WEBVTT - Study Hall: Why America Has A Housing Crisis

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<v Speaker 1>An illegal alien from Guatemala charged with raping a child

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<v Speaker 1>in Massachusetts. An MS thirteen gang member from Al Salvador

0:00:07.720 --> 0:00:11.840
<v Speaker 1>accused of murdering a Texas man of Venezuelan charged with

0:00:11.920 --> 0:00:15.840
<v Speaker 1>filming and selling child pornography in Michigan. These are just

0:00:15.920 --> 0:00:19.680
<v Speaker 1>some of the heinous migrant criminals caught because of President

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<v Speaker 1>Donald J. Trump's leadership. I'm Christy nom the United States

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<v Speaker 1>Secretary of Homeland Security. Under President Trump, attempted illegal border

0:00:28.160 --> 0:00:31.680
<v Speaker 1>crossings are at the lowest levels ever recorded, and over

0:00:31.760 --> 0:00:34.960
<v Speaker 1>one hundred thousand illegal aliens have been arrested. If you

0:00:35.040 --> 0:00:38.920
<v Speaker 1>are here illegally, your next you will be fined nearly

0:00:39.000 --> 0:00:43.000
<v Speaker 1>one thousand dollars a day, imprisoned, and deported. You will

0:00:43.040 --> 0:00:46.680
<v Speaker 1>never return. But if you register using our CBP home

0:00:46.720 --> 0:00:50.120
<v Speaker 1>app and leave now, you could be allowed to return legally.

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<v Speaker 1>Do what's right, leave now. Under President Trump, America's laws,

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<v Speaker 1>border and families will be protected.

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<v Speaker 2>Sponsored by the United States Department of Homeland Security. So

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<v Speaker 2>all right, let's talk about this.

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<v Speaker 3>There is a housing shortage in America, right, So what

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<v Speaker 3>does that mean for the average person and how does

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<v Speaker 3>that affect the real estate market over the next five years?

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<v Speaker 4>Well, that means that, you know, it's like anything else

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<v Speaker 4>supplying demand. The supply is low, the demand is high,

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<v Speaker 4>So that's why rents go up.

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<v Speaker 2>So so why is there a housing shortage? Though?

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<v Speaker 4>Man, there's been so much politicization of housing in real estate,

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<v Speaker 4>and it's difficult to build. Like you look at some

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<v Speaker 4>of the markets where's most pronounced New York, California. There's

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<v Speaker 4>this thing called Nimby. You have heard of Nimby. Not

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<v Speaker 4>in my backyard. People say, yeah, we need affordable housma,

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<v Speaker 4>don't build them, don't build them on my street, right,

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<v Speaker 4>And so what that does is it disturbs the real

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<v Speaker 4>estate market for that particular city and we just buy

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<v Speaker 4>and large have not built enough moderate and middle income

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<v Speaker 4>or affordable housing. So you know, millionaires don't have any problem.

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<v Speaker 4>They could buy whatever they want to buy right or

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<v Speaker 4>live wherever they want to live. We're talking about the

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<v Speaker 4>rank and file public workers, you know, teachers, ambulance drivers,

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<v Speaker 4>sanitation sanitation workers, the rank and file public who have

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<v Speaker 4>good jobs, they work hard. But there's been such an

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<v Speaker 4>escalation in the cost of rents because of the supply

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<v Speaker 4>and demand disruption that these rents are off the table.

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<v Speaker 4>I mean, if four million units of housing hit the

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<v Speaker 4>market tomorrow, all rents would drop, but it takes years

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<v Speaker 4>and years to build it. That's why you know, we

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<v Speaker 4>have this condition because it's hard to just increase the

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<v Speaker 4>supply quickly. You have to have an alignment of politics

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<v Speaker 4>of market forces like real estate excuse mean, like interest rates.

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<v Speaker 4>You know, interest rates are out of control right now,

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<v Speaker 4>so it makes it very hard to build. Sometimes you

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<v Speaker 4>have construction costs going off the rails, like everyone heard

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<v Speaker 4>about you know, what was going on with supply chain disruptions.

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<v Speaker 2>You know last year.

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<v Speaker 4>So you have all these things that can throw that

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<v Speaker 4>equation off and make it hard to produce housing. So

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<v Speaker 4>you know, right now it's come to a critical point,

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<v Speaker 4>and you know, particularly elected officials have to get off

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<v Speaker 4>of the rubric where they want to you know, almost

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<v Speaker 4>politicize housing, make all real estate developers evil, all real

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<v Speaker 4>estate is bad.

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<v Speaker 2>We have a lot of that narrative coming out.

