Podcast appearances and mentions of corey coates

Keith Weinhold plays a “financial superhero”, defending investors against the "greedy landlord" myth. A Zillow survey reveals the secret sauce of rental success: budget, location, and bedroom count - with pets stealing the show as the ultimate tenant dealbreaker. He exposes the dollar's sneaky inflation plot, showing how savvy investors can turn borrowing into a wealth-building adventure. Imagine homes that cost half their gold price from 100 years ago - mind-blowing!  Real estate investing isn't just a strategy - it's an epic journey of wealth creation!  Resources: GREmarketplace.com/OklahomaCity GREmarketplace.com/Tulsa Show Notes: GetRichEducation.com/episode/557 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching: GREinvestmentcoach.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE I'm your host, Keith Weinhold. Are Real Estate Investors greedy by nature? Learn why? In a sense, today's homes are actually half price compared to 100 years ago. Then results from a huge tenant survey that reveals the amenities that you must give renters or else they will leave how media headlines can trick you and more today on get rich education.   Mid south home buyers, I mean, they're total pros, with over two decades as the nation's highest rated turnkey provider. Their empathetic property managers use your ROI as their North Star. So it's no wonder that smart investors just keep lining up to get their completely renovated income properties like it's the newest iPhone. They're headquartered in Memphis and have globally attractive cash flows and A plus rating with the Better Business Bureau and now over 5000 houses renovated. There's zero markup on maintenance. Let that sink in, and they average a 98.9% occupancy rate, while their average renter stays more than three and a half years. Every home they offer has brand new components, a bumper to bumper, one year warranty, new 30 year roofs. And wait for it, a high quality renter, remember that part and in an astounding price range, 100 to 180k I've personally toured their office and their properties in person in Memphis, get to know Mid South. Enjoy cash flow from day one. Start yourself right now at mid southhomebuyers.com that's mid south homebuyers.com   Corey Coates  1:56   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  2:12   Welcome to GRE from Cape Hatteras, North Carolina to the Cape of Good Hope, South Africa and across 188 nations worldwide. I'm Keith Weinhold, and this is get rich education. 100 years ago, you could buy the average home with eight kilos of gold. Today, it only costs you four more on that later. But first, as a real estate investor, has a critic or a tenant ever insinuated some form of these two questions to you, either, is it ethical for you to own multiple homes, or even, are you greedy? Now, I doubt that you're going to be asked that question directly, but sometimes you can feel that that's the vibe that someone else is on. Well, there sure are greedy people in the world. You could be rich and greedy, or you could be poor and greedy. Even the definition of greed is an excessive and selfish desire for more wealth than one needs, often driven by a destructive motive. All right, that's the definition like you're willing to destroy other people in the pursuit of wealth that is rather different than acquiring wealth, which is usually done only when you first fulfill the needs of others. All right? Well, say that your critic makes $60,000 per year. Oh, well, then that means that they're in the top 1% of global income earners. I mean, sheesh, then they're like the Jeff Bezos of the developing world. So to help even things out, should your critic have to send half of their salary to Senegal or Mauritania or Burkina Faso if the critic's home has more than one bathroom in it, or they even own one car. Well, then they're fabulously wealthy by world standards. Then do they have to give it away to avoid being greedy? What if they ever worked overtime for extra money? Like is that evidence of certain greed? All that stuff is ridiculous, preposterous amounts don't create greed Spirit does. There is no implicit Machiavellian intent. If you have more wealth than average, where would you even draw the line? Like, once you hit seven rental properties? Oh, that's just fine, but eight of them is too many, or once you live in a home that costs 50% more than an area's median, then is that when it becomes greed? I mean, this doesn't make sense. Higher housing prices these past five years has to do with the lack of housing supply and with the. Abundance of dollar printing. It's those two things. The culprits aren't rental property owners. The culprits are burdensome development regulations and the Federal Reserve printing all the dollars, not your local landlord. Responsible landlords provide and maintain sound housing, and they do that for complete strangers, they're taking a lot of faith. Oh, so then could the tenant actually be the greedy one, if they both resent and expect that treatment from a stranger for free? I mean, real estate investors, hey, we take on risk, DEBT, TAXES, maintenance, insurance, market volatility, and we have the responsibility of building and maintaining a good credit score in most cases. I mean, you're the one that's truly invested in the property, not a tenant that can choose to move out in 30 or 60 days. Landlords are a bit like umpires. They're rarely appreciated, and they only get noticed when they do something wrong. I know I mentioned to you before that when I buy a property pretty soon, I casually mention to my tenant that, you know, each month, I just have to make them aware. Each month I make a big mortgage payment and I have to pay for property tax and insurance on this place. I mean, it's amazing to see how far that little mention goes with both timely rent collection and that they don't resent you as a landlord over time. See, tenants often don't know this because they've never owned property themselves, and actually, as you know, since I use property managers now, I don't make this mention to tenants anymore. See, to tenants often it can feel like they're just sort of renting air, and the rent payments they make to you are very visible to them. What's invisible to them are all of your expenses. You're the one as the investor that's contributing to communities. You are the good steward of a neighborhood's housing stock, and you provide homes for people who either can't or don't want to buy the myth of the evil landlord. It really just ignores realities. I mean, mom and pop investors own 72% of single family rental homes, and the typical landlord owns fewer than three units. Many don't have 401 Ks. I mean, rental properties are their retirement plan. So most landlords, real estate investors, they're not cigar chomping tycoons twirling mustaches atop piles of gold like Scrooge McDuck. They're regular people. So perspectives like this that can really help you ward off both critics and unaware tenants. And you know what odds are, if they had the opportunity, they would often do the same thing at a time when pensions are rare and inflation runs rampant. Who could blame anyone for seeking assets that grow in value and generate income. Here's what you need to know. Everyone plays the financial game in the context of their own economy. You Your critic and your tenant, your awareness and your mindset from listening to the show is merely more broad than others. If everyone understood that being wealthy is actually a choice like you do, we would all be better off. So the bottom line here is that real estate investors are not villains. They're just people trying to build a financial life raft in a financial ocean that is full of icebergs. Rich people aren't necessarily greedy, just like poor people aren't necessarily lazy. Greed exists in somebody's spirit, not in the amount of your net worth or whatever your income level is,.    All right., Well, heading into the summer here, there are more tenant moves than any other season. Rental demand has stayed fairly strong, not super strong, just fairly strong, with rents only up about 2% annually. When you amalgamate single family rentals and apartments, the share of rentals with a concession is dropping because the rental market is fairly strong, and when renters find a place, a lot of them are staying put, like it's the last lifeboat off the Titanic. Of course, these are all phenomena on a national level, and each local area is different. I mean that right, there is something that I could say on nearly every episode with low affordability, the home ownership rate is down and renter numbers are up. Now. I told you a while ago that it would go down that home ownership rate, and in the latest quarter ended, that home ownership rate has dropped from 65.7 down to 65.1 Percent. And that might not sound like much, but homeownership down six tenths of 1% in just a quarter. That means that there are at least about 500,000 new renters in America. More renters means more rental demand, more occupancy, and it's crucial for you to know what those renters want so that you can best serve them again. You're not greedy. You're trying to serve them as well as you can now, Zillow has an arm. It's called the Zillow group population science. It's something I hadn't even heard of until recently. What Zillow did with this group is they surveyed 36,000 US renters of both single family rentals and apartments to find out what trends are and what renters want. And I read their entire lengthy report. I think it was 40 pages, so that you don't have to and what I did is I pulled out the most salient pieces to help you attract and retain tenants, and the top three criteria that renters really consider essential when deciding whether or not to rent your property are the first thing, and 95% said this is that it's got To be within their budget, second, at 85% preferred location. Hmm, does that mean near tacos and coffee shops? And then the third most important thing renters consider essential at 84% is the preferred bedroom count. After that, the Floor Plan and the layout that fits their preferences was most important. After that, it's the preferred number of bathrooms. So note that the preferred number of bedrooms, then, is more important in making the rental decision than the preferred number of bathrooms, although they both matter. And then after that, in order of decreasing importance, is broadband internet, allowing pets and having common amenities like a gym, a business center, a rooftop and a lounge and those things, those common amenities, they were substantially more important for apartment renters than for single family home renters, as you would imagine. And here's key, a separate survey question was asked, What is the main reason that you passed on a particular property and decided not to rent it. Number one easily was that the property prohibited pets. The second biggest choice had to do with pets as well. It was that the property restricted the pet breed or size. The reasons that renters passed on a particular property are so centered around pets. What do pets rule this housing market? Now, that's kind of how it seems. Now, another thing that this survey revealed is like, gosh, it also seems like the age for doing almost anything in America is up. The median renter is age 42 did you have any idea there? 42 probably older than you thought. And the older people are, generally, the quieter they are, and the less they move. The most common application fee paid is $50 that's what the survey found. Hey, maybe that's one thing that hasn't been slapped with tariffs. It's an online world. The typical renter surveyed reported taking only one in person tour. Everything else is swiping, scrolling or going deep on Google Street View. Basically what tenants do is they check out everything online, and then once they've chosen the place that they want to rent, they often make that decision right there online, and then basically that one in person visit is just them showing up to confirm that there aren't any red flags at that place, that they mostly know that they won. And this is good for you if you're self managing and you're showing the places yourselves. I mean, there are just fewer tire kickers than there were back in the day. I mean, hey, talk to your parents. 25 years ago, rental ads were like four lines in a newspaper, no photos at all, so tenants then they had to show up in person to see what a rental place even looked like. Let's look at the percent of renter households in America by household income, less than $50,000 57% of renters were in that range, 50 to 100k 29% and 100k or more, 15% as far as how much security deposit you need to give, 75% of renters said their first month's rent was required to Secure the rental, and only 25% said that they also had to fork over last month's rent to secure it. In a really strong rental market, you can more often ask for that both first and last month's rent to get in. 40% reported getting their entire security deposit back at the end of the rental. Hmm, I guess the. Others pay for that mysterious carpet stain. Most pay additional fees on the rental, 58% and that's things like water, sewer, garbage, recycling or other utilities. And it even includes payment processing. There some landlords charge for that. And again, what I'm talking about here is single family rentals and apartments combined. All right, so more single family renters are going to pay for separate utilities on top of the rent. Of course, about half of American renters have renter's insurance. At 48% I suppose the others are living dangerously. A typical renter uses four websites or apps in their search and as I'm continuing on here with the results from this Zillow Rental survey of 36,000 renters, it also showed that the top three reasons that current renters say that they decide to stay long term are and this is big. I mean, this is about your retention rate. 72% stay long term because they say rental costs are a good deal, that's why they stay next most important is quiet neighbors. Yes, no drum kits or free range toddlers will help in apartments. One noisy neighbor can upset a lot of tenants, but a noisy neighbor that might not be a problem at all when people are dispersed in a single family rental and then the third most important thing in long term retention is 68% of renters stay in a unit because they can't afford to move elsewhere. Two thirds of tenants said their landlord or property manager notified them of a rent increase in the past two years, 37% of renters said they would be very or extremely likely to buy a home if mortgage rates fell. All right, that's about three in eight renters say that as far as the length of leases in America, 64% signed on for a one year lease, and 24% said their lease is longer than a year. So really, to summarize what you've learned here from that survey is that you need to know your audience, 42 year olds with pets and a strong preference for quiet neighbors. Keep your pricing competitive. Embrace tech. People want to apply and pay and do things online, and your tenants will stick around longer. You can either give a man a fish and feed him for a day, or teach a man to fish and feed him for a lifetime.    Here at GRE, we do both get riched occasion.com. Is where you learn through this very show and our videos over there, and our blog articles and more. The name gre marketplace.com is where you take action and see the markets and providers that make the best income properties nationwide. GRE marketplace is also where you get access to our totally free investment coaching strategy sessions with a real human being that has both an MBA and investing experience. And that's something we added three or four years ago that really helps you be profitable as an investor, get paid five ways so that you can have more income and wealth and perhaps even retire early. We help you find the right exact property addresses. That's what we help you do compared to 100 years ago, homes are half price today. This is fascinating. I'll get into that shortly. I'm Keith Weinhold. You're listening to get rich education.    The same place where I get my own mortgage loans is where you can get yours. Ridge lending group NMLS, 42056, they provided our listeners with more loans than anyone because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. Start your pre qual and even chat with President Caeli Ridge personally while it's on your mind, start at Ridge lendinggroup.com. That's Ridge lendinggroup.com. You know what's crazy?    Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds, just say. They're doing nothing. Check it out. Text family to 66866, to learn about freedom. Family investments, liquidity fund again. Text family to66866   Speaker 1  20:17   what's up? Everyone? This is HGTV. Tarek al Musa. Listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  20:35   Welcome back to get rich Education. I'm your host. Keith Weinhold, the headlines say homes are so expensive that you'd think millennials would be forced to live in IKEA showrooms. Now, a year or two ago, here on the show, I think I mentioned to you that at that time, it took eight kilos of gold to buy the average home, about 100 years ago, and at that time, only six. Well today, it took eight kilos of gold to buy an average home in 1920 but it's only four kilos now, in terms of gold, homes are half the price today, and I sent you that pretty shocking image showing this in our newsletter a month or two ago. So what in the monetary twilight zone has happened in the past 100 years? Well, a lot of things. The 1913 creation of the Federal Reserve inflated away your dollar's purchasing power over time. This was basically like giving your teen a credit card with no limit and hoping for the best, then removing the dollar's last link to gold redeemability in 1971 that freed the rains for unlimited dollar creation. And Robert Kiyosaki was here to discuss exactly that on the show with us on episode 358 go back and listen to episode 358 if you haven't heard it and you want to. Before long, dollars got so flimsy that dive bars started stapling them to the wall as decor, and it seems like the next stop for the dollar is kindling for your backyard fire pit. Now, there is, however, an affordability problem today that keeps renters staying as renters. But part of the calculus here is that homes only seem expensive because their values are usually compared to dollars. But that's faulty, because dollars are a moving measuring stick. This is like saying that an hour has 60 minutes in it this year and next year, it'll only have 55 minutes in it. That doesn't work. I mean, she should a few years, everyone would run a marathon in under an hour at that rate. Okay, so changing the measuring stick defeats the very purpose of a measuring stick. Here's what's even more amazing than that fact about the gold, despite that, homes only cost half as much today as they did in 1920 in terms of gold, you also get more home today. Today's homes have smaller lot sizes, smaller yards, but otherwise they have amenities that people couldn't have even dreamed of in 1920 I mean, this is really interesting. Let's compare a typical 1920 new home to a 2025 new home. We've gone from 1048 square feet up to 2411 so the size has more than doubled. Back then there was no Garage. Today you've got a heated garage. Back then you had one bathroom or even an outhouse in 1920 Oh, today you have two or three or even more indoor bathrooms in just the average new build home back in 1920 you had a wood burning stove that you had to keep loading, and you're like splitting and stacking firewood and storing that somewhere. Today, you have central heating. Just push a button. Back more than 100 years ago, you had no AC. Today, AC is completely standard. You had no insulation a lot of times in 1920 homes today you've got smart insulation. You used to have a very basic kitchen. Today you've got a center island and granite and quartz countertops. You had an ice box back in 1920 and a nice refrigerator or two. Today, back then, you had no dishwasher or garbage disposal. Today, you have both. Back in 1920 you had to use a washboard in a ringer to wash and dry your clothing. Can you imagine that today you have a washing machine? You had an outdoor clothesline back then today you have a dryer back in. 1920 you had these claw foot bathtubs, and often no shower. Today you have both bathtubs and showers, and several of them. Back then you had nothing where today you have a dedicated laundry room, and a lot of times a home office, and sometimes even a gym. I mean, so all those changes right there over the last 105 years. This really puts the exclamation point on the fact that homes are cheaper today. In terms of the value that you get, today's homes might be a third or a quarter of the price that they were a century ago. You can't point to mortgage rates either. They're still below their long run average of 7.7% per Freddie Mac the thing you've got to point to, the big problem here, the elephant in the room, is that salaries have not kept up with inflation, and that is the real crux of the problem in hurting homes affordability. Look, and this could be a real epiphany for you here that affordability fact is even more reason to move today's depreciating dollars into real assets and move that with emphasis and with urgency, dollar savers are just such massive losers. All right, so then, what is the opposite of saving dollars? Some people think it's spending dollars. No, the opposite of saving is not spending. It's borrowing dollars. That's how you go negative on that. The opposite of spending is not saving, it is borrowing. That is how you go negative and short the falling dollar. This really it's all just a fresh approach on what people need to consider doing. Borrow dollars, own income property, let tenants pay your debt, let inflation also shrink your debt like a cheap shirt that spends too much time in a clothing dryer, and just watch inflation pump up your asset price at the same time. Now you are just winning all over the place. You are racking up more wins than Novak Djokovic at the Australian Open. That's why I am resolute about saying what no one else out there says real estate done right is not an inflation hedge. A hedge is a defensive investing strategy where you break even. I mean, no one plays a game hoping for an outcome of a tie, spending money as an inflation hedge. That's why I refer to borrowing for income property as inflation profiting. That's the reason why. And see, other people's money pays down your debt, both the tenant and the inflation are whittling that away for you. Oh, and hey, for my fellow math weirdos, in 1920 a new home cost $6,300 and there are 35 ounces in a kilo of gold, and you can figure out the rest from there to see that homes cost half as much in gold. Now the bottom line here is that the real estate market is not broken. The dollar is and that dollar measuring stick is so miserably distorted and perverted that some people can't even see what's going on anymore. I've got another interesting way of helping you see this.    Let's look at something more recent than 1920 let's go back 30 years. Do you have any idea what the median us home price was then? Any guess 30 years ago, that's kind of charming. It was a modest $130,000 All right, with an 80% loan and zero principal pay down your mortgage balance would be a featherweight 104k today, that is a clear way of seeing how inflation debases your debt. And of course, the tenant would have paid it off for you by now as well. But I mean a loan balance of $104,000 without any principal pay down, sheesh, that's less than some people's American Express card limit. Really think about that by removing the principal pay down component, you can really see with transparency and lucidity the effect of inflation whittling down a loan balance to 104k and that is just 25% of today's median home price of $416,900 that is a stark example of inflation profiting, how your debt got relentlessly debased by the Fed. And of course, rental properties tend to be less expensive than this median number that I'm talking about. So the typical rental property is. In this scenario, you might just have a loan balance of 75k today, here, 30 years later, and the property would be worth, say, 300k inflation makes your loan balances feel like a featherweight over time. All right, now let's go somewhat further back in time again, 1950s Florida.    Last month, in our newsletter, I sent you those fascinating old newspaper clippings from a real estate sales ad from 1955 in the Miami area and a two bedroom, single family home, one bath, screened porch and a carport. Its price was $7,450 for the entire Miami area home. And the ad also showed that your monthly payment is $48 and then, okay, so that was a two bedroom, single family home this Miami area, three bed, one bath home with a screen porch, $7,900 so only an extra 450 bucks for an extra bedroom, that is the purchase price of the entire asset. And the monthly payments on this three bedroom are 50 bucks a month, a little more than the 48 bucks a month that it was for the two bedroom. And here's the thing, the monthly payment amount, as shown in this old newspaper advertisement, $48 and $50 that was principal, interest, taxes and insurance all together, a jaw dropping sub 8k for a Miami area home, not just Florida, but pricier Miami. I mean, can you imagine a Florida couple's home buying conversation in the mid 1950s there at Florida, honey, you're crazy if you think we're going to pay an extra $2 per month for a third bedroom. I mean, this is just astonishing. And yeah, my apologies for leaving you flabbergasted so many times in one episode. Gosh. Now to be sure, wages were lower back then, but back then, only one parent had to work. They still managed to buy homes, raise a family, and even pay for a milkman who actually delivered the milk. And now, you know, if we fast forward to the future, future generations, they're going to marvel at today's incredibly low median home price of 400 to 450k Yes, therefore you will be the one doing the flabbergasting, and you'll leave people From 2070 feeling abjectly flabbergasted when the median home price is $4 million then, I mean, it realistically could be, it could be more than that. It's the same way that today we're astonished at 1960s McDonald's menus where a burger was 15 cents. Yes, 15 cents is seriously how much McDonald's hamburger cost in the 60s. And of course, this is when restaurants also serve real meat and french fries cooked in tallow rather than seed oils, and shakes had real cream in them. That's all evidence of simultaneous skimpflation. But getting back to the monetary inflation, you know, as recently as 2011 we can even feel dazed and amazed about how the median home price, then was just $211,100 Yes, as recently as 2011 you're surely dazed and stupefied here, one thing I know, though, is that this did not leave you slack jawed, because Between you and I, we know there's only one slack job between us, and we know full well that that's not you. The bottom line, the bottom line here is that zooming out over time reveals a clear, uncomfortable truth. Savers get roasted, borrowers get rich. This is just a new way of looking at it.    And if you're a newer listener and you don't get our newsletter yet, it is free, full of value, and I write every word myself. There are more AI generated newsletters out there. That is not what this is. This is me to you, and to get the newsletter right now. Text. GRE to66866, 66866, we don't send you a bunch of texts that would be intrusive. It's an email newsletter. You can get it by texting GRE to 66866   Now, earlier this year, I talked with you about how home sales have crashed. When people read a media headline like that, home sales crash. You know, some people think that home prices are falling, but that's not. What that means is, you know, it means that the quantity of sales has fallen a lower transaction volume. With that in mind, to help you out in the future, when you're reading. For real estate and economic headlines, I jotted down a few fictitious headlines here, but yet they're the same type that you've seen before, and you'll see these again in the future, and they can be misleading. So let's straighten this out. Okay, here's the first fictitious yet realistic sounding headline, what people often think it means and what it really means. Developer uses tax loophole to deliver 200 unit apartment complex All right. Now, some people read that and they think that the developer is doing something nefarious or underhanded. No. Sometimes reporters use this word loopholes to describe legally created incentives to get much needed housing built. Reporters are often doing yeoman's work on behalf of NIMBYs. If this thing is producing more housing, then we need more loopholes, which are really incentives just like it. Here's another misleading headline. Now, almost all of the 50 states have a lower level of housing inventory than they did pre pandemic, but this headline says, Tennessee housing supply 4% more than pre pandemic levels. All right, some might see that headline and think, Oh, I guess that housing is a little oversupplied. Now, no, not necessarily, because most states had a scarce supply of inventory even before the pandemic hit back in 2020 the next headline is existing home sales fell off a cliff. All right, Did you note that this only includes existing homes, meaning resale homes, because, again, the headline is existing home sales fell off a cliff. So this doesn't include new builds. And there's nothing inherently falsified about some of these headlines. They just get misinterpreted. Softwood lumber prices hit all time record high. Okay, well, with persistent inflation, this might not be reason for alarm. Is it even an inflation adjusted high or not? Here's a headline, California leads the nation in out migration. All right, some people see this and assume that the California population is dropping. Well, maybe, maybe not. Again, the headline was, California leads the nation in out migration? Well, raw numbers aren't per capita. Cali is the largest state by population at almost 40 million. And also, if their in migration exceeds this out migration, well then they had positive net migration. And all of this doesn't even count births or deaths. You'd have to factor that in as well. The next headline is foreclosures Spike 50% year over year. Ooh, that sounds bad. And although this is a fake headline, just like the other ones that I'm telling you about, a phenomenon like this did recently occur, actually, but it's still at a really low level. It just rose from an extremely low level, two tenths of 1% up to three tenths of 1% that's a 50% gain. Here's a headline. You might see mortgage rates have dropped 2% this year. Maybe you'll see that in the future. Most people read something like this, and they assume that real estate values will resultantly soar. Well, maybe, maybe not. It sounds like homes are more affordable, and they would be, but the Fed might be cutting rates because the economy needs the help. It could mean we're in a recession. So if wages are down, even if mortgage rates are down, it might not actually be less affordable. The next fictitious headline is Philadelphia new build home prices surge 8% Oh, you're thinking that's got to be good, right? Well, I don't know what if new build Philly homes are constructed with 10% more square footage this year, but the price is only up 8% so they're actually selling at a lower cost per square foot. And this is also why existing home price change is more meaningful. The next fictitious headline is unemployment claims jump 30% in a week. All right? Well, this usually doesn't mean that there are mass layoffs and some economic Armageddon. If initial jobless claims rise from 200 up to 260k that's a 30% jump, but it's still low relative to recession levels, which are typically 400k plus and the last fictitious headline, Warren Buffett, b, u, F, F, E, T, invests $10 billion in apartment REITs. Oh, well, Buffett was spelled with only 1t Buffett should be spelled with a double T. Have you ever noticed that it is the most frequently misspelled name in financial media that's all for the headlines, so having the wherewithal about these sorts of things can help you better interpret what's happening in Real Estate's Future and the economy's future.    One of the most inexpensive national markets, I'll say, outside the Midwest, where you can own income property, where the numbers really make sense. An investor advantage place is in the state of Oklahoma. Some of these Oklahoma properties that we've begun dealing with here, they're pretty small. Like check out this single family rental I want to tell you about that's just 864 square feet. You know, more tenants desire this type of housing. Family sizes are smaller today, yet they want separation in the privacy of a single family home. And this one is brand new build, two beds, two baths, and the price is, get this $155,000 for new build. Yes, you heard that, right, and the projected rent is really strong. $1,250 I mean, this sort of cottage sized new build home is the type of product that can make the best rental, because if it were double the size, you might only get 50 or 60% more in rent. Now there's no garage on this new build 155k property, and you get all the finishes that you would expect from new construction. The second Oklahoma property to tell you about is this Tulsa duplex. This one really stands out. And Tulsa has over a million people in the metro. It was built just several months ago, $2,900 rent on a purchase price of about 360k and these ones, they've consistently appraised in the 375 to 380k range. So you could very well get some built in equity here with this duplex, where the numbers work pretty well as it is, each side of this new duplex has over 1300 square feet, three beds, two baths on each side, free management the first year, $3,000 cash to you post closing, all the nice finishes you'd expect with new build in this Tulsa duplex. So these two properties I've discussed here are really investor advantaged all new build. And that 155k single family rental was in Chickasaw, Oklahoma. And then the Tulsa duplex in the mid to high three hundreds. The next one is the last one. I'll mention. It's not as good of a deal, but it does look nicer because it's a brick faced new build single family rental for 320k in Lawton, Oklahoma. Lawton is more southwestern Oklahoma, with $2,400 rent, and it's 1800 square feet in this new build and just a little positive cash flow. The property tax rate is 1.1% property insurance is just 1250, a two car garage, all the types of finishes that you would expect with new build. So a property like this is if you're looking for a better quality tenant. Oklahoma City has had more happening than usual. You might have heard that the tallest building in the United States is planned to be built in Oklahoma City, yes, taller than anything in New York or Chicago. The Oklahoma City Thunder NBA team has been performing well. You know, those things are merely interesting and have almost nothing to do with the investor advantage. Rental properties, again, all three that I mentioned, there are new build. Not only are we in this persistent national housing shortage, but these entry level homes that make the best rentals, they're the ones that are in even shorter supply. That's a fact I probably don't mention to you often enough. The home ownership rate is down because of strained affordability, so you may very well have a long term tenant in these properties, and then you layer on the fact that they're new build, and it really looks promising for tenants wanting to stay for the long term. Check out the market and the provider. Learn more at either gre marketplace.com/oklahomcity or slash Tulsa. Yes, new build Oklahoma properties, if you're not sure about the exact address, that's going to provide you with the highest returns, our free investment coaching can help you with that as well borrow dollars with long term fixed interest rate debt that both tenants and inflation just relentlessly pay down for you while your expected price appreciation. Can leverage dollars at the same time. Start at gre marketplace.com/oklahoma, city or slash Tulsa until next week. I'm Keith Weinhold. Don't quit your Daydream.   Speaker 2  44:52   Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional. Additional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC exclusively.   Keith Weinhold  45:16   You know, whenever you want the best written real estate and finance info, Oh, geez. Today's experience limits your free articles access, and it's got pay walls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video. Course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text gre 266, 866, while it's on your mind. Take a moment to do it right now. Text, gre 266, 866,   The preceding program was brought to you by your home for wealth, building, getricheducation.com.

