker 1: essentially a lobbying group for these companies that own a 200 00:13:03,040 --> 00:13:07,080 Speaker 1: crap ton of rentalones. Yeah, it's like the Dairy Association. 201 00:13:07,400 --> 00:13:11,679 Speaker 1: Check out that episode Big Cheese. Uh the cheese spiracy. 202 00:13:11,840 --> 00:13:18,280 Speaker 1: So so, according to Diane tomb talk about Nomini determinism. Uh, 203 00:13:18,440 --> 00:13:25,000 Speaker 1: single family rental companies professionalize the rental sector that's traditionally 204 00:13:25,080 --> 00:13:28,640 Speaker 1: run by mom and pop landlords like many of us 205 00:13:28,720 --> 00:13:32,520 Speaker 1: know myself included. No. People who have been able to 206 00:13:32,720 --> 00:13:35,800 Speaker 1: kind of cycle through. They got in with one house, 207 00:13:35,880 --> 00:13:38,080 Speaker 1: they turned that into a rental instead of selling it, 208 00:13:38,120 --> 00:13:40,440 Speaker 1: they bought another, Rinse and repeat, and a lot of 209 00:13:40,440 --> 00:13:43,480 Speaker 1: people have met with success there. And I don't want 210 00:13:43,480 --> 00:13:47,240 Speaker 1: to diminish that success because it is hard work. But well, 211 00:13:47,080 --> 00:13:50,280 Speaker 1: what do they mean by professionalized? Will dissect that in 212 00:13:50,360 --> 00:13:53,040 Speaker 1: a little bit. Let's go onto the second thing that 213 00:13:53,120 --> 00:13:58,160 Speaker 1: the institutions admit is part of their secret sauce they 214 00:13:58,200 --> 00:14:02,320 Speaker 1: make a hefty profit while doing this. They're saying, yes, 215 00:14:02,400 --> 00:14:05,720 Speaker 1: we're giving better service. Yes, uncle Sam, we're helping people 216 00:14:05,720 --> 00:14:09,600 Speaker 1: avoid living rough and sleeping in the streets. But we're 217 00:14:09,679 --> 00:14:13,200 Speaker 1: not entirely doing it as an act of altruism. They 218 00:14:13,320 --> 00:14:15,600 Speaker 1: phrased this as a win win. It's a way to 219 00:14:15,760 --> 00:14:21,280 Speaker 1: rescue neighborhoods while also quote creating a long term, permanent 220 00:14:21,320 --> 00:14:26,440 Speaker 1: income stream for our shareholders. That quotation comes from Frederick 221 00:14:26,520 --> 00:14:29,440 Speaker 1: to Me, who once upon a time was the president 222 00:14:29,720 --> 00:14:32,760 Speaker 1: of Invitation Homes, one of the biggest players in this game, 223 00:14:33,000 --> 00:14:34,960 Speaker 1: and to me is right on that account. Just in 224 00:14:35,040 --> 00:14:39,400 Speaker 1: the example of Invitation Homes, they are now the largest 225 00:14:39,600 --> 00:14:44,240 Speaker 1: single family rental company in the United States. So if 226 00:14:44,240 --> 00:14:47,320 Speaker 1: you're renting from a company, now, uh, the odds are 227 00:14:47,360 --> 00:14:50,920 Speaker 1: most likely that they will be invitation homes if you're 228 00:14:50,960 --> 00:14:53,440 Speaker 1: renting a single family home, not like uh, you know, 229 00:14:53,520 --> 00:14:56,720 Speaker 1: living in a condo or renting an apartment. But housing 230 00:14:56,760 --> 00:15:01,040 Speaker 1: trends did work out for the investors because there are 231 00:15:01,120 --> 00:15:05,120 Speaker 1: fewer homes being built. Between two thousand seven two thousand seventeen, 232 00:15:05,520 --> 00:15:09,560 Speaker 1: the US added less than one million households in owner 233 00:15:09,720 --> 00:15:14,720 Speaker 1: occupied homes, but they added six point five million in 234 00:15:15,000 --> 00:15:20,400 Speaker 1: renter occupied homes. So if you are looking to own 235 00:15:20,440 --> 00:15:23,840 Speaker 1: a home, understand that there are many other people looking 236 00:15:23,880 --> 00:15:27,240 Speaker 1: to do the same, and it becomes its own job 237 00:15:27,640 --> 00:15:30,920 Speaker 1: right to find a house that you can own, and 238 00:15:31,000 --> 00:15:33,520 Speaker 1: a lot of it, like, let's talk about let's talk 239 00:15:33,520 --> 00:15:35,760 Speaker 1: about the process. This is where it gets kind of harry. 240 00:15:35,920 --> 00:15:39,600 Speaker 1: So a lot of families want to live in a 241 00:15:39,680 --> 00:15:42,720 Speaker 1: spacious house, you know, a house where your family can 242 00:15:42,760 --> 00:15:45,240 Speaker 1: grow because your kids aren't gonna want to live in 243 00:15:45,280 --> 00:15:48,280 Speaker 1: They're not going to be want to be roommates forever, right, 244 00:15:48,520 --> 00:15:51,320 Speaker 1: so they want to live in a good house with 245 00:15:51,360 --> 00:15:54,280 Speaker 1: a lot of space, in a good neighborhood with a 246 00:15:55,000 --> 00:15:59,000 Speaker 1: this is key again, a good school district. But due 247 00:15:59,040 --> 00:16:02,760 Speaker 1: to economic realities that beset so many people in this country, 248 00:16:03,200 --> 00:16:07,119 Speaker 1: many could no longer afford to do so. As owners, 249 00:16:07,480 --> 00:16:10,440 Speaker 1: you could buy a house on the outskirts of some place, right, 250 00:16:10,520 --> 00:16:14,200 Speaker 1: increasing your commute, uh, and then put in your kids 251 00:16:14,760 --> 00:16:18,240 Speaker 1: in a you know, a public school program you didn't 252 00:16:18,280 --> 00:16:21,400 Speaker 1: particularly love. Or you could say you could do the 253 00:16:21,400 --> 00:16:24,560 Speaker 1: math and say, well, maybe I get a house that's 254 00:16:24,560 --> 00:16:27,400 Speaker 1: not in the hottest, most tony part of town, but 255 00:16:27,760 --> 00:16:30,400 Speaker 1: I save enough money that I can afford to send 256 00:16:30,440 --> 00:16:32,840 Speaker 1: my kids to a private school that works for some 257 00:16:32,880 --> 00:16:36,280 Speaker 1: people but not all. I mean, my situation is interesting 258 00:16:36,320 --> 00:16:39,320 Speaker 1: and that my daughter's mom and I are not together, 259 00:16:39,440 --> 00:16:42,720 Speaker 1: but we're very close and co parent, and um, I 260 00:16:42,760 --> 00:16:44,680 Speaker 1: was able to buy this house because she rents a 261 00:16:44,720 --> 00:16:46,480 Speaker 1: place in early good school district, which I could never 262 00:16:46,560 --> 00:16:48,360 Speaker 1: in a million years afford it to buy a house 263 00:16:48,400 --> 00:16:50,520 Speaker 1: and even though it's only about ten minutes away from 264 00:16:50,560 --> 00:16:53,000 Speaker 1: the place where I live, and the school district lines 265 00:16:53,040 --> 00:16:57,400 Speaker 1: are really tricksy, and uh, it's almost it's nearly impossible too. 266 00:16:57,440 --> 00:16:59,720 Speaker 1: And that's honestly, one of the biggest factors in home 267 00:16:59,720 --> 00:17:02,960 Speaker 1: price in a lot of ways is the school district. Absolutely. 268 00:17:03,680 --> 00:17:07,119 Speaker 1: Just one of the things to remember, just through personal experience, 269 00:17:07,440 --> 00:17:09,879 Speaker 1: when you are attempting to even rent a home, if 270 00:17:09,920 --> 00:17:12,399 Speaker 1: you're not attempting to buy a home. One of the 271 00:17:12,480 --> 00:17:18,040 Speaker 1: things these companies do is give minimal windows between finding 272 00:17:18,040 --> 00:17:21,080 Speaker 1: a home you want to rent if it works for 273 00:17:21,119 --> 00:17:24,920 Speaker 1: your price, and actually getting to see the house that 274 00:17:25,040 --> 00:17:28,080 Speaker 1: you are going to rent. A lot of these companies 275 00:17:28,119 --> 00:17:31,520 Speaker 1: will get you to sign a document stating your intent 276 00:17:31,680 --> 00:17:34,200 Speaker 1: to lease the home, or basically to sign a lease 277 00:17:34,480 --> 00:17:36,800 Speaker 1: before you ever get to step foot in a home 278 00:17:36,960 --> 00:17:39,760 Speaker 1: and see the condition that it's in or anything about it. 279 00:17:39,960 --> 00:17:42,399 Speaker 1: I mean, it's all the power is in their hands, 280 00:17:42,560 --> 00:17:44,840 Speaker 1: you know, from the word go right, and that is 281 00:17:44,880 --> 00:17:48,520 Speaker 1: how the system works, that's how it's designed to be, 282 00:17:48,600 --> 00:17:51,959 Speaker 1: and it's not illegal. That's another important note here. No 283 00:17:52,000 --> 00:17:55,399 Speaker 1: one right now is breaking the law. And when you 284 00:17:55,440 --> 00:17:58,840 Speaker 1: feel like something screwy and you know that it's not 285 00:17:58,960 --> 00:18:03,360 Speaker 1: technically illegal. The time then is not necessarily to question 286 00:18:04,200 --> 00:18:08,200 Speaker 1: philosophical soft science stuff like ideology. The time is to 287 00:18:08,320 --> 00:18:12,320 Speaker 1: question the letter, nature and intent of the laws. So 288 00:18:12,520 --> 00:18:15,480 Speaker 1: simply put, here's the process, Here's how the sausage is made. 289 00:18:16,640 --> 00:18:21,439 Speaker 1: Let's say we are Illumination Global Unlimited. As everybody knows 290 00:18:21,480 --> 00:18:25,520 Speaker 1: that's the parent company of both black Stone and black Rock. 291 00:18:26,040 --> 00:18:29,840 Speaker 1: Uh So you well, here's what we do. We go 292 00:18:30,040 --> 00:18:34,159 Speaker 1: to market like Atlanta because that's easy for us to 293 00:18:34,200 --> 00:18:38,840 Speaker 1: riff on, and we find a distressed neighborhood. You can 294 00:18:38,880 --> 00:18:42,000 Speaker 1: find this in many ways, by looking at average income, 295 00:18:42,440 --> 00:18:48,160 Speaker 1: by looking at rate of foreclosure, by looking at crime rate. 296 00:18:48,359 --> 00:18:50,920 Speaker 1: There are any number of statistics you can just throw 297 00:18:50,960 --> 00:18:53,520 Speaker 1: our metrics rather that you can just throw into the 298 00:18:53,560 --> 00:18:57,440 Speaker 1: blender until you get the perfect, perfect smoothie of opportunity. 299 00:18:57,520 --> 00:19:01,320 Speaker 1: These neighborhoods will likely not be filled with very well 300 00:19:01,400 --> 00:19:04,520 Speaker 1: to do people, But what you're really looking at is 301 00:19:04,640 --> 00:19:10,040 Speaker 1: an established, good school district. Because you are putting yourself 302 00:19:10,119 --> 00:19:14,160 Speaker 1: in the mind of a starter family buying their first home, 303 00:19:14,560 --> 00:19:17,439 Speaker 1: something we can afford, and not only can we, not 304 00:19:17,600 --> 00:19:20,960 Speaker 1: only can we afford this aspiration as they put it, 305 00:19:21,359 --> 00:19:23,760 Speaker 1: but we can stay there for a while and we 306 00:19:23,800 --> 00:19:26,520 Speaker 1: can take our kids, hopefully all the way from first 307 00:19:26,880 --> 00:19:30,520 Speaker 1: grade two senior year of high school. And then, if 308 00:19:30,520 --> 00:19:34,840 Speaker 1: you're the investment firm, if you are Illumination Global Unlimited 309 00:19:34,960 --> 00:19:38,679 Speaker 1: Properties in this case, you move as quickly as possible 310 00:19:38,840 --> 00:19:43,240 Speaker 1: to obtain as many housing units in a concentrated area 311 00:19:43,600 --> 00:19:48,440 Speaker 1: that meet those requirements, that meet those constraints, and as 312 00:19:48,440 --> 00:19:51,320 Speaker 1: soon as you get them, you turn them into rentals. 