1 00:00:01,280 --> 00:00:06,120 Speaker 1: Welcome everybody to another episode of Financial Heresy where we 2 00:00:06,160 --> 00:00:08,760 Speaker 1: talked about how money works so that you can make more, 3 00:00:09,360 --> 00:00:13,720 Speaker 1: keep more, and give more. Today, I've got really good 4 00:00:13,760 --> 00:00:18,040 Speaker 1: friend of mine, the Economic Ninja, as a guest on 5 00:00:18,079 --> 00:00:21,080 Speaker 1: the episode. Here, we're gonna be talking about real estate. 6 00:00:21,440 --> 00:00:24,560 Speaker 1: We're gonna hear a different perspective on real estate than 7 00:00:25,120 --> 00:00:29,000 Speaker 1: I have brought onto the show in the past. And uh, 8 00:00:29,040 --> 00:00:32,320 Speaker 1: my friend Economic Ninja here, he has a long history 9 00:00:32,360 --> 00:00:35,960 Speaker 1: with investing in real estate, accurately predicting and making money 10 00:00:35,960 --> 00:00:39,279 Speaker 1: off of the financial crisis and is now looking at 11 00:00:39,320 --> 00:00:41,280 Speaker 1: what's going on today. And we're going to dive into 12 00:00:41,320 --> 00:00:43,559 Speaker 1: the ways that he's looking to make money uh in 13 00:00:43,640 --> 00:00:47,879 Speaker 1: this uh, in this new era of of housing in 14 00:00:48,159 --> 00:00:52,880 Speaker 1: the US. So thanks so much Ninja for joining us today. Hey, Joe, 15 00:00:52,920 --> 00:00:54,880 Speaker 1: thank you so much for having me on. And to 16 00:00:54,960 --> 00:00:56,800 Speaker 1: say this is a new era in real estate and 17 00:00:56,800 --> 00:01:02,320 Speaker 1: investing is an understatement. All right, Well, I'm excited to 18 00:01:02,360 --> 00:01:04,680 Speaker 1: get into it. Let's start off. I want to hear 19 00:01:04,800 --> 00:01:08,240 Speaker 1: your story, um, the you know, your first kind of 20 00:01:08,400 --> 00:01:11,160 Speaker 1: entry into real estate, how you got into making money 21 00:01:11,160 --> 00:01:15,120 Speaker 1: with real state before the financial crisis and then leading 22 00:01:15,200 --> 00:01:18,480 Speaker 1: up to it. Yeah, so I got into real estate 23 00:01:19,040 --> 00:01:21,959 Speaker 1: on the back end of the dot com bust. I 24 00:01:22,040 --> 00:01:27,080 Speaker 1: was investing in stocks heavily in nine All of a sudden, 25 00:01:27,160 --> 00:01:29,280 Speaker 1: we see that dot com bust happened the next year 26 00:01:29,319 --> 00:01:33,520 Speaker 1: or so, and I took my losses. I actually moved 27 00:01:33,560 --> 00:01:36,000 Speaker 1: most of my money out because I saw it cycle coming, 28 00:01:36,080 --> 00:01:39,200 Speaker 1: but still took heavy losses. Well, thank Heavens. I found 29 00:01:39,200 --> 00:01:41,320 Speaker 1: a book called Rich Dad, Poor Dad. I started reading 30 00:01:41,319 --> 00:01:43,640 Speaker 1: it and I couldn't put it down, probably one of 31 00:01:43,640 --> 00:01:45,840 Speaker 1: the fastest books I've ever read in my life. Totally 32 00:01:45,920 --> 00:01:48,400 Speaker 1: changed my life. The way that I saw a cash 33 00:01:48,400 --> 00:01:53,040 Speaker 1: flow um separate than investing, totally different realm. Right, there's 34 00:01:53,120 --> 00:01:57,040 Speaker 1: investing in speculating, but then there's actually building streams of revenue. 35 00:01:57,520 --> 00:02:01,760 Speaker 1: And so I bought my first home. Uh. Ironically, Uh, 36 00:02:01,880 --> 00:02:04,520 Speaker 1: my wife was in tears the week before we were 37 00:02:04,560 --> 00:02:07,760 Speaker 1: in escrow on a home because a lady told us 38 00:02:07,760 --> 00:02:10,200 Speaker 1: a mortgage broker said that we couldn't before the home, 39 00:02:10,280 --> 00:02:13,240 Speaker 1: that we don't make enough we needed to make more money, 40 00:02:13,320 --> 00:02:15,959 Speaker 1: and left my wife completely in tears. And I would 41 00:02:16,040 --> 00:02:19,280 Speaker 1: not settle for that answer. So literally a week later, 42 00:02:19,320 --> 00:02:22,000 Speaker 1: I'm in escrow. I have a lender that would lend 43 00:02:22,040 --> 00:02:25,200 Speaker 1: us the money at even a better rate um than 44 00:02:25,240 --> 00:02:28,200 Speaker 1: what this schmo told us we couldn't accomplish. And then 45 00:02:28,560 --> 00:02:31,119 Speaker 1: got my first house, and then six months later had 46 00:02:31,160 --> 00:02:33,880 Speaker 1: my first rental, and I didn't look back. I was 47 00:02:33,919 --> 00:02:37,639 Speaker 1: buying at the peak between flipping properties and buying real estate, 48 00:02:38,000 --> 00:02:41,960 Speaker 1: actual multi family properties two to four units, nothing that big. 49 00:02:43,080 --> 00:02:46,040 Speaker 1: I was six weeks in between each property, and so 50 00:02:46,240 --> 00:02:48,080 Speaker 1: me and my wife were very busy. I think we 51 00:02:48,120 --> 00:02:50,600 Speaker 1: have four escrows open at once, just a mom and 52 00:02:50,639 --> 00:02:53,400 Speaker 1: pop shop, and and it was great until two thousand 53 00:02:53,480 --> 00:02:58,720 Speaker 1: and six. What what changed in two thousand six that 54 00:02:58,840 --> 00:03:02,239 Speaker 1: made it not great anymore? You know? I guess I 55 00:03:02,400 --> 00:03:04,680 Speaker 1: really skipped through that coal, Like tell me your story 56 00:03:04,760 --> 00:03:07,720 Speaker 1: part really quick. Let me let me back try first, 57 00:03:07,720 --> 00:03:10,799 Speaker 1: because yeah, that leads up to what saw this. So 58 00:03:10,960 --> 00:03:14,079 Speaker 1: when I was doing my real estate business, like I said, 59 00:03:14,120 --> 00:03:16,440 Speaker 1: it started out with with cash flow. I started out 60 00:03:16,480 --> 00:03:20,320 Speaker 1: with one one bedroom, one bath condominium in Lake Havasu, Arizona. 61 00:03:20,360 --> 00:03:23,120 Speaker 1: It cost me seventy thousand bucks. It was awesome, rented 62 00:03:23,200 --> 00:03:26,000 Speaker 1: for seven hundred and eighty dollars a month, killer cash 63 00:03:26,000 --> 00:03:28,840 Speaker 1: flow with the minimum down paint UM. I moved on 64 00:03:28,919 --> 00:03:30,960 Speaker 1: to multi family because I found out that it was 65 00:03:31,040 --> 00:03:33,440 Speaker 1: just a lot less risk. Right. You you have a duplex, 66 00:03:33,480 --> 00:03:35,560 Speaker 1: it one person moved out, you're still getting fifty of 67 00:03:35,560 --> 00:03:38,320 Speaker 1: the income company. Um. And so I built up a 68 00:03:38,360 --> 00:03:42,480 Speaker 1: portfolio of a handful of multi family properties along that condominium. 69 00:03:43,040 --> 00:03:45,760 Speaker 1: But then I got into flipping homes, and this is 70 00:03:45,800 --> 00:03:47,760 Speaker 1: what led me to what happened in two thousands six. 71 00:03:48,400 --> 00:03:50,760 Speaker 1: So in California, I didn't want to own any property, 72 00:03:51,080 --> 00:03:55,000 Speaker 1: uh as far as rentals because of the unfairness. They 73 00:03:55,080 --> 00:03:58,720 Speaker 1: know how they treat landlords and how they benefit the tenants. 74 00:03:58,720 --> 00:04:01,720 Speaker 1: So if tenants were paying and uh, the laws in 75 00:04:01,760 --> 00:04:05,400 Speaker 1: California are men took pretty much bankrupt the landlords. And 76 00:04:05,440 --> 00:04:07,480 Speaker 1: so I saw that ahead of time as I was 77 00:04:07,600 --> 00:04:10,680 Speaker 1: diving into every book I can consume, and back then 78 00:04:10,720 --> 00:04:13,000 Speaker 1: we didn't have you do I wish we did. Um. 79 00:04:13,040 --> 00:04:16,320 Speaker 1: It took a lot more effort to consume content. Right. So, 80 00:04:16,440 --> 00:04:18,520 Speaker 1: as I was learning about the rental laws and the 81 00:04:18,600 --> 00:04:20,800 Speaker 1: tax laws about real estate, I found out like, look, 82 00:04:20,800 --> 00:04:24,680 Speaker 1: I'm gonna separate my business two portions, the cast flow 83 00:04:24,720 --> 00:04:26,919 Speaker 1: real estate and then the flipping real estate. And what 84 00:04:26,960 --> 00:04:29,480 Speaker 1: I was gonna do my first flip, I actually made 85 00:04:29,520 --> 00:04:32,480 Speaker 1: forty five thousand dollars in a period of eight weeks. Now, 86 00:04:32,720 --> 00:04:34,800 Speaker 1: with that being said, being a full time firefighter, I 87 00:04:34,839 --> 00:04:37,080 Speaker 1: was working seven days a week for a full month 88 00:04:37,160 --> 00:04:41,320 Speaker 1: to make that. But tho dollars was be incredible back 89 00:04:41,320 --> 00:04:43,680 Speaker 1: in two thousand and three two thou too, I think 90 00:04:43,680 --> 00:04:47,120 Speaker 1: it was, And so I was using that money to 91 00:04:47,160 --> 00:04:50,400 Speaker 1: go and put down on more properties. My goal, dumbest 92 00:04:50,440 --> 00:04:52,440 Speaker 1: goal in the world, was to own one piece of 93 00:04:52,440 --> 00:04:55,280 Speaker 1: property in every state. I literally in my office had 94 00:04:55,279 --> 00:04:57,919 Speaker 1: a beautiful office back not a Math of America, and 95 00:04:57,960 --> 00:05:01,080 Speaker 1: I had pins and I had four pins set. And 96 00:05:01,120 --> 00:05:03,880 Speaker 1: that was literally the dumbest thing I could have ever done, 97 00:05:04,120 --> 00:05:06,040 Speaker 1: because I figured out really quick at tax time I 98 00:05:06,080 --> 00:05:08,640 Speaker 1: needed to file in every state. So I cured that 99 00:05:08,760 --> 00:05:11,360 Speaker 1: idea out the window. Um. But what happened was as 100 00:05:11,400 --> 00:05:13,840 Speaker 1: I was flipping these homes, I started to see as 101 00:05:13,839 --> 00:05:16,200 Speaker 1: we were moving into two thousand and five, mid two 102 00:05:16,240 --> 00:05:19,320 Speaker 1: thousand five, I started reading about a jail that Michael 103 00:05:19,360 --> 00:05:22,920 Speaker 1: buried and uh what he and a team that we're 104 00:05:22,920 --> 00:05:25,479 Speaker 1: getting mocked at the time, I was reading this in 105 00:05:25,480 --> 00:05:28,279 Speaker 1: the Wall Street Journal and other publications, but they were 106 00:05:28,279 --> 00:05:31,520 Speaker 1: getting mocked for how they felt about the morriage backed securities. 