Author and financial expert, Chris Whelan, joins Keith as they explore the intricacies of the housing market's potential future. Chris drops an intriguing prediction of a possible 20% price correction. They dive deep into the complex world of real estate, examining the pandemic's significant impact on mortgages and economic trends. The conversation reveals the behind-the-scenes challenges of the housing market, from government interventions to the nuanced effects of interest rates and forbearance programs. They unpack the struggles in commercial real estate, particularly highlighting the unique challenges in markets like New York's rent-controlled properties. Chris's new book "Inflated: Money, Debt, and the American Dream" promises an insightful journey through America's economic transformation, tracing how the nation evolved from an agrarian society to a global economic powerhouse. Show Notes: GetRichEducation.com/556 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching: GREinvestmentcoach.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, what's the state of the housing market for the next five years, and could what's happening in the foreclosure market affect it? I see relative housing market price stability. My guest sees cracks. This could be somewhat of a debate today, then two great new cash flow and real estate markets in the same state that we're helping your portfolio with on get rich education, mid south home buyers, I mean, they're total pros, with over two decades as the nation's highest rated turnkey provider. Their empathetic property managers use your ROI as their North Star. So it's no wonder that smart investors just keep lining up to get their completely renovated income properties like it's the newest iPhone. They're headquartered in Memphis and have globally attractive cash flows and A plus rating with the Better Business Bureau and now over 5000 houses renovated. There's zero markup on maintenance. Let that sink in, and they average a 98.9% occupancy rate, while their average renter stays more than three and a half years. Every home they offer has brand new components, a bumper to bumper, one year warranty, new 30 year roofs. And wait for it, a high quality renter, remember that part and in an astounding price range, 100 to 180k I've personally toured their office and their properties in person in Memphis, get to know Mid South. Enjoy cash flow from day one. Start yourself right now at mid southhomebuyers.com that's mid south homebuyers.com.   Corey Coates  1:56   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  2:12   Welcome to GRE from Edison, New Jersey to Edinburgh, Scotland, where I am today, and across 188 nations worldwide, I'm Keith Weinhold, and you are back for another wealth building week on get rich education. Today's guest came to me recommended. It came from a guest that we've had on the show here before, Jim Rickards and his daughter Ally Rickards. His name is Christopher Whelan. He has a distinguished background. Comes from a prominent family, and he's the author of a new book that just published a few weeks ago. His father, Richard Whelan, was the biographer of Joe Kennedy, and was advisor to presidents and Fed chairman and today's guest, his son there, Chris. He has done a lot of work in DC. He lives just north of New York City today. So I guess coming recommended from Jim Rickards and learning a few things about today's guest helped me want to host him on the show. So though I'm just meeting him for the first time right here on the show, as it turns out, I learned that he has mentioned on other channels that real estate prices could correct down 20% and fall back to 2020 levels. I absolutely don't see how that's possible in any way. I'm going to bring that up with him, so we'll see. This could turn into somewhat of a debate. Like I said last week, I believe that significantly falling housing prices. That's about as likely as grocery store prices falling back to 2020 levels. Yes, I am in Edinburgh, Scotland today. It's my first time here. My mom, dad and also my brother's entire family came over from the US to meet up. It's been great. We're taking in all the best sites, Edinburgh Castle, other castles, the Scottish Highlands, Loch Ness, though I don't believe in any Loch Ness monster at all. I mean, come on, what a hoax. And we're seeing some other sites, though it didn't really interest the others, which I could understand. I visited the home where Adam Smith once resided, and I might put my video about that on our get rich education YouTube channel, so you could check that out over there. Of course, Adam Smith is considered the father of modern day economics for his work on supply versus demand and the GDP concept, the invisible hand, concept, much of that work conveyed in his magnum opus, The Wealth of Nations, published in 1776 as for the present day, let's meet this week's guest, including me, meeting him for the first time.     I'd like to welcome in a first time guest. He's the author of a widely acclaimed new book. It's named inflated money, debt and the American dream. It just released, and the book couldn't be more timely with the multitude of challenges related to inflation, many involving the housing market in his earlier books, he's been known, frankly, for just telling his readers the truth. He's worked at the Federal Reserve Bank of New York in politics and as an investment banker for more than 30 years. Today, he runs Whalen Global Advisors. You've seen him on CNBC in the Wall Street Journal, and now you're hearing him on GRE Welcome to the show. Chris Whalen.   Chris Whalen  5:43   Thank you, Keith, appreciate your invitation.    Keith Weinhold  5:45   Whalen is spelled W, H, A, l, e, n, if you're listening in the audio only, Hey, Chris, we're in a really interesting time in the economic cycle. We all know the Fed has a dual mandate, high employment and stable prices. What's interesting to me is, late last year, they cut rates by a full 1% and this is despite inflation being above target. Makes me wonder if they care more about high employment and they're rather willing to let inflation float higher. What are your thoughts?    Chris Whalen  6:18   I think historically, that's been the case. You know, the dual mandate Humphrey Hawkins, that drives the Fed's actions today was a largely socialist compromise between the Republicans and the Democrats. The Democrats wanted to guarantee everybody a job after World War Two, the legislation was really about soldiers and people who had served their country in many, you know, places around the world, for a long time, and then you would have the depression. So you had a whole generation or more of people that were looking for help when they came home. And that's what this was. But today, you know, there's another mandate, which is called keeping the treasury bond market open. We saw it was during COVID in 2020 President Trump got up, declared that people didn't have to pay their rent or their mortgages, and then didn't do anything. There was no follow up. At the time, folks in mortgage industry kind of looked at each other funny for about 60 days and said, What's going to happen? Because they have to advance principal, interest, taxes and insurance to protect the house. The first rule in mortgage finances protect the asset. But it all worked because the Fed dropped interest rates to zero and we had a boom. We refinanced two thirds of every mortgage in the United States, and that cash flow allowed the finance forbearance for millions of Americans. Now the unfortunate part, of course, was home prices went up double digits for six years. So why we had no affordability today? So, you know, it helped, but it certainly didn't help in some ways,   Keith Weinhold  7:48   mortgage loan forbearance back in the COVID era about five years ago, where you could basically just skip your mortgage payment and then they increase the overall duration of your loan period.   Chris Whalen  8:00   That's right. So you know, your government market, your conforming market, were falling. They also had various schemes, state forbearance for non agency loans. Nobody thought at all about the multifamily sector and the developers that didn't get paid for two years. And we're feeling the impact of that. Of course, today, that's probably the biggest pain point in US economy today is commercial real estate and multi family real estate, and neither one of them involves a consumer. So it gets no attention at all. You read about it in the specialty press, but that's about it.    Keith Weinhold  8:34   And by talking about multi family not affecting the consumer, you're just talking about who's on the owner side there?   Chris Whalen  8:40   precisely if all of the consumers have problems, you'd hear about it, and you do, especially in some of the blue states. I live in New York, so we have some of the more aggressive rent stabilization, rent control laws in the country. And they go back to World War Two. They go back almost a century,   Keith Weinhold  8:58   right? It's those people in the one to four unit space in residential real estate investing that really got the help there.    Chris Whalen  9:06   Well, at least, you know, the world didn't end. Imagine if all of those people had gone to foreclosure. The industry wouldn't have done that. Of course, they would have thrown up their hands and cried for help. But the point is, they made it work. But the cost of making it work that zero interest rate regime that the Fed put in place is still being felt today. If you look at banks which typically have prime large mortgages on their books, the loss given default is zero. Home prices are so high that if somebody actually goes to foreclosure, they sell the house, they pay off the loan easily, and there's usually a large residual left, which would go to the homeowner. So today, you know, if somebody gets in trouble, we do a short sale, we do a deed in lieu, and off they go. And that's why the stats don't show you the pain that many American families are feeling today, because about 60% of all payoffs of one to four family mortgages are people who. Are exiting the market, they're not going to buy another house. So what that means is that the cost of home ownership, or whatever other factors are involved, has made them make the decision not to go to another home mortgage.    Keith Weinhold  10:13   Yes, we have this historically low affordability that's beginning to be reflected in the home ownership rate. It's trended down from about 66 to 65% recently, we continue to be in this environment here, Chris in the one to four unit space, where those existing homeowners are in really good shape. They have record high equity levels of over 300k A lot of them have their home paid off. About 40% of American homeowners own their home free and clear, and of the remainder, those borrowers, 82% still have a mortgage rate of under 5% and of course, that principal and interest payment stays fixed. So even if there's economic hardship, it's pretty easy for people to make their payments and stay in their homes.   Chris Whalen  11:02   Well, it certainly is for most of the marketplace. If you look at the bottom 20% the FHA market, also the VA market, there's a little more stress there. There's still an awful lot of people who are in various types of forbearance in that market. That's going to end in October. So the Trump administration is pushing most of the rules back to pre COVID approaches for delinquency, for example, what we call the waterfall. And what that basically means is that if an FHA borrower gets in trouble, they'll have one shot at a modification where they lower the loan cost and stick part of the loan out the back to be paid off when the house is sold. If that doesn't take, if they don't re perform, then they're going to go to a foreclosure. We just ended another program for veterans. You know, they had three weeks notice, so now you're going to see a lot of veterans going to foreclosure. Unfortunately.   Keith Weinhold  11:56   yes, this administration is basically making sure that people are responsible or resume their payments. We've seen that student loan repayments needing to resume as well. Most foreclosure rate types are still pretty low, but yes, FHA foreclosure rates are higher than those for conventional loans.    Chris Whalen  12:15   Yeah, the interesting thing is, the veterans delinquency rate is half of the FHA rate, and even though people in uniform don't make a lot of money, they pay their bills. Yeah, it's quite striking.   Keith Weinhold  12:25   Why don't you talk to us more about areas where you see distress in the housing market before we talk about more inflation? Chris, the   Chris Whalen  12:34   key areas of housing stress at the moment are commercial real estate that has become underutilized. COVID drove a lot of this, but also the fact that industries could change their work practices. It could have people work from home. Look at housing. We sent everybody home in 2020 while we increased headcount by a third to address a surge in lending volume. It was insane. I gotta tell you, we were hiring people that we didn't see for months that changed the business model assumptions for a lot of industries. A lot of them moved out of blue states and went down to Florida and Texas. In the mortgage industry particularly, and so we have a lot of older real estate particularly, that is suffering. It has dropped in terms of appraised values. You also have higher interest rates and higher cap rates, that is to say the assumption of returns on the part of investors. So that hurdle has made a lot of these properties impaired, essentially. And then the other subclass is older multifamily properties. Think about those beautiful old apartments in the middle block up on the east side or the west side of Manhattan. They're not big enough to be viable, and so they have become this kind of subprime asset class, much in the way if you recall the signature bank failure, they typically bank these sorts of real estate properties, and now there's nobody that wants them. I think you're going to see some very specific pain coming out of HUD, and also Fannie Mae and Freddie Mac because they bank some of these smaller properties that really aren't bankable by commercial banks. That's what it comes down to. If you're going to read about this and hear about it a lot in the commercial market over next several years. And again, you know, the losses on bank owned multifamily properties today are averaging 100% so that means that there are a lot that have more expenses than simply losing the full loan amount. And you know, if you want to have a bank loan, they're not taking these properties. They don't want them, right? So the bank, REO rate, if you look at the data from the FDIC, is zero. And what that tells you is that they can't sell the properties they don't want them, because if they take ownership, the city's not going to let them abandon the property. They'll have to keep it and maintain it. It's a tough situation. This is. Has evolved over the last 20 years or so, because consumer incomes have been kind of stagnant in real terms. But the cost of operating a property in New York City is not going down. It's going up quite a lot, and the legislation we've seen from Albany doesn't allow owners to recapture expenses, doesn't allow them to renovate apartments. So if I have a rent stabilized apartment, I'll use a real example, in a beautiful building on Central Park South right, to renovate a unit that's been occupied for 20 years, new kitchen, new bathroom, sir, everything services. That's $150,000 so if I'm the owner and I can't recapture that cost. What do I do? I lock the door, I gut the apartment, and I lock the door, and I hope that the laws will change in the future, because I can't rent it, my insurance underwriter will not allow me to rent out an apartment that's not brought up to code. That's New York law, but the folks in Albany don't care about that. We have some really unreasonable people in positions of authority, unfortunately, in some of these states, and you talk to them about these issues, and they don't care. They just pander to consumers, regardless of whether or not it makes sense or not. And that's just the way it is.   Keith Weinhold  16:15   Those evil landlords, quote, unquote, most right evil. They're just mom and pop investors that are trying to beat inflation with real assets, and they have real expenses. Rent Stabilization basically just being a genteel term for rent control, which gives no one an incentive to improve a property for sure   Chris Whalen  16:35   and it reduces the availability of housing ultimately, because nobody builds. You see that in New York right now the home market is pretty tight, up to the conforming limit for Fannie Mae and Freddie Mac so you figure a million, 1,000,002 here in New York. But above that, it's quieted down quite a lot. There's compression in some of the higher end homes. And you know, if you go down south, you see a different problem, which is over building. They didn't want to build here, so they went down to the Carolinas and Texas and Florida. There's a huge amount of both multi family condo type developments and single family homes too. But above that average price level way above half a million dollars.   Keith Weinhold  17:15   Sure, it's made this dynamic where things have been flip flopped in the Northeast and Midwest, where the populations aren't growing very fast, those markets have been appreciating more than those in the high growth southeast, all coming back to supply. They're not bringing on enough new supply in the Northeast and Midwest, Chris has just laid out a few reasons for that, due to this high regulation. And then in the southeast, a high growth area, even though that's where people are moving, we're not getting much appreciation there, because you're able to build and that supply is able to keep up with demand. Well, Chris and I are going to talk more about the housing market and about inflation. When we come back, you're listening to get rich education. Our guest is Chris Whelan, the author of a great new book. I'm your host. Keith Weinhold.   the same place where I get my own mortgage loans is where you can get yours. Ridge lending group and MLS, 42056, they provided our listeners with more loans than anyone because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. Start your pre qual and even chat with President Caeli Ridge personally. While it's on your mind, start at Ridge lendinggroup.com. That's Ridge lendinggroup.com.    You know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom. Family investments, liquidity fund again. Text family to 66866.   Kathy Fettke  19:45   this is the real wealth network's Kathy Fettke, and you are listening to the always valuable get rich education with Keith Weinhold.    Keith Weinhold  20:00   You welcome back to get rich education. We're talking with the author of a great new book, Chris Whelan, it's called inflated money, debt and the American dream. Chris, I see the residential housing market and their price points as being resilient. I'm kind of looking around and seeing if you have any places where you think that there are any cracks in that? I've heard you talk elsewhere about a housing price correction. Were you talking in the one to four unit space? And how do you think that could happen?   Chris Whalen  20:31   I didn't come up with that idea. I did a biography of my good friend Stan middleman, who's the founder of freedom mortgage. It's a real rags to riches story of a successful entrepreneur, a great guy, by the way, is a beloved man in the mortgage industry. And so what he believes is that cycles are about a decade in terms of human behavior. And he says misery on the eights, which is kind of a cute way of saying it. And what Stan is basically saying is you eventually see so much price appreciation that affordability goes to zero. You run out of buyers, is another way to put it. And then once the Fed gooses it, he thinks we see an interest rate decline this year next year, perhaps you get rates to run a little bit. You get volumes to jump the way they did last summer. You remember, in the third quarter, we had great volumes in the mortgage industry, carried everybody through to the end of the year, and then after that, he says, we get a price correction, maybe back down to 2020 21 levels. So we're talking about a 20% price correction, and we're talking about the loans that have been made in the last few years being underwater. That's something we haven't talked about in a long time. We haven't talked about that since 2008 so I think that Americans inevitably have to see some kind of a correction. What the Fed did was wrong, what they did was excessive. I write about that in the end of my book, but unfortunately, the result is home prices that have galloped along, and eventually you got to reset it. Part of its supply coming online. Part of it is simply, like, I say, you run out of buyers, and when it's simply that purchase buyer who is either all cash or happens to have the deposit, and that's all you have. And there's no flexibility for people that want to get into the market. You know, that's tough. I could recall Paul Volcker years ago, we were talking about that in the book too. He ratcheted down home prices. He raised interest rates so much that home prices went down, and a lot of builders went out of business who had had a lot of snls go out of business, and, you know, the previous decade. So that was a tough time. We didn't even start to do that this time around, because they were afraid to the Fed is worried about keeping the Treasury market open, so they are afraid of deflation, which unfortunately means you don't get those opportunities to get into the market. I remember my parents, when I was very young, they would buy busted homes in Washington, DC. It was a great way to make a lot of money, and in five years, the House would double. That's the kind of market Washington was   Keith Weinhold  23:05   in my opinion, I don't see how there could be any substantial residential home price correction. Historically that happens when there's a wide swath of homeowners that get into financial trouble, like I was talking about earlier, the homeowner is in great financial shape today. In fact, since World War Two, we've only seen home prices drop substantially during one period. That was that period around 2008 and that's when we had conditions that are opposite of what they are today. We had loans underwritten with liar loans. We had an over supply of homes, like I was saying earlier, inflation can't touch one's principal and interest payment. We're still under supplied with homes. Most experts don't think we'll get that into balance for at least five years. I really don't see how home prices could fall substantially. I also don't see how they could rise substantially, like, say, 10% due to that low affordability, but I expect continued stability in prices?    Chris Whalen  24:02   Well, we'll see. I'm not as sanguine about that, because a lot of people feel house rich on paper, but when the bottom of the stack is really hurting as it is now, FHA delinquency rates really are in probably the mid teens. You don't see that yet in the middle with the 727, 40 FICO type borrowers. But I think over time you could, and if, again, it depends on the economy and some other factors, but I'll tell you right now, you're already seeing a correction in the hyad the bottom half, no. And there's a supply problem here, which I agree with you on. It's going to keep those home price is pretty firm. And even where I am in New York, for God's sake, Keith, there's no construction here. So we just had a house across the street from me go from million one. I live in Sleepy, hollow New York, and you know, this is typically around the conforming limit for prices for most of these homes, and it went for 150 $1,000 over the ask, it was crazy. Went in two weeks now, during COVID, we saw this sort of behavior, and we thought, Well, okay, you had zero interest rates. I got a 3% mortgage, by the way, awesome. But here we have a situation when markets cooled down a lot, and yet the lack of availability is really the driver. So in that sense, I agree with you, but I do think the high end could correct rather substantially.   Keith Weinhold  25:24    And of course, in multi family apartments, that's different. That's where values in a lot of markets have been depressed by more than 30% they were subject to those interest rates being jacked up, and we're still going to see balloon loans mature and people default on those in apartments. The pain is not over with air, but at some point that's going to bottom out, and that'll be a buyer opportunity in apartments.   Chris Whalen  25:47    Well, the thing is, new stuff is going fine. It's what happens is when the new gets built, the older assets down the road get discounted. That's really what's going on. People love new as you know, these kids love a new house, as opposed to an older house.   Keith Weinhold  26:02   Yes, that'll help reset the prices in the new market when you can compare those to what existing values are. Well, Chris, talk to us more about your new book and what the overall thesis of the book is in these critical times.    Chris Whalen  26:16   Inflated is meant to help people understand how our country went from agrarian, sleepy, isolationist America in the 1900s to being the dominant economy in the world and the provider of global money. We talk about how we got here. We talk about Abraham Lincoln and Franklin Roosevelt and many other characters. Obviously, we had to talk about Andrew Jackson, who is now embodied in our president, Donald Trump. We try and frame how this is all going to evolve in the future. And my thesis is basically the global currency role is something you get during or after a war. We took the baton from Great Britain after the First World War, and then by the end of World War Two, everybody in the world was broke, except for us. It was last man standing. And so rebuilt the world. We let everybody take advantage of us, and now President, who's saying, Nope, we got to change this. I think if it wasn't Trump, it would be somebody else. To be honest with you, Americans are tired of high inflation. They're tired of some of the other costs that come along with being the global reserve currency, so we try and frame all of this in an understandable way. And I particularly talk about housing during COVID and how that all really, I think, changed things for many Americans. Home ownership has been one of the basic ways we create wealth in this country, and the fact that we didn't have an opportunity for people to get in cheap with a fixer upper or a house that was foreclosed. You know, I think it's unfortunate, but the system just can't tolerate it. We've gone in 2008 and then in 2020 through two very significant crises when the government bond market stopped working. So we talk about that as well.   