313 00:19:51,359 --> 00:19:57,000 Speaker 1: Now you are ensuring as steady, predictable, consistent income stream 314 00:19:57,080 --> 00:20:00,119 Speaker 1: for yourself, and you are shareholders, and you are are 315 00:20:00,200 --> 00:20:04,640 Speaker 1: also kind of cutting off those other those families at 316 00:20:04,680 --> 00:20:09,400 Speaker 1: the past because they'll say, Okay, we love this home, right, 317 00:20:09,560 --> 00:20:12,879 Speaker 1: three bedrooms, two and a half baths. Yeah, they you 318 00:20:12,920 --> 00:20:16,639 Speaker 1: know that it's outdated, right, but that's fine because we 319 00:20:16,680 --> 00:20:20,399 Speaker 1: will have, you know, decades to fix this up. And 320 00:20:20,440 --> 00:20:24,399 Speaker 1: then they see that institution owns it and they're not 321 00:20:24,480 --> 00:20:27,159 Speaker 1: interested in selling it. They'll rent it to you for sure, 322 00:20:27,440 --> 00:20:29,600 Speaker 1: but they're not going to sell it because it's theirs. Now, 323 00:20:29,760 --> 00:20:32,560 Speaker 1: so you go, Okay, down the street, there's another for 324 00:20:32,800 --> 00:20:36,320 Speaker 1: sale sign, so let's go over there. That for sale 325 00:20:36,320 --> 00:20:39,480 Speaker 1: sign has been replaced by a sould sign and now 326 00:20:39,840 --> 00:20:45,200 Speaker 1: surprise that it's it's that same guy from Illumination Global 327 00:20:45,280 --> 00:20:49,800 Speaker 1: Unlimited answering the email and says, oh, hey, Jorgensen's or whatever, 328 00:20:51,160 --> 00:20:53,639 Speaker 1: it's great to talk with you again. Would you prefer 329 00:20:53,680 --> 00:20:57,800 Speaker 1: to rent this place? He's just got a deffel bagful 330 00:20:57,840 --> 00:21:02,960 Speaker 1: of cashier's checks that he's taken of the auction. And 331 00:21:03,080 --> 00:21:06,119 Speaker 1: this this is a real this is a real life occurrence. 332 00:21:06,240 --> 00:21:09,360 Speaker 1: And then soon you can find that every house in 333 00:21:09,400 --> 00:21:13,080 Speaker 1: that neighborhood that's in that district you want that meets 334 00:21:13,119 --> 00:21:18,280 Speaker 1: your own constraints is owned by an investment company and 335 00:21:18,320 --> 00:21:23,360 Speaker 1: they're not selling. But again they argue, you get advantages 336 00:21:23,720 --> 00:21:27,920 Speaker 1: if you're a corporate renter, you get in numerable advantages. 337 00:21:28,200 --> 00:21:33,440 Speaker 1: Let's dissect the phrase professionalization. So everybody, not everybody, but 338 00:21:33,520 --> 00:21:36,159 Speaker 1: a lot of people I think, have had an experience 339 00:21:36,200 --> 00:21:39,640 Speaker 1: where you're renting from someone who might be a family friend. 340 00:21:39,800 --> 00:21:44,000 Speaker 1: You're renting from someone who maybe they had another career 341 00:21:44,119 --> 00:21:48,280 Speaker 1: and they've retired now and they're getting passive income as 342 00:21:48,520 --> 00:21:51,199 Speaker 1: a landlord. Right. We can call this a mom and 343 00:21:51,240 --> 00:21:55,000 Speaker 1: pop operation. And this mom and pop operation is kind 344 00:21:55,000 --> 00:22:00,200 Speaker 1: of thing where where you say okay, the dishwah sure 345 00:22:00,320 --> 00:22:03,040 Speaker 1: is busted or the A C is out. I'm going 346 00:22:03,119 --> 00:22:07,720 Speaker 1: to contact the landlord, who's just another person who probably 347 00:22:07,800 --> 00:22:11,320 Speaker 1: lives somewhere nearby, and they're gonna come to the house. 348 00:22:11,400 --> 00:22:13,520 Speaker 1: They'll check it out. They want to save some money, 349 00:22:13,600 --> 00:22:17,080 Speaker 1: so before they actually call the plumber, before they actually 350 00:22:17,160 --> 00:22:19,600 Speaker 1: call the you know, the h V a C folks, 351 00:22:19,840 --> 00:22:22,040 Speaker 1: they're gonna see if they can fix it. And these 352 00:22:22,880 --> 00:22:25,240 Speaker 1: that I say this with immense respect because we've got 353 00:22:25,240 --> 00:22:28,240 Speaker 1: some of these landlords in the audience today. These folks 354 00:22:28,800 --> 00:22:33,480 Speaker 1: are the masters of always having a guy quote unpo 355 00:22:33,720 --> 00:22:36,160 Speaker 1: having a guy. Yeah. Not you and I were talking 356 00:22:36,160 --> 00:22:39,080 Speaker 1: about this, and I'll I'm sure you experience this. It's 357 00:22:39,160 --> 00:22:43,080 Speaker 1: just some dude, usually on a first name basis, who 358 00:22:43,240 --> 00:22:46,320 Speaker 1: might be calling themselves a handyman. They might not have 359 00:22:46,359 --> 00:22:49,280 Speaker 1: an official title. They've just got like a work truck 360 00:22:49,680 --> 00:22:52,199 Speaker 1: with a bunch of random tools, and they know what 361 00:22:52,240 --> 00:22:54,840 Speaker 1: they're doing. They're like, yeah, I do a little electricity 362 00:22:54,880 --> 00:22:58,480 Speaker 1: and do a little plumbering. Shout out to Gary, the 363 00:22:58,560 --> 00:23:02,040 Speaker 1: owner of the last time him I rented, who would 364 00:23:02,040 --> 00:23:03,720 Speaker 1: just show up with his truck like you said, and 365 00:23:03,760 --> 00:23:06,159 Speaker 1: you be like, let's fix it. Uh, you know, to 366 00:23:06,280 --> 00:23:08,920 Speaker 1: be fair, we did fight a battle against the basement 367 00:23:09,040 --> 00:23:12,879 Speaker 1: rats for about three years and we we still lost. 368 00:23:14,040 --> 00:23:17,040 Speaker 1: But we tried. We tried, guys, we really fought that battle. 369 00:23:17,800 --> 00:23:20,359 Speaker 1: We lost, you know. I I rented from the same 370 00:23:20,440 --> 00:23:23,960 Speaker 1: dude for two places, I guess for almost like six 371 00:23:24,040 --> 00:23:27,080 Speaker 1: years in total. And he only not only had a guy, 372 00:23:27,160 --> 00:23:30,480 Speaker 1: he had an army. Uh. He had like a ton 373 00:23:30,520 --> 00:23:32,520 Speaker 1: of different people that would come and so specialize in 374 00:23:32,560 --> 00:23:35,520 Speaker 1: different areas, whether it be h vac or plumbing or whatever. 375 00:23:35,560 --> 00:23:38,240 Speaker 1: And he'd come himself often as well. But it was 376 00:23:38,280 --> 00:23:40,400 Speaker 1: a real culture shock for me when I switched to 377 00:23:40,440 --> 00:23:43,280 Speaker 1: the company that I've been talking about, this Excalibur Homes company. 378 00:23:43,560 --> 00:23:46,760 Speaker 1: And to get something, even the smallest thing done, you 379 00:23:46,800 --> 00:23:49,760 Speaker 1: have to go on this like online portal, fill out 380 00:23:49,840 --> 00:23:54,840 Speaker 1: a form as upload pictures, and you know, good luck 381 00:23:54,880 --> 00:23:57,320 Speaker 1: if you'd hear back from anybody, you know, within a 382 00:23:57,320 --> 00:24:00,040 Speaker 1: couple of weeks, and if it was an emergency with 383 00:24:00,160 --> 00:24:02,520 Speaker 1: like water gushing everywhere, I don't even know how you 384 00:24:02,520 --> 00:24:04,240 Speaker 1: go about that. I had a hard time ever getting 385 00:24:04,280 --> 00:24:06,920 Speaker 1: a human being on the phone. And it's no shade 386 00:24:06,920 --> 00:24:09,040 Speaker 1: on the kind of people that you know work. They're 387 00:24:09,080 --> 00:24:12,720 Speaker 1: they're overloaded. These folks are essentially like case workers, their 388 00:24:12,760 --> 00:24:16,200 Speaker 1: property managers, where they're managing like dozens of properties I had. 389 00:24:16,440 --> 00:24:19,120 Speaker 1: When I moved out, I had to find my person knew. 390 00:24:19,119 --> 00:24:21,000 Speaker 1: It took me forever to even find and I left 391 00:24:21,000 --> 00:24:23,000 Speaker 1: there several messages and I finally got her. She's like, 392 00:24:23,320 --> 00:24:24,800 Speaker 1: I was like, did you give my message? And she 393 00:24:24,880 --> 00:24:27,760 Speaker 1: was like, wait, which knoll are you? And how weird 394 00:24:27,840 --> 00:24:30,920 Speaker 1: is that? For there there have been other knolls like that. 395 00:24:30,920 --> 00:24:33,600 Speaker 1: That really speaks to the volume of of of of 396 00:24:33,760 --> 00:24:37,480 Speaker 1: properties as person's managing. Yeah, so the issue there is 397 00:24:37,600 --> 00:24:40,600 Speaker 1: that you have you do have a human connection with 398 00:24:40,640 --> 00:24:43,560 Speaker 1: the mom and pop operations. I'm just using that phrase 399 00:24:43,600 --> 00:24:47,359 Speaker 1: for the sake of convenience. I I often I'm pretty 400 00:24:47,359 --> 00:24:52,239 Speaker 1: handy myself because I I prized self sufficiency. So I 401 00:24:52,400 --> 00:24:56,400 Speaker 1: usually would work out a deal where I would say, Okay, 402 00:24:56,680 --> 00:24:58,720 Speaker 1: I know how to fix this. I can help you out, 403 00:24:59,040 --> 00:25:01,800 Speaker 1: or I'll even pro actively do some improvements and kick 404 00:25:01,840 --> 00:25:04,320 Speaker 1: a little off the rent. And I was pretty successful 405 00:25:04,400 --> 00:25:07,080 Speaker 1: in that extent. But really what I was doing in 406 00:25:07,080 --> 00:25:09,320 Speaker 1: the long game, if you think about it, any time 407 00:25:09,359 --> 00:25:11,600 Speaker 1: I did a repair, any time I did an improvement, 408 00:25:12,000 --> 00:25:15,600 Speaker 1: I was increasing equity and value for that person, right, 409 00:25:15,920 --> 00:25:18,320 Speaker 1: and I was just getting kind of a coupon off 410 00:25:18,440 --> 00:25:22,720 Speaker 1: as a result. So professionalization the corporate argument is that 411 00:25:23,400 --> 00:25:27,960 Speaker 1: now you, as a resident of something owned by these institutions, 412 00:25:28,280 --> 00:25:31,680 Speaker 1: you can treat your interaction with this landlord in much 413 00:25:31,760 --> 00:25:34,800 Speaker 1: the same way you treat interactions with the utility company. 