107 00:05:32,400 --> 00:05:34,760 Speaker 1: And what I was seeing is that the Federal Reserve 108 00:05:34,800 --> 00:05:37,680 Speaker 1: started raising their rates. I started seeing not only real 109 00:05:37,760 --> 00:05:40,240 Speaker 1: estate prices continue to go up, because by the end 110 00:05:40,240 --> 00:05:42,080 Speaker 1: of a real estate cycle, and you see people that 111 00:05:42,160 --> 00:05:44,880 Speaker 1: get desperate, right they see everyone else around the making money, 112 00:05:45,120 --> 00:05:47,000 Speaker 1: and then they move in. It's at a fear of 113 00:05:47,000 --> 00:05:50,760 Speaker 1: missing out move and people were getting squeezed. People were 114 00:05:50,760 --> 00:05:53,640 Speaker 1: buying cars they couldn't afford. Gas was going up in price, 115 00:05:54,240 --> 00:05:57,320 Speaker 1: and I'm like this, this can't keep going. Well. Then 116 00:05:57,360 --> 00:06:00,159 Speaker 1: we started moving into what's called these ninja loans for 117 00:06:00,200 --> 00:06:02,960 Speaker 1: a lack of better term, uh no knock loans, things 118 00:06:02,960 --> 00:06:07,240 Speaker 1: like that, ways of getting people into that home um 119 00:06:07,279 --> 00:06:09,280 Speaker 1: because they couldn't afford the payment. So whether it be 120 00:06:09,560 --> 00:06:14,040 Speaker 1: stated income loans or uh or negative amortization, they were 121 00:06:14,080 --> 00:06:15,840 Speaker 1: trying anything they could in thanks to get them in 122 00:06:15,880 --> 00:06:18,880 Speaker 1: these loves, these homes. And I started thinking, I thought, 123 00:06:18,880 --> 00:06:21,599 Speaker 1: you know what, this is not going to last very long. 124 00:06:21,640 --> 00:06:24,560 Speaker 1: And I started researching cycles in real estate, how they 125 00:06:24,600 --> 00:06:27,560 Speaker 1: go up and down based off of Federal Reserve policy. 126 00:06:27,720 --> 00:06:30,760 Speaker 1: Mortgage rates really a lot of data, but really it 127 00:06:30,800 --> 00:06:35,160 Speaker 1: only came down to that Federal Reserve policy. The interest rates, 128 00:06:35,279 --> 00:06:37,359 Speaker 1: and I started to see that the homes that I 129 00:06:37,400 --> 00:06:40,600 Speaker 1: was flipping were the days on market were expanding. And 130 00:06:40,640 --> 00:06:43,280 Speaker 1: by early two thousand and six, I had this epiphany 131 00:06:43,320 --> 00:06:45,880 Speaker 1: and it was literally get out and get out now. 132 00:06:46,400 --> 00:06:49,279 Speaker 1: And so I started to not only liquidate, will drop 133 00:06:49,320 --> 00:06:52,719 Speaker 1: my prices on my flip homes more aggressively. I started 134 00:06:52,720 --> 00:06:56,320 Speaker 1: to liquidate our other real estate. And I figured that 135 00:06:56,440 --> 00:06:59,719 Speaker 1: as this started to correct, as interest rates kept running 136 00:06:59,760 --> 00:07:03,560 Speaker 1: up and actually plateau, I believe a two two five um, 137 00:07:03,560 --> 00:07:06,240 Speaker 1: as that pain kept going in the economy, there was 138 00:07:06,279 --> 00:07:08,960 Speaker 1: going to be a coming to Jesus moment, literally, just 139 00:07:09,040 --> 00:07:12,440 Speaker 1: like what we saw about Comperence. So by mid two 140 00:07:12,440 --> 00:07:15,440 Speaker 1: thousands six, I'd liquidy and all my properties Exceptarate three, 141 00:07:15,720 --> 00:07:19,239 Speaker 1: and those three literally almost took me down financially. Uh 142 00:07:19,360 --> 00:07:21,400 Speaker 1: as well because I had an issue of the tenant 143 00:07:22,240 --> 00:07:25,680 Speaker 1: and so UH. When I was getting out of real estate, 144 00:07:25,760 --> 00:07:28,520 Speaker 1: I was warning everybody I could. I said, these adjust 145 00:07:28,640 --> 00:07:30,880 Speaker 1: or a mortgage loans, the three one and five one 146 00:07:30,960 --> 00:07:34,760 Speaker 1: arms are now coming do and they're they're the mortgage 147 00:07:34,840 --> 00:07:36,880 Speaker 1: rates are going from a fixed rate for the first 148 00:07:36,880 --> 00:07:40,640 Speaker 1: set of years to a much higher variable rate, and 149 00:07:40,720 --> 00:07:44,480 Speaker 1: people simply can't afford them, and there's gonna be issues 150 00:07:44,520 --> 00:07:47,600 Speaker 1: these negative amorgization loans, that the interest was getting piled 151 00:07:47,640 --> 00:07:50,600 Speaker 1: on the back end of these mortgage products, and it 152 00:07:50,640 --> 00:07:53,680 Speaker 1: was getting harder and harder for people to survive. Now, 153 00:07:53,760 --> 00:07:56,200 Speaker 1: one thing I noticed, because I talked about real estate 154 00:07:56,240 --> 00:07:59,800 Speaker 1: cycles my channel, it's all about emotion every whether it 155 00:07:59,800 --> 00:08:02,880 Speaker 1: be a stocks, currencies, or real estate cycles, it's all 156 00:08:02,920 --> 00:08:05,560 Speaker 1: based on emotions. And one thing that is very hard 157 00:08:05,640 --> 00:08:08,280 Speaker 1: to figure out is how many people around you in 158 00:08:08,320 --> 00:08:11,600 Speaker 1: your social circle or actually missing your payments. It's an 159 00:08:11,600 --> 00:08:14,800 Speaker 1: embarrassing thing to talk about. It's never talked about until 160 00:08:14,840 --> 00:08:17,280 Speaker 1: it's too late. And what I found was that by 161 00:08:17,360 --> 00:08:20,040 Speaker 1: two thousand and seven, because all of my circle of 162 00:08:20,040 --> 00:08:24,520 Speaker 1: friends were in the construction industry, and what we found 163 00:08:24,520 --> 00:08:28,640 Speaker 1: with by seven everyone I knew, literally about eight percent 164 00:08:28,680 --> 00:08:31,160 Speaker 1: of the people I knew were behind on our mortgages. 165 00:08:31,640 --> 00:08:33,960 Speaker 1: Either they were just behind one or two payments, or 166 00:08:33,960 --> 00:08:37,400 Speaker 1: they were in straight up foreclosure. And that's when you know, 167 00:08:37,559 --> 00:08:40,160 Speaker 1: and I was having people yelling at me saying I 168 00:08:40,240 --> 00:08:42,599 Speaker 1: was jealous of them. You know that the world is 169 00:08:42,640 --> 00:08:44,439 Speaker 1: not falling apart, the sky is not falling, because I 170 00:08:44,480 --> 00:08:46,720 Speaker 1: was saying, there's gonna be a real estate crash, and 171 00:08:47,480 --> 00:08:50,360 Speaker 1: when that all came to full fruition. And I tell 172 00:08:50,440 --> 00:08:51,839 Speaker 1: this to people all the time, the crash didn't have 173 00:08:51,920 --> 00:08:55,120 Speaker 1: their no way it was happening in two thousand six. 174 00:08:55,160 --> 00:08:56,880 Speaker 1: It wasn't until two thousand and eight that the world 175 00:08:57,000 --> 00:08:59,360 Speaker 1: realized it because it was all over the mainstream media. 176 00:08:59,400 --> 00:09:02,400 Speaker 1: We had multiple banks failing because of their ties to 177 00:09:02,440 --> 00:09:06,040 Speaker 1: the mortgage industry. Now we're right back at that spot, 178 00:09:06,080 --> 00:09:09,600 Speaker 1: but literally at like a three four x multiple of 179 00:09:09,640 --> 00:09:12,320 Speaker 1: how much worse it is. That's what actually blows me 180 00:09:12,360 --> 00:09:17,160 Speaker 1: away with um, people that can't realize now. The other 181 00:09:17,160 --> 00:09:18,679 Speaker 1: thing I've noticed is that you know, I don't want 182 00:09:18,679 --> 00:09:21,000 Speaker 1: to get too far off topic with you, but um, 183 00:09:21,000 --> 00:09:24,480 Speaker 1: I'll close this question this how many people are in 184 00:09:24,520 --> 00:09:27,280 Speaker 1: this market right now that are real estate professionals, mortgage 185 00:09:27,320 --> 00:09:31,000 Speaker 1: professionals and real estate flippers or investors that were too 186 00:09:31,120 --> 00:09:34,800 Speaker 1: young to actually be involved in two thousand and six. 187 00:09:35,040 --> 00:09:37,800 Speaker 1: Everyone that I talked to that has been around and 188 00:09:37,880 --> 00:09:40,439 Speaker 1: investing in two thousand six literally are telling me right 189 00:09:40,440 --> 00:09:42,839 Speaker 1: now they completely agree with me, this is the top 190 00:09:42,920 --> 00:09:44,760 Speaker 1: and this one's gonna be a lot worse than what 191 00:09:44,840 --> 00:09:47,600 Speaker 1: we've witnessed in two thousand and eight. So that's one 192 00:09:47,600 --> 00:09:49,640 Speaker 1: thing that just sort of blows me away. With the 193 00:09:50,040 --> 00:09:53,199 Speaker 1: age cycle as well. It's just nearly what fifteen sixteen 194 00:09:53,280 --> 00:09:57,160 Speaker 1: years later, But how many people that were dedicated investors 195 00:09:57,320 --> 00:10:00,480 Speaker 1: or employees are working for commissions back then that are 196 00:10:00,520 --> 00:10:04,400 Speaker 1: now either retired or passed on just merely a fifteen 197 00:10:04,480 --> 00:10:07,600 Speaker 1: or sixty years later. That's what blows me away. Well, 198 00:10:07,640 --> 00:10:11,480 Speaker 1: I mean that makes sense to me considering everybody who 199 00:10:11,559 --> 00:10:16,040 Speaker 1: is in that industry before it collapsed, and so they 200 00:10:16,400 --> 00:10:18,920 Speaker 1: if they're still around and working, they're they're doing something 201 00:10:18,960 --> 00:10:21,080 Speaker 1: else now. They moved on, they got different jobs, they 202 00:10:21,120 --> 00:10:24,680 Speaker 1: moved industries, and everybody that came into real estate after 203 00:10:24,720 --> 00:10:27,760 Speaker 1: that hadn't been doing it before. Otherwise they would have 204 00:10:27,800 --> 00:10:30,400 Speaker 1: had PTSD, they wouldn't have gotten into it. So it 205 00:10:30,480 --> 00:10:32,640 Speaker 1: makes sense that the people in the industry right now, 206 00:10:32,679 --> 00:10:37,520 Speaker 1: we're not in it, you know. Uh, fifteen sixteen years ago, Um, 207 00:10:37,559 --> 00:10:42,400 Speaker 1: you mentioned watching the FED. That's interesting. I didn't so 208 00:10:42,520 --> 00:10:45,720 Speaker 1: because obviously back then it wasn't like it wasn't like 209 00:10:45,800 --> 00:10:49,520 Speaker 1: Jerome Powell's press conferences were watched by half the country 210 00:10:50,120 --> 00:10:53,600 Speaker 1: like they are today. Back then, Um, it wasn't. You know, 211 00:10:53,840 --> 00:10:57,040 Speaker 1: obviously it wasn't Powell, but it wasn't what Nobody knew 212 00:10:57,080 --> 00:11:00,640 Speaker 1: who the FED was, nobody knew who that chairman was. 213 00:11:00,720 --> 00:11:03,480 Speaker 1: It wasn't um. It wasn't as big of a deal 214 00:11:03,520 --> 00:11:06,800 Speaker 1: back then. Um or if people didn't think it was 215 00:11:07,000 --> 00:11:10,240 Speaker 1: as important back then. Um. And So you were watching 216 00:11:10,280 --> 00:11:13,760 Speaker 1: the FED and you were noticing, Okay, they're pushing rates up, 217 00:11:13,840 --> 00:11:15,960 Speaker 1: and that caused you to watch the look at the 218 00:11:16,000 --> 00:11:23,040 Speaker 1: cycles that the FED causes. UM. So right now, obviously 219 00:11:23,320 --> 00:11:26,840 Speaker 1: all eyes are on the Fed. They're tightening, they're raising rates. 