Keith Weinhold  28:03   I don't predict interest rates. I think it is really difficult to do you mentioned earlier about the prospect for lower interest rates coming. Everyone wants to know about coming. What's your outlook for the future of interest rates and inflation for just say the next five years? Chris,    Chris Whalen  28:19   I think interest rates will drop. That is to say what the Fed controls, which is short term interest rates. In the next year or so, we'll have a little bit of a boom as a result. But I think the concern about the federal deficit and US debt, the volatility caused by President Trump's trade strategy, and just general I think a sense of uncertainty among investors is going to keep long term interest rates higher than we saw during COVID And really the whole period since 2008 the Fed bought a lot of duration and took it out of the market, so they kept rates low. They're not going to do that as much in the future. I don't think they'll buy mortgage securities again, they are very chastened by that experience. So if they don't buy mortgage backed securities, and if the banks don't become more aggressive buyers, and I don't think they will, then you know, the marginal demand that would drive mortgage rates down is just not going to be there. Banks have been holding fewer and fewer mortgages and mortgage backed securities on their books for 35 years. If you look at the growth in the industry, the dollar amount of one to four family mortgages hasn't changed very much. So when you look at it that way, it's like, you know what's wrong? Two things. They want to only make mortgages to affluent households. They want to avoid headline risk and litigation and fines and all of that. And I think also, too some of the Basel capital rules for banks discourage them from holding mortgages and mortgage servicing rights, which is an area I work in quite a lot.   Keith Weinhold  29:55   It seems to me, like increasingly, the powers. It be the United States government just won't let the homeowner fail. They want to do so much to promote home ownership over the long term, we see relative ease with getting a mortgage. We've seen lower down payment requirements during other times, including COVID. We see the government jump in with things like mortgage loan forbearance and an eviction moratorium for renters. They just don't want to let people lose their homes. It just seems like there's more propensity to give homeowners a greater safety net than ever. Well,   Chris Whalen  30:29   we've turned it into an entitlement. Yeah, and Trump is changing that at the federal level. The states, the blue states, are going to continue to play that game at the state level, and they can even have state moratoria. But what's going to happen, and I think sooner rather than later, is you may see the federal agencies start to tier the states in terms of servicing fees, simply to reflect the cost. It takes over 1400 days to do a foreclosure in New York. Gosh, that is a big problem. You can lose the lien in New York now, it takes so long. So I think that, you know, from an investor perspective, from a developer perspective, it's not an attractive venue. That's just the reality. Then you even California is as progressive and as activists as it is, you can still get a foreclosure done very quickly using the trustees. It's just a totally different situation. If there are complications, you can get into a judicial foreclosure, which will take longer. But still, California works. New York is deliberately dysfunctional. We have people in the state legislature who are in foreclosure themselves, and they keep passing these laws. So, you know, I think at the federal level, you're going to see it roll back to pre COVID, but I will say that forbearance, both with respect to the agency and conventional market and private loans, is kind of the rule. Now we work with the borrower much more than we would in the past. It's it is really night and day.   Keith Weinhold  32:00   Chris, your new book has gotten a lot of acclaim. Let us know anything else that we should know about this book, and then if we can get it in all the usual places   Chris Whalen  32:10   you can buy it at Barnes and Noble Amazon. I have a page on my website, RC, waylon.com, with all the relevant links. But the online is the best way to get it. Most of the sales are on Kindle anyway, but well over 90% are online, so we don't have to worry about physical books. I think we'll be doing some book signings in the New York area. So we'll definitely let you know about that.   Keith Weinhold  32:33   One last thought is that the rate of inflation means more to a real estate investor than it does to a layperson, maybe five times as much or more, because when we borrow for an income property, our asset floats up with inflation. That part's really just a hedge on inflation. Our debt gets debased by inflation, which is really a mechanism for profiting from inflation over time. And then, thirdly, our cash flow tends to go up even faster than the rate of inflation, since our principal and interest stays fixed, so real estate investors can often be the beneficiary of inflation. It's sort of strange to go root for a force like inflation that can impoverish so many people. But what are your thoughts with respect to real estate investors and inflation?   Chris Whalen  33:19   Well, you know, it's funny when Jerome Powell at the Fed says that they have a 2% inflation target, my response is, well, we better have at least 2% inflation if we're going to make commercial real estate work. Commercial real estate went up for 75 years after World War Two. I can remember when I was in the rating business at Crowell bond ratings going to see some of the banks here in New York, their multifamily books had only seen the equity underneath the asset go up and up and up. In other words, the land ended up being 90% of the value, you know, 1520, years after the purchase and the improvements were almost worthless simply because the land appreciated so much. Now that has changed since COVID. A lot of commercial real estate, particularly has gotten under a bit of a cloud. You've seen falling prices. However, in parts of the country that are growing where you have a positive political environment, positive economic environment, you're still seeing fantastic growth in both commercial and multifamily markets. So I think being very careful and patient in doing your homework in terms of picking venues is more important now than ever before. You know, I'll give you an example. Down in Florida, we're building new malls every day. The mall down the road that's 15 years old. There's nothing wrong with it, but it's 15 years old. And so the price discounts that you're seeing for existing assets are rather striking. Same thing down in the Carolinas, down in, you know, Atlanta, and going down to the Texas growth spectacle, I'm always astounded by what's going on in Texas. They built so much in that whole area around South Lake, out by the airport. It, they're going to basically subsume used it. So, you know, in those markets, you have great opportunities, but you also have over building. And so we're going to see some cycles where they're going to be deals out there for projects that maybe were a little too ambitious have to get restructured, and astute investors can come in and do very well on that   Keith Weinhold  35:20   like we often say around here, in real estate investing, the market is typically even more important than the property itself. The name of Chris's new book, again, is inflated money, debt and the American dream. It has an awful lot of intersections with real estate investors and how they can play inflation. Uh, Chris has been a terrific conversation about the real estate market and larger market forces. It's been great having you here on the show.   Chris Whalen  35:47   Thank you, Keith. Let's do it again.   Keith Weinhold  35:49   Yeah, some good insights from Chris, a smart guy. And gosh, what a really sad state for rent stabilized apartments in New York City, where landlords of some of those properties, they would have to spend sometimes hundreds of 1000s of dollars in order to bring them up to code, but then they couldn't charge enough rent to offset those expenses due to government intervention and price fixing, so landlords just lock up the property vacant. And this sort of harkens back to when we were talking about some of this last year, when we had documentary film maker jen siderova on the show with her film called shopification, and it was about how rent control slowly makes neighborhoods fall into disrepair. All right, Chris and I had some difference of opinion there on the prospects for a home price correction. I think I made most of my points. He did, though, talk about running out of home buyers. If I have him back, maybe I'll pick up right there. More buyers are baked into the demographics, like I think I shared with you one time the US had its highest ever birth rate years between 1990 and 2010 more than 4 million births per year for a lot of those years. Just to review this with you, you might remember that 2007 was the US is peak birth year. Add 38 years to that for the average first time homebuyer age, and that housing demand won't even peak until 2045 and it will continue to stay high for a few years after that. So that's where the demand is just going to keep coming from, just piling on. And when I say that loan conditions have eased for American homeowners, like I did there during the interview, of course, what I'm talking about is the long term. I mean, lending conditions got more rigid after 2008 and with the adoption of Dodd Frank. What I'm talking about is, before the Great Depression, it was most common to have to make 50% to 60% down payments on property, and you had to repay the entire note in five to 10 years. I mean, can you imagine how that would hurt affordability today and then later, by 1950, 15, year loans were the common one. I mean, even that would impair affordability today. Today, 30 year loans are the common one, and you can put as little as 3% down on a primary residence. A lot of people don't know that either. It does not take 20% on a primary residence. So that's what I mean about the relative ease of credit flow today. Now, Chris has knowledge about other parts of the real estate market that I don't for his work inside DC and in other places like the foreclosure market. We talked about some of that right after the interview. For example, He was letting acronyms like NPL roll off his tongue, and I had to ask him what that meant. That's a non performing loan. Check out Chris's new book. Again, it's called inflated money debt in the American dream. And again, his website is RCwhalen.com and Chris also has a great sense of history, which we didn't get into, longtime real estate guys radio show co host Russell gray and I will discuss monetary history here on the show soon. Like I said, I'm coming to you from Edinburgh, Scotland this week, even if you don't see great sites, you know, it's interesting just walking the historic streets here, if you're an American that's visited here before, you surely know what I mean. And I told you that I'd let you know, the current real estate transaction I'm involved in is paying $650 a night for the hotel here in Edinburgh. Yes, that's a lot. I've actually paid less for fancier places in Dubai, but this hotel here is on the Royal Mile. Of course, I could have found less expensive accommodations elsewhere.    Speaking of less expensive, here's an announcement. And we have new investment property providers at GRE marketplace, two of them, the markets are both in Oklahoma, and they are Oklahoma City and Tulsa, Oklahoma as a state, is known for landlord friendly eviction processes and legal systems, kind of the opposite of New York. So this makes your property management more predictable. Now, when we look at this city, OKC has the lowest priced new single family rentals. I can think of it under 160k Yes, that really puts the exclamation point on inexpensive and favorable rent to price ratios often exceeding 1% which is obviously attractive for cash flow, meaning a 150k single family rental could yield over $1,500 in rent. There's high rental demand in certain sub markets. We have scouted out those exact places for you in the OKC metro, like Edmond Moore spelled M, O, O, R, E, and Midwest City, all supporting consistent rent income, though it was once really oil dependent, OKC has diversified economically, reducing your risk tied to commodity cycles and ok sees local economy that's supported by industries including aerospace, energy, health care and logistics. Then there's Tulsa. Tulsa has the highest cash flowing new build duplexes, perhaps anywhere in the US that I know about. On the single family rental side, a lot of Tulsa investors can find properties under 150k with monthly rents again exceeding 1% of the purchase price, clearly ideal. So yes, both Oklahoma City and Tulsa are now on GRE marketplace. You can either visit the pages and see them there, or one of our qualified, experienced GRE investment coaches. Meet with them. They can help guide you to the very best deals and show you the specific property addresses available right at this time for whatever best meets your needs. If you're looking to either start or expand to another market and you seek cash flow, you really need to consider Oklahoma. Yes, it is free to have a strategy session with an investment coach, whether that's for Oklahoma or other investor advantage regions. I often like to leave you with something actionable. You can start at GREinvestment coach.com start book a meeting for a free strategy session remotely. That's at GREinvestment coach.com, until next week, I'm your host. Keith Weinhold, don't quit your Daydream.   Dolf Deroos  42:51   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Advice, opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC exclusively.   Keith Weinhold  43:14   You know, whenever you want the best written real estate and finance info, oh, geez, today's experience limits your free articles access and it's got pay walls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters, and I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read, and when you start the letter, you'll also get my one hour fast real estate video. Course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text gre to 66866. While it's on your mind, take a moment to do it right now. Text, gre to 66866.   The preceding program was brought to you by your home for wealth, building, getricheducation.com.

Keith discusses the mortgage landscape, emphasizing the benefits of cash-out refinances with Ridge Lending Group President, Caeli Ridge. They unpack the Trump administration's plan to privatize Fannie Mae and Freddie Mac, which could impact the mortgage market. Investors are discovering powerful strategies to leverage property equity and optimize their financial portfolios. By understanding innovative borrowing techniques, savvy real estate investors can access tax-efficient capital and create sustainable wealth-building opportunities. Consider working with a lender that specializes in investor-focused loan products and provides comprehensive education on the options available.  Resources: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Show Notes: GetRichEducation.com/554 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching: GREinvestmentcoach.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, we're talking about the mortgage loan landscape in this era. Is title insurance a rip off today? Is it worth it for you to pay discount points at the closing table to get a lower interest rate? Learn about how a cash out refinance. Is your ability to borrow tax free, much like a billionaire does, and what are the dramatic changes that the current administration could take to alter the mortgage environment for years, all today on get rich education.    Speaker 1  0:34   Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, who delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests include top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:20   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:36   Welcome to GRE from Liverpool, England to Livermore, California and across 188 nations worldwide. I'm Keith Weinhold, and you are listening to get rich education, the voice of real estate. Since 2014 it's been estimated that there are about 800 billionaires in USA, and hey, you might be one of them, but there's a pretty good chance that you aren't well. When it comes to lending and mortgages, you can actually take a page out of a billionaires playbook and do something very much like what they do whenever you perform a cash out refinance if you've got dead equity in a property, and you can borrow against your own home to a greater extent than you can against your rental properties, even either one of those is a tax free event, you've now got tax free cash, and you can use that money on anything from investing it in the stock market To using your proceeds for a down payment on more real estate or buying a boat or going to Disneyland, and you didn't have to relinquish your asset at all. You continue to hold on to the asset. Now, the mechanics are somewhat different, sure, but when you do a cash out refinance like this, it's a bit like billionaires borrowing against their stock. Instead, you're borrowing against the value of your real estate. In fact, listening to this short clip, it's Trevor Noah talking about how billionaires do exactly this, and you'll notice that the crowd laughs because it actually sounds funny that you can really do this,    Speaker 2  3:22   the shares that they hold in a company, because it is an unrealized gain, right? So they go like, yeah, you're worth 300 billion, but we can't tax you on those stocks because you haven't sold the shares, so you don't, like, have the money. And I understand the argument. They go like, No, you don't have it. It's just what it's worth, because it will also crash, and then you have nothing, so we can't tax you on it. Then I'm like, Okay, I understand that. Then Elon Musk offers to buy Twitter, all right? He offers to buy it. And then he says in his offer, he goes, I'm putting up my Tesla stock as collateral. Then I'm like, so you do have it? Then he's like, no, no, no, no, I don't have it. I don't have it. I'm just gonna say so then they accept the offer. He now buys Twitter. Now that they've accepted his offer, he now goes to private equity and banks and like other rich people and whatever. He goes like, can you guys borrow me the money to buy Twitter? And then he's like, I'm I want to buy Twitter because I don't want to sell any of my Tesla shares, so I want to use your money to buy Twitter. And then it's like, but then they're like, What are we loaning it against? And he's like, Well, my Tesla shares. Then I'm going, like, Wait, so, so you, you can, you can buy a thing based on what you have, yes, but when we want to tax you, you can say, I don't have it. Do you hear what I'm saying here?   Keith Weinhold  4:46   Yeah, you can borrow against your real estate if you have substantial equity in it. We'll talk about just how much now billionaires borrow against their stock holdings using financial products like portfolio lines of credit or. For securities based loans. These are the names for how they do it, essentially taking out loans and using their stock as collateral. And this allows them to access cash without selling their assets and without incurring capital gains taxes, much like you can so you can say that you don't want to sell your property in you don't have to go through some capital raising round either, like a billionaire might have to when they're borrowing against their stock. You can just have a more standard mortgage application for your cash out refinance, and you don't even have to have a huge portfolio. I mean, even if you just own one 500k property with 50% equity in it, you can do this so it's available to most any credit worthy person, again, tax free. But of course, this doesn't mean that you always should take this windfall, because it often creates a higher monthly payment. You've got to be the one that makes that decision in controlling your cash flows, that is key. I'll talk about that some more with today's terrific guests. Also the Trump administration's desire to privatize Fannie Mae and Freddie Mac we're going to talk about that and what that would do to the mortgage landscape. I am in the USA today, next week, I'll be bringing you the show from London, England for the first time, the following week, from Edinburgh, Scotland. Yes, the mobile GRE Studio will be in effect. I typically set it up myself, and I usually don't need the help of the hotel staff for an appropriate Sound Studio either. And then shortly after that, I will be in Anchorage, Alaska, where I'm competing in these fantastic mountain running races. And then by next month, that's where I hope to meet up with you in person for nine days of learning and fun, as I'll be in Miami as part of the faculty for the terrific real estate guys invest or summon at sea, where we're all going to disembark from Miami and go to St Thomas, St Martin and the Bahamas, and then after that great event, it is a long flight from Miami back to Anchorage again. And that's got to be one of the longer domestic flights, not just in the nation, but in the world, Miami to Anchorage, and then shortly after that, I will be in the Great Northeast early this summer, New York and Pennsylvania, including for my high school reunion. So I'll really be putting the miles on these next couple months. One interesting thing that I've noticed for next week's show, where I'll be joining you from London, is how much I'm paying per night at both my hotel in England and then later my hotel in Scotland. That's obviously a short term real estate transaction. These are some of the more expensive places in the world, really. So next week and then the week after, I just think you'll find it interesting. I'll tell you how much I'm spending per night in both London and then Edinburgh. And they're both prime locations, where the hotels are the center of London and then right on Edinburgh's Royal Mile. That is in future weeks as for today, let's talk about the mortgage landscape with this week's familiar and terrific guest.   I'd like to welcome in one of the more recurrent guests in our history, so she needs little introduction. She's the longtime president of the mortgage company that's created more financial freedom for real estate investors than any lender in the nation because they specialize in income property loans. It's where I get my own loans for my own rental properties. Ridge lending group. Hey, welcome back to GRE Caeli ridge.    Caeli Ridge  8:57   Thank you, Keith. You know I love being here with you and your listeners. I appreciate you having me.   Keith Weinhold  9:01   You've helped us for so long. For example, who can forget way back in episode 56 Yeah, that's a deep scroll back when Chaley broke down each line of a good faith estimate for us, that's basically a closing statement sheet. She told us exactly what we pay for at the closing table, line by line like origination fee, recording costs and title insurance so helpful. It's just the sort of transparency that you get over there. Buyers pay for title insurance at the closing table. It is title insurance a rip off. A few years ago, a lot of people speculated that title insurance would fade away because the property's ownership could be transparent and accessible to everybody on the blockchain, but we don't really see that happening. So tell us about title insurance, and really, are we getting value in what we pay for there at the closing table?   Caeli Ridge  9:54   Well, I think the first thing I would say is that it really isn't going to be an option as far as I. Know, as long as the individual is going to source institutional funding leverage use of other people's money, they're going to require the lender, aka Ridge lending, or whoever you're working with, they're going to require that title insurance that ensures their first lien position. Doing that title search, first and foremost, is going to make it clear that there isn't some cloud on title, that there isn't some mechanic lien that had been sitting out there for however many years it may have just been around. And those types of things never go away. So for a lending perspective, it's going to be real important that that title insurance is paid for and in place to protect their interests, things like judgments, tax liens, like I said, a mechanic's lien, those will automatically take a first lien position in front of a mortgage. So obviously we're not going to risk that and find ourselves in second lien position in the event of default and somebody else is getting paid before we are. So not really an option. Is it a rip off? I don't know enough about how often it's paid out, and not to speak to that, but I will tell you that it isn't a choice.   Keith Weinhold  11:07   Title Insurance, like Shaylee was talking about. It protects against fraud related to the property's ownership, someone else claiming rights to the property, and this title search that an insurer does it also, yeah, it looks for those liens and encumbrances, including unpaid taxes, maybe unpaid HOA dues, but yeah, mortgage lenders typically require title insurance, and if you the borrower, you might think that's annoying. Well, it does make sense, because the bank needs to protect their collateral. If a bank ever has to foreclose, they need to have access to you, the borrower, to be able to do that without any liens or ownership claims from somebody else. Caeli, how often do title insurance companies mess up or have to pay out a claim? Does that ever happen?   Caeli Ridge  11:50   I mean, if I have been involved in a circumstances where that was the case, it's been so many years ago, they're pretty fastidious. I don't know that I could recall a circumstance where something had happened and the title insurance was liable. They go through the paces, man, they've got to make sure that, and they're doing deep dives and searches across nationwide to make sure that there isn't any unnecessary issue that's been placed on title Not that I'm aware of. No.    Keith Weinhold  11:50   Are there any of those other items that we tend to see on a good faith estimate that have had any interesting trends or changes to them in the past few years?    