414 00:25:34,920 --> 00:25:38,159 Speaker 1: We're talking about things like the ability to pay rent, 415 00:25:38,560 --> 00:25:41,640 Speaker 1: renew your lease, to put in maintenance request via an 416 00:25:41,680 --> 00:25:45,399 Speaker 1: online portal. You hate phones, You don't really want to 417 00:25:45,400 --> 00:25:48,239 Speaker 1: talk to your landlord, Denise. You don't have to call her, 418 00:25:48,440 --> 00:25:51,439 Speaker 1: just log on. Uh. And then there's also the idea 419 00:25:51,600 --> 00:25:56,160 Speaker 1: of what you would call uniformity and centralization of service. 420 00:25:56,800 --> 00:26:01,200 Speaker 1: So this company right invitation hole MS or whatever. They 421 00:26:01,280 --> 00:26:05,520 Speaker 1: won't say, Oh, Brian Lee will come by, he fixed 422 00:26:05,520 --> 00:26:09,119 Speaker 1: my Cadillac earlier last week, and uh, let me just 423 00:26:09,160 --> 00:26:11,800 Speaker 1: tell you a C compressors are on his mind or 424 00:26:11,800 --> 00:26:13,919 Speaker 1: anything like that, right, Like he's our h v a 425 00:26:13,960 --> 00:26:16,920 Speaker 1: C guy. They'll say, we have a deal with this 426 00:26:17,640 --> 00:26:21,719 Speaker 1: local branch of a vendor right of a company, and 427 00:26:21,800 --> 00:26:24,720 Speaker 1: we will always send these people and we can trust 428 00:26:24,800 --> 00:26:27,520 Speaker 1: their work. We've also probably got them on some sort 429 00:26:27,560 --> 00:26:31,480 Speaker 1: of agreement behind the scenes some kind of retainer, and 430 00:26:31,520 --> 00:26:34,800 Speaker 1: then you can always expect the same level of service 431 00:26:34,840 --> 00:26:38,480 Speaker 1: and repairs. You can also theoretically get twenty four or 432 00:26:38,520 --> 00:26:46,160 Speaker 1: seven assistants for emergency things, whether that's maintenance, unforeseen breakdowns, uh, 433 00:26:46,240 --> 00:26:49,040 Speaker 1: you know, like an emergency repair like a home break 434 00:26:49,080 --> 00:26:52,719 Speaker 1: in or something. And this sounds pretty good in theory, 435 00:26:53,119 --> 00:26:56,000 Speaker 1: unless this has actually happened to you, like with your 436 00:26:56,040 --> 00:27:00,639 Speaker 1: example NOLL in a case of something like at astrophic 437 00:27:00,720 --> 00:27:04,440 Speaker 1: flooding right or in the case of maybe smaller, smaller 438 00:27:04,480 --> 00:27:08,720 Speaker 1: flooding like your um, you have a finished basement in 439 00:27:08,760 --> 00:27:11,600 Speaker 1: a place you're renting and it floods, and you have 440 00:27:11,800 --> 00:27:16,080 Speaker 1: to contact this O this landlord company. You hope they 441 00:27:16,119 --> 00:27:19,399 Speaker 1: send somebody out to start mitigating the water damage. But 442 00:27:19,520 --> 00:27:22,480 Speaker 1: then you also have to contend with your own insurance, 443 00:27:22,680 --> 00:27:27,640 Speaker 1: which famously takes a long time to uh to pay 444 00:27:27,760 --> 00:27:30,720 Speaker 1: up for this stuff on your policy right. In fact, 445 00:27:30,800 --> 00:27:33,359 Speaker 1: that the usual idea is you have to pay for 446 00:27:33,440 --> 00:27:36,199 Speaker 1: it out of pocket and then we'll reimburse you know 447 00:27:36,640 --> 00:27:39,520 Speaker 1: what we feel like, or will reimburse according to the 448 00:27:39,640 --> 00:27:44,400 Speaker 1: terms of our agreement a callback. Yeah, yeah, I mean 449 00:27:44,440 --> 00:27:48,360 Speaker 1: it does sound good right again in theory, but we 450 00:27:49,160 --> 00:27:52,040 Speaker 1: if you have ever rented, if you know anyone who's rented, 451 00:27:52,119 --> 00:27:56,560 Speaker 1: then everybody inevitably has some kind of war story, about 452 00:27:57,119 --> 00:28:00,879 Speaker 1: war story or a horror story about waiting on maintenance. 453 00:28:01,040 --> 00:28:04,680 Speaker 1: You can't do laundry today, can't take a shower, You 454 00:28:04,760 --> 00:28:07,440 Speaker 1: gotta sweat out the weekend with no a C until 455 00:28:07,560 --> 00:28:10,120 Speaker 1: someone can make it to you. Well, yeah, think about 456 00:28:10,119 --> 00:28:12,600 Speaker 1: how dangerous that is with the current heat waves going 457 00:28:12,680 --> 00:28:15,400 Speaker 1: through the UK and the US. I mean, like, if 458 00:28:15,400 --> 00:28:17,879 Speaker 1: it's if it's a hundred and fifteen in your small 459 00:28:17,920 --> 00:28:20,399 Speaker 1: town in Texas and you can't get ahold of the 460 00:28:20,440 --> 00:28:23,680 Speaker 1: company that runs your you know, maintenance, and you don't 461 00:28:23,720 --> 00:28:25,640 Speaker 1: have a C and you've got let's say a little 462 00:28:25,680 --> 00:28:29,480 Speaker 1: kid or something that could be super super dangerous. Absolutely, 463 00:28:29,760 --> 00:28:33,200 Speaker 1: and you nailed it, Matt. People have unfortunately been in 464 00:28:33,240 --> 00:28:37,080 Speaker 1: that situation before. And this happens with kids, this happens 465 00:28:37,119 --> 00:28:39,959 Speaker 1: with pets, with the elderly, you know, with people who 466 00:28:40,080 --> 00:28:44,959 Speaker 1: might not necessarily have the agency two improvise, adapt and 467 00:28:44,960 --> 00:28:50,120 Speaker 1: overcome those, uh, the situations. And what we found is, 468 00:28:50,320 --> 00:28:52,120 Speaker 1: and we'll get to us in a bit today, what 469 00:28:52,160 --> 00:28:55,080 Speaker 1: we found is the problem here is not that the 470 00:28:55,080 --> 00:28:58,160 Speaker 1: theory is bad. The theory sounds nice. Actually, the problem 471 00:28:58,320 --> 00:29:01,800 Speaker 1: is the theory doesn't always to match with the practice 472 00:29:02,040 --> 00:29:07,200 Speaker 1: or implementation of these volunteered ideas. We found multiple reports 473 00:29:07,280 --> 00:29:11,800 Speaker 1: up to and including lawsuits from corporate renters alleging these 474 00:29:11,800 --> 00:29:17,240 Speaker 1: companies were absolutely no better than non corporate uh landlords 475 00:29:17,360 --> 00:29:22,560 Speaker 1: and worse at times. From the perspective again, of these institutions, 476 00:29:22,560 --> 00:29:25,760 Speaker 1: at least the stuff they say publicly, there's this sense 477 00:29:25,960 --> 00:29:30,480 Speaker 1: that they were able to take this disaster, this disastrous situation, 478 00:29:30,520 --> 00:29:34,560 Speaker 1: the foreclosure crisis, and through it not just keep people 479 00:29:34,560 --> 00:29:37,760 Speaker 1: in homes, but also, by way of a Bob Ross 480 00:29:37,800 --> 00:29:41,760 Speaker 1: style happy little accident, they were creating a solid revenue 481 00:29:41,800 --> 00:29:45,520 Speaker 1: stream along the way. Again, so when when is it? 482 00:29:45,600 --> 00:29:48,840 Speaker 1: Is it a cobalt blue revenue stream with little ripples 483 00:29:48,880 --> 00:29:52,520 Speaker 1: and fish swimming past? You have to ask them. You 484 00:29:52,600 --> 00:29:55,520 Speaker 1: have to ask them. I didn't find it in their 485 00:29:55,560 --> 00:29:59,160 Speaker 1: in their statements or interviews, but but uh so when 486 00:29:59,200 --> 00:30:02,840 Speaker 1: when everything scope of setting not really though? What are 487 00:30:02,840 --> 00:30:13,280 Speaker 1: we talking about? We'll tell you afterward from our sponsor. Okay, 488 00:30:13,280 --> 00:30:15,560 Speaker 1: we're back. Here's the thing. This is the thing that 489 00:30:15,720 --> 00:30:19,240 Speaker 1: is haunting Okay, and this is absolutely true when you 490 00:30:19,360 --> 00:30:25,240 Speaker 1: think about it. The same class of institutional investor that 491 00:30:25,400 --> 00:30:29,080 Speaker 1: is claiming this is a win win is also this 492 00:30:29,440 --> 00:30:33,160 Speaker 1: is also the class that helped create the financial crisis 493 00:30:33,240 --> 00:30:36,800 Speaker 1: that led to the housing crash and now is profiting 494 00:30:36,920 --> 00:30:40,520 Speaker 1: from the federal intervention we outlined earlier. Think of it 495 00:30:40,600 --> 00:30:44,560 Speaker 1: like a fireman starting fires, driving back to the station, 496 00:30:45,240 --> 00:30:47,880 Speaker 1: waiting a minute, and then driving back to the fire 497 00:30:48,200 --> 00:30:52,080 Speaker 1: they started to save the day. I don't believe that's 498 00:30:52,160 --> 00:30:55,760 Speaker 1: necessarily hyperbolic, or it's like like change changing out of 499 00:30:55,760 --> 00:30:58,680 Speaker 1: their fireman outfit into their insurance adjuster outfit, you know 500 00:30:58,720 --> 00:31:03,120 Speaker 1: what I mean? Like, yeah, well, it's interesting because one 501 00:31:03,200 --> 00:31:07,200 Speaker 1: of the major problems that led to that crash and 502 00:31:07,240 --> 00:31:10,640 Speaker 1: though eight was the combining of a bunch of different 503 00:31:10,640 --> 00:31:15,800 Speaker 1: mortgages that were considered subprime, right, combining those bundling them 504 00:31:15,840 --> 00:31:20,680 Speaker 1: with a couple of like really good mortgages, right, and 505 00:31:20,720 --> 00:31:24,640 Speaker 1: then pretending like they're all the same, they're all um 506 00:31:24,800 --> 00:31:27,000 Speaker 1: whatever they call them A plus or double A and 507 00:31:27,080 --> 00:31:31,480 Speaker 1: all that stuff. But because of the way, isn't that 508 00:31:31,520 --> 00:31:34,160 Speaker 1: all what you isn't that what you call speculation? Essentially? 509 00:31:34,280 --> 00:31:36,680 Speaker 1: Wasn't it just rampant kind of like gaming of the 510 00:31:36,760 --> 00:31:39,840 Speaker 1: system to try to make the most bang for your buck. Well, yeah, 511 00:31:39,880 --> 00:31:42,200 Speaker 1: a lot of that appeared, at least look to my 512 00:31:42,280 --> 00:31:45,520 Speaker 1: understanding guys, a lot of that appeared to be corruption 513 00:31:45,600 --> 00:31:48,920 Speaker 1: within the institutions. Like I think it's Fannie Mae and 514 00:31:48,960 --> 00:31:52,760 Speaker 1: Freddie Mac that are like deciding is that right or wrong? Maybe? 