220 00:11:27,400 --> 00:11:31,160 Speaker 1: Um Where are we at in the cycle right now? 221 00:11:31,280 --> 00:11:33,480 Speaker 1: Given what the Fed has done over the last couple 222 00:11:33,520 --> 00:11:37,199 Speaker 1: of years? Yeah, great question. So to understand where we 223 00:11:37,240 --> 00:11:38,600 Speaker 1: are on the cycle now, we have to go back 224 00:11:38,640 --> 00:11:42,199 Speaker 1: to the green Span and Bernacky era. And green Span 225 00:11:42,360 --> 00:11:45,080 Speaker 1: was famous and talking about when he was in front 226 00:11:45,080 --> 00:11:47,880 Speaker 1: of Congress talking about your rational exuberance. So we were 227 00:11:47,920 --> 00:11:52,160 Speaker 1: talking about the dot com build up. Then we had 228 00:11:52,240 --> 00:11:55,440 Speaker 1: BERNACKI moving you know, the the quote unquote pro of 229 00:11:55,480 --> 00:11:59,559 Speaker 1: the Great Depression. I was watching him like a hawk 230 00:11:59,760 --> 00:12:03,080 Speaker 1: when they started to raise rates in it was Greenspan 231 00:12:03,120 --> 00:12:05,360 Speaker 1: had a part of this between two thousand and three 232 00:12:05,440 --> 00:12:07,360 Speaker 1: and two thousand and five when they started, it was 233 00:12:07,480 --> 00:12:09,600 Speaker 1: end of two thousand three, Memory serves right. They started 234 00:12:09,679 --> 00:12:12,679 Speaker 1: raising incrementally twenty five basis points about every I don't know. 235 00:12:12,720 --> 00:12:15,640 Speaker 1: A couple of months they took the FED funds rate 236 00:12:15,720 --> 00:12:18,160 Speaker 1: from around twenty five basis points and this it was 237 00:12:18,160 --> 00:12:20,840 Speaker 1: twenty five basis points behind you because they had to 238 00:12:20,920 --> 00:12:24,480 Speaker 1: drop it massively to spur lending, to spur the economy 239 00:12:24,520 --> 00:12:26,880 Speaker 1: after the dot com crash. This is just a wash 240 00:12:26,960 --> 00:12:30,040 Speaker 1: rents repeat cycle. So they started to raise it until 241 00:12:30,080 --> 00:12:32,360 Speaker 1: they got that FED funds rate to about two and 242 00:12:32,400 --> 00:12:35,400 Speaker 1: a quarter two and a half percent of Memory survey. Right, 243 00:12:35,440 --> 00:12:37,240 Speaker 1: I could be totally I might be thinking about the 244 00:12:37,559 --> 00:12:41,240 Speaker 1: eighteen cycle. But what happened was a mortgage went from 245 00:12:41,280 --> 00:12:44,160 Speaker 1: at the bottom that I remember, um a thirty year 246 00:12:44,160 --> 00:12:47,640 Speaker 1: fixed mortgage for a single family home UH owner occupied 247 00:12:48,200 --> 00:12:51,520 Speaker 1: was around four point eight percent to five point two percent, 248 00:12:51,920 --> 00:12:54,160 Speaker 1: and I was at the low of the cycle, you know, 249 00:12:54,240 --> 00:12:56,320 Speaker 1: in the early two thousand's. It brought it right back 250 00:12:56,400 --> 00:12:58,800 Speaker 1: up to where I started buying real estate at about 251 00:12:58,840 --> 00:13:02,000 Speaker 1: seven a quarter to seven a half percent now. Ben 252 00:13:02,040 --> 00:13:06,440 Speaker 1: Bernaki was famously interviewed by Maria barjar Romo when she 253 00:13:06,559 --> 00:13:08,840 Speaker 1: was on CNBC It's funny that I talked about Maria 254 00:13:08,880 --> 00:13:10,920 Speaker 1: bart Romo being on CBC and I get tons of 255 00:13:10,920 --> 00:13:13,199 Speaker 1: comments on my videos. She's never worked there and oh 256 00:13:13,240 --> 00:13:16,440 Speaker 1: man until the year age. So uh. She said that 257 00:13:16,679 --> 00:13:18,280 Speaker 1: there's a lot of rumors on Wall Street that the 258 00:13:18,600 --> 00:13:20,520 Speaker 1: housing market is in trouble and that we could see 259 00:13:20,559 --> 00:13:24,280 Speaker 1: a really big or significant decline in overall home prices 260 00:13:24,320 --> 00:13:27,520 Speaker 1: around the country. And for Ben Bernack, you'll never forget it. 261 00:13:27,520 --> 00:13:29,840 Speaker 1: And I was screaming and almost threw something at my 262 00:13:29,920 --> 00:13:32,880 Speaker 1: big screen TV, which by back then they're prehistoric and 263 00:13:32,880 --> 00:13:36,280 Speaker 1: they were literally like the size of a car. And seriously, 264 00:13:36,520 --> 00:13:38,640 Speaker 1: but I was screaming at him because he says, well, 265 00:13:38,720 --> 00:13:41,040 Speaker 1: I really don't think that I agree with your, uh, 266 00:13:41,360 --> 00:13:45,040 Speaker 1: your theory here, because real estate, it is impossible for 267 00:13:45,080 --> 00:13:47,880 Speaker 1: it to fall all around the country at the same time. 268 00:13:48,520 --> 00:13:51,280 Speaker 1: And what he didn't realize and or either he realized 269 00:13:51,320 --> 00:13:53,520 Speaker 1: it or he was just in just lying to us, 270 00:13:54,160 --> 00:13:57,240 Speaker 1: was that the American consumer had been tapped out. That 271 00:13:57,400 --> 00:14:01,719 Speaker 1: inflation in both the home price and vehicle prices and 272 00:14:01,920 --> 00:14:04,199 Speaker 1: gas we didn't have inflation like we do now. That's 273 00:14:04,240 --> 00:14:08,560 Speaker 1: what we should talk about, um, that the Americans consumer 274 00:14:08,679 --> 00:14:11,319 Speaker 1: was so full of debt, so full of credit card debt, 275 00:14:11,360 --> 00:14:13,559 Speaker 1: and they started going late on their credit card, um, 276 00:14:14,080 --> 00:14:17,719 Speaker 1: you know, payments that it was going to be at 277 00:14:17,840 --> 00:14:20,880 Speaker 1: an easy guarantee that that crash was going to happen. 278 00:14:20,880 --> 00:14:23,480 Speaker 1: And so here Ben Bernacki sitting there telling you there's 279 00:14:23,480 --> 00:14:26,360 Speaker 1: no issues, there's no issues, keep buying. Oh and he said, 280 00:14:26,360 --> 00:14:28,120 Speaker 1: and this was the ad mid two thousand six, we 281 00:14:28,200 --> 00:14:31,000 Speaker 1: have solved the mortgage crisis. And people don't realize that. 282 00:14:31,080 --> 00:14:33,680 Speaker 1: In two thousand and six there was literally a quote 283 00:14:33,720 --> 00:14:37,320 Speaker 1: unquote mortgage crisis and the Feedow Reserve stepped in and 284 00:14:37,360 --> 00:14:40,120 Speaker 1: they said they fixed it. Ben Bernacki was in front 285 00:14:40,120 --> 00:14:42,320 Speaker 1: of and this is when you know there's problems. The 286 00:14:42,320 --> 00:14:45,120 Speaker 1: Fed chairman is in front of Congress and on TV 287 00:14:45,640 --> 00:14:47,880 Speaker 1: once every couple of weeks or every month, you know 288 00:14:48,000 --> 00:14:50,600 Speaker 1: things are getting bad. And he was doing that in 289 00:14:50,600 --> 00:14:53,320 Speaker 1: two thousand six, and then it sort of just went away. 290 00:14:53,480 --> 00:14:56,080 Speaker 1: Why because the FOW Reserve stepped in and back stopped 291 00:14:56,120 --> 00:14:58,600 Speaker 1: the banks and gave them almost like a line of credit, 292 00:14:58,960 --> 00:15:02,560 Speaker 1: just bought them enough time to really see some true destruction. 293 00:15:02,680 --> 00:15:05,320 Speaker 1: And that's where we are now. You literally have the 294 00:15:05,320 --> 00:15:07,640 Speaker 1: Federal Reserve chairman. This is What blows me away when 295 00:15:07,640 --> 00:15:09,520 Speaker 1: I talked about a three or four x multiple ALB 296 00:15:09,520 --> 00:15:11,640 Speaker 1: which is worth it is you know, the Federal Reserved 297 00:15:11,680 --> 00:15:13,840 Speaker 1: chairman coming out and saying things like you're going to 298 00:15:13,880 --> 00:15:19,120 Speaker 1: experience pain, It is going to be uncomfortable, things like, um, 299 00:15:19,360 --> 00:15:22,080 Speaker 1: this is not going to be a popular decision. And 300 00:15:22,120 --> 00:15:24,600 Speaker 1: what blows me away is that's very nice speak for 301 00:15:25,040 --> 00:15:28,000 Speaker 1: you are screwed. You're going to lose your house, You're 302 00:15:28,000 --> 00:15:32,280 Speaker 1: gonna feel immense pain. This inflation that we're experiencing right 303 00:15:32,320 --> 00:15:36,120 Speaker 1: now is going to be worse than n Why it's 304 00:15:36,160 --> 00:15:39,440 Speaker 1: so easy. The whole world shut down and there was 305 00:15:39,440 --> 00:15:42,360 Speaker 1: a bottleneck and then an expansion in the supply chain, 306 00:15:42,480 --> 00:15:45,240 Speaker 1: and then another bottleneck, And it's absolutely blows me away 307 00:15:45,400 --> 00:15:48,320 Speaker 1: that just like a heartbeat, as it's about to end 308 00:15:48,360 --> 00:15:51,880 Speaker 1: its life cycle, it goes into what's called de fibrillation. 309 00:15:52,120 --> 00:15:54,600 Speaker 1: It just starts to go back and forth all crazy. 