Caeli Ridge  12:27   Yeah, I've got a good one, and this is actually timely credit reports. So over the last couple of years, something has been happening with credit reports where, you know, maybe three, four years ago, a credit report, let's say a joint credit report, a husband and wife went and applied that credit report might cost 25 bucks. Well, now it's in excess of 100 plus. Some of what we're going to be talking about today, it kind of gets into the wish list of Jim neighbors, who is the president of the mortgage brokers Association. He's been talking to the administration about some of his wishes, and credit report fees is actually one of the things that they're wanting to attack and bringing those costs down for the consumer. So when we look at a standard Closing Disclosure today, credit report costs have increased significantly. I don't have the percentages, but by a large margin over the last couple of years,    Keith Weinhold  13:21   typically not one of your bigger costs, but a little noteworthy. There one thing that people might opt and choose to have on their good faith estimates, so that borrower therefore would actually pay more out of pocket with today's higher mortgage rates. And I'm sure not to say high, because historically, they are not high. Do we see more people opting to pay discount points at the closing table to get a lower rate and talk to us about the trade offs there   Caeli Ridge  13:46   right now, first and foremost, that there isn't a lot of option for investment property transactions, whether it be a purchase or refinance. There's not going to be that option where the consumer gets to choose to say, Okay, I want to pay points for a lower rate or not pay points for a higher rate the not paying points is the key here. There isn't going to be a zero point option for investment property transactions. And this gets a little bit convoluted, and then I'll circle back and answer the question of, when does it make sense to pay the points, more points versus less points? We have been in a higher rate environment that I think a lot of people have become accustomed to as a result secondary markets, where mortgage backed securities are bought and sold, they keep very close tabs on the trends and where they think things are headed. Well, something called YSP, that stands for yield, spread, premium, under normal market circumstances, a consumer can say, okay, Caeli, I don't want to pay any points. Okay, I'll take this higher interest rate, and I don't want to pay any points, because that higher interest rate is going to have YSP, yield, spread, premium to pay compensation to a lender, and you know, the other third parties that may be involved in that mortgage backed security. But. Sold and traded, etc, okay? They have that choice under normal market circumstances. Not the case right now, because when this loan sells the servicing rights, whoever is going to pick up the servicing rights, so when Mr. Jones goes to make his mortgage payment, he's going to cut a check to Mr. Cooper. That's a big one, right? Or Rocket Mortgage, or Wells Fargo, whoever the servicer is, the servicing rights are purchased at a cost. They have to pay for the servicing rights, and let's say that's 1% of this bundle of mortgage backed securities that they're purchasing. Well, they know the math is, is that that servicer is going to take about 36 months before that upfront cost is now in the black or profitable. This all will land together. Everybody, I promise you stick with me, so knowing that we've got about a 36 month window before a servicer that picked up the rights to service this mortgage is going to be profitable in a higher rate environment, as interest rates start coming down, what happens to the mortgage that they paid for the rights to service 12 months ago, 18 months ago, that thing is probably going to refinance right prior to the 36 month anniversary of profitability. So that YSP seesaw there is not going to be available for especially a non owner occupied transaction. So said another way, zero point rates are not going to be valid on a non owner occupied transaction in a higher rate environment when secondary markets understand that the loans that are secured today will very likely be refinanced prior to profitability on the servicing side of that mortgage backed security that is a risk to the lender, yes. So we know that right now you're not going to find a zero point option. Now that may be kind of a blanket statement. If you were getting a 30% loan to value owner occupied mortgage with 800 credit scores, you know that's going to be a different animal. And of course, you're going to have the option to not pay points. The risk for that is nothing. Okay, y SP is going to be available for you, the consumer, to be able to choose points at a lower rate, no points higher rate. When does it make sense to pay additional points? Let's say to reduce an interest rate, the break even math. And you know, I'm always talking about the math, the break even math is actually the formula is very simple. All you need to do is figure out the cost of the points. Dollar amount of the points, let's say it's $1,000 and that's what it's going to cost you to, say, get an eighth or a quarter or whatever the denomination is, in the interest rate reduction. But you aren't worried about the interest rate necessarily. You're looking at the monthly payment difference. So it's going to cost you $1,000 in extra points, but it's only going to save you $30 a month in payment when you divide those two numbers, what's that going to take you 33 months? 30 well, okay, and does that make sense? Am I going to refinance in 33 months? If the answer is no, then sure pay the extra 1000 bucks. But that's the math, the cost versus the monthly payment difference divide that that gives you the number of months it takes to recapture cost versus cash flow or savings, and then you be the determining factor on when that makes sense.    Keith Weinhold  18:10   It's pretty simple math. Of course, you can also factor in some inflation over time, and if you would invest that $1,000 in a different vehicle, what pace would that grow at as well? So we've been talking about the pros and cons of buying down your mortgage rate with discount points before we get into the administration changes. Cheley talk about that math in is it worth it to refinance or not? It's a difficult decision for some people to refinance today with higher mortgage rates than we had just a few years ago, and at the same time, we've got a lot of dead equity that's locked up.   Caeli Ridge  18:40   I would start first by saying, Are we looking to harvest equity? Are we pulling cash out, or are we simply doing a rate and term refinance where we're replacing one loan with another loan, if it's for rate and term, if we're simply replacing the loan that we have today with a new loan, that math is going to be pretty simple. Why would you replace 6% interest rate with a 7% interest rate? If all other things were equal, you wouldn't unless there was a balloon feature, or maybe an adjustable rate mortgage or something of that nature involved there that you have to make the refinance. So taking that aside, focusing on a cash out refinance, and when does it make sense? So there's a little extra layered math here. The cash that you're harvesting, the equity that you're harvesting, first of all, borrowed funds are non taxable. What are we going to do with that pile of cash? Are we going to redeploy it for investing more often than not talking to investors? The answer is yes. What is that return going to look like? So you've got to factor that in as well, and then we'll get to the tax benefit in a moment. But generally speaking, I like to as long as the cash flow is still there, okay, you've got to have someone else covering that payment. Normally, there's exceptions to every rule. I don't normally advise going negative on a cash out refi. There are exceptions. Okay, please hear me. But otherwise, as long as the existing rents are covering and that thing is still being paid for by somebody else, then what you want to do is look at that monthly payment. Difference again, versus what you're getting out of it. And then you divide those two numbers pretty simply, and it'll take you how long. And then you've got a layer in the cash flow that you're going to get from the new acquisitions, and whether that be real estate or some other type of investment, whatever the return is, you're going to be using that to offset. And then finally, I would say, make sure that you're doing adding in the tax benefit. These are rental properties guys, right? So closing costs can be deducted now that may end up hurting debt to income ratio down the road. So don't forget, Ridge lending is going to be looking at your draft tax returns. Very, very important to ensure that we're setting you up for success and optimizing things like debt to income ratio on an annual basis.   Keith Weinhold  20:40   Now, some investors, or even primary residence owners might look at their first and only mortgage on a property, see that it's 4% and really not want to touch that. What is the environment and the appetite like today for having a refinance in the form of a second mortgage? That way you can keep your first mortgage in place and, say, 4% get a second mortgage at 7% or more. How does that look for both owner occupied and non owner occupied properties today?   Caeli Ridge  21:07   you're going to be looking at prime, plus, in many cases, if you don't want to mess with a first lien, a second lien mortgage is typically going to be tied to an index called prime. Those of you that are familiar with this have probably heard of that. Indicee. There's lots of them. The fed fund rate, by the way, is an index. There's lots of them. The Treasury is also another index. Prime is sitting, I think, at seven and a half percent. So you're probably going to be looking at rate wise, depending on occupancy and credit score and all of those llpas that we always talk about, loan level, price adjustment. You know, it could be prime plus zero, it could be prime plus four. So interest rates could range between, say, seven and a half, on average, up to 11 even 12% depending on those other variables. More often than not, those are going to be interest only. So make sure that you're doing that simple math there. And I would prefer if I'm giving advice the second liens, the he loan, which is closed ended, very much like your first mortgage, it's just in second lien position. It's amortized over a certain period of time, closed ended. Not as big a fan of that. If you can find the second liens, especially for non owner occupied, I would encourage it to be that open ended HELOC type.    Keith Weinhold  22:15   What are we looking at for combined loan to value ratios with second mortgages    Caeli Ridge  22:19   on an owner occupied I think you'd be happy to get 90. I think I've heard that in some cases, they can go up to 95% in my opinion, that would go as high as they'll let you go right on a non owner occupied, I think you'd be real lucky to find 80, and probably closer to 70.    Keith Weinhold  22:34   That really helps a lot with our planning. Well, the administration that came in this year has made some changes that can create some upheaval, some things to pay attention to in the mortgage market. We're going to talk about that when we come back. You're listening to get rich education. Our guest is Ridge lending Group President, Caeli Ridge I'm your host, Keith Weinhold.    The same place where I get my own mortgage loans is where you can get yours. Ridge lending group  NMLS, 42056, they provided our listeners with more loans than anyone because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. Start your prequel and even chat with President Chaeli Ridge personally while it's on your mind, start at Ridge lendinggroup.com. That's Ridge lendinggroup.com.    You know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing. Check it out. Text family to 66866, to learn about freedom. Family investments, liquidity fund again. Text family to 66866   Hal Elrod  24:38   this is Hal Elrod, author of The Miracle Morning and listen to get rich education with Keith Weinhold, and don't put your Daydream.   Keith Weinhold  24:55   Welcome back to get rich education. We're talking about mortgages again, because this is one. Where leverage comes from. I'm your host. Keith Weinhold, we're sitting down with the president of ridge lending group, Caeli Ridge, and I know that she has some knowledge and some updates on new administration leadership and some potential changes for the market there. What can you tell us? Caeli   Caeli Ridge  25:16   I'm pretty excited about this one, and I'm watching very diligently to see how it unfolds. So the new director of the FHFA Federal Housing Finance Agency, all is Bill Pulte. This is the grandson of Pulte Homes. Okay, smart guy. I'm excited to see what he's going to come in and do. Well. He had recently, I think in the last couple of weeks, he put out in the news wires asking for feedback from the powers that be, related to Fannie and Freddie, what improvements they would like to see. So first up was Jim neighbors. He is the president of the mortgage brokers Association. He had a few very specific wish list items, if you will. And the first one on his list was the elimination of LLP, as for non owner occupied and second home. So let me just kind of paint a picture here, because there's some backstory I think is important. So an LLPA, for those of you that have never heard that term before, stands for a loan level price adjustment. And a loan level price adjustment is a positive number or a negative number that associates with the individual loan characteristics. So things like loan to value or loan size, occupancy is a big ll PA, the difference between an owner occupied where you live and one that you're going to use as a rental property, that's a big one. Credit score, property type, is it a single family? Is it a two to four? Is this a purchase? Is it a refi? Anyway, all of those different characteristics are ll pas. Well, if we take a step back in time, gosh, about three years ago now, Mark Calabria, at the time, was the director of the FHFA, and he had imposed increases, specific increases. This was middle of 22 I want to say specific increases to the LL pas for non owner occupied property. So if anybody kind of remembers that time, we started to really see points and interest rates take that jump sometime in 2022 more than just the traditional interest rate market and the fluctuations. This was very material to investment property and second home, but we'll focus on the investment property. So Mr. Jim neighbors came in and said, first and foremost, I'd like to see those removed, and I want to read something to the listeners here, because I thought it was very interesting. This is something I've been kind of preaching from the the rooftops, if you will, for many, many years. Yeah, we've got neighbors sticking up for investors here. He really is. And I Yeah, well, yes, he is. And more often than not, they're focused on the owner occupied so I'm just going to kind of read. I've got my cheat sheet here. I want to make sure I get it all right for everybody. So removal of the loan level price adjustments on investment properties and second homes, he noted that these risk based fees charged by Fannie and Freddie discourage responsible buyers from purchasing second homes and investment properties, with that insignificant increase to cost. And here's the important part, originally introduced to account for additional credit risk, many of the pandemic era llpa increases were not based on updated risk metric. In fact, data has shown that loans secured by investment properties often have strong credit profiles and lower than expected default rates. I mean, anybody that has been around long enough to see what we've come from, like, 08,09, and when we had the calamity of right, the barrier for entry for us to get any conventional financing as investors has been harsh. I mean, I make that stupid joke of vials of blend DNA samples. But aside from it being an icebreaker, it kind of feels true. We really get the short end of the stick. And I feel like as investors especially, post 08,09, our credit profiles, our qualifications, the bar is so high for us, the default risk there has largely been removed. We've got so much skin in the game. With 20 25% down, credit score is much higher, debt to income ratios more scrutinized, etc, etc. So I think that this is, if it passes muster. I think this is going to be a real big win for the non owner occupied side of agency, Fannie, Mae, Freddie, Mac lending.   Keith Weinhold  29:13    The conventional wisdom is, is that if you the borrower, get into financial trouble, you're more likely to walk away from your rental properties than you are your own home and neighbors, sort of like a good neighbor here sticking up for us and stating that, hey, us, the investors, we're actually highly credit worthy people.   Caeli Ridge  29:29   Yeah, absolutely. So fingers crossed. Everybody say your prayers to the llpa and mortgage investor rates gods.   Keith Weinhold  29:37   we'll be attentive to that. What other sorts of changes do we have with the administration? For example, I know that Trump and some others in the administration have talked about privatizing the GSEs, those government sponsored enterprises, Fannie, Mae, Freddie Mac and what kind of disruption that would create for the industry. Is it really any credence to that?   Caeli Ridge  29:58   They've been talking about it for. For quite a while. I mean, as long as Trump has been kind of on the scene, that's been maybe a wish list for him. I don't see that happening over the next years. That is an absolute behemoth to unpack and make a reality. Speaking of Mark Calabria, he was really hot and heavy on the trails of doing that. So what this is, you guys so fatty Freddy, are in conservatorship that happened back post 08,09, and privatizing them and making them where it is not funded, or conservatorship within the United States government. Now it still has those guarantees against default. It's a very complicated, complex, nuanced dynamic of mortgage backed securities, but if we were to privatize them at some point now, am I saying that that's a bad thing? No, not necessarily, but I think it has to be very carefully executed, and because there are so many moving parts, I do not think that just one term of presidency is going to make that happen. If we do it, it's going to be years down the road from now. Is my crystal ball. I don't think we're going to see that anytime soon.    Keith Weinhold  30:58   That's interesting to know. Are there any other industry changes that are important, especially for investors, whether that has to do with the change in administration or anything else?   Caeli Ridge  31:08    Well, specific to that wish list from Mr. Neighbors, one of the other things that he had asked, and there were quite a few, for owner occupied changes as well, he wants to reduce the seasoning for cash out refinances of investment properties, which would be huge good. Yeah, right now it's 12 months on a cash out refinance given very specific acquisition details. Okay, I won't go down that rabbit hole, but currently, if you haven't met exactly these certain benchmarks, you may have to wait 12 months to pull cash out of a property from the day that you acquire it, he's asking that that be pulled back to about six months, which would be nice   Keith Weinhold  31:46   reducing the seasoning period from 12 months to six months, meaning that an investor a borrower, would only need to own that property for that shorter duration of time prior to performing a refinance.   Caeli Ridge  31:58    Cash out refinance, no seasoning required on a rate and term. This is specific for cash out. But again, for cash out, but exactly right   Keith Weinhold  32:04   now, one trend that I think about sometimes, especially when I think back to 2008 2009 days since I was an investor through that time, is, are there any signs in the reduction of the appetite or the propensity to lend, to make loans. So how freely is credit flowing?    Caeli Ridge  32:25   I think pretty freely. I'm not seeing that they're tightening the purse strings. That's not the lens that I'm looking at it from, and I try to keep that brush stroke broad. There have been, I think that on the post, close side, there's been a little extra from Fannie Freddie, and I think that has to do with profitability markers. But overall, I'm not seeing that products are disappearing necessarily, or that guidelines are really becoming even more cumbersome. If anything, I would say it's maybe the reverse of that, and I do believe that probably is part and parcel to this administration and the real estate background that comes with it.   Keith Weinhold  32:59   One other thing I pay attention to, but it just really hasn't been much of a story lately. Are delinquencies in foreclosures. It seems like they've ticked up a little bit, but they're still both really historically low and basically a delinquency being defined as when a borrower makes one late payment, and foreclosures being the more severe thing, typically a 120 days late or more. Any trends there? I'm not   Caeli Ridge  33:24   seeing any now. And in fact, I would tell you that, because we focus so much on investor needs, first payment default is I can count on less than one hand, if I had to, how many times I've seen that happen with our clients over 25 years. So nothing noteworthy there for me.    Keith Weinhold  33:40   Yes. I mean, today's borrowers are just flush with equity. Nationally, there's a loan to value ratio of 47% which is healthy, in a sense. On average, borrowers have a 53% equity position. Of course, the next thing, I think, is like, I don't really know if that's a smart strategy. They're not really getting that much leverage out there. But I think a lot of people just have the old mentality of get it paid off.    Caeli Ridge  34:06   And I think that depending on where you are in your journey, I mean, if you're in phase three, right, where you're just really looking at these investments, these nest eggs to carry you into your retirement and or for legacy reasons, fine, but otherwise, I may argue the point in that I don't care that you have a 3% interest rate on an investment property, or whatever it may be, if it's sitting there idle and as long as it can cash flow, the true chances of those individuals of keeping that mortgage that they got in 2020, 2021, etc, at those ridiculously low interest rates and stroking 360 payments later to pay it to zero is a fraction of a percent right now, whether they're on the sidelines for something else, I don't know, but that debt, equity, I think, is hurting them more than a 3% interest rate is helping them.   Keith Weinhold  34:52    And a lot of times, the mindset of someone is, if they don't need to build wealth anymore, and they're older and they already built wealth, they don't care if they're loaned to value. Was down to zero, and they have it paid off, whereas someone that's in the wealth building phase probably wants to get more leverage. Yeah, Chaley at risk lending group, there you see so many applications come in, and especially since you're an investor centric lender, I like to ask you what trends you're seeing. What are people buying? What are people doing? Are they refinancing? Are they paying loans off? Are they trying to take out more credit? Are there any overall trends with investors that you see in there    Caeli Ridge  35:29   right now? I think the all in one is a clear winner there. The all in one, that first lien, HELOC, that you and I talked about, we broke my little corner of the internet with that one, that one is a front runner for sure, on the refinance side, specifically, we are seeing quite a bit more on the refi side of things, that equity is kind of just sitting there. So even though, if the on one isn't a good fit for them, I'm seeing investors that are willing to tap into that equity instead of just sitting around and waiting for them to potentially lose some equity if the housing market does start to take some decline. And then I would say, on the purchase transaction side, something that's kind of piqued my interest is the pad split. I'm looking at that more often where, for those that are not familiar, you can probably speak more to this, Keith, they're buying single family resident properties, even two to four unit properties, and a per bedroom basis, turning those into rental properties. And they're looking to be quite profitable. So I've got my eyes on that too.   Keith Weinhold  36:23   before we ask how we can learn more about you and what you do in there at Ridge Kayle. Is there any last thing that you'd like to share? Maybe a question I did not think about asking you, but should have.    Caeli Ridge  36:35   I would like to share with your listeners that if they are not working with a lender that focuses on their education and has that diversity of loan product that we have, that they're probably in the wrong support group. You need to be working with a lender that has a nationwide footprint and that has diversity of loan product to cover whatever methodology of real estate investing that you're looking for, and really puts a fine touch on the education of your qualifications and your goals as they relate to underwriters guidelines   Keith Weinhold  37:10   what we're talking about, and I know this through my own experience in dealing with Ridge, since I use them for my own loans myself, is sometimes Ridge might inform You that, hey, you can go and do this and make this deal now, but that's going to mess up this bigger thing 12 months down the road, whereas if you talk with an everyday sort of owner occupant mortgage company, oh, they're just not going to talk like that, because owner occupants, they might only buy every seven years, or something like that. And investors are different, and you need to have that foresight and look ahead. Caeli, this has been great, a really informative conversation about the pulse of the market. Tell us what products that you offer in there.   Caeli Ridge  37:50   Our menu is very, very diverse. I would say what. It's probably easier to describe what we don't offer. We do not have bear lot loans or land loans. We're not offering those right now. We do not have second lien HELOCs currently. We suspended that two years ago. But otherwise, guys, we're going to have everything that you're going to need. So just very quickly, I'll rattle off Fannie Freddie, okay, those golden tickets that we talk about, we've got DSCR loans, bank statement loans, asset depletion loans, ground up construction, short term bridge loans for fix and flip or fix and hold. We have our All In One that's my favorite first lien. HELOC, we have commercial loan products for commercial property and residential on a cross collateralization basis. So very, very robust in the loan product space.   Keith Weinhold  38:33   Caeli Ridge, it's been valuable as always. And then Ridge lending group.com, or your phone number   Caeli Ridge  38:39   855-747-4343, 855-74-RIDGE, , and then to reach us an email, if that's your better mechanism to contact us info@ridgelendinggroup.com   Keith Weinhold  38:50   that's been valuable as always. Thanks so much for coming back onto the show.    Caeli Ridge  38:53   Appreciate it. Keith,   Keith Weinhold  39:00   Yeah, terrific information from Chaley. As always, if you're enamored of borrowing tax free, like a billionaire, against your real estate, they sure can help you out with that and determine whether that's right. It doesn't mean that you always should, but if you have investment ideas for debt equity, and you're attentive to cash flows, run the numbers with them and see if it's worthwhile. As far as new purchases, we all know that soured affordability has made it especially tough for first time homebuyers, and there's more data out there that shows that tenant durations are historically long, longer than they usually are. Tenants are staying in places longer because they have to. Investor purchases have stayed strong, though investors have been buying about the same proportion of single family homes and making them rentals that they have historically and Redfin tells us that. The value of properties that investors have purchased is up more than 6% year over year, so investors are still buying and that makes sense. We're in this era where there's more uncertainty than usual, there's higher stock volatility than usual, and more people are sort of asking themselves, where would I get a better return than on income property, and where would my return be more stable today than in income property as well? If you work with Ridge lending group for a time, you're probably going to understand why I personally use them for my own loans. You'll notice that they really understand what investors need. Thanks to Caeli Ridge today and thank you for being here too. But as always, you weren't here for me. You were here for you until next week. I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 3  40:56   Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  41:20   You know, whenever you want the best written real estate and finance info, oh, geez, today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video. Course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text. GRE to 66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866   The preceding program was brought to you by your home for wealth, building, get rich education.com.    