515 00:31:52,760 --> 00:31:56,560 Speaker 1: I'm absolutely it started back in We're talking about the 516 00:31:56,600 --> 00:31:59,720 Speaker 1: subprime mortgage market, is what it was called. Started back 517 00:31:59,720 --> 00:32:06,520 Speaker 1: in And uh, Fannie Mae and Freddie Mack are despite 518 00:32:06,560 --> 00:32:10,040 Speaker 1: the super innocuous names. What do we always say about 519 00:32:10,040 --> 00:32:15,120 Speaker 1: super innocuous names. Fannie Mae and Freddie Mac. We're our 520 00:32:15,400 --> 00:32:19,640 Speaker 1: mortgage lenders, right, but their government sponsored and they started 521 00:32:19,720 --> 00:32:24,480 Speaker 1: making home loans accessible to people with pretty low credit 522 00:32:24,520 --> 00:32:28,520 Speaker 1: scores and also a heightened risk of defaulting on those loans, 523 00:32:28,600 --> 00:32:33,760 Speaker 1: which is saying I can't or will not pay you. Uh. Now, 524 00:32:33,800 --> 00:32:35,960 Speaker 1: a lot of you know this is something. This is 525 00:32:35,960 --> 00:32:40,440 Speaker 1: where we see an inequality in socioeconomic hierarchy, because, as 526 00:32:40,440 --> 00:32:46,960 Speaker 1: you know, defaulting and risk and borrowing and debt work 527 00:32:47,320 --> 00:32:50,600 Speaker 1: very very differently for people at the at the top 528 00:32:50,800 --> 00:32:56,160 Speaker 1: fringes of income and wealth. Right owing, we say that, 529 00:32:56,200 --> 00:32:58,560 Speaker 1: we said this before, but it's such a great, such 530 00:32:58,600 --> 00:33:02,880 Speaker 1: a great observation. You owe the bank ten thousand dollars, 531 00:33:02,920 --> 00:33:06,120 Speaker 1: that's your problem. You owe the bank ten million dollars, 532 00:33:06,160 --> 00:33:09,800 Speaker 1: that's the bank's problem. And that's kind of the rarefied air. 533 00:33:09,880 --> 00:33:13,720 Speaker 1: But you're you're nailing it that this, uh, this crisis 534 00:33:14,200 --> 00:33:19,240 Speaker 1: was caused by aggressively flexing with the rules of the game. Right. 535 00:33:19,320 --> 00:33:22,080 Speaker 1: You can you can only hit the pinball machine so 536 00:33:22,120 --> 00:33:26,920 Speaker 1: many times before it breaks and tilts, and it's kind 537 00:33:26,920 --> 00:33:29,960 Speaker 1: of dumb to act surprised when you were the one 538 00:33:30,080 --> 00:33:33,240 Speaker 1: hitting it. Yeah. Well, yeah, because the investment class that 539 00:33:33,280 --> 00:33:35,880 Speaker 1: you're speaking of here, Ben, they were bundling those things 540 00:33:35,920 --> 00:33:39,120 Speaker 1: together and then betting that those numbers we're gonna keep 541 00:33:39,240 --> 00:33:43,480 Speaker 1: rising and that they're gonna continue making money. Half of 542 00:33:43,520 --> 00:33:47,640 Speaker 1: those products there were just people's mortgages, the money that 543 00:33:47,680 --> 00:33:51,360 Speaker 1: they owed to banks, um and then when it came 544 00:33:51,400 --> 00:33:54,400 Speaker 1: crashing down, the whole system came with it as long, 545 00:33:54,640 --> 00:33:57,959 Speaker 1: you know, as well as a ton of people's homes 546 00:33:58,000 --> 00:34:01,080 Speaker 1: and abilities to live with a home and own a 547 00:34:01,160 --> 00:34:03,200 Speaker 1: home or at least pay a mortgade on it. And 548 00:34:03,280 --> 00:34:06,640 Speaker 1: for many of those families, to further exacerbate the danger, 549 00:34:06,960 --> 00:34:11,600 Speaker 1: that was their only big investment, other than perhaps a car. 550 00:34:12,200 --> 00:34:17,440 Speaker 1: So you know, student loans are still a ravenous financial 551 00:34:17,480 --> 00:34:20,000 Speaker 1: predator for a lot of people. Maybe a story for 552 00:34:20,040 --> 00:34:24,279 Speaker 1: a different day, but you know, I'm full disclosure. I 553 00:34:24,280 --> 00:34:27,080 Speaker 1: am friends with I know people who made a great 554 00:34:27,200 --> 00:34:31,920 Speaker 1: deal of money working in the mortgage industry leading up 555 00:34:31,920 --> 00:34:35,919 Speaker 1: to this time, and some of them I won't give names, 556 00:34:35,960 --> 00:34:38,480 Speaker 1: but some of them did have moral qualms about this, 557 00:34:39,120 --> 00:34:41,279 Speaker 1: and some of them didn't even realize I think the 558 00:34:41,440 --> 00:34:45,279 Speaker 1: enormity of the sea change that was occurring. So this 559 00:34:45,360 --> 00:34:49,680 Speaker 1: is what happens, and you this is not necessarily us 560 00:34:49,760 --> 00:34:57,120 Speaker 1: saying these institutions purposefully created this with a plan to 561 00:34:57,360 --> 00:35:00,480 Speaker 1: enact the some second half of a grand game in 562 00:35:02,800 --> 00:35:06,120 Speaker 1: two No, but they definitely took advantage of it. And 563 00:35:06,520 --> 00:35:09,839 Speaker 1: the same class, the same cohort was in a big 564 00:35:09,880 --> 00:35:16,040 Speaker 1: way responsible for the housing crisis that produced this opportunity. 565 00:35:16,120 --> 00:35:21,040 Speaker 1: So all right, improvised, adapt overcome. Who feels like this 566 00:35:21,160 --> 00:35:25,120 Speaker 1: current plan has been a success? Shareholders definitely seemed to 567 00:35:25,160 --> 00:35:28,560 Speaker 1: dig it. Again, we're talking one of the golden Geese 568 00:35:28,840 --> 00:35:34,320 Speaker 1: of investing guaranteed, safely predictable profits. You're kind of out 569 00:35:34,320 --> 00:35:38,560 Speaker 1: of the land of um speculation where you could be 570 00:35:38,680 --> 00:35:43,400 Speaker 1: making five percent profit, You could lose ten percent value 571 00:35:44,120 --> 00:35:46,319 Speaker 1: year over year, something like that. Now we're in the 572 00:35:46,400 --> 00:35:49,359 Speaker 1: land where so long as a couple of conditions are met, 573 00:35:49,600 --> 00:35:52,960 Speaker 1: so long as their their butts in the bedrooms paying 574 00:35:53,000 --> 00:35:56,520 Speaker 1: you x amount of dollars every month, you can reliably 575 00:35:56,640 --> 00:36:01,120 Speaker 1: predict out into the future. That's amazing. Uh. And if 576 00:36:01,160 --> 00:36:05,800 Speaker 1: it weren't people involved, everybody would be if it worked 577 00:36:05,960 --> 00:36:08,600 Speaker 1: for the fact that real people are getting hurt in this, 578 00:36:08,600 --> 00:36:13,600 Speaker 1: this would be um an a plus mortgage of a plan. Well, 579 00:36:13,920 --> 00:36:16,879 Speaker 1: you know else I think is excited about the way 580 00:36:16,920 --> 00:36:20,520 Speaker 1: this is going. Local politicians. Look, I don't have the 581 00:36:20,600 --> 00:36:22,719 Speaker 1: data to back this up, and I'm I can't tell 582 00:36:22,719 --> 00:36:26,560 Speaker 1: you how much these individual corporations are donating in you know, 583 00:36:27,080 --> 00:36:31,759 Speaker 1: campaign finances to to various campaigns across the country. But 584 00:36:31,840 --> 00:36:35,920 Speaker 1: I bet as these big institutions with a fairly large 585 00:36:36,200 --> 00:36:39,239 Speaker 1: lobbying firm or a lobbying what what do we call 586 00:36:39,280 --> 00:36:44,640 Speaker 1: that organization? The National Rental Home Council, the quote trade 587 00:36:44,640 --> 00:36:47,719 Speaker 1: group slash lobbying slash. You know, well, they've already got 588 00:36:47,760 --> 00:36:50,120 Speaker 1: one of those. They're making hand money, hand over fist 589 00:36:50,200 --> 00:36:52,239 Speaker 1: and rent. They must be donating quite a bit of 590 00:36:52,239 --> 00:36:58,800 Speaker 1: money to campaigns. I just haven't seen the actual numbers. Yeah, yeah, 591 00:36:58,880 --> 00:37:03,320 Speaker 1: it's the writing is on the back room walls for sure, 592 00:37:03,800 --> 00:37:07,200 Speaker 1: they I I imagine. Yes, there are politicians who are 593 00:37:07,440 --> 00:37:10,439 Speaker 1: doing quite well based on this, but there are also 594 00:37:10,560 --> 00:37:14,560 Speaker 1: politicians who are fighting against it. As we'll see. Uh 595 00:37:14,600 --> 00:37:18,640 Speaker 1: this again. You know, we don't want to improperly vilify 596 00:37:18,840 --> 00:37:23,480 Speaker 1: people here, but there are clear that well there I 597 00:37:23,520 --> 00:37:29,600 Speaker 1: said in probably we can we Yeah, I think we should. Uh. 598 00:37:29,840 --> 00:37:32,480 Speaker 1: There are people who don't agree that it's a win win, 599 00:37:32,680 --> 00:37:35,920 Speaker 1: and most of those folks are tenants, not just housing 600 00:37:36,040 --> 00:37:41,520 Speaker 1: rights activists. Remember the complaints we mentioned earlier from tenants, Well, 601 00:37:41,640 --> 00:37:45,360 Speaker 1: here's an example from the Atlanta metro area in nearby 602 00:37:45,440 --> 00:37:49,080 Speaker 1: Gwynette County alone. As we speak, there are already multiple 603 00:37:49,160 --> 00:37:52,280 Speaker 1: lawsuits against some of those big players, and they allege 604 00:37:52,320 --> 00:37:58,160 Speaker 1: these corporations focus primarily on short term shareholder profit and 605 00:37:58,239 --> 00:38:01,160 Speaker 1: that these corporations, as it was volt of, you know, 606 00:38:01,280 --> 00:38:04,759 Speaker 1: caring about the bottom line, prioritizing that over everything else. 607 00:38:05,360 --> 00:38:09,440 Speaker 1: They ignore concerns about quality of life, much needed repairs, 608 00:38:09,600 --> 00:38:13,840 Speaker 1: and they've reported at times hazardous living conditions. You know, 609 00:38:14,160 --> 00:38:17,560 Speaker 1: like think about something where you have a gas powered 610 00:38:17,560 --> 00:38:23,520 Speaker 1: doven and it's just not turning off. And then you 611 00:38:23,680 --> 00:38:25,880 Speaker 1: call an emergency line and they say you need to 612 00:38:25,920 --> 00:38:29,240 Speaker 1: go online and put in a form and you're like, hey, 613 00:38:29,600 --> 00:38:32,560 Speaker 1: this gas is flammable, Like okay, well there's a box 614 00:38:32,600 --> 00:38:34,799 Speaker 1: you can check for that and we'll have someone get 615 00:38:34,840 --> 00:38:38,200 Speaker 1: back to you. You know, now, now Brian Lee or 616 00:38:38,280 --> 00:38:41,800 Speaker 1: Garry is starting to look pretty good. In Gwinnette County, 617 00:38:42,040 --> 00:38:43,759 Speaker 1: I looked at a home that was owned by one 618 00:38:43,760 --> 00:38:46,440 Speaker 1: of these companies that if you go around the house 619 00:38:46,520 --> 00:38:49,640 Speaker 1: to the backyard and looked at the where the fireplace 620 00:38:49,680 --> 00:38:52,360 Speaker 1: goes up right along the house on the back wall, 621 00:38:52,880 --> 00:38:55,799 Speaker 1: you could see the sighting on the back there is 622 00:38:55,840 --> 00:38:59,719 Speaker 1: like melted, which means there's a there's a flaw in 623 00:38:59,800 --> 00:39:03,600 Speaker 1: the side where the heat you know, travels when you're 624 00:39:03,600 --> 00:39:07,200 Speaker 1: burning things inside the house in the fireplace that obviously 625 00:39:07,239 --> 00:39:10,800 Speaker 1: hasn't been repaired ever. So you know, you just imagine 626 00:39:10,800 --> 00:39:12,760 Speaker 1: if you ended up renting that home and you weren't 627 00:39:12,760 --> 00:39:16,239 Speaker 1: aware of that situation, you could potentially start a fire 628 00:39:16,239 --> 00:39:18,719 Speaker 1: in your own home just by using your fireplace the 629 00:39:18,760 --> 00:39:22,680 Speaker 1: way it's intended to be used. And we're not that is, 630 00:39:22,880 --> 00:39:26,279 Speaker 1: and we we are not being self absorbed necessarily by 631 00:39:26,320 --> 00:39:31,759 Speaker 1: talking about Atlanta. Uh, twenty of homes purchased in the 632 00:39:31,800 --> 00:39:38,680 Speaker 1: Atlanta area last year, just over those homes were bought 633 00:39:38,680 --> 00:39:43,480 Speaker 1: by investors in the rate was fift was twelve percent. 