310 00:15:54,680 --> 00:15:57,840 Speaker 1: And that's what we're seeing with assets with emotions, and 311 00:15:57,880 --> 00:16:00,400 Speaker 1: that's what gets me super pumped for it's coming. But 312 00:16:00,480 --> 00:16:02,640 Speaker 1: also at the same time, people like yourself, people like 313 00:16:02,720 --> 00:16:05,120 Speaker 1: me are trying to warn people to get ready for 314 00:16:05,160 --> 00:16:10,440 Speaker 1: this because this will be the greatest alright, A couple 315 00:16:10,440 --> 00:16:12,440 Speaker 1: of things that you mentioned in there that I want 316 00:16:12,480 --> 00:16:14,880 Speaker 1: to that I want to circle back to because I 317 00:16:14,880 --> 00:16:18,440 Speaker 1: think they're very important. Um. Number one, you mentioned credit 318 00:16:18,480 --> 00:16:21,840 Speaker 1: card debt. Now you blow me away on YouTube. Your 319 00:16:21,880 --> 00:16:26,400 Speaker 1: YouTube channel is fantastic. You cover everything everything there is, 320 00:16:27,000 --> 00:16:29,440 Speaker 1: um the Economic Ninja on YouTube for anybody who wants 321 00:16:29,760 --> 00:16:32,400 Speaker 1: to check that out. UM, I just made a video 322 00:16:32,400 --> 00:16:35,160 Speaker 1: about credit card debt on my YouTube channel. You've probably 323 00:16:35,200 --> 00:16:38,200 Speaker 1: already covered this, um, But right now, credit card debt 324 00:16:38,240 --> 00:16:41,480 Speaker 1: just hit an all time high and interest rates are 325 00:16:42,000 --> 00:16:47,840 Speaker 1: unbelievably high, like there's skyrocketing like crazy, and delinquency. So far, 326 00:16:48,560 --> 00:16:50,840 Speaker 1: they're up, but they're not anywhere where they used to 327 00:16:50,840 --> 00:16:55,120 Speaker 1: be yet. Um. But it's like this is a trend 328 00:16:55,240 --> 00:16:58,960 Speaker 1: that can't continue. And so, uh, that's something that you 329 00:16:59,040 --> 00:17:02,360 Speaker 1: mentioned happened last time where people were tapped out. If 330 00:17:02,400 --> 00:17:04,680 Speaker 1: you are loading up on your credit card debt while 331 00:17:04,760 --> 00:17:07,960 Speaker 1: interest rates are going up and inflation is continuing to 332 00:17:07,960 --> 00:17:09,880 Speaker 1: go up, you're not gonna be able to make your 333 00:17:09,920 --> 00:17:15,800 Speaker 1: payments soon. And that's now. I'm so glad that he 334 00:17:15,840 --> 00:17:19,480 Speaker 1: used the word yet because so many people look at 335 00:17:19,520 --> 00:17:22,000 Speaker 1: a predetermined or in their mind, they just look at 336 00:17:22,000 --> 00:17:24,119 Speaker 1: a snapshot of time, as in what's in front of 337 00:17:24,119 --> 00:17:26,720 Speaker 1: them right now, what happened yesterday, what's going on today, 338 00:17:26,960 --> 00:17:29,560 Speaker 1: and then they take that information, that data, and they go, well, 339 00:17:29,560 --> 00:17:31,320 Speaker 1: that's how it's going to be to mark. And most 340 00:17:31,359 --> 00:17:33,240 Speaker 1: people don't realize that. With when it comes to a 341 00:17:33,320 --> 00:17:36,680 Speaker 1: real estate collapse, it is a slow moving train wreck. 342 00:17:36,800 --> 00:17:39,320 Speaker 1: Imagine a freight train that is literally going one mile 343 00:17:39,359 --> 00:17:42,800 Speaker 1: an hour. It's just cruising and uh, the engineer decided 344 00:17:42,800 --> 00:17:45,080 Speaker 1: to go take a nap. It's just cruising. There's a 345 00:17:45,119 --> 00:17:47,840 Speaker 1: semi truck stopped on the road ahead of it. It 346 00:17:47,920 --> 00:17:49,760 Speaker 1: doesn't matter that the train is going one mile an 347 00:17:49,760 --> 00:17:52,040 Speaker 1: hour or fifty miles an hour. If that truck does 348 00:17:52,080 --> 00:17:55,000 Speaker 1: not move, that train is going to slowly push into it. 349 00:17:55,000 --> 00:17:56,960 Speaker 1: It's gonna start to push it down the tracks until 350 00:17:56,960 --> 00:17:59,840 Speaker 1: it breaks and a half and slowly just descemp just 351 00:18:00,080 --> 00:18:03,600 Speaker 1: destroys it. That's what happens in real estate. In stocks, 352 00:18:04,280 --> 00:18:07,320 Speaker 1: a crash can happen literally over a thirty day period 353 00:18:07,320 --> 00:18:09,960 Speaker 1: where you see it thirty wiped out of a stock market. 354 00:18:10,040 --> 00:18:14,080 Speaker 1: This has happened multiple times. Stock market crashes lead to 355 00:18:14,160 --> 00:18:17,679 Speaker 1: housing crash crashes, right because when the stock market collapse happens, 356 00:18:17,840 --> 00:18:19,680 Speaker 1: and this is what happened in two thousand seven. People 357 00:18:19,680 --> 00:18:22,280 Speaker 1: don't realize two thousand seven, the Dow, the NASDAC, other 358 00:18:22,359 --> 00:18:25,680 Speaker 1: stock industries were actually all falling. And what was happening 359 00:18:25,800 --> 00:18:27,919 Speaker 1: is banks are getting tighter on their lending. Was that 360 00:18:27,880 --> 00:18:30,160 Speaker 1: they were getting tighter on the lending in an already 361 00:18:30,200 --> 00:18:35,160 Speaker 1: hard housing market. There was less buyers, less velocity of transactions, 362 00:18:35,240 --> 00:18:39,959 Speaker 1: which even exacerbated the problem with the mortgage industry. So 363 00:18:40,040 --> 00:18:42,600 Speaker 1: now you look at credit card debt, credit card debt, 364 00:18:42,720 --> 00:18:45,320 Speaker 1: the delinquencies are at a certain rate. They are higher 365 00:18:45,400 --> 00:18:48,320 Speaker 1: today than they were a year ago. They're hired today 366 00:18:48,359 --> 00:18:51,000 Speaker 1: than they weren't two years ago. I believe they're gonna 367 00:18:51,000 --> 00:18:53,359 Speaker 1: be much higher a year from now. And the reason 368 00:18:53,400 --> 00:18:56,960 Speaker 1: why is we're seeing mass layoffs. We are seeing inflation 369 00:18:57,080 --> 00:18:59,720 Speaker 1: at a rate just the cost of exit's insane. And 370 00:19:00,200 --> 00:19:02,680 Speaker 1: eggs are so important because it's in just about every 371 00:19:02,680 --> 00:19:05,360 Speaker 1: prepackaged so even if you don't eat healthy, you're gonna 372 00:19:05,400 --> 00:19:09,399 Speaker 1: be hit with inflation. Um you're going to see in 373 00:19:09,480 --> 00:19:13,280 Speaker 1: the future more layoffs, higher prices, which means, like you said, 374 00:19:13,359 --> 00:19:16,600 Speaker 1: even worse higher interest rates. The FED is set, We're 375 00:19:16,640 --> 00:19:19,679 Speaker 1: still going to raise probably what more basis points that 376 00:19:19,880 --> 00:19:24,479 Speaker 1: was before that Job's blowout report. We we are in 377 00:19:24,560 --> 00:19:28,200 Speaker 1: a cycle, a raising cycle right now, and we're facing 378 00:19:28,280 --> 00:19:30,240 Speaker 1: something that we haven't seen in forty years. And I 379 00:19:30,280 --> 00:19:33,280 Speaker 1: think it's gonna be worse. Is that inflation. So when 380 00:19:33,280 --> 00:19:35,880 Speaker 1: you're talking about today that snapshot of credit card debt, 381 00:19:35,880 --> 00:19:38,040 Speaker 1: it's going to get worse. Well, you haven't even brought 382 00:19:38,040 --> 00:19:41,080 Speaker 1: into the effect which I know you've covered, probably student 383 00:19:41,119 --> 00:19:44,200 Speaker 1: loan debt, mortgage debt, the cost of rent still even 384 00:19:44,200 --> 00:19:47,040 Speaker 1: as rents coming down, which is a deflationary signal that 385 00:19:47,080 --> 00:19:49,200 Speaker 1: shows you where we are in the real estate cycle, 386 00:19:49,720 --> 00:19:54,600 Speaker 1: but also um uh, just household living. These costs are 387 00:19:54,640 --> 00:19:56,919 Speaker 1: so high. The Fed knows that they're about to have 388 00:19:57,040 --> 00:19:59,200 Speaker 1: to pounce. Now. I don't think they're ever going to 389 00:19:59,280 --> 00:20:01,160 Speaker 1: get to the point where I don't think Powell's got 390 00:20:01,160 --> 00:20:04,600 Speaker 1: the cajoni is to to deal with inflation like U 391 00:20:04,640 --> 00:20:07,159 Speaker 1: Paul Bolker did. And the reason why it's really not 392 00:20:07,240 --> 00:20:09,520 Speaker 1: a you know, a thought about do you have the guts, 393 00:20:09,720 --> 00:20:11,600 Speaker 1: it's because he knows that the government can't pay its 394 00:20:11,640 --> 00:20:15,119 Speaker 1: debts at these higher rates. Um So I think that 395 00:20:15,160 --> 00:20:18,679 Speaker 1: we're gonna actually see a crash before we see, you know, 396 00:20:19,000 --> 00:20:22,000 Speaker 1: Jerome Powell move rates up into the teens kind of. 397 00:20:23,840 --> 00:20:26,840 Speaker 1: I'm really glad that you said that, said the thing 398 00:20:26,880 --> 00:20:30,080 Speaker 1: about eggs, you said that even if you don't eat healthy, 399 00:20:30,640 --> 00:20:32,639 Speaker 1: you're gonna be paying more because of eggs. So I 400 00:20:32,720 --> 00:20:34,560 Speaker 1: like that you mentioned that because most people don't know 401 00:20:34,600 --> 00:20:37,720 Speaker 1: that eggs are one of the healthiest food So good 402 00:20:37,720 --> 00:20:39,400 Speaker 1: shout out there, good point. All right, But you said 403 00:20:39,400 --> 00:20:43,240 Speaker 1: that Powell, he uh he mentioned or he's he's said 404 00:20:43,359 --> 00:20:47,480 Speaker 1: basically every single time, uh he's he's saying something publicly. 405 00:20:47,880 --> 00:20:51,639 Speaker 1: You're gonna experience pain, You're gonna it's gonna be economically harder, 406 00:20:51,680 --> 00:20:55,000 Speaker 1: like we're we're gonna we're we're tightening up the ratchet 407 00:20:55,040 --> 00:21:00,000 Speaker 1: here on American households um and this. So that's a huge, 408 00:21:00,040 --> 00:21:03,879 Speaker 1: huge difference than we've seen for a decade here, where 409 00:21:03,920 --> 00:21:06,359 Speaker 1: everybody has expected the Fed to come in and save 410 00:21:06,440 --> 00:21:09,240 Speaker 1: the economy, save the crash, save the stock market, you know, 411 00:21:10,080 --> 00:21:15,480 Speaker 1: stop the pain because of inflation. Now he's saying, we're 412 00:21:15,600 --> 00:21:18,280 Speaker 1: intentionally trying to cause you pain so that you have 413 00:21:18,400 --> 00:21:21,520 Speaker 1: less money to spend, so that we can get control 414 00:21:21,520 --> 00:21:25,160 Speaker 1: over the inflation that we caused yes, you know what's 415 00:21:25,160 --> 00:21:27,960 Speaker 1: crazy is that, Um, you're right, it's nine day difference, 416 00:21:28,240 --> 00:21:30,639 Speaker 1: but this crash is nine day difference. You see the 417 00:21:30,680 --> 00:21:34,359 Speaker 1: Federal Reserve. Both Greenspan and Bernaky were faced with inflation. 418 00:21:34,600 --> 00:21:36,560 Speaker 1: They really weren' I don't care what the cost of 419 00:21:36,560 --> 00:21:38,919 Speaker 1: a SUV was back then, or then gas doubled in 420 00:21:38,960 --> 00:21:42,159 Speaker 1: price in jail seven. What's happening right now is very scary. 