The Father of Reaganomics, David Stockman, joins us to explore the complex world of international trade and its impact on investors.  Key insights include: Challenging conventional wisdom about trade policies Understanding economic forces that drive investment opportunities Gaining expert perspective on global economic trends Stockman provides a candid analysis of current trade strategies, revealing: The true drivers of economic competitiveness Potential pitfalls of protectionist approaches Critical insights for strategic investors The episode cuts through political noise to offer clear, actionable economic intelligence for informed decision-making. Smart investors look beyond headlines to understand the deeper economic forces shaping their financial future. Resources: Check out David Stockman's Contra Corner Newsletter Show Notes: GetRichEducation.com/553 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching: GREinvestmentcoach.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, I sit down with a long time White House occupant who was the official economic advisor to an ex president. We get the real deal on tariffs and what they mean to you. Trump gets called out and the ominous sign about what's coming six months from now, today on, Get Rich Education.   Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being the flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests include top selling personal finance author Robert Kiyosaki. Get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit get rich education.com   Corey Coates  1:14   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:30   Welcome to GRE from Brookline, Massachusetts to Brooklyn, New York and across 188 nations worldwide. I'm Keith Weinhold, and you are listening to get rich education, just another shaved mammal behind this microphone here. I recently spent some time with the father of Reaganomics, David Stockman, in New York City, and sometimes an issue so critical surfaces that real estate investors need to step back and understand a broader force in the economy. Three weeks ago, here, I told you how the second and third way, real estate pays you. Cash flow and ROA are sourced by your tenants employment and the future of your tenants employment is influenced by tariffs and other policies of this presidential administration. This is going to affect rates of inflation and a whole lot of things. Now, an organization called the American Dialect Society, they actually name their word of the year, and this year, it is shaping up to be that word, tariff. In fact, Trump has described that word as the most beautiful word in the dictionary. And I think we all know by now that a tariff is an import tax that gets passed along to consumers when it comes to materials used in real estate construction that's going to affect future real estate prices. Well, several key ones so far were exempted from recent reciprocal tariffs, including steel, aluminum, lumber and copper exempted. Not everything was exempted, but those items and some others were but who knows if even they are going to stay that way. And now, when it comes to this topic. I think a lot of people want to make immediate overreactions in even posture like they're an expert in become an armchair economist, and I guess we all do a little of that, me included. But rather than being first on this and overreacting, let's let the policy which Trump called Liberation Day last month when he announced all these new tariffs. Let's let policy simmer a little and then bring in an expert that really knows what this means to the economy and real estate. So that's why I wanted to set up this discussion for your benefit with the father of Reaganomics and I today. In fact, what did Reagan himself say about tarrifs back in 1987 this is part of a clip that's gained new life this year. It's about a minute and a half.    Speaker 1  4:13   Throughout the world, there's a growing realization that the way to prosperity for all nations is rejecting protectionist legislation and promoting fair and free competition. Now there are sound historical reasons for this. For those of us who lived through the Great Depression, the memory of the suffering it caused is deep and searing, and today, many economic analysts and historians argue that high tariff legislation passed back in that period called the Smoot Hawley tariff greatly deepened the depression and prevented economic recovery. You see at first when someone says, Let's impose tariffs on foreign imports, it looks like they're doing the patriotic thing by protecting American products and jobs, and sometimes for a short while at work. Price, but only for a short time. What eventually occurs is first, home grown industries start relying on government protection in the form of high tariffs. They stop competing and stop making the innovative management and technological changes they need to succeed in world markets. And then, while all this is going on, something even worse occurs. High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars. The result is more and more tariffs, higher and higher trade barriers, and less and less competition, so soon, because of the prices made artificially high by tariffs that subsidize inefficiency and poor management, people stop buying. Then the worst happens, markets shrink and collapse, businesses and industry shut down, and millions of people lose their jobs.    Keith Weinhold  5:50   Now, from what I can tell you as a listener in the GRE audience, maybe you're split on what you think about tariffs. In fact, we ran an Instagram poll. It asks, generally speaking, tariffs are good or bad? Simply that 40% of you said good, 60% bad. Over on LinkedIn, it was different. 52% said they're good, 48% bad. So it's nearly half and half. And rather than me taking a side here, I like to bring up points that support both sides, and then let our distinguished guests talk, since he's the expert. For example, if a foreign nation wants to access the world's largest economy, the United States, does it make sense for them to pay a fee? I mean, it works that way in a lot of places, when you want to list a product on eBay or Amazon, you pay them a fee. You pay a percentage of the list price in order to get access to a ready marketplace of qualified buyers. All right. Well, that's one side, but then the other side is, come on, let's look at history. Where have tariffs ever worked like Where have they ever been a resounding, long term success? Do they have any history of a sustained, good track record? I generally like free trade. Then let's understand there's something even worse than a steep tariff. There are quotas which are imposed, import limits, trade limits, and then there are even all out import bans. What do terrorists mean to the economy that you are going to live in and that your tenants live in? It's the father of Reaganomics, and I on that straight ahead on Get Rich Education. I'm your host. Keith Weinhold.   you know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back, no weird lock ups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text, family to 66866, to learn about freedom, family investments, liquidity fund, again. Text family to 6686   Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group and MLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com, that's ridgelendinggroup.com.    Hey   Robert Helms  9:28   Hey everybody. It's Robert Helms of the real estate guys radio program. So glad you found Keith Weinhold in get rich education. Don't quit your Daydream.   Keith Weinhold  9:48   when it comes to White House economic policy like tariffs, taxes and inflation, don't you wish you could talk to someone that's often been inside the White House. Today, we are even better. He was the official advisor to an ex president on economic affairs, a Wall Street and Washington insider and Harvard grad. Today's guest is also a former two time congressman from Michigan. He's a prolific author, and he is none other than the man known as the father of Reaganomics. He was indeed President Ronald Reagan's budget advisor. He was first with us last year, but so much has happened since. So welcome back to the show. David Stockman,    David Stockman  10:26   very good to be with you, and you're certainly right about that. I think we're really in uncharted waters. Who could have predicted where we are today, and therefore it's very hard to know where we're heading, but you have to try to peer through the fog and all the uncertainty and the noise and the, you know, day to day ups and downs that's coming from this White House in a way that we've never seen before. And I started on Capitol Hill in 1970 so I've been watching this, you know, for more than a half century, actually, quite a while. And man, it's important to go through all this, but it's sort of uncharted waters.    Keith Weinhold  11:04   Sure, it's sort of like you wake up every day and all you do know is that you don't know. And David, when it comes to tariffs, I want to give you my idea, and then I want to ask you about what the tariff objective even is. Now, to be sure, no one is asking me how to advise the President. I'm an international real estate investor, but I do most of my business in the US, and I sure don't have international trade policy experience. It seems better to me, David, that rather than shocking the world with new tariffs that kick in right away, it would have been better to announce that tariffs begin in, say, 90 days, and then give nations space to negotiate before they kick in. That's my prevailing idea. My question to you is, what's the real objective here? What are terrorists proposed to do? Raise revenue, onshore companies merely a negotiation tactic? Is the objective? Something else?    David Stockman  12:00   Well, it might be all of the above, but I think it's important to start with a predicate, and that is that the problem is not high tariffs abroad or cheating by foreign competitors or exporters. There is a huge problem of a chronic trade deficit that is not benign, that does reflect a tremendous offshoring of our industrial economy, the loss of good, high paying industrial and manufacturing jobs. So the issue is an important one to address, but I have to say, very clearly, Trump is 100% wrong when he attempts to address it with tariffs, because foreign tariffs aren't the problem. Let me just give a couple of pieces of data on this, and I've been doing a lot of research on this. If you take the top 51 exporters to the United States, our top 51 trade partners, and this is Mexico and Canada and the entire EU and it's all the big far eastern China, Japan, South Korea, India, you know, all the rest of them. If you look at the and that's 90% of our trade, we have 2.9 trillion of imports coming in from all of those countries, and the tariff that we Levy, this is the United States, on those imports, is not high. It's higher than it was in the past, mainly because of what Trump did in the first term, but it's 3.9% now compared to bad times historically, decades and decades ago. That's relatively low. But here's the key point, if we look at the same 51 trading partners in terms of the tariffs they levy on our exports to China and to the EU and to Canada and Mexico and South Korea and all the rest of them. The tariff average, weighted average that they levy is 2.1% so let me restate that the average US tariff is about twice as high 4% around things as what our partners imposed 2% now the larger point is whether it's 4% or 2% doesn't make a better difference. That's not a problem when it comes to 33 trillion of world trade of which we are, you know, the United States engages in about five and a half trillion of that on a two way basis, import, export, in the nexus of a massive global trading system. So he's off base. He's wrong. The target is not high tariffs or unfair foreign trade. Now there are some people who say, Well, you're looking at monetary tariffs. So in other words, the import duty they levy on, you know, exports to South Korea or India or someplace like that, right? And that, the real issue, supposedly, is non tariff barriers. For instance, you know, some governments require you that all procurement by government agencies has to be sourced from a domestic supplier, which automatically shuts out us suppliers who might want that business. Well, the problem is we're the biggest violator of the non tariff barrier in that area. In other words, we have something like $900 billion worth of state, federal and local procurement that's under Buy America policies, which means EU, Mexico, Canada, China, none of them can compete. Now I mention that only as one example, because it's the kind of classic non tariff barrier, as opposed to import duty that some people point to, or they point to the fact that while foreign countries allegedly manipulate their currency, but you know the answer to that is that number one, overwhelming, no doubt about it, largest currency manipulator in the world, is the Federal Reserve. Okay, so it's kind of hard to say that there's a unfair trade problem in the world because of currency manipulation. And then there is, you know, an argument. Well, foreign governments subsidize their exporters. They subsidize their industrial companies, and therefore they can sell things cheaper. And therefore that's another example of unfair trade, but the biggest subsidizer of tech industry, and of a lot of other basic industry in the United States is is the Defense Department. You know, we have a trillion dollar defense budget, and we put massive amounts of dollars in, not only to buying, you know, hardware and weapons and so forth, but huge amounts of R and D that go into developing cutting edge technologies that have a lot of civilian applications that, in fact, we see all over the world. That's why we're doing this broadcast right now. The point is that problem is not high tariffs because they're only low tariffs. The problem is not unfair trade, because there's all kinds of minor little interferences with pure free markets, but both, everybody violates those one way or another due to domestic politics. But it's not a big deal. It doesn't make that big a difference. So therefore, why do we have a trillion dollar trade deficit in the most recent year, and a trade deficit of that magnitude that's been pretty continuous since the 1970s the answer is three or four blocks from the White House, not 10,000 miles away in Beijing or Tokyo. The answer is the Federal Reserve has in the ELLs building there in DC, not far from the White House. Yes, yes, right there, okay, the Eccles building the Fed has a huge, persistent pro inflation bias, sure. And as a result of that, it is pushed the wage levels and the price levels and the cost levels of the US economy steadily higher, and therefore we've become less and less competitive with practically everybody, but certainly a lower wage countries nearby, like Mexico or China, far away. And you know, there's, it's not that simple of just labor costs and wages, because, after all, if you source from China, you've got to ship things 10,000 miles. You've got supply chain management issues, you've got quality control issues, you've got timeliness issues. You have inventory carry costs, because there's a huge pipeline, and of course, you have the actual freight cost of bringing all those containers over. But nevertheless, when you factor all that in, our trade problem is our costs are too high, and that is a function of the pro inflation policies of the Fed. Give one example. Go back just to the period when the economy was beginning to recover, right after the great recession. And you know the crisis of 208209 and I started 210 unit labor costs in manufacturing in the United States. Just from 210 that's only 15 years, are up 55% that's unit labor costs. In other words, if you take wage costs and you subtract productivity growth in that 15 year period, the net wage costs less productivity growth, which is what economists call unit labor costs, are up 53% and as a result of that, we started, you know, maybe with a $15 wage difference between the United States and.China back in the late 1990s that wage gap today is $30 in other words, the fully loaded way at cost of average wages in the United States. And I'm talking about not just the pay envelope, but also the payroll taxes, the you know, charge for pension expense, health care and so forth. The whole fully loaded cost to an employer is about $40 an hour, and it's about $10 in the United States and it's about $10 an hour in China. Now that's the reason why we have a huge trade deficit with China, because of the massive cost difference, and it's not because anybody's cheating. Is because the Fed, in its wisdom, decided, well, you know, everybody will be okay. We're going to inflate the economy at 2% a year. That's their target. It's not like, well, we're trying to get low inflation or zero inflation, but we're not quite making it. No, they're proactive. Answer is, we've got to have 2% or the economy is not going to work. Well, well, 2% sounds well, that's a trivial little number. However, when you do it year after year, decade after decade, for a long period of time, and the other side is not inflating at the same rate, then in dollar terms, you have a problem, and that's where we are today. So this is important to understand, because it means the heart of the whole Trump economic policy, which is trying to bring manufacturing home, trying to bring industry back to the United States, a laudable objective is based on a false diagnosis of why this happened, and it is unleashed ball in the china shop, disruption of global economic flows in relationships that are going to cause unmitigated problems, even disaster in the US economy. Because it's too subtle, when you think about it, the world trade system just goods. Now, we've not even talking about services yet, or capital flows or financing on a short term basis. The World Trade in goods, merchandise, goods only is now 33 trillion. That is a hell of a lot of activity of parts and pieces and raw materials and finished products flowing in. You know, impossible to imagine directions back and forth between dozens and dozens of major economies and hundreds overall. And when you start, you step into that, not with a tiny little increase in the tariff. To give somebody a message. You know, if our tariffs are averaging 4% that's what I gave you a little while ago. And you raise tariffs to 20% maybe that's a message. But Trump didn't do that. He raised the tariff on China to 145% in other words, let's just take one example of a practical product, almost all the small appliances that you can find in Target or even a higher end retail stores United States or on Amazon are sourced in China because of this cost differential. I've been talking about this huge wage differential. So over the last 20, 25, years, little it went there now 80% of all small appliances are now sourced in China, and one, you know, good example would be a microwave oven, and a standard one with not a lot of fancy bells and whistles, is $100 now, when you put 145% tariff on the $100 landed microwave oven is now $245 someone's going to say, Gee, are we going to be able to sell microwaves at $245 they're not certain. I'm talking about a US importer. I'm talking about someone who sells microwaves on Amazon, for instance, or the buyers at Walmart or Target, or the rest of them, they're going to say, wait a minute, maybe we ought to hold off our orders until we see how this is going to shake out. And Trump says he's going to be negotiating, which is another whole issue that we'll get into. It's a lot of baloney. He has no idea what he's doing. Let's just face the facts about this. So if orders are suddenly cut back, and the flow that goes on day in and day out across the Pacific into the big ports in Long Beach in Los Angeles is suddenly disrupted, not in a small way, but in a big way, by 20, 30, 40, 50% six or seven months down the road, we're going to have empty shelves. We're going to have empty warehouses. We're going to have sellers who suddenly realize there's such a scarcity of products that have been hit by this blunderbuss of tariffs that we can double our price and get away with it.   Keith Weinhold  25:00   Okay, sure. I mean, ports are designed. Ports are set up for stadium flows, not for surges, and then walls and activity. That just really doesn't work.   David Stockman  25:08   And let me just get in that, because you're on a good point. In other words, there is a complicated supply line, supply chain, where, you know, stuff is handed off, one hand to another, ports in China, shipping companies, ports here, rail distribution systems, regional warehouses of you know, people like Walmart and so forth, that whole supply chain is going to be hit with a shock. Everything is going to be uncertain in terms of the formulas that everybody uses right now, you know that you sell 100 units a week, so you got to replace them at the sales rate, and you put your orders in, and know that it takes six weeks to get here, and all this other stuff, all of the common knowledge that's in the supply chain that makes it work, and the handoffs smooth and efficient From one player in the supply chain to the next, it's all going to be disrupted. But the one thing we're going to have is we're going to have shortages, we're going to have empty shelves, and we're going to have price which I'm sure that Trump is not going to start saying price gouging of a you know, right? But that's not price gouging. If you have a you know, go to Florida. We have a hurricane. Where we live in Florida and New York, we have a hurricane. All of a sudden the shelves are empty and there's no goods around, because everybody's been stocking up getting ready for the storm. And then all of a sudden, the politicians are yelling that somebody's price gouging, because they raised their prices in a market that was in disequilibrium. Well, that's not price gouging. That's supply and demand trying to find a new balance basic economics. You know, when the demand is 100 and the supply is 35 okay, but I'm kind of getting ahead here, but I think there's very good likelihood that there's going to be a human cry right before, you know, maybe in the fall or right before Christmas, about price gouging and Trump then saying, Well, I was elected to bring prices down and bring inflation under control. It's out of control because all of these foreigners raised their prices. And no, they did, and it was the tariff that did it, and all the people in the supply chain are trying to take advantage of the temporary disruptions. So I think people have to understand, and I can't say this, and I don't like to say it, because I certainly didn't think the other candidate in the last election had anything to offer in terms of dealing with our serious economic problems in this country. I'm talking about Harris. But the fact is, Donald Trump has had a wrong idea for the last 40 to 50 years of his adult life. In that core idea is that trade deficits are a sign of the other side cheating. They're a sign that you're being exploited or taken advantage of or ripped off, or it's not at all okay. Trade deficits are a consequence of cost differences between different jurisdictions, and to the extent that we've artificially, unnecessarily inflated our costs. We need to fix the problem at the source. He ought to clean house at the Federal Reserve. But the problem is, Trump wants lower interest rates when, in fact, the low interest rates created all the inflation that led to our loss of competitiveness and the huge trade deficits we have today. So to summarize, it is important to understand, do not have faith in Trump's promise that we're going to have a golden age of economic prosperity. We are going to have a economic disaster, and it's a unforced error. It's self inflicted, and it's the result of the wrong fundamental idea of one guy who's in the oval office right now throwing his considerable weight around and pushing the economy into upheaval that really is totally unnecessary. He should have done what he was elected to do, and Matt's work on getting production up and costs down, that's not going to be solved with tariffs. David, I have another important point to bring up. But before we do just quickly, are those two to 4% tariffs you mentioned earlier. Those are the tariff levels pre Trump second term correct.    We could clarify that those are for the year 2023 that was the latest full year data that we have with great deal of granularity.    Keith Weinhold  29:56   The point I want to bring up is there any history? That tariffs actually work. Some people cite the Smoot Hawley Tariff Act from the 1930s and that it drove us deeper into the Great Depression. And David, on the one hand, when we think about, do tariffs actually work? If Indonesia can make shoes for us for $11 why would we want to onshore an activity like that? That is a good deal for us. And then, on the other hand, you have someone like Nvidia, the world's leading semiconductor company, they announced plans to produce some of their AI supercomputers entirely on American soil for the first time recently. And you have some other companies that have made similar announcements. So that's a small shred of evidence that tariffs could work. But my question is, historically, do tariffs actually work?    