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<v Speaker 4>Of certain communities in certain cities, but it doesn't help

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<v Speaker 4>to do anything because people still cannot find good housing

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<v Speaker 4>and the only way to get it is to build it. Right,

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<v Speaker 4>we have to ubzone. A lot of communities don't want

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<v Speaker 4>to go through rezonings and up zone, they say all that,

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<v Speaker 4>we don't want that high building here. Well, okay, that's

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<v Speaker 4>your opinion, but we have people sleeping in shelters, right,

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<v Speaker 4>we have people who really need housing. And I firmly

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<v Speaker 4>believe that housing security from most families is financial security,

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<v Speaker 4>because if people have a roof over the head, there's

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<v Speaker 4>more money they have to dedicate to healthcare, the education,

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<v Speaker 4>the other well being of the family, taking care of

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<v Speaker 4>the elderly, everything else the families have to deal with.

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<v Speaker 4>But if sixty seventy percent of your income is used

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<v Speaker 4>to pay rent, cuts out a lot of options what

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<v Speaker 4>you could do otherwise.

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<v Speaker 5>When you talk about up zone, and I was immediately

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<v Speaker 5>thinking a city I used to work in the newer show.

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<v Speaker 5>We're seeing a lot of towers go up there, and

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<v Speaker 5>I'm wondering, when when you're building units and you're adding

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<v Speaker 5>that to the portfolio, what's the allocation that has to

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<v Speaker 5>be affordable housing? And obviously your expertise in the field,

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<v Speaker 5>are you seeing people just meaning the minimum or people

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<v Speaker 5>exceeding the amount? If there is a certain allocation you

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<v Speaker 5>have to have.

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<v Speaker 4>Well, first of all, let me say this the.

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<v Speaker 2>Earners, what's up.

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<v Speaker 1>An illegal alien from Guatemala charged with raping a child

0:06:40.960 --> 0:06:44.760
<v Speaker 1>in Massachusetts. An MS thirteen gang member from El Salvador

0:06:45.000 --> 0:06:49.120
<v Speaker 1>accused of murdering a Texas man of Venezuelan charged with

0:06:49.200 --> 0:06:53.080
<v Speaker 1>filming and selling child pornography in Michigan. These are just

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<v Speaker 1>some of the heinous migrant criminals caught because of President

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<v Speaker 1>Donald J. Trump's leadership. I'm Christine nom United States Secretary

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<v Speaker 1>of Homeland Security. Under President Trump, attempted illegal border crossings

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<v Speaker 1>are at the lowest levels ever recorded, and over one

0:07:09.240 --> 0:07:12.480
<v Speaker 1>hundred thousand illegal aliens have been arrested. If you are

0:07:12.560 --> 0:07:16.480
<v Speaker 1>here illegally, your next you will be fine nearly one

0:07:16.480 --> 0:07:21.040
<v Speaker 1>thousand dollars a day. Imprisoned and deported, you will never return.

0:07:21.400 --> 0:07:24.400
<v Speaker 1>But if you register using our CBP home app and

0:07:24.480 --> 0:07:27.840
<v Speaker 1>leave now, you could be allowed to return legally. Do

0:07:27.960 --> 0:07:33.080
<v Speaker 1>what's right, leave now. Under President Trump, America's laws, border

0:07:33.280 --> 0:07:35.120
<v Speaker 1>and families will be protected.

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<v Speaker 4>Sponsored by the United States Department of Homeland Security, Eric

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<v Speaker 4>new Roshell in that administration has done it absolutely correctly.

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<v Speaker 4>They have embraced real estate development, and they've used market

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<v Speaker 4>forces and capitalist forces and real estate developers to help

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<v Speaker 4>bring that city into the modern era and the wave

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<v Speaker 4>of development that there is impressive, right. But in other

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<v Speaker 4>areas it's not so easy because you have a lot

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<v Speaker 4>of different opinions, a lot of you know, just fights

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<v Speaker 4>over what should be built, could be built. We don't

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<v Speaker 4>want that tower here, I think. To answer your second question, generally,

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<v Speaker 4>depending different municipalities had different requirements about how much affordable

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<v Speaker 4>housing should be built, and usually what happens is it's

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<v Speaker 4>tied to some type of tax abatement or some type

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<v Speaker 4>of government funding that will be provided to the project

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<v Speaker 4>to build it. We had a scenario recently in Harlem.

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<v Speaker 2>Right, we're very active. We do a lot. And a city.

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<v Speaker 4>Council person turned down a developer on one hundred and

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<v Speaker 4>forty fifth Street who bought land and only was required

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<v Speaker 4>to do twenty percent affordable housing, but he wanted to

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<v Speaker 4>ubzone the project and do nine hundred units. He went

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<v Speaker 4>as far as fifty percent affordable housing. She still voted

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<v Speaker 4>it down. Well, wow, politics, So you think about that's

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<v Speaker 4>the wrong move, right, I mean, that's four hundred and

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<v Speaker 4>fifth the families who are not going to have clean, decent,

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<v Speaker 4>energy efficient affordable housing for themselves. Right, it's a it's

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<v Speaker 4>an absolute loss. But we see too much of that

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<v Speaker 4>these days. So let me ask you this, well, two questions.