421 00:21:42,200 --> 00:21:44,280 Speaker 1: And when you said earlier in the in the interview 422 00:21:44,680 --> 00:21:47,520 Speaker 1: that a lot of people are now focusing on the FED, 423 00:21:47,560 --> 00:21:50,760 Speaker 1: they're watching them like a hawk as compared to back then, 424 00:21:51,000 --> 00:21:54,960 Speaker 1: I don't believe that's actually true. Because you are focused 425 00:21:55,000 --> 00:21:57,840 Speaker 1: on the markets. You are an influencer. You are only 426 00:21:57,880 --> 00:22:02,200 Speaker 1: around people that are intelligent, lee contemplating what's going to 427 00:22:02,280 --> 00:22:04,480 Speaker 1: happen next, trying to figure out their next move. Right, 428 00:22:04,560 --> 00:22:08,200 Speaker 1: you have put yourself your social circle is a spate 429 00:22:08,359 --> 00:22:11,199 Speaker 1: I mean huge compared to what I was dealing with 430 00:22:11,200 --> 00:22:13,000 Speaker 1: back then. Right, I still think the same amount of 431 00:22:13,000 --> 00:22:16,520 Speaker 1: people in the same age brackets were watching the fedback then. 432 00:22:16,920 --> 00:22:20,040 Speaker 1: But what's crazy is what who isn't the amount of 433 00:22:20,040 --> 00:22:23,560 Speaker 1: people that literally today everyone in this Listens podcast, I 434 00:22:23,600 --> 00:22:25,440 Speaker 1: guarantee you sav up I know one of these people 435 00:22:25,600 --> 00:22:28,359 Speaker 1: that are saying you're crazy. The market is not going 436 00:22:28,400 --> 00:22:31,919 Speaker 1: to crash. It's different this time. Housing is an asset. 437 00:22:31,960 --> 00:22:34,200 Speaker 1: It's gonna keep going up, and you have no They 438 00:22:34,200 --> 00:22:37,160 Speaker 1: have no concept of what's happening. A matter of fact, 439 00:22:37,280 --> 00:22:39,120 Speaker 1: you want to talk to somebody, it's oblivious. Just call 440 00:22:39,160 --> 00:22:41,440 Speaker 1: a real estate agent. I mean, honestly, that's just really 441 00:22:41,440 --> 00:22:44,159 Speaker 1: what it is. Look at where they get their money from. Oh, 442 00:22:44,160 --> 00:22:46,320 Speaker 1: I only get my money if something buys yourselves. Well, 443 00:22:46,320 --> 00:22:49,119 Speaker 1: of course, of course everything is great. They just have 444 00:22:49,280 --> 00:22:51,560 Speaker 1: no idea because they're not thinking. They don't have that 445 00:22:51,600 --> 00:22:53,919 Speaker 1: investor mindset like you do. So it's actually a compliment 446 00:22:53,960 --> 00:22:56,440 Speaker 1: to you and your listeners because honestly, that's where we 447 00:22:56,480 --> 00:22:58,359 Speaker 1: are right now, and that's what is exciting to me 448 00:22:58,400 --> 00:22:59,879 Speaker 1: because that means there's going to be that much more 449 00:22:59,880 --> 00:23:04,320 Speaker 1: a tunity as this really gets ripping. When I was 450 00:23:04,400 --> 00:23:09,360 Speaker 1: a stockbroker in two thousand, let's see, when was this, 451 00:23:09,640 --> 00:23:14,359 Speaker 1: When the Fed was making movesen Fed was tightening, stock 452 00:23:14,400 --> 00:23:17,879 Speaker 1: market started to crash. Literally, I was a stockbroker. I 453 00:23:17,960 --> 00:23:20,679 Speaker 1: talked to people who were active investors. I talked to 454 00:23:20,800 --> 00:23:25,760 Speaker 1: all of my friends financial advisors, traders, Very very few 455 00:23:25,760 --> 00:23:29,240 Speaker 1: people focused on the FED. Very few people even knew 456 00:23:29,240 --> 00:23:31,880 Speaker 1: who the FED chairman was, and the ones who did 457 00:23:31,960 --> 00:23:35,960 Speaker 1: didn't understand why the FED moving interest rates had had 458 00:23:36,000 --> 00:23:39,159 Speaker 1: the impact on the markets that it did. Now, I 459 00:23:39,200 --> 00:23:42,320 Speaker 1: think we're probably back to a similar space like that today. 460 00:23:42,320 --> 00:23:44,399 Speaker 1: But there was a period of time when all the 461 00:23:44,480 --> 00:23:46,760 Speaker 1: memes about pal printing the money. There were a lot 462 00:23:46,800 --> 00:23:49,000 Speaker 1: of people who were excited about the FED making moves 463 00:23:49,040 --> 00:23:52,400 Speaker 1: because they were thinking they were getting rich. But you're 464 00:23:52,440 --> 00:23:54,400 Speaker 1: probably right that a lot of people are aren't paying 465 00:23:54,400 --> 00:23:57,679 Speaker 1: attention today because it's not fun anymore. Dude, let me 466 00:23:57,680 --> 00:23:59,359 Speaker 1: dive in. You gotta be so fired up. I'm so 467 00:23:59,400 --> 00:24:02,560 Speaker 1: glad you were up eighteen And this is a perfect 468 00:24:02,640 --> 00:24:05,159 Speaker 1: that is a perfect example of what I'm talking with, 469 00:24:05,240 --> 00:24:08,080 Speaker 1: these FED rate hike and dropping cycles and how they 470 00:24:08,080 --> 00:24:11,560 Speaker 1: affect real estate call asset classes. In twenty, I want 471 00:24:11,560 --> 00:24:13,359 Speaker 1: to say it was mid twenty was the end of 472 00:24:15,520 --> 00:24:18,880 Speaker 1: the or the Federal Reserve came out and they came 473 00:24:18,880 --> 00:24:20,760 Speaker 1: out with what's called the dot plot plan, and they 474 00:24:20,760 --> 00:24:24,680 Speaker 1: actually projected the rate of rise of the Federal funds 475 00:24:24,760 --> 00:24:27,600 Speaker 1: rate and it started to like basis points or something 476 00:24:27,640 --> 00:24:29,560 Speaker 1: like that, and they were going to raise literally like 477 00:24:29,600 --> 00:24:33,240 Speaker 1: a stair step climbing up. Um. Donald Trump became president, 478 00:24:33,480 --> 00:24:35,400 Speaker 1: and I said, okay, here we go. This is it. 479 00:24:35,440 --> 00:24:39,120 Speaker 1: This is the next crash. I've been preparing since this 480 00:24:39,280 --> 00:24:42,080 Speaker 1: is a calculated deal. They were going to take down 481 00:24:42,400 --> 00:24:44,600 Speaker 1: the markets again because housing was starting to pick up, 482 00:24:45,400 --> 00:24:48,119 Speaker 1: the stall market was starting to pick up. Donald Trump 483 00:24:48,160 --> 00:24:50,119 Speaker 1: came out in October, I want to say it was 484 00:24:50,119 --> 00:24:53,880 Speaker 1: October four of eighteen, and he said, the Federal Reserve 485 00:24:54,000 --> 00:24:56,840 Speaker 1: is trying to crash the markets. You need to wake up. 486 00:24:56,880 --> 00:24:58,720 Speaker 1: Everyone needs to wake up. And I'll never forget it. 487 00:24:58,760 --> 00:25:01,280 Speaker 1: I moved my retirement in to a bond fund. It 488 00:25:01,400 --> 00:25:06,400 Speaker 1: was awesome. From this October four to literally Christmas Eve 489 00:25:06,520 --> 00:25:09,879 Speaker 1: of the stock market, the Dow Jones felled nineteen and 490 00:25:09,880 --> 00:25:12,040 Speaker 1: a half percent. I believe it was literally in that 491 00:25:12,080 --> 00:25:15,400 Speaker 1: short of time because learn happened was as the fed 492 00:25:15,520 --> 00:25:19,200 Speaker 1: race of their rates, all all debt, I don't care 493 00:25:19,359 --> 00:25:21,600 Speaker 1: what debt you're talking about, gets more expensive. It blows 494 00:25:21,600 --> 00:25:23,520 Speaker 1: me away. How people go ten years not gonna go 495 00:25:23,600 --> 00:25:25,639 Speaker 1: up because the federies are right. No, it does. The 496 00:25:25,680 --> 00:25:28,159 Speaker 1: reason why it does it's very simple. A bank or 497 00:25:28,160 --> 00:25:30,840 Speaker 1: a lending institution has two options. Do I put money 498 00:25:30,880 --> 00:25:32,680 Speaker 1: on loan to the Fed? Where do I go loan 499 00:25:32,720 --> 00:25:35,120 Speaker 1: money onto the real economy. Well, as as things get 500 00:25:35,160 --> 00:25:37,919 Speaker 1: tight and the consumer starts to get tapped, the banks 501 00:25:37,920 --> 00:25:40,160 Speaker 1: go has a lot of risk. So either I'm gonna 502 00:25:40,160 --> 00:25:42,080 Speaker 1: ask a lot of interest from you guys, or I'm 503 00:25:42,080 --> 00:25:43,480 Speaker 1: gonna school put it all a loan with the Fed. 504 00:25:44,080 --> 00:25:47,320 Speaker 1: And as the Fed raises rates, what happens is that 505 00:25:47,480 --> 00:25:50,480 Speaker 1: risk mitigation issue he keeps just rising. They go, well, 506 00:25:51,280 --> 00:25:53,239 Speaker 1: I'm getting a percent over at the Fed, so I'm 507 00:25:53,240 --> 00:25:55,080 Speaker 1: gonna ask more over there. I'm getting one and a 508 00:25:55,119 --> 00:25:56,959 Speaker 1: half percent over the Feds. Now I'm gonna ask more 509 00:25:56,960 --> 00:25:59,480 Speaker 1: over year, and that's how it gets affected. So all 510 00:25:59,520 --> 00:26:03,600 Speaker 1: credit card get everything, it's affected. So it was the 511 00:26:03,640 --> 00:26:06,359 Speaker 1: one time I've never seen it. But honestly, unless we 512 00:26:06,400 --> 00:26:08,679 Speaker 1: had a president that was rarely against the Federal Reserve, 513 00:26:08,720 --> 00:26:12,040 Speaker 1: which we haven't had really since the beginning of Reagan's term. 514 00:26:12,080 --> 00:26:17,280 Speaker 1: And then obviously JFK, the Federal Reserve stopped raising rates 515 00:26:17,320 --> 00:26:19,399 Speaker 1: in December. They came out right around Christmas time and 516 00:26:19,400 --> 00:26:20,680 Speaker 1: said we're not going to rate rates, and then I 517 00:26:20,760 --> 00:26:23,879 Speaker 1: believe it was in January they actually dropped rate. That 518 00:26:24,040 --> 00:26:28,280 Speaker 1: was the shortest period from a great hike cycle to 519 00:26:28,480 --> 00:26:31,480 Speaker 1: a lowering cycle that did not happen in two thousand 520 00:26:31,560 --> 00:26:34,960 Speaker 1: five five. They kept that plateau the rate, the Fed 521 00:26:35,000 --> 00:26:37,399 Speaker 1: Fund rate plateau for about a year year and a half, 522 00:26:37,600 --> 00:26:41,480 Speaker 1: and we saw equities already dropping significantly before that. Because 523 00:26:41,520 --> 00:26:44,159 Speaker 1: people need to know this. The Federal Reserve is in 524 00:26:44,200 --> 00:26:48,320 Speaker 1: the job of waiting till it's too late. Why because 525 00:26:48,560 --> 00:26:50,960 Speaker 1: they don't want to be blamed for the crash. My 526 00:26:51,040 --> 00:26:52,520 Speaker 1: job is to make sure everyone knows that they are 527 00:26:52,600 --> 00:26:55,160 Speaker 1: the blame for the crash because of what they did 528 00:26:55,240 --> 00:26:57,679 Speaker 1: years prior. And so that's why it's so easy to 529 00:26:57,680 --> 00:27:00,200 Speaker 1: figure this out. So now you have the rate. Now, 530 00:27:00,200 --> 00:27:02,720 Speaker 1: I think about this. Last December, I came out and 531 00:27:02,760 --> 00:27:05,439 Speaker 1: I said, mortgagers are going to explode. Yeah, ready, this 532 00:27:05,520 --> 00:27:07,920 Speaker 1: is gonna be nutty. The top is in on real estate, 533 00:27:07,960 --> 00:27:10,480 Speaker 1: actually called the top two June's ago. Because of the 534 00:27:10,560 --> 00:27:14,560 Speaker 1: velocity of transaction that stopped. They literally came out comes 535 00:27:14,560 --> 00:27:16,560 Speaker 1: out goes, yeah, inflation is getting out of control. We're 536 00:27:16,560 --> 00:27:19,560 Speaker 1: gonna do something about it in March. And I'm like, 537 00:27:19,720 --> 00:27:21,440 Speaker 1: oh my gosh, look at what they're doing. They're not 538 00:27:21,480 --> 00:27:23,920 Speaker 1: even gonna raise in December, he literally came out inflations 539 00:27:23,960 --> 00:27:26,040 Speaker 1: getting too hot. We're gonna do something. We've lost control. 