David Stockman  30:44   That's a great question, and there's a huge history. And you can go back all the way the 19th century, where Donald Trump seems to be preoccupied, but what he fails to recognize is that they worked in the 19th century because they were revenue tariffs. It wasn't an effort to, like, bring jobs back to America. We were booming at the time. Jobs were coming to America, not leaving, and it was the federal government's main source of revenue. Because, as you know, prior to 1913 there was no income tax, right? So that was one thing. Okay, then when we got into the 20th century and host World War Two, it became obvious to people that the whole idea of comparative advantage, going all the way back to Adam Smith, and that enhanced a global trade where people could specialize in whatever their more competitive advantage is, was a Good thing. And so we had round after round of negotiations after World War Two that reduced tariff levels steadily, year by year, decade by decade. So by the time we got to the 1990s when China, then, you know, arose from the disaster of Mao and Mr. Dang took over and created all the export factories and said, It's glorious to be rich and all these things is we got red capitalism. But if we start in the 1990s the average tariff worldwide, now this is weighted average on all goods that are bought and sold or imported and exported, was about 9% and there were have been various free trade deals done since then. For instance, we had NAFTA, and the tariffs on Mexico and Canada and the United States went to zero. We had a free trade deal in 212 with South Korea. This never comes up, but the tariff on South Korean goods coming the US is zero. The tariff on us, exports going to South Korea is zero because we have a free trade agreement, and it's worked out pretty well with South Korea. Now we're not the only ones doing this. Countries all over the world. The EU is a total free trade zone in economy almost as big as the United States that used to have tariff levels between countries. Now it's one big free trade zone. So if you take the entire world economy, that 9% weighted average tariff of the early 90s, which was down from maybe 2025, 30, pre World War Two in this Smoot Hawley era, was down to 2.25% by the time that Donald Trump took office, the first time around in 2017 now 2.25% is really a rounding error. It's hardly when you have $33 trillion worth of goods moving around, you know, container ships and bulk carriers and so forth all around the world, and air freight and the rest of it, rail. 2% tariff is not any kind of big deal, as I say in some of the things I write, it's not a hill of beans. So somehow, though 45 years ago, Trump got the idea that tariffs were causing a problem and that we had trade deficits, not because our costs were going up owing to bad monetary policy, but because the other guy was cheating. Remember, this is Trump's whole view of the world. It's a zero sum game. I win, you lose, and if I'm not winning, is because you're cheating. Okay? In other words, I'm inherently going to win. America's inherently going to win unless the other guy is cheating. Now, Trump sees the world the same way that I think he looked at electrical and plumbing contractors in the Bronx, you know, in the 1980s and 1990s when he was developing his various Real Estate projects. These are pretty rough and tumble guys. It's a wild, easy way to make a living. So there's a lot of, you know, there's a lot of pretty rough baseball that's played that mentality that the other guy is always trying to screw me, the other guy's always cheating, the other guy's preventing me from winning, is, is his basic mentality. And it's not Applicable. It's not useful at all to try to understand the global economy. Try to understand why America's $29 trillion economy is not chugging along as strongly and as productively as it should be, why real wages are not making the gains that workers should be experiencing and so forth. So he ought to get out of this whole trade, tariff trade war thing, which he started, I don't know how he does, it's a little late, and focus on the problems on the home front. In other words, our trade problem has been caused by too much spending, too much borrowing, too much money printing on the banks of the Potomac. It's not basically caused in Beijing or Tokyo or Seoul or even Brussels, the European Union. And we need to get back to the basic and the real culprit, which is the Federal Reserve and its current chairman, Paul, if he wants to attack somebody, go after the Fed. Go after Paul. But ought to give them a mandate to bring inflation to zero and to stop fooling around with everything else and to stop monetizing the public debt that is buying government debt, take care of your own backyard first before you start taking, yeah, sure, yeah, exactly. You know, I've been in this for a long time. I start, as I said, I started on Capitol Hill. There have been a lot of protectionist politicians, but they always argued free trade is good, but it has to be fair trade. And you know, we have this example in our steel industry, for instance, where we producers abroad are competing unfairly for one reason or another. But the point I'm getting to is they always said this is an exceptional case. Normally we would go for free trade, but we got to have protection here. We got to have a temporary quota. Even when I was in the Reagan administration, we had a big argument about voluntary quotas on Japanese car exports, and I was totally against it. I thought the US industry needed to get its act together, get its costs down. Needed to get the UAW under control, because it had pushed wages, you know, way, way, way too high terms of total cost. But they argued, yeah, well, you're right, but we have to have 10 years in order to allow things to be improved and adjusted and catch up. So this is only temporary. This is just this. Yes, this is protectionism, but it's temporary. It's expedient that we can avoid and so therefore we'll make an exception. But there is no one, and most of these people were, you know, in the payroll of the unions, or they were congressmen from south to South Carolina going to bad for the textile industry, or congressman from Ohio going to bat for the steel industry, whatever, but there was no one who ever came along and said tariffs are big, beautiful things, and we need to have permanent high tariffs, because that's the way we're going to get prosperity back in United States. It's a dumb idea. It's wrong. It's disproven by history and people. Even though Trump has done a lot of things that I like you know, he's got rid of dei he's got rid of all of this green energy, climate crisis nonsense, all of that that he's done is to the good when you come to this basic question, how do we get prosperity in America? The answer is, through free market capitalism, by getting the government out of the way, by balancing the budget and by telling the Fed not to, you know, inflate the economy to the disadvantage that it has today. That's how you get there. And Trump is not a real Republican. Trump is basically what I call a status. He's for big government, right wing status. Okay, there's left wing, Marxist status, then there's right wing status. But you know, all of this tariff business is going to create so much corruption that it's almost impossible to imagine, because every day there's someone down there, right now, I can guarantee it at the, you know, treasury department or at Commerce department saying, but we got special circumstances here in terms of the parts that we're making for aircraft that get assembled in South Korea or something, and we need special relief. Yes, every industry you're doing is putting in for everybody's going to be there the lobby. This is the greatest dream that the Washington lobbyist community ever had. Trump is literally saying he put this reciprocal tariff. You saw the whole schedule. That he had on that easel in the White House on April 2, immigration day. It was called Liberation Day. I called it Demolition Derby Day. There was a reciprocal tariff for every single country in the world based on a phony formula that said, if we have $100 million deficit with somebody, half of that was caused by cheating. So we're going to put a tariff in place closes half of the difference. I mean, just nonsense, Schoolboy idiocy. Now it is. I mean, I know everybody said, Oh, isn't it great? We've finally got rid of the bad guys, Biden, he's terrible, and the Democrats, I agree with all that, but we replaced one set of numb skulls with another set. Unfortunately, Republicans know better, but they're so intimidated, apparently buffaloed by Trump at the moment, that they're going along with this. But they know you don't put 145%tariff on anything. I mean, it's just nuts. David, I feel like you're telling us what you really think and absolutely love that.    Keith Weinhold  41:04   Interestingly, there is a Ronald Reagan clip about tariffs out there in a speech that he gave from Camp David, and it's something that's really had new life lately. In fact, we played the audio of that clip before you came onto the show today, Reagan said that he didn't like tariffs and that they hurt every American worker and consumer as Reagan's economic advisor in the White House. Did you advise him on that?    David Stockman  41:27   Yes, I did. And also I can give you a little anecdote that I think people will find interesting. Yeah, the one time that he deviated in a big way from his free trade commitments was when he put the voluntary export quota on the Japanese auto industry. That was big. I don't remember the exact number, but I think it said they couldn't export more than 1.2 million cars a year, or something like that the United States. And the number was supposed to adjust over time, but we had huge debates in the Cabinet Room about those things, and at the end of the day, here's what he said. He said, You know, I've always been for open trade, free trade. I've always felt it has to be fair trade. But, you know, in this case, the Japanese industry came to us and asked for voluntary quotas, so I didn't put up a trade barrier. I'm only accommodating their request. Well, the Japanese did come to him and ask. They did, but only when they were put up to it by the protectionists in the Reagan administration who, on this took them on the side, you know, their negotiators and maybe their foreign minister. I can't remember exactly who commerce secretary and said, If you don't ask for voluntary quotas, we're going to unleash Capitol Hill and you're going to get a real nasty wall put up against your car. So what will it be? Do you want to front for voluntary quotas? Are we going to unleash Congress? So they came to Reagan and said they were the Japanese industry said they're recommending that he impose voluntary restraints on auto exports. That was just a ruse. He wasn't naive, but he believed what you told him. He believed that everybody was honest like he was, and so he didn't understand that the Japanese industry that was brought to meet with him in the Oval Office had been put up to, it been threatened with, you know, something far worse, mandatory quote is imposed by Congress. But anyway, it's a little anecdote. What happened? On the other hand, he continued to articulate the case for small government sound money. We had deficit problems, but he always wanted a balanced budget. It was just hard to get there politically. And he believed that capitalism produces prosperity if you let capitalism work and keep the government out of the marketplace. And there is no bigger form of intervention and meddling and disruption in the capitalist system, in the free market, in the marketplace, than quotas on every product in every country at different levels. They're going to have 150 different countries negotiating bilaterally deals with the United States. That's the first thing that's ridiculous. They can't happen. The second thing is they're going to come up with deals that don't amount to a hill of beans, but they'll say, we have a deal. The White House will claim victory. Let me just give one example. As we know, one of the big things that Trump did in the first administration was he renegotiated NAFTA. And NAFTA was the free trade agreement between Mexico, Canada, United States. Before he started in 2017 the trade deficit of the US with Mexico and Canada combined with 65 billion. And he said, That's too big, and we got to fix NAFTA. We have got to rebalance the provisions so that the US comes out, not on the short end of the stick 65 billion. So they negotiated for about a year and a half, they announced a new deal, which he then renamed the United States, Mexico, Canada agreement, usmca, and, you know, made a big noise about it, but it was the same deal with the new name. They didn't change more than 2% of the underlying machinery and structure, semantics. Well now, so now we fast forward to 2024 so the usmca Trump's pride and joy, his the kind of deal that he says he's going to seek with every country in the world is now four years into effect. And what is the trade deficit with Canada and Mexico today, it's 230 5 billion okay? It's four times higher now than it was then when he put it in place. Why? Because we have a huge trade deficit with Mexico. Why because, you know, average wages there are less than $10 an hour, and they're $40 an hour here. That's why it has nothing to do with a bad trade deal. It has to do with cost differences.    Keith Weinhold  46:27   David, this has been great, and as we're winding down here, we have a lot of real estate investor listeners tell us what this administration's overall policies, not just tariffs, but overall policies, mean for future employment, and then tell us about your highly regarded contra corner newsletter.    David Stockman  46:45   Well, those are that's a big question. I think it doesn't mean good, because if they were really trying to get America back on track our economy, they would be fighting inflation tooth and nail to get it down to zero. They would be working day and night to implement what Musk came up with in the doge that is big spending cuts and balancing the budget. They're not doing that. They're letting all these announcements being made, but they're not actually cutting any spending. They would not be attempting to impose this huge apparatus of tariffs on the US economy, but they're not doing that. So I'm not confident we were going in the wrong direction under Biden, for sure, and we're going in an even worse direction right now under Trump. So that's the first thing. The second thing is, I put out a daily newsletter called David stockman's Country corner. You can yes signers on the internet, but this is what we write about every day, and I say A plague on both their houses, the Democrats, the Republicans. They're all, in many ways, just trying to justify government meddling, government spending, government borrowing, government money printing, when we would do a lot better if we went in the opposite direction, sound money, balanced budgets, free markets and so forth, so. And in the process, I'm not partisan. You know, I was a Republican congressman. I was a budget director of the Reagan administration. I have been more on the Republican side, obviously, over my career than the Democrats, but now I realize that both parties are part of the problem, and I call it the uni party when push comes to shove, the uni party has basically been for a lot of wars abroad and a lot of debt at home, and a lot of meddling in the economy That was unnecessary. So if you look at what I write every day, it tries to help people see through the pretenses and the errors of the unit party, Democrats and Republicans. And in the present time, I have to focus on Trump, because Trump is making all the noise.    Keith Weinhold  48:59   100% Yes, it sure has kept life and the news cycle exciting, whether someone likes that news or not. Well, David, this has been great. In fact, it sounds a lot like what Reagan might have told me, perhaps because you were a chief economic informant for him, smaller government, letting the free trade flow and lower inflation. Be sure to check out David stockman's contra corner newsletter if you like what we've been talking about today, just like it was last year, David, it's been a real pleasure having you on GRE today.    David Stockman  49:30   Well, thank you very much. And these are important issues, and we've got to stay on top of them.   Keith Weinhold  49:41   Oh, yeah. Well, David Stockman truly no mincing words. He doesn't like tariffs. In summary, telling GRE listeners that the problem with trade imbalances is inflation attack that instead quell inflation, don't impose tariffs. A lot of developing nations and China have distinct advantages over manufacturing in the United States, besides having the trained labor and all the factories and systems in place, think about how many of these nations have built in lower costs they don't have to deal with these regulatory agencies, no EPA, no OSHA, and not even a minimum wage law to have to comply with. And here in the US get this, 80% of American workers agree that the US would benefit from more manufacturing jobs, but almost 75% disagree that they would personally be better off working in a factory themselves. That's according to a joint Cato Institute in YouGov survey. It's sort of like how last century, Americans lamented the demise of the family farm, yeah, but yet, they sure didn't want to work on a farm themselves. Now there are some types of manufacturing, like perhaps pharmaceuticals or computer chips that could likely be onshore, because those items are high value items. Their value can exceed the cost of being produced in the USA, but a lot of these factory goods, not again. If these topics interest you do a search for David stockman's contra corner, or you can directly visit David stockman's contra corner.com. Big thanks to the father of Reaganomics, David Stockman on the show this week. As for next week, we're back more toward the center of real estate investing. Until then, I'm your host. Keith Weinhold, don't quit your Daydream. Y   Unknown Speaker  51:42   nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC   Keith Weinhold  52:02   You know, whenever you want the best written real estate and finance info, oh, geez, today's experience limits your free articles access and it's got paywalls and pop ups and push notifications and cookies disclaimers, it's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long. My letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video. Course, it's all completely free. It's called The Don't quit your Daydream. Letter, it wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text GRE to 66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866   The preceding program was brought to you by your home for wealth, building, getricheducation.com.  

Keith introduces the three types of freedom: time freedom, money freedom, and location freedom, and how real estate investing can provide all three. He is joined by special guest, Loral Langemeier, a global wealth expert, who shares her journey from a $25,000 investment to becoming a millionaire through real estate and mentorship.  Debt is Not Negative: Loral emphasized that debt is simply the cost of money and can be a positive tool when used responsibly. Tax Strategies for Wealth Building: She introduced the "tax trifecta" - understanding how you make money, how to activate tax code deductions, and how to invest in alternatives like real estate to reduce taxes.  Active Engagement and Mentorship: Loral stressed the importance of actively engaging in your wealth-building journey, getting the right mentors, and continuously learning. She believes the difference between those who succeed and those who struggle is their level of active participation and willingness to learn from experts. Resources: Ask questions and make requests at AskLoral.com to receive free tickets, ebooks, and other resources. Show Notes: GetRichEducation.com/549 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, it's the first time that we have a certain legacy finance personality on the show. We're talking about how you can cultivate your own personal wealth mindset, how to creatively add value to your real estate and how to put your kids to work for big tax deductions and more. Today on get rich education.    Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, who delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:12   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:28   Welcome to GRE from the second state of Pennsylvania to the second to last State of Alaska and across 188 nations worldwide. I'm Keith weinholding. You are back for another wealth building week. This is get rich education, and coincidentally, they are the two states where I've lived my life. Every single one of us has a gap in our lives. There is a gap between who you are and who you could be. And today, my guest and I will talk about this some more. Look, there are people who should already be financially free, but they're not. Their residual income could exceed their expenses by now, yet they aren't financially free. It's not because they're lazy, it's not because they're stupid, it's because they're stuck in one of these three traps. Number one, they're working harder instead of smarter. Number two, they're playing small instead of playing to win, which is like paying off low interest rate debt instead of keeping their own money, like I discussed last week, or thirdly, investing in all the wrong things, or not investing at all. And the worst part is that these people don't even realize that they're doing it. Most people aren't even cognizant. They don't have any awareness of the gap. You're not going to make progress on closing a gap that you don't know exists, you've got no chance of hitting a bull's eye when you're aiming at the wrong target. And I think it helps to develop a structure in your life where you have to tell yourself, I better do a good job here, or else. Yeah, it's the or else part that's a motivator. Now, some people won't extrapolate that mantra beyond the workplace. The number one thing that keeps employees showing up at work is fear. They tell themselves, I better show up at work on time, or else, I better do a good job on this project, or else I better give a great sales presentation. Or else. Now that's all well and fine, but to close the gap between who you are and who you could be, tell yourself something on a higher level, like I had better get some residual income outside of work, or else I'm going to stay stuck in a soulless job forever, and I'll never get that time back. So you've got to set up the right for else consequence for yourself. And then, yeah, of course, there are smaller ones like, I better avoid eating kettle chips, or else I'll gain weight. Let's be mindful that there are three types of freedom. You've got three types time freedom, money freedom and location freedom. Real Estate Investing gives you all three. You can make an unlimited income. There's the money freedom part. You can remotely manage your property managers from anywhere. There's your location. Freedom. And since you're not directly responding to your tenant, your property manager is, well, there's your time, freedom, you've got a buffer from emergencies, once you get this dialed in, and it does take a few years, oh, now you've got the time freedom, the money freedom and the location freedom. What do you want to avoid only making a big income? It was recently reported that Wall Street bonuses were way up this past year. Okay, yeah, but how happy are those finance worker Manhattanites who wear an iron pressed button down shirt and a Patagonia vest for 14 hours a day. That's not time freedom for sure, and it isn't location freedom either, unless it's 100% work from anywhere. You know, in my life, I recently got a great reminder of this. It really hit me. I have this close friend. He was the valedictorian of our high school class. I think I brought him up before. He's still a tight friend. I mean, sometimes we go on vacations together. Well, we have a high school class reunion back in Pennsylvania this summer, and among him and our other like, closest group of friends, my tightest guys, I'm always encouraging everyone to, hey, spend at least a week together, because we can't all get together like this that often, and because I have the time freedom to kind of suggest that and even push for that. Well, my valedictorian friend, he is a surgeon in St Louis, and among this tightest knit group of friends, he's the only one that cannot get the week off so that we can all hang out together more after the reunion. Instead, he can only get three or four days. He's got to get back to work as a surgeon in St Louis. Now, I'm sure he's compensated really well, and he doesn't live a bad life, but as a surgeon, you know, it's just become blatantly obvious that he doesn't have either the time freedom or the location freedom. Yet I do as a remote real estate investor, even though it's not something that I studied in college, but my valedictorian surgeon friend, you know, he had a long educational path, you know, undergrad and med school and residency and a ton of training and all these years tied up in his medical education. Therefore, you know, sometimes when people do that, they feel obligated, like that's what they should do, that's what they have to do, because he's already put so much into it. But he only has one of the three types of freedom. And no matter what you went to school for, if you find out about something better, like a great business idea or remote real estate investing, you've got to consider pivoting into that and go into that if it makes sense for you, the world changes. It keeps getting faster, and you've got to change with it. So obtaining financial freedom through real estate helps you deal with an external locus of control issue where life is constantly happening to you, rather than something you can influence. When you're an employee, life happens to you more often than when you're the one pushing the buttons, when you control the three freedoms now, you are narrowing that gap between who you are and who you could be.    I didn't mention it previously. Two weeks ago, I brought you the show from Las Vegas, Nevada, last week, from just outside Colorado Springs. And today I'm here in Anchorage, Alaska, where I'll be for a few weeks before heading to London, England, and then from there, on to Scotland. I plan to visit the former home of the father of economics when I'm in Edinburgh, Scotland, of course, that is Adam Smith, the author of The Wealth of Nations. I might tell you more about that at that time.    Before we bring in our guest this week, a quarter recently ended.  Here is our asset class rundown. The NAR reported that the median sale price of an existing home rose 3.8% year over year in February, marking the 20th straight month that sale prices increased year over year. Mortgage rates fell from 6.9% to 6.6 per Freddie Mac this is all year to date. Q1, the S, p5, 100 was down four and a half percent. The NASDAQ down 10 and a half percent. That's officially correction territory, as those tariff years dominated. The quarter interest rates of all kinds are a little lower yield on the 10 year, Tino falling from 4.6 to 4.2 despite inflation concerns, inflation hovering just under 3% for most of the quarter, Bitcoin down 12% oil is still super cheap, beginning the quarter where it ended near 70 bucks. Gold has been the star performer this year. Are up 17% just in the quarter, and for the first time in history, has searched the over $3,000 an ounce, its best quarter since 1986 in fact, this century, gold has now outperformed the S, p5 100 by two and a half times. Just incredible. There's our asset class rundown. Let's speak with this week's guest.   This week's guest has been a long time, prominent, well known name, perhaps even a household name. She is a global wealth expert, six time New York Times, best selling author, and today, she runs integrated wealth systems and other alternative asset platforms since 1996 she's been involved in multiple areas of finance, mentoring, real estate investment, business development and gas and oil. And much like me, she teaches people her strategies on how to make money, invest money and keep money, but together, you and I can look forward to getting her spin today, and you've seen her seemingly everywhere over time, in the USA Today, The Wall Street Journal, the view Dr Phil in every major legacy network channel, many times she is on a mission to change The conversation about money. She was known as the millionaire maker from back when a million was actually a lot of money. Welcome to GRE Loral Langemeier.   Loral Langemeier  11:31   hey, thank you. It's great to be here. Look forward to talking with your audience,   Keith Weinhold  11:35    Laurel, though we're a real estate investing show and audience here, I think that you and I would agree that wealth building starts in the mind that most valuable six inches of real estate between our ears. What's your take on cultivating a wealthy mindset?   Loral Langemeier  11:50   You got to hang out with millionaires. I said the fastest way to become a millionaire is hang out with them. Is for me. I knew that's what happened. 1996 Bob Proctor introduced me to Robert Kiyosaki, Sharon Lechter, I flew down, sat at her kitchen table. I walked out that day. I flew in as an exercise physiologist for Chevron, building fitness centers in their blue collar like offshore oil rigs, refineries like the sexiest places in the world, Kazakhstan and goal Africa. I went in as an exercise physiologist. I went out the next day as a master distributor with a cash flow game. And I jumped, I quit my job and said, I'm going to go follow this Japanese kind of game around. And I was teased and teased and teased. Keith because, I mean, Rich Dad, Poor Dad didn't really hit until 1998 so sort of this risky proposition. But like with anything you say yes, you figure it out. And I knew people asked me over the time. They said, What would have happened if Rich Dad, Poor Dad didn't hit, if it didn't become as big? I said, we just opened up another door that's such a message for people, their need to see the path of how to do everything before they move is honestly one of their biggest saboteurs. So for mindset, I think mindset also goes with knowledge, because I just know, having taught this, you know, just this whole millionaire hold like a millionaire maker book. And for all your listeners, I can give them a ebook copy of the millionaire maker. So love to give that out to everybody for free. However. You want to do that in the show notes, but becoming a millionaire is the same thing as take like you said, you got to learn to make money. As an entrepreneur, even if you have a job, you've got to learn to make money. You've got to learn to keep it through better tax planning, and you have to invest in alternatives, which is why real estate was my first millionaire status. And I've been a millionaire now in nine industries. So that's kind of exciting new hit nine industries this last year. So done in a lot of different categories. Real Estate was my first in 1999 and during that period, if it wasn't hanging out with Robert Sharon, Keith Cunningham, like Bob Proctor. I mean the guys. I mean when you're living around millionaires, the fastest way to not only get your mindset, but then your behavior and your knowledge levels just skyrockets because you're around I mean people who live it, and they're living it every day. I think those who sit on the bleacher seats, I call it Keith, where they're just watching, reading, but never getting in the game. They're the ones who like they're sitting in the oyster seats, right? They're just watching. They're not actually get on the playing field.   Keith Weinhold  14:09   Sure, it harkens back to the classic Jim Rohn quote, you are the average of the five people that you spend the most time with. Laurel when it comes to mindset, one thing I think about is that every single day, 8.2 billion humans wake up, and every single one of us has this gap between who we are and who we could be, yet most of us make zero progress on this ever present gap. So when it comes to wealth mindset and finances, what can we do?    