634 00:39:43,640 --> 00:39:49,160 Speaker 1: Excuse me. So what we're seeing now is also as 635 00:39:49,239 --> 00:39:52,440 Speaker 1: these rates increase, we learn more about the system, when 636 00:39:52,480 --> 00:39:56,279 Speaker 1: we learn more about the strategy. And here in Atlanta, 637 00:39:57,360 --> 00:40:00,640 Speaker 1: the one of the big demographics is the the majority 638 00:40:00,840 --> 00:40:04,720 Speaker 1: of neighborhoods being targeted they meet what you described met 639 00:40:05,000 --> 00:40:08,840 Speaker 1: and they're also majority black neighborhoods. Also, just just just 640 00:40:08,920 --> 00:40:10,480 Speaker 1: to point, I mean, we mentioned at the top of 641 00:40:10,520 --> 00:40:13,680 Speaker 1: this episode, UM that you know, these the large financial 642 00:40:13,680 --> 00:40:17,560 Speaker 1: institutions are only buying up a small percentage of the 643 00:40:17,600 --> 00:40:20,759 Speaker 1: overall housing supply. But I believe it is correct to 644 00:40:20,760 --> 00:40:24,439 Speaker 1: say that Atlanta it's it's it's above average. What's happen 645 00:40:24,680 --> 00:40:30,600 Speaker 1: absolutely Atlanta, one could argue, is a prototype um or 646 00:40:30,680 --> 00:40:33,400 Speaker 1: it's or it's a little bit the cycle is a 647 00:40:33,400 --> 00:40:37,200 Speaker 1: little bit further ahead than other cities. You can also 648 00:40:37,239 --> 00:40:39,880 Speaker 1: see this, by the way, in Charlotte. For anybody who 649 00:40:39,960 --> 00:40:44,520 Speaker 1: wants UH kind of apples to apples understanding here. So 650 00:40:44,719 --> 00:40:47,840 Speaker 1: there are people saying when when there are people saying, 651 00:40:48,000 --> 00:40:50,960 Speaker 1: not so fast. There are people saying it's the end 652 00:40:51,000 --> 00:40:54,080 Speaker 1: of the middle class, and there are people saying, guys, 653 00:40:54,120 --> 00:40:58,919 Speaker 1: calm down, stop worrying. Uh, don't, don't call the Wall 654 00:40:58,920 --> 00:41:02,360 Speaker 1: Street cats fat ats. That's not cool. So now we 655 00:41:02,400 --> 00:41:05,399 Speaker 1: have to ask what is true. It is true that 656 00:41:05,480 --> 00:41:08,920 Speaker 1: these corporations do not own a huge portion of American 657 00:41:09,000 --> 00:41:13,200 Speaker 1: homes dot dot dot. Yet you see, they have massive 658 00:41:13,280 --> 00:41:17,120 Speaker 1: and growing structural advantages that need to be talked about. 659 00:41:17,160 --> 00:41:20,200 Speaker 1: These are These are the waste to stack the decks 660 00:41:20,239 --> 00:41:24,319 Speaker 1: such that non corporate home buyers may be left in 661 00:41:24,360 --> 00:41:27,560 Speaker 1: the dust sooner than we would like to think. And 662 00:41:27,719 --> 00:41:31,680 Speaker 1: what do we mean by this? Okay, first, mortgages, Normal 663 00:41:31,800 --> 00:41:37,319 Speaker 1: people typically are gonna pay a mortgage realistically four to 664 00:41:37,400 --> 00:41:41,880 Speaker 1: six percent. You'll hear about some sweetheart deals like two stuff. 665 00:41:42,880 --> 00:41:47,239 Speaker 1: But companies like, right now it's nine one right, So 666 00:41:47,360 --> 00:41:50,880 Speaker 1: four to six is fine. And you know there are 667 00:41:50,880 --> 00:41:52,880 Speaker 1: a ton of variables that can change with that, the 668 00:41:52,960 --> 00:41:58,439 Speaker 1: length of your mortgage agreement, refinancing, so on. Companies though, 669 00:41:58,800 --> 00:42:02,040 Speaker 1: can borrow money for or way way way way way 670 00:42:02,160 --> 00:42:06,800 Speaker 1: way way way way less. Oh, of course, because they 671 00:42:06,840 --> 00:42:08,640 Speaker 1: get a discount and everything because they're doing it at 672 00:42:08,680 --> 00:42:11,560 Speaker 1: such scale. Um, and the and and again, having more 673 00:42:11,840 --> 00:42:16,240 Speaker 1: capital and more investments yields the opportunity to to parlay 674 00:42:16,280 --> 00:42:20,080 Speaker 1: those deals into other deals. Um, it's a smaller scale version. 675 00:42:20,120 --> 00:42:21,640 Speaker 1: But it's sort of like my friend I mentioned in 676 00:42:21,640 --> 00:42:23,480 Speaker 1: the last episode of How You Know. You do one 677 00:42:23,520 --> 00:42:26,440 Speaker 1: rental property, it allows you to have the borrowing power 678 00:42:26,520 --> 00:42:28,160 Speaker 1: to get another one and another one if you pay 679 00:42:28,200 --> 00:42:30,880 Speaker 1: your bills. A giant company is just a massive scaled 680 00:42:30,960 --> 00:42:34,480 Speaker 1: version of this. But then I was wondering, Um, you know, 681 00:42:34,880 --> 00:42:38,440 Speaker 1: we talked about how the subprime mortgage crisis was in 682 00:42:38,480 --> 00:42:42,560 Speaker 1: some ways as a result of like borrowing being very 683 00:42:42,600 --> 00:42:46,000 Speaker 1: easy and equitable. Uh, and folks maybe who shouldn't have 684 00:42:46,040 --> 00:42:48,000 Speaker 1: been able to get loans being able to get loans, 685 00:42:48,040 --> 00:42:50,840 Speaker 1: and then that causing the crisis of people being underwater 686 00:42:50,880 --> 00:42:54,759 Speaker 1: and having their houses fore closed. But now it's am 687 00:42:54,760 --> 00:42:57,120 Speaker 1: I correct and saying that it's it's much much more 688 00:42:57,520 --> 00:43:01,480 Speaker 1: difficult and the CRITI here, you are much more stringent 689 00:43:01,800 --> 00:43:05,240 Speaker 1: for getting alone period, not to mention that the interest 690 00:43:05,320 --> 00:43:07,960 Speaker 1: rates are much higher. Yeah, I mean, there is an 691 00:43:08,080 --> 00:43:12,680 Speaker 1: argument that I think is valid that people who ordinarily 692 00:43:13,080 --> 00:43:15,680 Speaker 1: should have been turned down not just what they've been, 693 00:43:15,760 --> 00:43:19,120 Speaker 1: but they should have been where you know, just got 694 00:43:19,160 --> 00:43:21,759 Speaker 1: an Adam boy and told to keep going. And in 695 00:43:21,800 --> 00:43:26,840 Speaker 1: many cases, unfortunately, people might not have fully understood what 696 00:43:26,840 --> 00:43:32,120 Speaker 1: they were agreeing to write, like a mortgage that changes 697 00:43:32,360 --> 00:43:35,840 Speaker 1: and balloons on you with all sorts of small print 698 00:43:35,920 --> 00:43:39,240 Speaker 1: finds and I should call them fees that are applied. 699 00:43:40,000 --> 00:43:44,640 Speaker 1: This this is all part and parcel of the same thing. 700 00:43:45,320 --> 00:43:49,560 Speaker 1: If we look at the structural advantages here, we said, yes, 701 00:43:50,360 --> 00:43:56,319 Speaker 1: these companies can because capital begets capital right, money makes money, 702 00:43:56,440 --> 00:44:01,120 Speaker 1: that's the secret. Uh, these companies can get a huge 703 00:44:01,360 --> 00:44:05,240 Speaker 1: loans at interest rates of stuff like one point four percent. 704 00:44:06,040 --> 00:44:08,719 Speaker 1: And what this means in practice is that you can 705 00:44:08,800 --> 00:44:11,960 Speaker 1: take you can be an institutional investor and you can 706 00:44:12,000 --> 00:44:17,520 Speaker 1: afford to tack on thousands of dollars over the asking 707 00:44:17,560 --> 00:44:21,240 Speaker 1: price of every home, and because of that much lower 708 00:44:21,280 --> 00:44:23,640 Speaker 1: interest rate, you still end up getting the house at 709 00:44:23,680 --> 00:44:27,160 Speaker 1: the same actual cost as the homeowner. You're just you're 710 00:44:27,239 --> 00:44:30,759 Speaker 1: moving the money differently, you're moving your costs differently. And 711 00:44:30,800 --> 00:44:33,600 Speaker 1: then when we talk about paying for the house cold 712 00:44:33,640 --> 00:44:38,759 Speaker 1: hard cash, if you had told us twelve years ago 713 00:44:38,840 --> 00:44:43,040 Speaker 1: even that, uh, it would be normalized for folks to 714 00:44:43,120 --> 00:44:46,840 Speaker 1: show up with a briefcase full of cash, right or 715 00:44:47,040 --> 00:44:50,080 Speaker 1: a one and done sign a check for eight hundred 716 00:44:50,080 --> 00:44:53,040 Speaker 1: thousand dollars. If you told us that would happen, I 717 00:44:53,080 --> 00:44:56,320 Speaker 1: think our first natural question would be, Wow, who calls 718 00:44:56,360 --> 00:44:59,719 Speaker 1: the police first? Is it the Does the bank call 719 00:44:59,800 --> 00:45:03,160 Speaker 1: the least does the realtor? Who is busting this drug dealer? 720 00:45:03,760 --> 00:45:09,399 Speaker 1: But the outside of the bank is cutting the cashiers? Right? 721 00:45:09,760 --> 00:45:14,120 Speaker 1: And this this is now normalized. And there's a great 722 00:45:14,120 --> 00:45:17,839 Speaker 1: Slate article that dives into this. They look specifically at 723 00:45:18,440 --> 00:45:22,520 Speaker 1: some Atlanta based stuff and they say that a lot 724 00:45:22,560 --> 00:45:25,040 Speaker 1: of these companies use a mixture of debt and cash 725 00:45:25,160 --> 00:45:27,880 Speaker 1: from renters because they already have other tenants, you know, 726 00:45:28,400 --> 00:45:33,920 Speaker 1: to buy houses. But typically those offers are always going 727 00:45:33,960 --> 00:45:36,239 Speaker 1: to be in cash. And that is a huge leg 728 00:45:36,320 --> 00:45:39,200 Speaker 1: up because of what you're telling the seller or their 729 00:45:39,280 --> 00:45:44,040 Speaker 1: representative is, Hey, we're saving so many steps, right, We're 730 00:45:44,040 --> 00:45:48,640 Speaker 1: eliminating having to have some sort of relationship or you 731 00:45:48,760 --> 00:45:51,759 Speaker 1: having to have a long term relationship with a bank, etcetera. 732 00:45:52,160 --> 00:45:55,720 Speaker 1: We can just you know, always have this Saturday together. 