540 00:27:26,240 --> 00:27:28,200 Speaker 1: We'll do it in March. Pretty kicked back for three 541 00:27:28,200 --> 00:27:30,760 Speaker 1: months and just watch this happen because they don't want 542 00:27:30,760 --> 00:27:33,440 Speaker 1: to be blamed. When they started raising raids, and at 543 00:27:33,480 --> 00:27:36,680 Speaker 1: first it's crazy, people and equities are all excited, like, yeah, 544 00:27:36,800 --> 00:27:39,679 Speaker 1: dollars gonna get value, It's gonna be great. No, no, 545 00:27:39,760 --> 00:27:43,440 Speaker 1: it's not great because after time, lending borming gets more expensive, 546 00:27:43,480 --> 00:27:46,240 Speaker 1: and that's how corporations run. They don't run on profits, 547 00:27:46,359 --> 00:27:49,200 Speaker 1: they run on debt. People don't get that anymore because 548 00:27:49,200 --> 00:27:51,960 Speaker 1: it's more advantageous for a corporation to take on debt 549 00:27:52,280 --> 00:27:56,520 Speaker 1: and blow its cash than to literally hold cash and 550 00:27:56,560 --> 00:27:58,359 Speaker 1: invest that way because they get taxed the way the 551 00:27:58,359 --> 00:28:01,560 Speaker 1: tax laws work. So anyway, that just to say that 552 00:28:01,680 --> 00:28:04,480 Speaker 1: this is worse, I know, I'm selling a broken record. 553 00:28:04,480 --> 00:28:12,840 Speaker 1: I'm just I'm popped. I'm yeah, right. I want to 554 00:28:12,840 --> 00:28:15,320 Speaker 1: get into why you're excited. First, let's talk about what's 555 00:28:15,320 --> 00:28:17,879 Speaker 1: going on right now. You brought up real estate agents before, 556 00:28:17,960 --> 00:28:19,800 Speaker 1: and real estate agents when you ask them, what do 557 00:28:19,840 --> 00:28:22,720 Speaker 1: you think will happen to the real estate market. That's 558 00:28:22,720 --> 00:28:24,760 Speaker 1: a very You're going to get a very different answer 559 00:28:24,800 --> 00:28:28,119 Speaker 1: than what you Then if you ask them what is 560 00:28:28,200 --> 00:28:31,160 Speaker 1: business like right now? For you? If you ask them 561 00:28:32,200 --> 00:28:34,120 Speaker 1: is what do you think is going to happen? It'll 562 00:28:34,160 --> 00:28:36,159 Speaker 1: be I think it's gonna be flat, you know, I 563 00:28:36,200 --> 00:28:37,920 Speaker 1: think it's gonna be you know, a little bit of 564 00:28:37,960 --> 00:28:39,840 Speaker 1: a low year, you know, a little bit flat whatever. 565 00:28:39,960 --> 00:28:41,959 Speaker 1: But if you ask them, how's business right now? Uh, 566 00:28:42,240 --> 00:28:44,080 Speaker 1: you know it's been it's been two months since I 567 00:28:44,160 --> 00:28:47,360 Speaker 1: closed on a property. Oh yeah, I love it. So 568 00:28:47,440 --> 00:28:49,840 Speaker 1: I'm a licensed real estate agent. However, I call myself 569 00:28:49,840 --> 00:28:51,960 Speaker 1: the worst real estate age of the world. I'm too broken. 570 00:28:52,600 --> 00:28:56,480 Speaker 1: One was smashing success until the broker got too too 571 00:28:56,480 --> 00:28:59,120 Speaker 1: big for her ego got too big. But I've had 572 00:28:59,160 --> 00:29:03,400 Speaker 1: all kinds of different cycles and this and it's crazy because, um, 573 00:29:03,440 --> 00:29:05,200 Speaker 1: a couple of years ago, when I was working as 574 00:29:05,200 --> 00:29:07,240 Speaker 1: a real estate agent, UM, I couldn't stand it because 575 00:29:07,240 --> 00:29:08,960 Speaker 1: I knew where we were in the cycle right when 576 00:29:09,080 --> 00:29:11,600 Speaker 1: the world got locked down, and I was worth focused 577 00:29:11,600 --> 00:29:13,480 Speaker 1: on getting in with the backside of the banks and 578 00:29:13,520 --> 00:29:17,360 Speaker 1: becoming an Ario specialist where I literally worked with banks 579 00:29:17,840 --> 00:29:19,760 Speaker 1: on the back that there's offices they don't even want 580 00:29:19,760 --> 00:29:21,400 Speaker 1: you to know about where they have to clear out 581 00:29:21,440 --> 00:29:23,960 Speaker 1: literally fifty homes at a time. And then my job 582 00:29:24,840 --> 00:29:27,400 Speaker 1: is to excuse me, fund all of that, Like I 583 00:29:27,480 --> 00:29:29,480 Speaker 1: literally go in, I paid to change the walks, I 584 00:29:29,520 --> 00:29:31,280 Speaker 1: do all that stuff. Totally different than what you think 585 00:29:31,280 --> 00:29:34,440 Speaker 1: and ario agent is And so you're talking to real 586 00:29:34,480 --> 00:29:36,080 Speaker 1: estate agents now and you're like, so what do you 587 00:29:36,120 --> 00:29:38,080 Speaker 1: think's going on? Like, oh, no, we're going through a correction. 588 00:29:38,120 --> 00:29:39,760 Speaker 1: This is good, this is healthy. They it was, it's 589 00:29:39,760 --> 00:29:41,640 Speaker 1: a it's probably it's a good thing. And now you 590 00:29:41,640 --> 00:29:44,640 Speaker 1: know buyers finally healthy upper hand. They're trying their hardest 591 00:29:44,680 --> 00:29:46,640 Speaker 1: to try and sell you on that back end. You know, no, 592 00:29:46,800 --> 00:29:49,200 Speaker 1: this is good, it's healthy thing. Well, how has it been, 593 00:29:49,320 --> 00:29:52,360 Speaker 1: like you said, like by actually so like I'm actually 594 00:29:52,360 --> 00:29:54,160 Speaker 1: starting to work as an uber driver and which is 595 00:29:54,200 --> 00:29:55,840 Speaker 1: sad to say, because I just did a video for 596 00:29:55,920 --> 00:29:57,600 Speaker 1: Uber drivers. I'm like, get ready, you're about to have 597 00:29:57,680 --> 00:30:00,080 Speaker 1: more competition. You could shake a stick at and I 598 00:30:00,120 --> 00:30:02,360 Speaker 1: get you where drivers telling me I'm wrong. It's just 599 00:30:02,440 --> 00:30:05,600 Speaker 1: it doesn't matter what him uh industry you're in. It's 600 00:30:05,680 --> 00:30:07,880 Speaker 1: very hard to see the tiles or they're riding on 601 00:30:07,920 --> 00:30:10,680 Speaker 1: the wall unless you're an investor. You've been there long enough, 602 00:30:11,440 --> 00:30:14,120 Speaker 1: so I've already totally lost topic of what you're saying. 603 00:30:14,200 --> 00:30:17,000 Speaker 1: But I mean, you're totally right. These people that are 604 00:30:17,040 --> 00:30:19,280 Speaker 1: in the industry that work on a commission are literally 605 00:30:19,360 --> 00:30:21,280 Speaker 1: lying to themselves. The south thing is a lot of 606 00:30:21,320 --> 00:30:24,360 Speaker 1: them they're invested in Airbnb's I mean literally, how many 607 00:30:24,360 --> 00:30:26,720 Speaker 1: agents I know that owned an Airbnb that is about 608 00:30:26,720 --> 00:30:30,280 Speaker 1: to stop running? Not only because of uh, the economy 609 00:30:30,360 --> 00:30:32,480 Speaker 1: and people don't have the money to pay more than 610 00:30:32,520 --> 00:30:35,000 Speaker 1: a hotel costs, and hotels of the ability to lower 611 00:30:35,040 --> 00:30:37,840 Speaker 1: their rates um, Airbnb is usually do not because they 612 00:30:37,840 --> 00:30:40,640 Speaker 1: have fixed costs. But then also you've got literally the 613 00:30:40,680 --> 00:30:43,400 Speaker 1: cities that are shutting down airbnb is left and right. 614 00:30:43,480 --> 00:30:45,959 Speaker 1: It just it blows me away. So even agents that 615 00:30:46,000 --> 00:30:48,680 Speaker 1: you think are amazing because they're driving around a range 616 00:30:48,760 --> 00:30:51,480 Speaker 1: Rover that they known and afford, um, you know, and 617 00:30:51,480 --> 00:30:55,640 Speaker 1: they've got all these assistance, Uh, they're literally hemorrhaging money 618 00:30:55,760 --> 00:30:58,920 Speaker 1: right now, which is blows me one. Yeah, it's a 619 00:30:58,960 --> 00:31:01,640 Speaker 1: good point because it brings up just a wider lesson 620 00:31:01,680 --> 00:31:06,160 Speaker 1: of life that sometimes it's not the best skill is 621 00:31:06,160 --> 00:31:08,840 Speaker 1: not being able to find the It's not about finding 622 00:31:08,840 --> 00:31:12,320 Speaker 1: the answer. It's about figuring out the right question to ask, um, 623 00:31:12,520 --> 00:31:15,600 Speaker 1: And specifically for this it's like, well, don't ask you know, 624 00:31:15,720 --> 00:31:18,680 Speaker 1: a professional what they think is going to happen. Uh, 625 00:31:18,720 --> 00:31:20,719 Speaker 1: it's a better question to ask what is going on 626 00:31:20,840 --> 00:31:25,520 Speaker 1: for you right now? Um? Okay, So the real estate 627 00:31:25,560 --> 00:31:28,960 Speaker 1: crash you anticipate will be three to four times worse 628 00:31:29,000 --> 00:31:32,200 Speaker 1: than it was last time, but you've said multiple times 629 00:31:32,240 --> 00:31:35,000 Speaker 1: now you're really excited about that, not because of the 630 00:31:35,040 --> 00:31:37,480 Speaker 1: pain other people will have, but because of the opportunity. 631 00:31:37,560 --> 00:31:41,480 Speaker 1: Every every problem is also an opportunity. So what kind 632 00:31:41,480 --> 00:31:45,239 Speaker 1: of things are you looking for to start happening That 633 00:31:45,320 --> 00:31:48,640 Speaker 1: looks like an opportunity to you. Okay. So one thing 634 00:31:48,640 --> 00:31:50,960 Speaker 1: that happens to a real estate crash is that lending 635 00:31:51,000 --> 00:31:55,120 Speaker 1: gets tight. Banks get tight because they're losing their hemorrhaging money. 636 00:31:55,200 --> 00:31:58,120 Speaker 1: They are watching for closer stack up. They do not 637 00:31:58,280 --> 00:32:00,640 Speaker 1: feel like running out and giving you us smoking deal 638 00:32:00,680 --> 00:32:03,160 Speaker 1: on a loan with zero points. Okay. So that's one thing. 