Loral Langemeier  14:38   You gotta get a mentor and a coach. And I got a mentor and a coach when I was 17, what shifted me and really changed the whole trajectory of my life. I grew up at farm in farm girl in Nebraska, and at 17, I was going off to university, also going to play basketball. And so I went to one of those pre sports seminars, and Dennis Whateley was a speaker. And. And I ran to the front of the stage, and I got the book, Think and Grow Rich, and that I can tell you, a farm girl 17, going like, there's a whole other way to live. So instead of going to school to get a law degree, which is what I went into, which I still think I'd be a heck of a little debater and negotiator, but I do that enough in business now, I got a finance degree, and I just studied. And my first mentor at 17, I walked into a bank, and I remember asking the bank president, will you mentor me? Because rich people put their money here. I need to understand money, because I don't understand it. And I was never really raised in that conversation, which I would say, 99% of the planets that way. And I have taught and traveled this work since, you know, 1999 when I became a millionaire, Keith, I've put this work into six continents, all but Antarctica. So I know it works in principle. Everything we will talk about today works in every continent. The benefit is the United States has the most corporate structure, the best tax structure, the best tax strategist, stack strategies. So even my high net worth international clients end up, typically in Nevada, with a C Corp or some sort of asset company or trust, where then they can buy us real estate, US gas and oil and activate our tax code for them. So we do a lot of really high, high level international strategies. Just because I bent all over to do that, when very blessed to do that, it's interesting, because I think mentoring, you're not going to be taught this. And what drives me crazy when people say, and I'm sure you've heard this a million times on your podcast too, Keith, schools should teach this. No, they shouldn't. Parents, you need to teach it. You need to be more active in your household than your family. And instead of letting Tiktok raise your kids, you need to raise your kids. So I do a lot of work in this category, because my kids are now 18 and 25 raised them a single mom, but legacy work is critical, and that's why I have a game. I have a millionaire maker game. So from the cash flow game, I have a game, and I think the parents have got to put the conversation about money in the household, and they got to monitor like, what they say, you know, don't ever, ever say to a child. Don't ask for it, or, you know, or we can't afford it, because you can afford anything you want if you learn to make money. And I think Keith is part of this. I know we're in a real estate show, but you know, how many people want to be real estate millionaires and never make it? How many people want to do like you said, whatever, the life they're really meant to live? But again, I think they're in I don't think I know their environment, who they hang out with, who they spend time with, what they read there. Are they binging your podcasts and my YouTube channel, or are they binging Netflix and Hulu and watching John like how you feed your mind and what content, how many books you read? I don't care if they're ebooks audiobooks, but you've got to put new content in your brain all the time and be around the people making it happen.   Keith Weinhold  17:41   Oh, that's great. Sure. To change yourself. You got to change your five, change your mentors, change your influencers, and, yeah, be that parent that teaches your children about money, and you don't have to teach that money is a scarce resource. I really just think that's one part of a mindset. That's where most people's mind goes when they think about money. They think about it as a scarce resource for one thing, and it's pretty counterintuitive with the mindset. I mean, if you want to be in the top of 1% you're probably going to be misunderstood and even iconoclastic.   Loral Langemeier  18:13   Yep, I would agree. And you know, another thing with mindset that I think is interesting is, and again, I'm gonna go back to knowledge, about consuming the right knowledge. And on my YouTube channel, which is, you know, Laura Langmuir, The Millionaire maker, it's family friendly. It's for five years old and up. We actually have a YouTube journal, Keith, that we did, where it says, What day did you watch the video? What did you learn? What will you do? And in 365, days, because I'm there every day, here is your this. And that's what I tell parents. I said, get yourself and get your kids a journal and at least one lesson from every recorded, you know, video. So I would say, give me five to 10 minutes a day just for a new piece of content. And the biggest one that is searched on my channel. I want to relate this to real estate is people's mindset and understanding with debt. They have such a negative, negative relationship to debt. And I want to start with this. Debt is the cost of money period. It is not negative. I think it's the most positive thing you could do. And as a real estate investor, arbitraging debt, meaning, if you can get debt for two, 3% or 0% I have over 500 sources, I can get 0% financing for 21,24 months, that's free money that's not hard money, that's not 13% 14,15, that's free. And I would go into a million dollars of 0% debt I have, and I will at the end if I can invest it and make 10,12, 20, 30% so people need to learn, debt is your friend. If you use it in a responsible, organized and educated way, it is absolutely your enemy if you're using it to buy lifestyle crap. So like, debt is such a weird thing. Keith and I don't care how long I've had clients, if they grew up with a lot of debt and a negative impact around money, they can be a millionaire and still have this weird relationship to death. Oh my god, debt, and it's literally. They tremor. It's like it's just money, and there's plenty of it. It's just the cost of it. Or is it being paid to you, or are you paying it out and arbitraging that that range could build. I mean, that alone, if you just learned that strategy and applied it on top of your real estate strategy, would triple, if not 10x your portfolio,   Keith Weinhold  20:19   like we say around here at GRE financially free beats debt free. You understand the difference? So does our audience. A lot of people don't. In fact, trying to retire your debt and slow your progress toward being financially free. I love it. Yep, you know what's funny, Laurel, just like you're coming on this show today, sometimes I'm a guest on other shows, and the way I've started to have the host introduce me to say, Hey, if you want your show to get some attention, say that our guest today, me has millions of dollars in debt, and he has from a young age that attracts attention. They think it's a negative thing. They don't know that my debt is outsourced to tenants. They don't realize a net worth statement. That's only the debt side of the column. We haven't talked about the asset side of the column, so it's really just an example of being paradoxical and iconoclastic. There we move beyond the mindset Laurel. I know you have some really actionable things on how you can help people build wealth quickly. Tell us about that.    Loral Langemeier  21:16   So again, using debt is a massive piece of it. I'll just talk about some of the stories, like when I got into real estate in 1999 real estate in 1999 I lived in Marin, California, Sausalito, specifically right on the water. I shouldn't be on one side, right the San Francisco Bay. And got pregnant at 19 January, 8 was like, Oh, little sticks like, Oh, I'm gonna be my mom. And I knew I'd be a single mom. So I entered parenting as single mom, and I struck that, you know, another check for $25,000 seems to be the number for a real estate mentor that I've been kind of putting off. And I said, Oh, it's time. I said, so right now let's go. I have nine months. And he said, Why do we have nine months? I said, I'm really close to being millionaire, but I gotta hit millionaire status. And I need this much cash flow by my 34th birthday, which was June that year. I said, because in September, I'll be having a baby. And he went, what dropped the phone, and so he said, All right, so I wired him the money, and he said, meet me in Oklahoma City the next day. Yeah, well, there's a ticking clock. Yeah, there was my timeline nine months. But we went straight to the streets. And I think for the for me, I was privileged to be with a whole team, and I don't think I am a massive advocate. If you don't know what you're doing and you haven't done it, why take 100% risk in any industry that you've never played so I only got 15 20% of that run. But here's what I came with. In 1999 I knew how to build a database because Bob Proctor taught me that. So during the cash flow era, I bought my own inventory, took out debt, bought $500,000 of games, put them in my own warehouse so I could collect my own database. So from 96 to 99 I had acquired 18,000 people who had bought Rich Dad, Poor Dad books, cash flow, cash flow, 101202, all his the products, and I had my own financing. So I was doing my own product. I had my own stuff. And all this is a big backstory, because a lot of you in real estate don't have a database. And here's the value I brought to that team that earned me another almost 10, 15% of equity is I brought 18,000 people, and when they saw that, they're like, you could help us raise the money, I said, I don't know to raise money. And they said, we do so again, I bought my way into a team for 25,000 in a mentoring program. There's about 10 of us that met in Oklahoma City, went down to Norman, and within less than a month, we raised $16 million out of that database. They did. I didn't know how to do it again. I sat on the sideline, but highly mentored and guided. So I was on a winning team from the beginning. We bought so much real estate, and then we went into the remodel. And so right then it's like, well, let's own the construction company, so that way we could get better buys. We can buy for the whole street. We can buy for the whole apartment. So we bought we started construction companies. We started being the distributor of the windows and doors in Oklahoma. We did that in Kansas. Now we do flooring as part of the distribution. We've done stoves. I mean, you name it, if you're going to buy it, buy it from yourself, or some way that you get paid extra. And then, like I told you before we went on the show, I would have the property management company. So we would start that, which was then came along with the cleaning companies. Gotta have the cleaning companies, the cleaning crews, the hauling crews. You're gonna pay one 900 got junk, buy your own truck, lease your own truck, haul your own stuff, and then rent it out lease it to others. So when we say cash flow fast in real estate, I went all in. So I own 51% of every property management company, and I put a ad in the paper for an electrician or a plumber, because they were mine most of two expensive things. And so they became partners. And I just made a lot of stuff, quite frankly, but I made it up with a lot of mentoring and guidance, of which those guys are still great, great friends of mine. We still own a little bit of property together. We went to Mexico and did a whole run through Mexico. The team was the most vital part. And what I say to folks in real estate, if you want to go big is you better get a database. I just find key that so many people in real estate don't understand. The Association of having a database, and the way I describe it is, today I might not want to buy, but if you don't have my name, phone number and email, and you don't continue to market to me the day, I am ready to buy or sell, you're no longer on my radar because you're not keeping in touch with me. Your job is an agent, a broker, an investor, I mean, is to build this database of people who then will go along with you on a journey. And I can tell you, it was a very blessed to have done it that way, but that 18,000 is what helped me become a millionaire. Because I had the people. I didn't know what to do with them. I didn't know how to raise my I didn't know anything about a PPM. I knew nothing, but I learned it all, and I was under a very, very successful. You know, decades and decades of success team. So, you know, they were 20,30, years my senior, but boy, I learned. I really leaned into it. And I think people do buy into programs and mentoring communities, but they don't do the work. And I see it all the time, I don't know how many people, and I'm holding up my millionaire maker book, and then this latest one, which is how I made my kids millionaires on paper at 10, again, by using trust real estate. Put them in my real estate company, shareholders,   Keith Weinhold  26:05   make your kids millionaires. Is the title of the book you just held on that second one.   Loral Langemeier  26:10   That one's a 2022, that was my latest best seller, and how I did it with my kids. And again, this back to The Parenting. So I can go a lot of ways, Keith, but I think the do it fast is go wider. I think so many people just go into buying just the asset, and they don't like I'm in the cannabis space right now in Nevada, legal. I'm an illegal cannabis I have licenses and very similar, if you're going to go in and you say seed to sale, you own everything like so I mean, the guy who's running my farm, he owns the label makers. He owns the, I mean, if you name it, he owns the nutrient company, because you need nutrients for the plant you're going to own. You're going to own. So the more you own of what you do and you have to pay, the more you keep your cash flow. And again, I see that mistake with real estate people subbing all the work to so many people. It's like there's so much cash that just went out that could be at least a percent of that could have stayed home with you. Sure   Keith Weinhold  26:59   100% there's an awful lot there. You're a big believer in vertical integration, in bringing in all these levels and stages of construction and management and so on, and bringing them in house. And yeah, it's interesting. You talk about the importance of the team. Here, we talk about how your team, whether that's your property manager, your mortgage loan officer, your 1031 exchange agent, how your team is actually even more important than the property itself. And yeah, when it comes to having a database these names Laurel, it's amazing, in a way, reassuring, in a high tech world with AI, that it still comes down to that primordial human connection of people and who you know you're the listener. As you've listened to Laurel, you could probably tell that she was a star student, which is why she's now a star teacher and mentor so much more when we come back with Laurel Langemeier, this is Get Rich Education. I'm your host. Keith Weinhold.   you know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back, no weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom. Family investments, liquidity fund again. Text family to 66866.   hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridgelendinggroup.com that's Ridgelendinggroup.com.   Hal Elrod  29:43   This is Hal Elrod author of The Miracle Morning and listen to get it rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  30:01   Welcome back to get rich education. We have a well known name in the finance space. For decades, Laurel Langemeier with us. She has done an awful lot of real estate investing in her career, and as you can tell, she's got her own recipe, her own formula. She does things differently, she integrates. She brings things in house. Has multiple companies, and Laurel knows that you can be a profiteer when you serve the customer or the tenant, really, to the maximum amount. A lot of people have a gap there, and there's an opportunity cost. And Laurel, I know that one way you serve people is with Airbnbs in the Ozark region of Arkansas. Tell us about what you're doing there. That's really interesting.   Loral Langemeier  30:41   So we bought pretty big houses, and a few of them we actually the one we were remodeling it, and that's when we really got to know the Ozarks. And there's a lot of tentacles. And so to get, like, from the properties we were buying to where you would rent a boat or a jet ski or get your watercraft, it was all the way around the lake. I mean, that's two lane roads, and it just took forever. And I thought, well, let's so we have another LLC that we bought some boats and jet skis. And again, when you get to know what do people really go to the Ozarks part that we call it the Redneck Riviera. They go to party. They go to party more than they need some bougie house to stay in. That's not what they really come they want to stay on the docks. So instead of putting a lot of money, we said, how can we force Do we have one property has 22 beds, so 22 people can sleep, but they just barely sleep there because they party. So we put more money in rehabs, into the dock, expanding the dock, big sound systems, a big bar, refrigerators, just made it super fun. And then when the tenants come, they don't just rent for the night. We also give them. We'll get your groceries and booze. We'll stock your bar down on the dock if you want. We'll pull up our boats and jet skis. So we had our own small fleet. Again, we just stacked on more service. So when the tenants arrived, a we got, you know, anywhere between depending on the boats and the jet skis and the tubes and all the ropes and everything they wanted, water skis. I mean, whatever they wanted to rent. Basically, we became like a rental company, and everybody freaked out, and they said, Oh my gosh, you're going to get killed in insurance. You're not. I mean, yeah, it's a lot more planning, and it's more work to get all that prepared. But that was anywhere between 500 to 1000 more a night in just the Airbnb. So again, why? If you're going to do one thing, do more for them, the more you serve a client, I don't care what area it is, yeah, the more you serve people, the more money you will make, because they're going to buy it, they're going to have to go get their booze on their own. They're going to have to go get groceries like that's a whole day of getting all that gear to their property versus, let us just save you a day on your holiday and let us do it all for you. There's so many creative ways that you could just serve people, and if you don't know what to do, ask them, What a novel concept. I do surveys all the time, like always doing polling and surveys. Hey, I'm a money expert. What do you want me to talk about? That's what right now, if you really look at a lot of my YouTube and a lot of my social media, people want reduced taxes. So like, I'm doing a heavy, heavy lift, because it was a survey that told me to do it, not just because Laurel decided to do it. And I think so many of you don't realize your audience will tell you what they want and how they want to be served. If you're listening, that's how you make money. And so many people as you know too Keith, that come as the entrepreneur saying, This is what I'm going to teach you. Well, nobody asked, nobody asked for that content. You wonder why it's not working. Is because you're pushing your agenda versus pulling and giving and serving their agenda?   Keith Weinhold  33:23   Well, that is a great point. How do you know what people want? Two words ask them, which is exactly what you're doing there and the way that you're adding value and amenities onto a property there, like with what you're doing with Airbnbs in the Ozarks. It actually brings up a thought for another Jim Rohn quote. Jim Rohn said money is usually attracted, not pursued. Tenants are attracted to your rental units, new luxurious floors, and you'll soon profit when they compete over it.   Loral Langemeier  33:52   Yeah, it's a lot of this stuff. It's not difficult. It's just different. And I use that saying all the time because people are like, Oh my gosh, it's so scary. He said, It's not scary. The only reason why people put fear and risk and that kind of negative energy and words, you know, language around, I think real estate or money or any of that, is the lack of knowledge. Because if they don't know, anything that you don't know is scary, like you and I talked before the show about aliaska. I mean, if you don't know how to ski and you try to go to aliaska, good luck. You would be scared out of your mind. But once you learn, it's exhilarating. And I find out with everything. So anything you approach and just notice the hesitation, is it because you need to learn it then lean in and find the best in class to teach you and like, shortcut your learning curve. You don't have to study for years and years and years and years. Becoming an entrepreneur is a decision right now, today, in two minutes, make a decision, and then get to work on what your offers are. You say, Well, what am I going to offer? People ask them, and they'll tell you what they're going to buy from you, because they're buying stuff all day long in this economy, they are buying and going to continue to buy.   Keith Weinhold  34:56   If you yourself have a question for Laurel, you can always ask. Ask it at Ask loral.com L, O, R, A, L and Laurel, what are some of the more outstanding questions that you get over there, and how do you help them with some of the most important ones?   Loral Langemeier  35:12   I'd say the number the biggest flood of content and questions right now is, how do we reduce taxes? I made up this term called the tax trifecta, because what affects your tax return is how you make your money. If you're just an employee, meaning a w2 like in America, that's what it's called. And Kiyosaki said it best in Rich Dad Poor about there's two tax systems. You're an employee, you're going to get tax pieces. You live on what's left. You're an entrepreneur, and you make money inside of a company. You activate 81,000 pages of tax code, and then you pay tax. So you decide how, where you want to pay tax. I call this living corporate life. So when how you make your money inside, what kind of a company? Right? And then activate the 81,000 pages of code for the deductions. Like I teach my people, they'll never go on a vacation. They're gonna have a business trip. And when you're in real estate, you can go anywhere in the world legally on a business trip, as long as you do what's required to actually make it a business trip by looking at real estate, and it's not that difficult. I mean, the reason I'm in a lot of different businesses is my kids have never been on a vacation. I don't take vacations because they're not deductible. I take business trips. So I teach families how to employ their kids. How to do all of that, like, how do you activate your kids? I mean, when my son was born in 1999 he was employed day one. He had Roth IRA By the second day of his life, and he was funded every day. And he's 25 now, just that one move made him a millionaire, just the one move of maximizing your Roth IRA strategically using it to invest in real estate. So I use a lot of participating notes. I did all sorts of different plays to grow their Roths tax free, tax deferred. So I'm super active about the whole family being in a real estate business. I think real estate is it's the first one I went after, and it's still the first one I tell lots of families. I mean, it's got to be in your portfolio. I still own a lot of commercial real estate, some residential, I said, in the Ozarks, but most of mine went commercial within the last especially COVID, I went all commercial for the most part, besides a few pieces of residential. Back to what do I that tax trifecta, how you make money, how you activate the tax code. And then the biggest one that nobody in financial planners will not tell you about it, your tax, your CPA, won't tell you about it. TurboTax is never going to tell you about it. It's how you invest in alternatives. So real estate, obviously, is a big one. Gas and oil is a massive one. Aviation, water rights, mineral rights, conservation easements, carbon credits, those are the ones that affect your tax, because you get the depreciation schedules. So it's how you make it, how you use deductions and how you invest collectively makes up your tax. And so those are the kind of questions key some category of that, like I told you before the show, I have a new guy that just joined by over $20 million of real estate and only a few LLCs, no S corp, no C Corp, no trust. I'm like, and then you have these ridiculous insurance agents who say insurance will cover it all. You don't need to have an LLC or an S corp RC. You do? You do too. I would never live on just insurance that is such as 1960s conversation, like you guys got to grow up?   Keith Weinhold  38:17   Yeah? Well, you know, totally. And you mentioned Rich Dad, and it's really the Cash Flow Quadrant. And one thing that the Cash Flow Quadrant helps delineate is you touched on it your tax treatment. Tom wheelwright is the most frequent guest that we have ever had here on the show, being the tax guy coming from the rich dad school. And Tom wheelwright was really the first one to inform us that something like 98 to 99% of the tax code is actually a road map for where the deductions are. Only one or 2% of maybe are the tax tables and what you must pay almost all the rest of it, is this roadmap to give you a guaranteed ROI if you follow it, something that you don't usually get in investing. And you brought up a few interesting tax strategies there. I think one of them is how you employ your kids and get deductions that way, while your kids learn. Tell us more about that.   Loral Langemeier  39:11   I mean, when Logan was two, I put him out. He was painting buildings. He was around all sorts of, you know, title companies and closing tables. And then my daughter's same thing. So I take them with me. There's again, part of parenting is they have to be involved in your life. And I think so many parents just leave their kids home. They leave them with the device or their phone or some iPad. None of us have it like if they're gonna sit at a time, you know, a closing table, then I want them if they may not know everything at that moment, but that experience in that environment of just being a natural environment for them to know, to do business deals. It changes them. Changes your kids drastically. And then fast forward, when my kids are 18, they get an LLC for their birthday, and they're added on shareholders in a bigger way, because then I use again the roadmap. Because, you know, well, I always. Laugh, I say, but people read fiction novels and junk whatever. I'm reading the tax code. I think the tax code is the most creative, freeing body of work that has ever been done. It's fascinating. It's so creative. My son's becoming a CPA because of it. So when my son went to school, he was on a football scholarship. He played for Georgia, Southern starting center five years because I'm a single mom and I only make $42,000 I don't even own a phone. I don't own a car. I don't own a home, actually, because it's held in LLC It's an estate property   Keith Weinhold  40:32   I put or on paper or on papers.    