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<v Speaker 4>How do real estate developers get paid?

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<v Speaker 2>Last answer, well, so what I mean by that? You get

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<v Speaker 2>paid like twice? Though?

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<v Speaker 4>Right, Well, no real estate developers take all the risks,

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<v Speaker 4>So what we do? What do you mean twice?

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<v Speaker 2>So you get all?

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<v Speaker 3>Right, Well you can explain it better than me, obviously,

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<v Speaker 3>but from my understanding, you you get a part of

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<v Speaker 3>the development fee, yes, right, and then you have if

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<v Speaker 3>you have equity in it, then you can get that

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<v Speaker 3>as some level of conversation as well.

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<v Speaker 4>Right, So the equity, the equity that you would invest

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<v Speaker 4>would just be returned to you.

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<v Speaker 2>Right.

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<v Speaker 4>The equity is so when you do a project. Let's say,

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<v Speaker 4>you know, when you buy a house, right, you know,

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<v Speaker 4>you go to the bank and the bank says, okay, uh,

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<v Speaker 4>you know I want to buy this house. I'll say okay,

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<v Speaker 4>mister Livingston. You know you have to put down twenty percent.

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<v Speaker 4>That's your equity. Same thing when you do a development deal.

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<v Speaker 4>The bank is going to give you one hundred percent

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<v Speaker 4>of the deal. You have to bring some equity. Usually,

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<v Speaker 4>depending on how large the project is, you get into

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<v Speaker 4>a scenario where the equity is coming from a third

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<v Speaker 4>party investor, a limited partner, which is usually a real

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<v Speaker 4>estate private equity fund. It could be an insurance company

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<v Speaker 4>or some just an investor that has a lot of

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<v Speaker 4>capital and they have to invest it because they need

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<v Speaker 4>to generate returns on their capital to pay pensioneers or

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<v Speaker 4>to pay out insurance claims. Whatever it is. So the

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<v Speaker 4>equity gets returned. But to answer your question specifically, a

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<v Speaker 4>real estate developer will get fees, right, So you get

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<v Speaker 4>a developer fee. You could get distributions based off of

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<v Speaker 4>refinancing the project because let's say you know, like.

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<v Speaker 2>You have a project, you do it.

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<v Speaker 4>After ten years or whatever, rents go up, you have

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<v Speaker 4>one level of debt you've been paying down that you

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<v Speaker 4>could refinance, put a new mortgage on, take some capital out.

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<v Speaker 4>But more regularly, what happens is once you put the

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<v Speaker 4>building into service, every month is cash flow. Remember NI,

0:11:11.520 --> 0:11:14.280
<v Speaker 4>you have your NI, you pay your debt. What remains

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<v Speaker 4>is cash flow that can be distributed to partners.

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<v Speaker 1>An illegal alien from Guatemala charged with raping a child

0:11:26.480 --> 0:11:30.280
<v Speaker 1>in Massachusetts. An MS thirteen gang member from Al Salvador

0:11:30.559 --> 0:11:34.680
<v Speaker 1>accused of murdering a Texas. Man of Venezuelan charged with

0:11:34.760 --> 0:11:38.640
<v Speaker 1>filming and selling child pornography in Michigan. These are just

0:11:38.720 --> 0:11:42.520
<v Speaker 1>some of the heinous migrant criminals caught because of President

0:11:42.520 --> 0:11:46.120
<v Speaker 1>Donald J. Trump's leadership. I'm Christy nom the United States

0:11:46.120 --> 0:11:50.920
<v Speaker 1>Secretary of Homeland Security. Under President Trump, attempted illegal border

0:11:50.960 --> 0:11:54.520
<v Speaker 1>crossings are at the lowest levels ever recorded, and over

0:11:54.559 --> 0:11:57.800
<v Speaker 1>one hundred thousand illegal aliens have been arrested. If you

0:11:57.880 --> 0:12:01.360
<v Speaker 1>were here illegally, your net next you will be fine

0:12:01.400 --> 0:12:05.520
<v Speaker 1>nearly one thousand dollars a day, imprisoned and deported you

0:12:05.600 --> 0:12:09.120
<v Speaker 1>will never return. But if you register using our CBP

0:12:09.280 --> 0:12:12.000
<v Speaker 1>home app and leave now, you could be allowed to

0:12:12.080 --> 0:12:16.880
<v Speaker 1>return legally. Do what's right. Leave now. Under President Trump

0:12:17.040 --> 0:12:20.640
<v Speaker 1>America's laws, border and families will be protected.

0:12:20.720 --> 0:12:22.880
<v Speaker 2>Sponsored by the United States Department of Homeland Security,