639 00:32:03,480 --> 00:32:06,600 Speaker 1: So when I talk about it, um, opportunities, that's not 640 00:32:06,680 --> 00:32:08,400 Speaker 1: that you're gonna be able to walk into any bank 641 00:32:08,480 --> 00:32:10,480 Speaker 1: and they're just gonna give you a property at a 642 00:32:10,480 --> 00:32:12,960 Speaker 1: great rate. Okay, what you're gonna find is you're gonna 643 00:32:12,960 --> 00:32:16,040 Speaker 1: find desperate sellers or banks that are liquidating homes that 644 00:32:16,080 --> 00:32:18,800 Speaker 1: they foreclosed off, and you're going to need to figure 645 00:32:18,800 --> 00:32:21,000 Speaker 1: out how to get that money. So one thing I 646 00:32:21,080 --> 00:32:23,800 Speaker 1: want to stress of people is you can't walk into 647 00:32:23,840 --> 00:32:26,840 Speaker 1: a real estate crash scenario as an investor the same 648 00:32:26,840 --> 00:32:30,200 Speaker 1: way that you would invest today, because today it's quite 649 00:32:30,200 --> 00:32:31,920 Speaker 1: easy to get a loan if you have a good 650 00:32:31,920 --> 00:32:33,560 Speaker 1: credit score. And as a matter of fact, if you're 651 00:32:33,600 --> 00:32:36,520 Speaker 1: just breathing because I've got pulled up right now, just 652 00:32:36,600 --> 00:32:40,120 Speaker 1: news articles about how many UM stated income mortgages are 653 00:32:40,160 --> 00:32:42,320 Speaker 1: out there right because they're having a hard time lending. 654 00:32:42,960 --> 00:32:44,560 Speaker 1: You're not going to be able to just jump in 655 00:32:44,600 --> 00:32:46,680 Speaker 1: and get that load. So you need a good credit score, 656 00:32:46,720 --> 00:32:48,840 Speaker 1: you need money on the side, and you need a 657 00:32:48,880 --> 00:32:51,560 Speaker 1: balance sheet that works so that a bank can trust 658 00:32:51,760 --> 00:32:55,320 Speaker 1: you to either takeover payments of a foreclosure that they've 659 00:32:55,360 --> 00:32:59,800 Speaker 1: got or literally buy it out right right. So that's 660 00:33:00,320 --> 00:33:04,440 Speaker 1: one thing. The other thing, though, is the opportunity is 661 00:33:04,640 --> 00:33:08,880 Speaker 1: massive because there are ways of being able to get 662 00:33:09,040 --> 00:33:11,880 Speaker 1: large amounts of debt on the books in one whack. 663 00:33:11,960 --> 00:33:14,880 Speaker 1: Either hard money loans, which I do not suggest now, 664 00:33:15,360 --> 00:33:18,520 Speaker 1: but during the downfall, when things are literally at their 665 00:33:18,520 --> 00:33:21,240 Speaker 1: worst with it's at the bleakest, when everybody's telling you 666 00:33:21,240 --> 00:33:23,360 Speaker 1: you're crazy to buy a house, that's when you know 667 00:33:23,400 --> 00:33:26,320 Speaker 1: you're at the mottom. That's it sounds funny. That's regardless 668 00:33:26,360 --> 00:33:31,000 Speaker 1: of fed UH monetary policy. That sort of plays into it. 669 00:33:31,040 --> 00:33:33,240 Speaker 1: But literally, it's all about emotion, right, you want to 670 00:33:33,320 --> 00:33:36,239 Speaker 1: race in when everybody's saying you are a joke, you 671 00:33:36,280 --> 00:33:42,200 Speaker 1: are nuts. There's ways of consulted, getting debt built up 672 00:33:42,200 --> 00:33:44,320 Speaker 1: to where you could buy multiple homes at once, and 673 00:33:44,400 --> 00:33:48,320 Speaker 1: that's where I see the most value. Um, when this 674 00:33:48,400 --> 00:33:51,320 Speaker 1: crash takes back, this one will be so much worse 675 00:33:51,400 --> 00:33:54,720 Speaker 1: in one aspect because of inflation, because of the rates, 676 00:33:54,760 --> 00:33:56,520 Speaker 1: all that stuff. I do believe we're gonna see double 677 00:33:56,560 --> 00:33:59,200 Speaker 1: digit mortgage ms right in the second. Just to say 678 00:33:59,280 --> 00:34:01,240 Speaker 1: that that's not even awesome was insane to me because 679 00:34:01,240 --> 00:34:05,320 Speaker 1: of what happened in ninety eight in two around that area. Um. 680 00:34:05,320 --> 00:34:09,440 Speaker 1: But what opportunities exist is commercial property. Commercial property real 681 00:34:09,560 --> 00:34:12,480 Speaker 1: estate investing has been out of the region. Most real 682 00:34:12,560 --> 00:34:15,040 Speaker 1: estate investors because of the amount you need down, the 683 00:34:15,160 --> 00:34:18,799 Speaker 1: rates and the terms you have literally just witnessed a 684 00:34:18,920 --> 00:34:21,600 Speaker 1: time in history that is unlike any time in real 685 00:34:21,680 --> 00:34:25,400 Speaker 1: estate history in our country, and that is technology exploded 686 00:34:25,800 --> 00:34:29,560 Speaker 1: and allows more companies to not need a building to 687 00:34:29,719 --> 00:34:34,120 Speaker 1: do business. B two B business are e commerce, all 688 00:34:34,120 --> 00:34:38,480 Speaker 1: this stuff. Internet has literally blown out, um, the need 689 00:34:38,600 --> 00:34:40,400 Speaker 1: for commercial real estate. So I believe that there is 690 00:34:40,440 --> 00:34:42,040 Speaker 1: about to be a day where you're going to be 691 00:34:42,080 --> 00:34:44,760 Speaker 1: able to pick up commercial property and redevelop it into 692 00:34:44,880 --> 00:34:49,280 Speaker 1: residential in ways that have never been open. That dad 693 00:34:49,280 --> 00:34:51,840 Speaker 1: gets me really excited. It's a whole new realm that 694 00:34:51,960 --> 00:34:54,240 Speaker 1: I never moved into when I was a real estate investor, 695 00:34:54,320 --> 00:34:57,279 Speaker 1: I was just doing VESTIMENTI especially mixed news properties. I 696 00:34:57,600 --> 00:35:00,600 Speaker 1: can't wait to buy up poems on properties in main 697 00:35:00,680 --> 00:35:03,359 Speaker 1: Street USA that have like a little storefront and then 698 00:35:03,400 --> 00:35:05,640 Speaker 1: have a couple of apartments above. I mean, think about 699 00:35:05,680 --> 00:35:08,480 Speaker 1: what you can do with your side households and businesses 700 00:35:08,520 --> 00:35:12,240 Speaker 1: downstairs while you're getting cash flow residential real estate upstairs. 701 00:35:12,440 --> 00:35:15,359 Speaker 1: That's just so exciting to me. But then another thing 702 00:35:15,440 --> 00:35:18,399 Speaker 1: that really gets me so excited about this crash because 703 00:35:18,480 --> 00:35:21,160 Speaker 1: I believe it is going to be horrific quite frankly, um, 704 00:35:21,400 --> 00:35:23,840 Speaker 1: and I'm not joking, like we're talking Great Depression style, 705 00:35:23,880 --> 00:35:26,880 Speaker 1: but because of advancements in technology, it will be as sharp, 706 00:35:27,000 --> 00:35:29,880 Speaker 1: it will be sharper on the decline and uh and 707 00:35:30,160 --> 00:35:34,600 Speaker 1: faster to recover because of modern monetary policy, right the computers, 708 00:35:34,800 --> 00:35:37,880 Speaker 1: digital currencies, things like that. Um. But what will happen 709 00:35:37,920 --> 00:35:41,200 Speaker 1: is the ability to help other people, which will increase 710 00:35:41,200 --> 00:35:45,400 Speaker 1: your net worth because of as you take people with you, 711 00:35:45,600 --> 00:35:48,759 Speaker 1: both successful people that are entrepreneurs, who take them alongside you, 712 00:35:48,920 --> 00:35:50,879 Speaker 1: but then you also help people that have been beat down. 713 00:35:51,320 --> 00:35:53,960 Speaker 1: There are so many good people in this world that 714 00:35:54,200 --> 00:35:56,400 Speaker 1: but just it's not their lifestyle. Like you and me, 715 00:35:56,520 --> 00:35:59,239 Speaker 1: we love making money, we love you know, investing, we 716 00:35:59,280 --> 00:36:01,719 Speaker 1: love helping people will make money and become successful. But 717 00:36:01,719 --> 00:36:03,000 Speaker 1: there are so many people who just doing nine to 718 00:36:03,040 --> 00:36:05,120 Speaker 1: five job but they just want't be good people. Well, 719 00:36:05,320 --> 00:36:06,960 Speaker 1: they get caught up in this, They get caught up 720 00:36:06,960 --> 00:36:09,279 Speaker 1: in the minutia of life and then uh and then 721 00:36:09,640 --> 00:36:11,600 Speaker 1: trying to impress people they probably don't even respect in 722 00:36:11,640 --> 00:36:14,520 Speaker 1: the first place, and then they have to do this reset. Well, 723 00:36:14,560 --> 00:36:17,319 Speaker 1: you're able to help those people, that's really where you 724 00:36:17,400 --> 00:36:20,840 Speaker 1: become successful. I mean, your your money explodes and your 725 00:36:20,920 --> 00:36:23,719 Speaker 1: your your life credits for lack of better terms explodes 726 00:36:24,120 --> 00:36:26,919 Speaker 1: your karma points right, you get blessed that way too. 727 00:36:26,920 --> 00:36:31,800 Speaker 1: So that's another thing that I'm super excited. I really 728 00:36:31,840 --> 00:36:34,759 Speaker 1: like that idea that you brought up about turning commercial 729 00:36:34,800 --> 00:36:38,480 Speaker 1: property into residential. I mean, when you look at supply 730 00:36:38,520 --> 00:36:42,239 Speaker 1: and demand right now, Um, the supply and demand of 731 00:36:42,280 --> 00:36:46,080 Speaker 1: commercial real estate in UH in the United States is 732 00:36:46,160 --> 00:36:50,040 Speaker 1: absolutely insane versus the average across the world, Like we 733 00:36:50,080 --> 00:36:55,520 Speaker 1: have way too much compared to everybody else. Um. Residential 734 00:36:56,040 --> 00:36:59,680 Speaker 1: is kind of kind of the opposite, Like we still 735 00:36:59,760 --> 00:37:02,640 Speaker 1: have people moving here, we still have immigration, our population grows, 736 00:37:02,640 --> 00:37:06,400 Speaker 1: it g globalization continues, will probably likely to continue to 737 00:37:06,440 --> 00:37:09,200 Speaker 1: have more and more people moving here, um, and so 738 00:37:09,400 --> 00:37:11,640 Speaker 1: we do need more housing. That's not to say that 739 00:37:11,840 --> 00:37:13,759 Speaker 1: the price or the cost of the value of the 740 00:37:13,760 --> 00:37:15,640 Speaker 1: housing that we do have won't go through a crash 741 00:37:15,680 --> 00:37:18,799 Speaker 1: like you're saying, but it means that long term, you 742 00:37:18,880 --> 00:37:22,080 Speaker 1: take the stuff that's oversupplied like commercial and turn into 743 00:37:22,160 --> 00:37:26,560 Speaker 1: stuff that's undersupplied like residential. There's a reason why companies 744 00:37:26,560 --> 00:37:30,160 Speaker 1: like Costco are researching building apartment buildings on top of 745 00:37:30,200 --> 00:37:33,120 Speaker 1: costcos right now, Like that's the thing the big money. 