733 00:45:56,160 --> 00:45:59,000 Speaker 1: Not only that it's a sure thing, whereas even if 734 00:45:59,000 --> 00:46:02,840 Speaker 1: you're pre approved or a mortgage um. You know, as 735 00:46:02,920 --> 00:46:05,399 Speaker 1: anyone who's bought a house can tell you, like, you're 736 00:46:05,440 --> 00:46:07,920 Speaker 1: dealing with crap up until the day before the closing, 737 00:46:07,960 --> 00:46:10,640 Speaker 1: oftentimes in terms of getting your financial ducks in a row, 738 00:46:11,120 --> 00:46:13,520 Speaker 1: Like I had a crisis with mine where it almost 739 00:46:13,520 --> 00:46:15,640 Speaker 1: seemed like I was going to lose it or lose 740 00:46:15,680 --> 00:46:20,000 Speaker 1: the particular one that I got because of some inconsistency 741 00:46:20,080 --> 00:46:23,520 Speaker 1: with my rent history because the house that I was renting, 742 00:46:24,360 --> 00:46:28,040 Speaker 1: my closing was one month before the anniversary of two 743 00:46:28,160 --> 00:46:30,720 Speaker 1: years being in that property, and they all of a sudden, 744 00:46:30,800 --> 00:46:33,440 Speaker 1: like we need exactly two years of rental proof. And 745 00:46:33,480 --> 00:46:36,120 Speaker 1: while I love my previous landlord that I mentioned, he 746 00:46:36,200 --> 00:46:39,520 Speaker 1: was not someone that really dealt with digital files or email. 747 00:46:39,560 --> 00:46:42,319 Speaker 1: Everything was on paper, and uh, he doesn't live in 748 00:46:42,320 --> 00:46:44,280 Speaker 1: the country anymore, so I couldn't get him on the phone. 749 00:46:44,640 --> 00:46:48,200 Speaker 1: So when you are paying cash, there's no worry that 750 00:46:48,280 --> 00:46:50,239 Speaker 1: anything's gonna that the rug could be pulled out from 751 00:46:50,280 --> 00:46:53,239 Speaker 1: under your your potential purchaser and and cost you the sale. 752 00:46:54,440 --> 00:46:56,879 Speaker 1: You know, you have earnest money, You have earnest money 753 00:46:56,920 --> 00:46:59,359 Speaker 1: that you'll get, you know, for your trouble. But that's 754 00:46:59,440 --> 00:47:02,360 Speaker 1: not the same is selling your house. And also it's 755 00:47:02,400 --> 00:47:05,840 Speaker 1: it's a bit of a trustful right any mortgage, because 756 00:47:06,040 --> 00:47:10,840 Speaker 1: the the idea then is saying nothing will go super 757 00:47:10,880 --> 00:47:15,520 Speaker 1: wrong for thirty years, so you know we'll be well 758 00:47:15,520 --> 00:47:17,640 Speaker 1: and going at the end of this. And this works 759 00:47:17,640 --> 00:47:19,560 Speaker 1: for a lot of people, but you you can see 760 00:47:19,600 --> 00:47:22,960 Speaker 1: logically how this would be much more appealing to be 761 00:47:23,040 --> 00:47:27,560 Speaker 1: able to say, okay, I'll take the the four hundred 762 00:47:27,640 --> 00:47:33,760 Speaker 1: thousand dollars now just transferred through. But another structural advantage 763 00:47:33,800 --> 00:47:37,840 Speaker 1: here is that the ratio of home value versus rent 764 00:47:38,440 --> 00:47:43,960 Speaker 1: has changed. There's a recent SEC disclosure that shows a 765 00:47:44,000 --> 00:47:48,839 Speaker 1: company like Invitation Homes their portfolio now is worth like 766 00:47:49,560 --> 00:47:54,360 Speaker 1: sixteen billion dollars US after renovations. Every year the company 767 00:47:54,400 --> 00:47:58,080 Speaker 1: gets about one point nine billion dollars in rent, which 768 00:47:58,160 --> 00:48:01,000 Speaker 1: is insane. And what that means if you play with 769 00:48:01,040 --> 00:48:03,520 Speaker 1: them as a little is that it only takes about 770 00:48:03,640 --> 00:48:07,480 Speaker 1: eight years of rental payments to pay back a typical 771 00:48:07,719 --> 00:48:11,680 Speaker 1: house that Invitation Homes has bought. That's that's what it 772 00:48:11,680 --> 00:48:14,160 Speaker 1: takes for them to recoup cost, and that's not a 773 00:48:14,239 --> 00:48:17,560 Speaker 1: very long time at all. So these companies aren't blindly 774 00:48:17,680 --> 00:48:20,960 Speaker 1: buying single family homes just anywhere they're not rolling the 775 00:48:21,040 --> 00:48:24,560 Speaker 1: dice near as much as people might think. They're targeting 776 00:48:24,560 --> 00:48:28,880 Speaker 1: these specific houses and neighborhoods. And we should add the 777 00:48:29,040 --> 00:48:32,640 Speaker 1: people that would have been living there as homeowners are 778 00:48:32,719 --> 00:48:35,600 Speaker 1: also the part of the US population that has the 779 00:48:35,680 --> 00:48:40,000 Speaker 1: greatest potential to be wealth builders for the middle class. Uh. 780 00:48:40,040 --> 00:48:43,280 Speaker 1: These that's why these companies ignore bigger, more expensive homes, 781 00:48:43,400 --> 00:48:47,560 Speaker 1: especially ones that are moving ready. You know why because 782 00:48:47,560 --> 00:48:52,520 Speaker 1: people who are already previous homeowners wealthy and no offense here, 783 00:48:52,560 --> 00:48:54,880 Speaker 1: but this is how people have been referring to it. 784 00:48:55,080 --> 00:49:00,719 Speaker 1: Wealthy boomers. Uh, and maybe folks in the hex sector 785 00:49:00,920 --> 00:49:05,799 Speaker 1: right young, very well paid. They can afford to throw 786 00:49:05,840 --> 00:49:08,680 Speaker 1: a little more cheddar at the mouse trap, and so 787 00:49:08,880 --> 00:49:13,160 Speaker 1: they will. They will snap up those convenience a little 788 00:49:13,160 --> 00:49:17,160 Speaker 1: more posh properties. And they're also not looking at places 789 00:49:17,200 --> 00:49:20,440 Speaker 1: that are dealing with, you know, losing their population or 790 00:49:20,480 --> 00:49:23,040 Speaker 1: just people who are moving away right in great droves. 791 00:49:23,160 --> 00:49:26,960 Speaker 1: They're looking for places that are hot right now for 792 00:49:27,280 --> 00:49:32,600 Speaker 1: like you said, been that the profitable sector to come 793 00:49:32,640 --> 00:49:38,160 Speaker 1: through and just be batteries for them forts in the matrix. Yeah, 794 00:49:38,320 --> 00:49:41,439 Speaker 1: it's you know, it's like, uh, that's a great point, Matt, 795 00:49:41,520 --> 00:49:45,880 Speaker 1: because places like Pittsburgh and Providence. You won't see the 796 00:49:46,040 --> 00:49:50,680 Speaker 1: same phenomenon occurring. And it makes sense that they wouldn't 797 00:49:50,680 --> 00:49:54,399 Speaker 1: engage in that field or in that theater, because if 798 00:49:54,440 --> 00:49:57,040 Speaker 1: you are a renter and you want to buy a 799 00:49:57,080 --> 00:50:02,960 Speaker 1: home in Pittsburgh or Providence, then if it becomes too inconvenient, 800 00:50:03,520 --> 00:50:05,200 Speaker 1: you might do what a lot of your other friends 801 00:50:05,239 --> 00:50:09,480 Speaker 1: are doing and just move. So there's people are already 802 00:50:09,480 --> 00:50:12,239 Speaker 1: thinking in terms of alternatives in those areas I would 803 00:50:12,280 --> 00:50:16,000 Speaker 1: pose it. So the other structural advantage here is that 804 00:50:16,280 --> 00:50:20,480 Speaker 1: they're programmatic in their approach. Right, this isn't They're not 805 00:50:20,560 --> 00:50:25,320 Speaker 1: buying homes like a stressed out uh couple of parents 806 00:50:25,400 --> 00:50:28,439 Speaker 1: starting a family saying, hey, I've I've got to take 807 00:50:28,520 --> 00:50:30,880 Speaker 1: time off this one afternoon and do as much as 808 00:50:30,880 --> 00:50:34,920 Speaker 1: I can. It's their full time job. They can bring 809 00:50:34,960 --> 00:50:40,439 Speaker 1: analysis to bear. They scientifically systematically scour markets. They make 810 00:50:40,520 --> 00:50:45,760 Speaker 1: cash offers on the most attractively priced properties. Um Slate 811 00:50:46,600 --> 00:50:50,440 Speaker 1: Slate summarizes it by saying, while normal people buy houses 812 00:50:50,480 --> 00:50:54,319 Speaker 1: when they actually need to move somewhere, savvy investors buy 813 00:50:54,360 --> 00:50:57,840 Speaker 1: houses several years before a bunch of people need to 814 00:50:57,880 --> 00:51:00,360 Speaker 1: move to an area. Like what we're talking about with 815 00:51:00,480 --> 00:51:04,200 Speaker 1: part one. You know, the reason the Crown of the 816 00:51:04,320 --> 00:51:07,399 Speaker 1: United Kingdom possesses so much real estate, and the reason 817 00:51:07,440 --> 00:51:10,200 Speaker 1: the Vatican possesses so much real estate is that they 818 00:51:10,239 --> 00:51:13,520 Speaker 1: can afford to lose money on it for a long time. Right, 819 00:51:13,880 --> 00:51:17,959 Speaker 1: They don't need to move there now, so it makes 820 00:51:17,960 --> 00:51:20,799 Speaker 1: sense they can play the long game. Yeah, that's why 821 00:51:20,840 --> 00:51:24,680 Speaker 1: you see all these derelict properties in certain parts of 822 00:51:24,719 --> 00:51:27,640 Speaker 1: any major city because several of them are I would 823 00:51:27,680 --> 00:51:31,160 Speaker 1: say much of them are owned by investment corporations that 824 00:51:31,200 --> 00:51:33,839 Speaker 1: are just sitting on those things and it's only year 825 00:51:33,960 --> 00:51:37,279 Speaker 1: three of year seven that they're anticipating it will take 826 00:51:37,320 --> 00:51:40,879 Speaker 1: for a certain area to exactly exactly, and that's calculated 827 00:51:41,000 --> 00:51:46,960 Speaker 1: into the spreadsheet, into the budget projections. Atlanta is home 828 00:51:47,080 --> 00:51:52,200 Speaker 1: to a unique complication here and I want to shout 829 00:51:52,239 --> 00:51:55,560 Speaker 1: it out and see what you guys, I think. Have 830 00:51:55,800 --> 00:52:02,080 Speaker 1: you heard of Stignet. It's a software, okay, steg Net. 831 00:52:02,400 --> 00:52:06,840 Speaker 1: It's the creation of a guy named A. J. Stiegman. A. J. 832 00:52:07,040 --> 00:52:11,640 Speaker 1: Steigman is as of two the top residential real estate 833 00:52:11,719 --> 00:52:16,120 Speaker 1: broker in all of the Atlanta metro area. He has 834 00:52:16,239 --> 00:52:20,800 Speaker 1: sold more houses in Atlanta than any other broker. Despite 835 00:52:20,840 --> 00:52:23,640 Speaker 1: the fact that he's pretty much a one man army 836 00:52:23,920 --> 00:52:27,160 Speaker 1: and he currently lives in Florida. Very very intelligent guy, 837 00:52:27,320 --> 00:52:33,920 Speaker 1: former chess prodigy stig Net. Yeah, dude, Ben, I really 838 00:52:33,960 --> 00:52:36,160 Speaker 1: thought you're gonna say Mark Spain. I don't know if 839 00:52:36,200 --> 00:52:39,840 Speaker 1: you guys see his things everywhere. That dude is the billboard. 840 00:52:41,120 --> 00:52:43,840 Speaker 1: So it's amazing I can sell houses when I have 841 00:52:43,960 --> 00:52:46,520 Speaker 1: so many billboards to take care of. Yeah, but I 842 00:52:46,680 --> 00:52:49,520 Speaker 1: love the billboard advertising. We should get a billboard. I 843 00:52:49,640 --> 00:52:52,440 Speaker 1: pitched it one time, what if I combined my billboard 844 00:52:52,480 --> 00:52:55,040 Speaker 1: business was my real estate thought? Seriously, I was like, 845 00:52:55,239 --> 00:52:57,359 Speaker 1: I wonder if I could buy a billboard and live 846 00:52:57,400 --> 00:52:59,920 Speaker 1: in it because there's space there that's like his big 847 00:53:00,040 --> 00:53:03,440 Speaker 1: gives a European or San Francisco apartments, but a lawn 848 00:53:03,520 --> 00:53:05,600 Speaker 1: chair up there, a little cot and build it up 849 00:53:06,080 --> 00:53:09,719 Speaker 1: great views, you know. But uh, and then like, how 850 00:53:09,920 --> 00:53:12,160 Speaker 1: how much is rental space and a billboard? Have I 851 00:53:12,280 --> 00:53:15,040 Speaker 1: stumbled into a loophole where it will pay for itself? 852 00:53:15,360 --> 00:53:17,719 Speaker 1: And then I just have to awkwardly explain to people 853 00:53:17,800 --> 00:53:20,120 Speaker 1: when they come over, like, Okay, you gotta park by 854 00:53:20,160 --> 00:53:22,640 Speaker 1: the Whole Foods and then we're gonna walk over to 855 00:53:22,719 --> 00:53:27,000 Speaker 1: the interstate, I would imagine, and then you just climb 856 00:53:27,080 --> 00:53:30,040 Speaker 1: up this ladder. Uh, don't just don't look down. It's fine. Um, 857 00:53:30,640 --> 00:53:32,360 Speaker 1: you know. For for those with fears of heights, we 858 00:53:32,480 --> 00:53:35,520 Speaker 1: we offer a harness situation. I I hate to burst 859 00:53:35,560 --> 00:53:37,640 Speaker 1: your bubble, but I imagine it would fall under the 860 00:53:37,760 --> 00:53:41,920 Speaker 1: same rules as like living in a commercial. Yeah, man, 861 00:53:42,000 --> 00:53:44,920 Speaker 1: they keeps sticking me. It's two things. It's getting the 862 00:53:45,040 --> 00:53:50,000 Speaker 1: sofa up there and the zoning. Really but but uh, 863 00:53:50,680 --> 00:53:53,440 Speaker 1: by my aspirations aside, tell us if you do live 864 00:53:53,480 --> 00:53:56,160 Speaker 1: in a billboard, I want to know more about your life. Um, 865 00:53:56,680 --> 00:54:02,320 Speaker 1: aspirations aside. Steak Net is this proprietary software that this 866 00:54:02,640 --> 00:54:05,440 Speaker 1: that this guy A J invented and what it does 867 00:54:05,719 --> 00:54:11,480 Speaker 1: is scan enormous data sets to identify undervalued single family 868 00:54:11,560 --> 00:54:16,680 Speaker 1: homes before human competition. And the question is does that 869 00:54:17,040 --> 00:54:22,799 Speaker 1: phrase human competition also mean the humans working for institutional investors. Uh. 870 00:54:23,040 --> 00:54:26,840 Speaker 1: It's funny because by his own admission, steak net is 871 00:54:27,000 --> 00:54:31,279 Speaker 1: a nod to sky Net from the terminator. And you 872 00:54:31,360 --> 00:54:34,880 Speaker 1: can read about him in Business Insider. Wall Street Journal 873 00:54:34,960 --> 00:54:38,319 Speaker 1: did a look at him. Uh. The thing is he's 874 00:54:38,320 --> 00:54:42,000 Speaker 1: not really, he's not. This is the this is the 875 00:54:42,120 --> 00:54:45,480 Speaker 1: next twist. This is why he's unique, right, because he's 876 00:54:45,480 --> 00:54:49,160 Speaker 1: got this superpower, a brilliant mind applied to real estate, 877 00:54:49,719 --> 00:54:53,960 Speaker 1: and he has he doesn't just do this for funzies. 878 00:54:54,160 --> 00:54:59,239 Speaker 1: It's his job, and he has clients. His clients are 879 00:54:59,360 --> 00:55:03,480 Speaker 1: not single family homebuyers. His clients are those investors that 880 00:55:03,600 --> 00:55:07,399 Speaker 1: we're talking about, the ones that rent these things out 881 00:55:07,480 --> 00:55:11,799 Speaker 1: for long term profit. He helps them. He bloodhounds for them, 882 00:55:12,239 --> 00:55:15,120 Speaker 1: and he hasn't named his clients, but he describes them 883 00:55:15,160 --> 00:55:19,240 Speaker 1: as quote, hedge funds, high net worth family offices, billion 884 00:55:19,320 --> 00:55:26,600 Speaker 1: dollar plus private equity firms, institutional investors, and you know, 885 00:55:26,840 --> 00:55:29,879 Speaker 1: he got I think he had dragged a little bit 886 00:55:30,040 --> 00:55:32,000 Speaker 1: when these stories came out, but I want to be 887 00:55:32,160 --> 00:55:35,320 Speaker 1: fair to him. He is he is making a living 888 00:55:35,480 --> 00:55:38,760 Speaker 1: off the create off his own work, off the product 889 00:55:38,840 --> 00:55:42,279 Speaker 1: of his own mind. And this is like we have 890 00:55:42,400 --> 00:55:46,280 Speaker 1: to be careful not to not to say the guy's 891 00:55:46,840 --> 00:55:50,680 Speaker 1: a villain. He's very open about what he has done, 892 00:55:51,200 --> 00:55:55,360 Speaker 1: and he says it's pattern recognition and he applied you know, 893 00:55:55,480 --> 00:56:00,520 Speaker 1: his learnings from chess and analysis of games to real 894 00:56:00,680 --> 00:56:04,920 Speaker 1: estate to make it a scalable investment. And so I 895 00:56:05,040 --> 00:56:08,239 Speaker 1: think that's a story that needs to be told. Not 896 00:56:08,480 --> 00:56:12,520 Speaker 1: every not every city or metro area is going to 897 00:56:12,680 --> 00:56:18,120 Speaker 1: have that same kind of extraordinary individual putting their eye 898 00:56:18,200 --> 00:56:22,239 Speaker 1: on them. But all of these areas described are going 899 00:56:22,400 --> 00:56:26,800 Speaker 1: to be uh under the scrutiny of similar programs. This 900 00:56:26,920 --> 00:56:31,319 Speaker 1: might mean you've got an analyst who is keeping their 901 00:56:31,360 --> 00:56:35,480 Speaker 1: finger on the pulse of where new offices and factories 902 00:56:35,520 --> 00:56:38,200 Speaker 1: are being built. Right like when we were in Austin 903 00:56:38,360 --> 00:56:42,600 Speaker 1: earlier this summer, the city was a buzz with the 904 00:56:43,520 --> 00:56:45,960 Speaker 1: with the new Tesla factory, right with the news of 905 00:56:46,040 --> 00:56:50,600 Speaker 1: that being on the horizon. And we've seen similar things 906 00:56:51,160 --> 00:56:55,440 Speaker 1: in other cities where a large a large company is 907 00:56:55,520 --> 00:56:59,080 Speaker 1: coming in that changes instantly as soon as that becomes public. 908 00:56:59,200 --> 00:57:02,960 Speaker 1: That changes the conversation about real estate, and these folks 909 00:57:03,000 --> 00:57:05,360 Speaker 1: are likely to hear about it well before the public. 910 00:57:05,760 --> 00:57:09,560 Speaker 1: In many cases, you look at public school enrollment data, 911 00:57:09,840 --> 00:57:11,759 Speaker 1: right that gives you a leg up, and then you 912 00:57:11,920 --> 00:57:14,800 Speaker 1: look at year over year stuff, and then you can say, okay, 913 00:57:15,280 --> 00:57:17,680 Speaker 1: we buy here to your point, Matt, not because it 914 00:57:17,680 --> 00:57:20,000 Speaker 1: will be profitable at the end of this year, but 915 00:57:20,160 --> 00:57:23,800 Speaker 1: because in five years we're going to have a machine 916 00:57:23,880 --> 00:57:28,320 Speaker 1: that just makes mailbox money for us. And look this 917 00:57:28,520 --> 00:57:31,960 Speaker 1: is not a national problem just yet. We acknowledge that 918 00:57:32,120 --> 00:57:35,520 Speaker 1: it's best to be careful claims here. Many many people 919 00:57:35,640 --> 00:57:39,240 Speaker 1: living in the United States have not personally witnessed this, 920 00:57:40,360 --> 00:57:43,920 Speaker 1: but it's just because they're living in neighborhoods that aren't 921 00:57:44,080 --> 00:57:50,280 Speaker 1: currently in the scope of these operations. And unless someone 922 00:57:50,440 --> 00:57:55,160 Speaker 1: puts some rules in the game, this will very very 923 00:57:55,280 --> 00:57:58,000 Speaker 1: likely become a national problem. You can say it's another 924 00:57:58,080 --> 00:58:02,240 Speaker 1: symptom of the growing echo mcdivide. You can hang all 925 00:58:02,440 --> 00:58:08,240 Speaker 1: sorts of conclusions on that hook of objectivity, but it's true. This, 926 00:58:08,720 --> 00:58:11,480 Speaker 1: this is growing. This is not going to go away 927 00:58:11,920 --> 00:58:16,000 Speaker 1: unless something changes. Um. We mentioned in part one that 928 00:58:17,400 --> 00:58:22,720 Speaker 1: local politicians in our fair metropolis are calling for some 929 00:58:22,920 --> 00:58:26,760 Speaker 1: sorts of regulation, like the Atlanta mayor just in June 930 00:58:26,760 --> 00:58:31,240 Speaker 1: of this year, uh Andrea Dickens, the new guy, has 931 00:58:31,320 --> 00:58:34,280 Speaker 1: said that he wants to figure out a way to 932 00:58:34,680 --> 00:58:39,920 Speaker 1: place restrictions or constraints on property investors because the mayor, 933 00:58:40,320 --> 00:58:43,560 Speaker 1: the mayor's office at least, is arguing that those investors 934 00:58:43,920 --> 00:58:48,160 Speaker 1: are driving the surge in home prices. I think there 935 00:58:48,200 --> 00:58:50,200 Speaker 1: are a lot of things the belt line, you know, 936 00:58:50,400 --> 00:58:53,280 Speaker 1: shout out to Ryan Graville. Yeah, and it wasn't the 937 00:58:53,320 --> 00:58:55,280 Speaker 1: belt Line. For people that know, the belt Line is 938 00:58:55,320 --> 00:58:59,840 Speaker 1: like a refurbished area of commercial railroad that has the 939 00:59:00,080 --> 00:59:03,840 Speaker 1: kind of been converted into commercial property, real estates, um 940 00:59:03,920 --> 00:59:06,240 Speaker 1: and all of that. And initially, if I'm not mistaken, Ben, 941 00:59:06,520 --> 00:59:08,680 Speaker 1: wasn't the idea that it was going to be for 942 00:59:08,800 --> 00:59:10,560 Speaker 1: more affordable housing and then that just kind of went 943 00:59:10,600 --> 00:59:13,960 Speaker 1: out the window. Yeah, I believe like it's it's really 944 00:59:14,120 --> 00:59:17,480 Speaker 1: you know all like overpriced condos and boogie kind of 945 00:59:17,600 --> 00:59:20,160 Speaker 1: malls and restaurants and things like that, that it's really 946 00:59:20,240 --> 00:59:23,880 Speaker 1: not focusing on you know, affordable housing like at all. 947 00:59:24,080 --> 00:59:26,760 Speaker 1: I mean, the film industry moved here right like kind 948 00:59:26,760 --> 00:59:28,920 Speaker 1: of in tandem. There's all there's all kinds of things 949 00:59:28,960 --> 00:59:31,320 Speaker 1: that happened, Ben, as you're saying, it's a massive combination 950 00:59:31,400 --> 00:59:35,240 Speaker 1: of things that are working together to make this situation exist. 