746 00:37:33,280 --> 00:37:37,239 Speaker 1: I didn't even know that, Yeah, so so something I 747 00:37:37,280 --> 00:37:39,080 Speaker 1: want to talk about real estate crash too. You just 748 00:37:39,080 --> 00:37:41,320 Speaker 1: brought up a good point. People talk about crap, I 749 00:37:41,440 --> 00:37:45,080 Speaker 1: talk about crash of all time. Um, the value of 750 00:37:45,440 --> 00:37:49,240 Speaker 1: the monthly cost of your living expenses never changes people, 751 00:37:49,280 --> 00:37:51,879 Speaker 1: That's what people need to realize. It always stays within 752 00:37:51,920 --> 00:37:54,880 Speaker 1: this range of two thirds, one third or two thirds 753 00:37:54,920 --> 00:37:57,560 Speaker 1: of the take home income of the average person in 754 00:37:57,680 --> 00:38:01,359 Speaker 1: any community around the country. So what happens is when 755 00:38:01,440 --> 00:38:04,520 Speaker 1: real estate prices crash, they only crashed because the cost 756 00:38:04,560 --> 00:38:07,560 Speaker 1: of buying that home went up significantly. And what's the 757 00:38:07,640 --> 00:38:11,440 Speaker 1: one major reason bar and costs will go up. Its interest. 758 00:38:11,840 --> 00:38:15,279 Speaker 1: It's uh, the mortgage interest. Now, taxes have spiked in 759 00:38:15,360 --> 00:38:18,840 Speaker 1: locales before, and we've seen little towns implode, but really, 760 00:38:18,880 --> 00:38:22,280 Speaker 1: by and large, whereas mortgage interests goes up, the cost 761 00:38:22,320 --> 00:38:24,880 Speaker 1: of buying that home goes up on a monthly basis. 762 00:38:24,960 --> 00:38:28,520 Speaker 1: And that's what the human beings that buy homes care about. 763 00:38:28,880 --> 00:38:31,600 Speaker 1: So what's crazy is we talked about a real estate crash, 764 00:38:31,920 --> 00:38:34,160 Speaker 1: but getting into a home is still going to be 765 00:38:34,320 --> 00:38:37,160 Speaker 1: just as expensive. There's only a very small window where 766 00:38:37,200 --> 00:38:40,759 Speaker 1: it becomes less costs to buy a home. And I'll 767 00:38:40,800 --> 00:38:43,960 Speaker 1: get an example This was in two thousand intent when 768 00:38:44,280 --> 00:38:47,279 Speaker 1: mortgage rates dropped, and again out of the Fed aggressively 769 00:38:47,400 --> 00:38:51,440 Speaker 1: dropped the FED funds rate after Lehman Brothers collapsed. It 770 00:38:51,520 --> 00:38:55,480 Speaker 1: took time and it was a lag. Mortgage rates fell. 771 00:38:55,760 --> 00:38:59,919 Speaker 1: Now when they fell to their bottom around two eleven 772 00:39:00,000 --> 00:39:02,719 Speaker 1: thats of twelve um. That was the point where it 773 00:39:02,760 --> 00:39:06,000 Speaker 1: became cheaper to rent. But ironically, you didn't see all 774 00:39:06,040 --> 00:39:09,080 Speaker 1: the renters dive in. And again when you talk about 775 00:39:09,080 --> 00:39:12,560 Speaker 1: affordable homes or a housing crisis, we had the exact 776 00:39:12,640 --> 00:39:16,480 Speaker 1: same conversations in two thousands six. And the only reason 777 00:39:16,560 --> 00:39:20,920 Speaker 1: is there wasn't in a population explosion. What there was was, 778 00:39:20,960 --> 00:39:22,600 Speaker 1: all of a sudden, a bunch of people watched a 779 00:39:22,600 --> 00:39:24,200 Speaker 1: bunch of people getting the homes and went, well, I 780 00:39:24,239 --> 00:39:26,120 Speaker 1: want to get into homes. And then by then, by 781 00:39:26,120 --> 00:39:28,160 Speaker 1: the time they actually did something, it was too late. 782 00:39:28,320 --> 00:39:30,880 Speaker 1: What I was exploding in price inventory was low. All 783 00:39:30,880 --> 00:39:32,719 Speaker 1: of a sudden we got a housing crisis. No, that 784 00:39:32,840 --> 00:39:34,640 Speaker 1: housing crisis went away a couple of years later as 785 00:39:34,680 --> 00:39:36,479 Speaker 1: the price crashed, But you didn't see those same people 786 00:39:36,520 --> 00:39:39,120 Speaker 1: go I'm gonna dive in. No, they didn't, because, like 787 00:39:39,200 --> 00:39:42,399 Speaker 1: you said earlier, they were burdened down with credit card debt. 788 00:39:42,600 --> 00:39:46,359 Speaker 1: So now their credits scores are destroyed. And that's what's 789 00:39:46,360 --> 00:39:48,440 Speaker 1: crazy to me. If you can do anything right now 790 00:39:48,440 --> 00:39:51,640 Speaker 1: to prepare save your credit score, you're going to want 791 00:39:51,680 --> 00:39:54,560 Speaker 1: to use it if you get out of debt. Uh, 792 00:39:54,600 --> 00:39:56,400 Speaker 1: you know, don't get any more debt. But if you 793 00:39:56,400 --> 00:39:58,319 Speaker 1: could save your credit score, you were going to be 794 00:39:58,360 --> 00:40:01,799 Speaker 1: like the goolden goose, crapping out credit score numbers at 795 00:40:01,840 --> 00:40:04,359 Speaker 1: at your local bank, and they're going to want to 796 00:40:04,400 --> 00:40:06,760 Speaker 1: give you a house during this next crisis. Now, whether 797 00:40:06,800 --> 00:40:08,279 Speaker 1: you want it or not, or you can afford or 798 00:40:08,280 --> 00:40:10,080 Speaker 1: not is a totally different thing. But but that is 799 00:40:10,080 --> 00:40:13,080 Speaker 1: where we are today. Construction, new construction is always a 800 00:40:13,160 --> 00:40:15,640 Speaker 1: lagging indicator to the strength of a real estate market. 801 00:40:15,640 --> 00:40:18,080 Speaker 1: Why just take the long term time for a guy 802 00:40:18,120 --> 00:40:19,960 Speaker 1: that owns a construction company like I do. I just 803 00:40:20,160 --> 00:40:22,600 Speaker 1: actually just left my construction company, but uh, it takes 804 00:40:22,600 --> 00:40:24,279 Speaker 1: a while for someone I need to go. You know what, 805 00:40:24,360 --> 00:40:26,359 Speaker 1: I think the markets going up, you know, I think 806 00:40:26,400 --> 00:40:27,839 Speaker 1: it's a good time to buy a piece of land, 807 00:40:28,080 --> 00:40:30,160 Speaker 1: get a permit, do the building, and sell it. It It 808 00:40:30,239 --> 00:40:32,520 Speaker 1: takes two years, and so that's why you see the 809 00:40:32,560 --> 00:40:35,560 Speaker 1: most amount of properties being built. And I'll tell you what. 810 00:40:35,680 --> 00:40:37,799 Speaker 1: That's another example, because I talked about a hundred homes 811 00:40:37,920 --> 00:40:39,600 Speaker 1: my first year during this crash, and I'm gonna do 812 00:40:39,880 --> 00:40:41,959 Speaker 1: at this time, I'm gonna be on YouTube. I'm gonna 813 00:40:42,000 --> 00:40:44,799 Speaker 1: do it by buying up literally swass of homes that 814 00:40:44,840 --> 00:40:47,239 Speaker 1: are three quarters of the way built by from lead are. 815 00:40:47,520 --> 00:40:49,760 Speaker 1: I'll go in the backside. You'll never see these properties 816 00:40:49,800 --> 00:40:52,359 Speaker 1: hit the market, and I'll go negotiate these with the 817 00:40:52,360 --> 00:40:54,280 Speaker 1: banks and I'll go buy ten homes of one whack 818 00:40:54,320 --> 00:40:56,960 Speaker 1: and we'll finish up in rent. So that's the kind 819 00:40:56,960 --> 00:40:59,120 Speaker 1: of stuff, you know, between commercial and then buying up 820 00:40:59,120 --> 00:41:01,400 Speaker 1: homes that are three cores of the way bill but 821 00:41:01,440 --> 00:41:03,880 Speaker 1: you're any cash come in. Those are the kind of 822 00:41:03,880 --> 00:41:10,239 Speaker 1: opportunities I see. Fantastic. Well, you have a wonderful real 823 00:41:10,360 --> 00:41:13,160 Speaker 1: estate course that I'm going to link in the description below. 824 00:41:13,520 --> 00:41:17,319 Speaker 1: The coolest thing I think about your courses are that 825 00:41:17,600 --> 00:41:20,160 Speaker 1: you add to them consistently over time. So as this 826 00:41:20,200 --> 00:41:24,279 Speaker 1: real estate crash continues to accelerate, opportunities start to come up, 827 00:41:24,440 --> 00:41:27,120 Speaker 1: you're gonna be documenting the things that you're doing to 828 00:41:27,160 --> 00:41:30,240 Speaker 1: take advantage. Give the actual strategies and tactics to start 829 00:41:30,280 --> 00:41:33,800 Speaker 1: making money. Um so I think it's it's a an 830 00:41:33,800 --> 00:41:36,319 Speaker 1: insane value the amount of money you're gonna be able 831 00:41:36,320 --> 00:41:39,560 Speaker 1: to make by following the steps in this course. I'll 832 00:41:39,600 --> 00:41:42,560 Speaker 1: linked that below and then I'll say YouTube channel where 833 00:41:42,560 --> 00:41:46,279 Speaker 1: you throw up YouTube videos multiple times a day. Yeah, 834 00:41:46,480 --> 00:41:48,120 Speaker 1: thank you so much, and yeah, you know, it's sounds 835 00:41:48,120 --> 00:41:50,160 Speaker 1: funny when we're talking about courses. I think the most 836 00:41:50,239 --> 00:41:53,040 Speaker 1: valuable thing we could do is peat giving people like 837 00:41:53,200 --> 00:41:56,160 Speaker 1: on time and legitimate content. You know, there's one thing 838 00:41:56,200 --> 00:41:59,000 Speaker 1: to invest in yourself and you know, buy a book 839 00:41:59,040 --> 00:42:00,719 Speaker 1: and read it, but then you've got to go by 840 00:42:00,760 --> 00:42:03,760 Speaker 1: the next book, in the next book, because things change rapidly, 841 00:42:03,800 --> 00:42:07,040 Speaker 1: and like this mortgage, uh situation, it's going to change 842 00:42:07,200 --> 00:42:09,040 Speaker 1: very rapidly. And so that's all I wanted to do. 843 00:42:09,080 --> 00:42:10,640 Speaker 1: And I appreciate I really I didn't even know you're 844 00:42:10,680 --> 00:42:13,920 Speaker 1: gonna do that. I thank you so much for that. Well, 845 00:42:13,960 --> 00:42:17,360 Speaker 1: thank you so much for joining today. Fantastic conversation. I 846 00:42:17,360 --> 00:42:20,440 Speaker 1: always love talking with you, Ninja, And for anybody who 847 00:42:20,520 --> 00:42:23,040 Speaker 1: wants more, check out those links in the description below 848 00:42:23,080 --> 00:42:26,640 Speaker 1: and have a good day. Thanks so much, so I 849 00:42:26,680 --> 00:42:27,319 Speaker 1: appreciate it.