951 00:59:35,920 --> 00:59:38,800 Speaker 1: And it it does feel at times like there is 952 00:59:39,000 --> 00:59:43,480 Speaker 1: some kind of massive conspiracy to prevent younger people from 953 00:59:43,640 --> 00:59:47,200 Speaker 1: ever being able to afford owning a home. It feels 954 00:59:47,280 --> 00:59:49,520 Speaker 1: like that because there are so many factors and so 955 00:59:49,640 --> 00:59:54,800 Speaker 1: many uh mechanisms at play. So but the thing is, 956 00:59:54,880 --> 00:59:57,840 Speaker 1: as we said before, it's tough too. It's tough to 957 00:59:57,920 --> 01:00:02,560 Speaker 1: see it as an actual, big, unified conspiracy and more 958 01:00:02,800 --> 01:00:06,080 Speaker 1: as just a bunch of different people figured out how 959 01:00:06,240 --> 01:00:10,800 Speaker 1: to make money. As yeah, as the field changed with 960 01:00:11,400 --> 01:00:16,200 Speaker 1: each previous iteration. Look, it's not just uh, it's not 961 01:00:16,400 --> 01:00:21,080 Speaker 1: just noble innovations that stand on the shoulders of giants, folks. 962 01:00:21,320 --> 01:00:25,440 Speaker 1: It's everything and and I think that's something humans miss often. 963 01:00:25,560 --> 01:00:29,160 Speaker 1: But a real quick look at the belt line. Um, 964 01:00:29,600 --> 01:00:33,280 Speaker 1: for anyone who is interested in learning more about urban planning, 965 01:00:33,520 --> 01:00:36,240 Speaker 1: this story always fascinates me. As were of fact, back 966 01:00:36,280 --> 01:00:38,120 Speaker 1: in the day we were trying to do a podcast 967 01:00:38,280 --> 01:00:41,840 Speaker 1: with Ryan Gravel where I was uh. When Ryan Gravel's 968 01:00:41,880 --> 01:00:47,080 Speaker 1: studying at Georgia Tech, he sees tremendous opportunity in the 969 01:00:47,200 --> 01:00:53,320 Speaker 1: long neglected railway system right the old rails, and he says, look, 970 01:00:53,360 --> 01:00:57,840 Speaker 1: we can make this part of two things I care 971 01:00:57,880 --> 01:01:01,919 Speaker 1: about intensely. We can make the city more walkable, less 972 01:01:01,960 --> 01:01:06,160 Speaker 1: dependent upon fossil fuels and cars. Right, I want a 973 01:01:06,240 --> 01:01:09,760 Speaker 1: place where people can use mixed transportation. Right, Let's get 974 01:01:09,800 --> 01:01:12,120 Speaker 1: a let's get a train car system on there. You know, 975 01:01:12,400 --> 01:01:15,720 Speaker 1: Let's let's bring that back. Let's make things walkable. Let's 976 01:01:15,720 --> 01:01:17,960 Speaker 1: have a place where people can bike, you know, and 977 01:01:18,520 --> 01:01:22,280 Speaker 1: let's make sure that A in his original proposal, a 978 01:01:22,400 --> 01:01:26,040 Speaker 1: huge part of this is affordable housing to combat UH, 979 01:01:26,240 --> 01:01:33,080 Speaker 1: the tsunami of gentrification, and this idea, this project takes off. 980 01:01:33,240 --> 01:01:37,080 Speaker 1: But to your point, like so many other like so 981 01:01:37,200 --> 01:01:43,280 Speaker 1: many other developer deals to include you know, affordable housing 982 01:01:43,400 --> 01:01:46,480 Speaker 1: or something in their live laugh, love or live work 983 01:01:46,560 --> 01:01:52,320 Speaker 1: play whatever, UH mixed facilities, the affordable housing part quickly 984 01:01:52,560 --> 01:01:56,640 Speaker 1: gets forgotten. It's just not as profitable and there are 985 01:01:56,720 --> 01:02:00,200 Speaker 1: tons of ways to caveat and loopole it. So the 986 01:02:01,160 --> 01:02:04,560 Speaker 1: construction and development of the belt line continues apace. I 987 01:02:05,040 --> 01:02:08,360 Speaker 1: would urge anybody's interested in learning more about this to 988 01:02:08,680 --> 01:02:12,040 Speaker 1: find Ryan Grabble follow him online for his work, which 989 01:02:12,080 --> 01:02:16,560 Speaker 1: I find quite inspiring. I I do classify him out 990 01:02:16,600 --> 01:02:18,800 Speaker 1: of all the people in UH in this episode that 991 01:02:18,840 --> 01:02:20,920 Speaker 1: we've discussed, I do classify them as one of the 992 01:02:21,000 --> 01:02:24,800 Speaker 1: good guys. And there we go. That's that's the question. 993 01:02:24,960 --> 01:02:29,400 Speaker 1: How long before this situation changes? Is it going to 994 01:02:29,800 --> 01:02:32,560 Speaker 1: peter out? Will this plan no longer be viable for 995 01:02:32,800 --> 01:02:38,040 Speaker 1: profit seekers? Or will it just franchise and expand, you know, 996 01:02:38,320 --> 01:02:41,280 Speaker 1: and now it'll be like the definition of reality TV 997 01:02:42,120 --> 01:02:45,480 Speaker 1: is everything every genre. Now you know, going to be 998 01:02:45,520 --> 01:02:48,520 Speaker 1: a part of this is every home buying experience going 999 01:02:48,600 --> 01:02:53,320 Speaker 1: to be part of institutional investors. And I think at 1000 01:02:53,360 --> 01:02:55,600 Speaker 1: some point, very soon, all of these companies will be 1001 01:02:55,680 --> 01:02:59,000 Speaker 1: absorbed by American Homes for Rent because it's just the 1002 01:02:59,040 --> 01:03:02,680 Speaker 1: best name and they're buying up so many houses. That's 1003 01:03:02,720 --> 01:03:05,000 Speaker 1: just what it will be. Anywhere you go within the 1004 01:03:05,120 --> 01:03:08,840 Speaker 1: United States, you will have to contact them and rent 1005 01:03:08,960 --> 01:03:12,440 Speaker 1: the home that you decided you want because it's been 1006 01:03:12,520 --> 01:03:15,919 Speaker 1: chosen for you from with an algorithm. Okay, it's sort 1007 01:03:15,960 --> 01:03:22,280 Speaker 1: of like the giant commercial prison Corporation UM Corrections Corporation 1008 01:03:22,400 --> 01:03:25,120 Speaker 1: of America. They may have rebranded, but you know, it's 1009 01:03:25,160 --> 01:03:27,479 Speaker 1: it's kind of it has the potential to become something 1010 01:03:27,560 --> 01:03:31,120 Speaker 1: about Yeah, and I mean a lot. I'll answer the question. 1011 01:03:31,160 --> 01:03:34,720 Speaker 1: A lot of people are asking, where's Amazon in this? 1012 01:03:35,400 --> 01:03:39,400 Speaker 1: Why isn't Amazon buying up neighborhoods yet? Well, well, that 1013 01:03:39,600 --> 01:03:43,200 Speaker 1: might be on the way Amazon fans, but they're a 1014 01:03:43,280 --> 01:03:46,400 Speaker 1: little distracted because the news just broke yesterday as we 1015 01:03:46,560 --> 01:03:51,560 Speaker 1: record this that Amazon is buying a medical company. They 1016 01:03:51,640 --> 01:03:56,280 Speaker 1: are buying one Medical It's three point nine billion dollars 1017 01:03:56,560 --> 01:04:02,000 Speaker 1: and it is their first big step into into the 1018 01:04:02,720 --> 01:04:10,560 Speaker 1: privatized health system of the United States. So yeah, One 1019 01:04:10,640 --> 01:04:13,360 Speaker 1: Medical was already kind of the Amazon of healthcare anyway. 1020 01:04:13,400 --> 01:04:15,720 Speaker 1: It's sort of like a you know, a way of 1021 01:04:16,320 --> 01:04:19,960 Speaker 1: finding a clinic online and getting connected to care. So 1022 01:04:20,320 --> 01:04:23,120 Speaker 1: it's it's definitely kind of got that had that vibe already. 1023 01:04:23,160 --> 01:04:25,880 Speaker 1: I'm sure they were positioning themselves for that sale for 1024 01:04:25,960 --> 01:04:28,560 Speaker 1: many years. Yeah, it's they got it for cheaper than 1025 01:04:28,600 --> 01:04:31,440 Speaker 1: they got Whole Foods, which was thirteen point seven billion 1026 01:04:31,600 --> 01:04:34,800 Speaker 1: in seventeen, and they got it for less cash than 1027 01:04:34,880 --> 01:04:38,880 Speaker 1: they did uh MGM, which they bought for eight point 1028 01:04:38,960 --> 01:04:42,880 Speaker 1: five billion dollars just earlier this year. And interesting thing 1029 01:04:42,960 --> 01:04:46,720 Speaker 1: about Amazon and One Medical, they are making some institutional 1030 01:04:46,800 --> 01:04:50,120 Speaker 1: investor moves in this because they bought One Medical for 1031 01:04:50,320 --> 01:04:56,800 Speaker 1: eighteen dollars a share. All cash, baby, all cash cash, 1032 01:04:57,080 --> 01:05:00,720 Speaker 1: just king cash rules everything around, I mean and us 1033 01:05:01,240 --> 01:05:04,160 Speaker 1: and so this is uh so, this is where we 1034 01:05:04,320 --> 01:05:07,120 Speaker 1: leave it. We want to know your take, folks, want 1035 01:05:07,120 --> 01:05:10,840 Speaker 1: to hear your war stories, your horror stories, your success stories. 1036 01:05:11,520 --> 01:05:15,720 Speaker 1: If you feel comfortable giving any insight or advice to 1037 01:05:15,800 --> 01:05:18,480 Speaker 1: your fellow listeners. We'd love to read that too. We 1038 01:05:18,560 --> 01:05:20,120 Speaker 1: can't wait to hear from you. We try to be 1039 01:05:20,240 --> 01:05:22,600 Speaker 1: easy to find online. All you have to do is 1040 01:05:22,680 --> 01:05:26,320 Speaker 1: go to your Prime account. Uh, log in via Holmes 1041 01:05:26,440 --> 01:05:33,600 Speaker 1: for sale. That's letter four. Just kidding. It's social at us. Yeah, yeah, 1042 01:05:33,720 --> 01:05:35,840 Speaker 1: you can. You can. You can add us on on 1043 01:05:36,240 --> 01:05:40,600 Speaker 1: Twitter where we are conspiracy stuff. We're also conspiracy stuff 1044 01:05:40,640 --> 01:05:44,400 Speaker 1: on um YouTube, where we have daily video posts from 1045 01:05:44,440 --> 01:05:47,240 Speaker 1: our podcast episodes and more fun stuff to come in 1046 01:05:47,360 --> 01:05:49,880 Speaker 1: the near future. Uh. And you can also find us 1047 01:05:50,040 --> 01:05:54,400 Speaker 1: on Instagram where we are conspiracy stuff show yes. And 1048 01:05:54,640 --> 01:05:56,640 Speaker 1: we also have a phone number. If you don't like 1049 01:05:56,760 --> 01:05:59,800 Speaker 1: social media, call one eight three three st d w 1050 01:06:00,200 --> 01:06:02,760 Speaker 1: y t K. When you call in, please give yourself 1051 01:06:02,800 --> 01:06:05,840 Speaker 1: a cool nickname, and then you've got three minutes say 1052 01:06:05,880 --> 01:06:08,000 Speaker 1: whatever you'd like. Please let us know if we can 1053 01:06:08,080 --> 01:06:10,600 Speaker 1: use your voice and or message on the air. That 1054 01:06:10,680 --> 01:06:13,200 Speaker 1: would be huge, very much appreciate it. If you've got 1055 01:06:13,320 --> 01:06:15,640 Speaker 1: more to say than you can fit in a voicemail, 1056 01:06:15,680 --> 01:06:18,240 Speaker 1: why not instead send us a good old fashioned email. 1057 01:06:18,480 --> 01:06:40,600 Speaker 1: We are conspiracy at iHeart radio dot com. Stuff they 1058 01:06:40,640 --> 01:06:42,520 Speaker 1: Don't want you to Know is a production of I 1059 01:06:42,720 --> 01:06:45,760 Speaker 1: heart Radio. For more podcasts from my heart Radio, visit 1060 01:06:45,840 --> 01:06:48,520 Speaker 1: the i heart Radio app Apple podcasts, or wherever you 1061 01:06:48,640 --> 01:06:49,760 Speaker 1: listen to your favorite shows.