Loral Langemeier  40:34   No companies own it all and trust on it all. So I own nothing like I literally live Rockefeller style, and I teach people that this really was beyond the millionaire maker stuff. But my point with the kids is then when he goes to school. So instead of going every Friday to watch him play football, on a Saturday, I went on a business trip to see my son, and he and I actually are looking again. That's in states pro Georgia, where Georgia's other is buying some apartments that we can then back into, and then then we go to the athletic department, and we know how much they will guarantee rent paying scholarship men to live in our apartment, like there are so many cool ways, and that that's how my son will get involved. So during all of my trips to watch him, Yes, I took one hour to watch him play football. Otherwise, I went to see my business partner. So my point is, and when he came home, he had to come home, not to just come home, but he came home to see his business partner happened to be his mom. So there's a way to put your kids into these businesses early and put them through school, have school that can't be written off. And even though he's done a scholarship, all that travel was still not a deduction, unless we structured it as a deduction to the real estate company. There's so many strategies that I honestly, Keith, I made a lot of these up. And I went to, you know, my top tax team, and I said, why can't we do this? I said, I want this to be done. Tell me the legal way to do it, and then they would guide me. So then I just turn around and I teach other people that when you do your own taxes, number one, you're not educated enough to do your own taxes, so why people do Turbo Tax or even H R Block? I mean, that's where kindergarteners play. And if you want to be a millionaire, you have to get experts around the table that really know what they're doing. I mean, a proper tax strategist at the level we have, and I have, like, 28 people on my financial teams that integrate. I mean, they have masters of accounting. So they've gone to school five and six years. They've sat for four exams and had 2000 hours of audit. So whenever, like an engineer or somebody, even a real estate investors, try and do their own taxes, I'm like, it's a highly, highly skilled expertise. So anyway, I could go into the team approach. I don't think Keith, I know so many people are so close to getting it really all right, but their sequence is completely out of order, and they're just at call tax and invisible paying. You're just used to it. You're just used to paying it because you think you have to. And you've been scared by the media that it's this big, scary thing, and the IRS is going to come get you. It's like, no, they're not. This is legal to do all this stuff. You just have to do it right and document it right   Keith Weinhold  42:57   right. And that's part of your team, your tax team, and that's another good ROI. If you pay a tax preparer and strategist 5k which is more than most people, maybe they're making you 10x that or more with their knowledge of the tax code. And for you, the listener that might find the tax code to be dry reading, you know, for a lot of people, you're probably right that it is dry reading. But if you think of it this way, if I act on what I read, then I am getting paid for what I'm reading here in the IRS tax code. Well, Laurel, do you have any just last thoughts, overall, whether that's about wealth, mindset or real estate or anything else, as we're winding down here   Loral Langemeier  43:35   any question ever you just go to ask Laurel, A, S, K, L, O, R, E, L, ask questions. Make a request you can ask about I have online events. You can ask for free tickets. You can ask her ebooks. So ask her whatever you want. We're super generous on giving gifts away to especially our new listeners and new folks. But a lot of it's, I'm going to say it's active engagement. That's a term I've used as I walked into 25 and I look at the people I've made over 10,000 millionaires, probably 12, 14,000 by now. But the difference between those who make it and those who still struggle is active engagement. I'm showing this on your screen just to have it on video, but I got this magic wand because people say I have a magic wand. I said, I do. I naturally now officially have one, and it comes with pixie dust. But it doesn't really matter. It won't work. I can't just, you know, anoint you with my little wand, and all of a sudden it's magically going to change. You have to actively, like you said, study the IRS code, study my books like my millionaire maker is a blueprint for how to be a millionaire. So there's seven families in the book. Pick which one you're closest to and what you've done to yourself, and then start the pattern, and there's a pattern and a sequence for everybody, for seven different kinds of family, and what you've done to yourself. And I also live the last kind of words I would say to people is that I've been doing this way too long. I have no judgment, no criticism about what you did to yourself. A lot of people are ashamed or embarrassed, like I can't believe I'm this old and I should be farther along. So what now? What is my. Saying, so what happened or how you got here? What do you want to do about it now? So we start with a new, fresh line and stand and let's go and you can create anything you want with the right team around you and the right initiative. So just know you'll be actively engaged in this. This isn't me, doing it for you or to you. It's with you, and you have to own it. You have to own your own wealth. Nobody else cares about it more than you.   Keith Weinhold  45:23   these strategies work as long as you do. Laurel, it's been a great mindspring of ideas for the listener here. Thanks so much for coming onto the show.   Loral Langemeier  45:32   Thank you. Appreciate it. Look forward to hearing from many of you and helping you out.   Keith Weinhold  45:35   Oh, yeah, a wide range of expertise from Laurel Langemeier there. And you know, we're talking about the awareness of the gap between who you are and who you want to be earlier. Really, there could be a gap between how you're utilizing your rental property currently and what it could be Laurel found more ways, for example, to serve her short term rental tenants in the Arkansas Ozarks with providing boats and jet skis dockside to her tenants. In fact, there's a book all about this called the gap and the gain. It was published about five years ago, and let me tell you what it's about and maybe save you 10s of hours of reading most people, especially highly ambitious people, are unhappy because of how they measure their progress. We all have an ideal. You have an ideal. I have an ideal. It's a moving target that is always just out of reach. Well, when you measure yourself against that ideal, you're in the gap. However, when you measure yourself against your previous self, you're in the gain measuring your current self versus your former self, that can have enormous psychological benefits. That's how you can feel like you're making progress, and that gives you confidence, and you make more progress. You might have only owned two rental properties last year, and you're going to have four this year. So you want to make that comparison, don't make the comparison that Ken McElroy has 10,000 units and you never will big thanks to the driven and experienced Laurel Langemeier, today, I feel like she has a narrow gap between who she is and who she could be.    There is a lot happening here at GRE in our newsletter called The Don't quit your Daydream letter. I recently let you know about what chat gpts ai updates mean for real estate investors, and I showed you that before and after photo of how you can now tell AI to just renovate your rental unit, and within just a minute, it shows a pre and post renovation, it shows what the renovation would look like. AI is also being used for fraud, like to generate fake receipts or insurance fraud that makes a property look damaged when it really isn't. And every few weeks, I like to send you a good real estate map, like the recent one that I sent you, showing the cost of living by county and how that map was almost like a cheat code on how you can find the best real estate.    Also here at GRE our free coaching is helping connect you with properties. Many of you are interested in BRRRR strategy properties lately, I recently reshot the entire real estate pays five ways course, and I updated it for today's times with today's numbers. I'm giving that away for free, those videos and even giving a free gift at the end of the course, I share those resources with you in the Don't quit your Daydream letter as well.    And then, of course, I sent you details on the Great Investor Summit at sea cruise starting in Miami, sailing the Caribbean June 20 to 29th and how you can have dinner with me and the other faculty, like Robert Kiyosaki, Robert Helms, Peter Schiff, Ken McElroy and more. And this particular cruise event is not cheap to attend, although I don't make any money from the event, but our Don't Quit Your Daydream letter is totally free. I would love to have you as a reader, and you'll stay informed on all these Real Estate Investing Insights and trends and events and more, otherwise, you're really missing out. See, the reason that I write the letter is that I have visual things to show you that I cannot do on an audio medium here, like this, like those real estate maps. And before and after photos. I write the letter myself. You know so many other letters are now AI generated. I write this myself. It is all from me to you. And if you aren't already a reader, you can get the Don't quit your Daydream. Letter free right now, just text text GRE to 66866, and by the way, we don't text you the letter each week. That would be intrusive. The letter is emailed. It's just a convenient way for you to opt in. You can do that while it's on your mind again. Text GRE to 66866, and I'll turn it alternative way to get the letter is to visit get rich education.com/letter that's get rich education.com/letter. I've got a lot more for you next week. Until then, I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 1  51:01   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  51:25   You know, whenever you want the best written real estate and finance info, oh, geez, today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video. Course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text GRE to 66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866.   The preceding program was brought to you by your home for wealth, building, getricheducation.com    

Keith discusses the shift from a six-figure to a seven-figure income being necessary for a comfortable lifestyle and argues that a $5 million net worth is a minimum for financial security. He explains the benefits of leveraging a car loan for arbitrage, using a 3.99% interest rate to invest in real estate with a 20-25% total return. He also discusses the current state of the real estate market, noting that home prices and rents are expected to increase by 3-5% annually. Lower mortgage rates could increase affordability and bring more buyers into the market, potentially leading to higher home prices. Two-bedroom rents have increased by 3.7% nationwide, with significant growth in Nebraska metros. Resources: Get our wealth-building newsletter free— text ‘GRE' to 66866 Show Notes: GetRichEducation.com/548 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold today, why earning a seven figure income is the new six figures? Then a discussion on the direction of real estate prices and rents. I just bought a car though I could have paid all cash. Why did I get a loan instead? Then learn about how to perform due diligence on buying an income property with the pros and cons of turnkey real estate investing and the mistakes you must avoid today. On getricheducation.   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit get rich education.com   Corey Coates  1:20   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:36   Welcome to GRE from the first State of Delaware to the 50th state of Hawaii and across 400 nations worldwide. I'm Keith weinholden. This is get rich education, the voice of real estate investing Since 2014 Are we really gonna change the name away from the Gulf of Mexico? Well, I'll tell you one thing. There is zero history of hurricanes in the Gulf of America, therefore, I expect the appropriate adjustment to my insurance premiums big savings. Hey, you know, despite being a geography guy, I'm really not emotionally invested in this movement to change the names of giant pieces of real estate like Denali back to Mount McKinley and the Gulf of Mexico to the Gulf of America. It's only a little interesting to me. I mean, there are just more significant things to concern oneself with. So call it either one. I don't care. I know what you're talking about. Before we talk real estate, let's discuss your personal finances. I recently watched Dr Steven Franson speak surfacing this topic, and it got me thinking, when it comes to annual income, is you earning seven figures like the new six figures. Now, I guess that earning six figures could still be a short term goal to some people that are new to the working world, but maybe as little as a decade ago, having a six figure income was aspirational, or even a sign that you made it, or could even feel wealthy. I remember that today that is so far gone. Now, of course, it depends on where you live, but today, you need 50k just to survive. Your housing would be pretty standard in that case, and I don't know that you could get much fresh, healthy food at 50k per year, you might still have to be living with your parents. You need 100k just to sort of live. Perhaps that's if you're single and you're near the coasts, or you're married without children today, you need 200k for a life with travel and some dining out. I mean, you couldn't really even ball out on your vacations, like on 200k you're gonna balk at 500 bucks a night for a resort hotel. I mean, you're staying at more of a hotel than a resort, but at 200k of income, you can usually do some discretionary spending. At 300k in a lot of places, that's what a full family needs, a household with kids in order to live a little bit beyond that, and that's a combined income both spouses. If you make 450k today, now you're able to travel pretty well. You're probably still flying coach more than first class at 450k you may or may not be paying for the airline lounge, but you are staying at some comfy hotels. You really need to make $1 million a year today to live pretty close to all out fly first class travel well. But you're still flying commercial on a million dollar salary. You're not chartering anything. If that has not bought you time to cook, you can afford an executive chef with a million dollars so that you don't have to eat restaurant food. You know, restaurant food, even at finer restaurants, is laced with seed oils. This is why what used to be a six figure lifestyle is now a seven figure lifestyle. My spin here on this also is whatever you do at any income level, 50k a year to a million bucks a year or more, buy enough time to exercise that's something that's going to matter both to you and to those that you love over the long term. All right, so that's income. How about when it comes to net worth? There is a minimum amount in my mind that you need to have in net worth for me to say that you've got it made in America today. What do you think that number is? How about that? What do you think is the threshold? What's your thought? It is $5 million that is just a starting point, a minimum net worth that you need, if you just invested that you could probably live off its income for the rest of your life. For most people, compound interest will not get you to the $5 million net worth Mark anytime soon. Only leverage will. But yeah, after the COVID induced wave of inflation years ago, you've gotta recalibrate what you think of as a lot of money, and some people haven't caught up with this still. Now, I was on that great riverboat tour of Chicago not long ago. I think I brought this up to you in a previous episode, but you know, one thing that struck me as odd was that the tour guide, he was describing Chicago skyscrapers and the architecture around us, and he said they poured millions into that project. I mean, really emphasizing that millions were spent. I mean, today millions can mean as little as 2 million. That's an amount so tiny today for a construction project that what is that like, four average homes would be $2 million I mean, some entire counties in the Bay Area have a median home price of more than $2 million just one mediocre home. So let's talk about the direction of home prices and rents nationally here. Now I do not think that home prices or rents can really climb a whole lot over the next year, like 10% appreciation. I don't see it now. I also don't see how home prices and rents could fall substantially. The reason that prices cannot spike dramatically, it's still due to an affordability constraint, and I don't expect that prices or rents are going to fall a good bit either, or really fall significantly at all, because housing demand still exceeds supply. So that's the constraint on the downside. Really, nothing has changed there. The average for sale home today, it gets between two and a half and five offers that obviously depends on the area, so you keep seeing both prices and rents increase at this range of three to 5% that's the zone that we're in now, and we've been in that zone for most of the last Two years. Really pretty modest, not exciting, appreciation rates. Zumper tells us that two bedroom rents are up 3.7%   nationwide. Rents have actually declined in some Sunbelt cities, Durham, North Carolina and Nashville are some big losers I was describing Austin to you a few weeks ago. Do you know that two national leaders in rent growth are both in the same state. Yes, these two cities are both up more than 20% in rents year over year. It's in the Midwest. Any idea where I'm talking about it is Lincoln and Omaha, Nebraska both up over 20% and perhaps recent GRE listener guest grant Frankie is happy about that. He's the only person I know that invests predominantly in Lincoln, and this is due to strong job growth and also that supply that still hasn't kept up with demand. Now back to my point about how nationally, both rent growth and price growth are still pretty modest, which is still a highly profitable formula for a leveraged investor that bought right But historically, it is kind of boring. Many believe that as soon as mortgage rates fall sharply, and a lot of surveys show this, if. That five and a half percent is the magic mortgage rate level that will increase affordability so much that home prices will soar. I'll tell you my spin on that is maybe even that remains to be seen from listening to me for 10 and a half years now, you know that the direction of the economy has a substantial effect on housing, rents and prices, a force bigger than just mortgage rates. And when mortgage rates fall and other interest rate types fall, that usually means that the economy needs the help, which might mean that employment is down. If employment falls, home prices can still rise. They usually do, but perhaps not as much as you thought they would. So my point is, is that when mortgage rates fall significantly, that does not automatically translate into soaring price growth. Again. You gotta take history over hunches. If there's one thing that feels a little different in this cycle though, it's that we do have this palpable amount of pent up housing demand, so lower rates really could bring a lot more buyers off the sidelines. So therefore, it is possible that home prices will soar if rates really plummet. It is just not axiomatic. Now I just bought a new car, though I could have paid all cash. I chose to get the loan. And before I tell you about why I considered not getting a car at all and just using Uber Lyft ride sharing services forever. But sometimes I like to go off the beaten path and trek in some remote places. So that just wouldn't work. I also travel a good bit, and I considered not owning any car that's tethered to just one place. It's just not that efficient. But it came down to freedom. I enjoy my freedom and autonomy to hop in my own car and drive it on a whim. Though I could have paid all cash for this new car purchase, I chose to put the minimum amount down, and I got a loan for about 95% of the cost of the car. Why would I do that? Car debt is surely not as good as real estate debt. With car debt, I have to repay my own loan. I cannot outsource these car debt payments to tenants, and the payment is about $900 a month. I'll have to pay all of that myself. Also, unlike real estate, a car is a depreciating asset. Unlike mortgage interest, car loan interest is typically not tax deductible either. I'm not going to rent this car out through Toro and try to get an income stream off the car. Nothing like that. So this might sound like three strikes against a car loan. I've got to make the payment myself. It's declining in value, especially as a new car. It starts depreciating fast as soon as I drive it off the lot, and I'm not going to have any tax breaks. Oh, come on. I mean, that might sound like bad debt to a lot of people. Leading GRE I am a staunch advocate for good debt. So why did I embrace a car loan to the maximum leveraged amount? Because I am making my car loan good debt. The definition of good debt is debt that makes money for you. Car loan debt is secured, meaning there is underlying collateral, the car itself. And by the way, credit card debt is an example of unsecured debt. The big reason, though, is the financing through the dealership BMW is a 3.99% interest rate for five years, my credit's perfect. So I got a good rate there. Therefore this car loan is a simple arbitrage play. I'm borrowing at a lower rate to invest at a higher rate. Look, even if my car loan rate were double 8% I would probably still get this car loan, but it's 3.99How do I have confidence that I'm going to beat that on an annualized basis over the next five years? Well, first future inflation expectations are elevated, like I touched on on last week's show, if true, inflation the real diminished purchasing power of your dollar over the next five years is 4% I mean, that's a break even for me, right there already, but I'm gonna do a lot better than that. As a real estate investor, I know that instead of sinking this money into the car, that's enough of a down payment for a rental single family. Home or almost a low cost duplex, and being cognizant that real estate pays five ways, I expect a minimum of a 20 to 25% total rate of return with low risk. Now, if you're a new listener, that last part sounded far fetched. I know that's okay. You just don't know how to calculate your ROI for an income property with a loan. Yet another way to describe my strategy here is though I could pay cash, why would I tie up that many funds in a car? So I'm cognizant of opportunity cost. Opportunity cost means that you're missing out on a greater benefit when you choose one option over another. This loan approach also keeps me more liquid. Look, keep your money. Don't give it to a bank. Make your bank take five years to get all the money, while my $900 monthly payment stays fixed the whole time as inflation just keeps relentlessly debasing the bank's payment that they get from me. I mean, with that part, it works the same way as it does in real estate or any fixed rate loan that you could get. Be mindful, by paying all cash, you would not improve your net worth at all. Nothing happens to your net worth. Paying all cash reduces both your asset column and your debt column by the same amount, and it hurts your liquidity. Now, if you've got an emergency, you could be in a case where all of your funds would be gone if you paid all cash, they're inside the car, and you might not be able to extract them back out. All right. Well, what about the depreciating asset part of this equation? That's what most cars are. Well, just like a piece of real estate, your car's value will rise or fall regardless of your equity position. That doesn't influence it at all. So I will be underwater on the car. That's a way that some people might look at it. That means that I'm going to owe more on the balance than the car is worth. That appears irresponsible to some people. Well, yeah, that just means that the bank's money is tied up in the car, not mine. I've got it off giving me a good return. Look, when you have loans, you have another type of leverage, and it's not the mathematical type that I often discuss here. I mean, have you ever owed a friend money when something untoward happens? Who is motivated to talk between the two of you? You are your friend, your friend. They're going to be the one that's willing to work with you and help you out. They've got to give you levers when there's a mal apropos occurrence and the borrower loses their job or has a medical disaster and a huge bill, the person that's owed the money is always going to keep communication lines open with you, you as the borrower, are the one that is in control. Keep your debt on, keep your own money, stay in control. And how is this car loan making money for me, if I get a, say, 23% total return from income property and keep paying a 4% car loan, that is 19% arbitrage, I mean, what an easy choice. Again, the definition of good debt is debt that is used to increase your wealth. So getting the Max car loan allows me to avoid paying that opportunity cost of having all the funds tied up in a depreciating asset. And that is how a real estate investor buys a car. Now you're a smart investor. I mean, we have a really wise, responsible audience comprised of people just like you. But what would be some reasons that a real estate investor should pay all cash? Because there are some, and a lot of them revolve around, if you're financially irresponsible, if instead you got a car loan so you could stay liquid and maintain your life as a profligate and reprobate gambling degenerate and lose it all on sports gambling through the freaking Draft Kings and FanDuel apps. Okay, that's not a good reason. But as a GRE listener, that probably is not you. I was probably not talking about you, right. There another reason to pay all cash rather than getting the loan like I have, is if you don't have the liquidity to service the 900 Dollar monthly debt payment yourself, you could be over leveraged. See the chunk that I'm investing in real estate instead of the car that real estate will produce income for me, but it actually will not produce as much as $900 in cash flow to fully offset the car payment. Now it's going to produce a few $100 but my arbitrage is being created with the summation of all of real estate's five profit centers. I've got the whole shebang now, the leverage appreciation, the cash flow, the ROA, the tax benefits and the inflation profiting all coming at you. All five. My liquidity comes from elsewhere. A third reason why a real estate investor would want to pay all cash for a car is because say that you would effectively be forced to pay all cash for the car. Because if you took on a $900 monthly payment, that would dent your mortgage loan qualifications, debt to income ratio that mortgage loan underwriters are going to look at it would hike up your DTI so much that you couldn't qualify for future income property loans. So right, there are, what was that? Three reasons that a real estate investor would want to pay all cash if they could. But let's not lose the bigger point I was talking about the exceptions there. The bigger point is that consider getting the maximum loan for your next car, or even getting a loan against your current car if you already have one without any debt on it. It's actually a rational approach, because you want to consider the loan first, since this is your money, you earned it, approach it with the strategy first of keeping your own money that you traded away your finite life's time for. Think of keeping it first and only then consider giving it away next. I am getting the biggest car loan that I can and making the minimum monthly payments all 60 months five years, I did the same thing with my last car. It is an easy choice for me in just one word, it is for the arbitrage one word, most experienced financiers and real estate investors have not been exposed to those ideas that I just shared with you, and at the least, I am confident that I just gave you something to chew on mentally. There I've been talking about the intersection of your personal finances and real estate investing. Today, I'm your host, Keith Weinhold here on episode 548 of the get rich education podcast    what have GRE listeners been doing these past few weeks, they have been scooping up BRRRR properties, employing the buy, renovate, rent, refinance and repeat strategy fueled by GRE 's recent live event. You can watch the video of the event on demand right now, get an understanding of the strategy, see why it's so lucrative, and if it interests you, even get you paired up with actual property addresses conducive to the strategy. You can do that at GRE webinars.com this event can indelibly elevate your entire socio economic class and shape your legacy. That is a deep statement. Hey, this is what 8x leverage and $500 plus of cash flow on each single family rental property can do for you with the burr strategy in Cleveland. I mean, how much earlier will this allow you to retire? The event is free to watch. You can watch from home. I mean, come on, what else are you going to do at home tonight? Spend that time cleaning out your closet or smoking meats. Maybe at least, spend that time getting a car loan. What's the opportunity cost of you smoking meats tonight when you can actionably Build a real estate legacy with the BRRRRstrategy? Strategically outsource the meat smoking to somebody else. That's what I do. It does not take much to get started. These pre renovated homes are often about 60k some GRE followers have already bought two or three at a time. You'll see Jerry's investment coach Naresh and event co host Phil. I mean, just watching him talk is amazing. Phil is America's preeminent authority on burr real estate investing. Again, you can watch the event right now, and I don't know how long we'll keep it up for, just visit GRE webinars.com    Next fatal mistakes that you've got to avoid when buying income property with some vital due diligence tips. I'm Keith Weinhold. You're listening to get rich and. Vacation.    You know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it. If I wasn't invested myself, you can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom, family investments, liquidity fund, again. Text family to 66866    Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Chaeli Ridge personally. Start Now while it's on your mind at Ridge lending group.com that's Ridge lending group.com   Robert Kiyosaki  26:49   this is Rich Dad, Poor Dad. Author Robert Kiyosaki, listen to get rich education with Keith Weinhold. And the reason I respect Keith, He's a very strong, smart, bright young man.   Keith Weinhold  27:10   Welcome back to get rich Education. I'm your host. Keith Weinhold, it's been a while, but I know that I shared with you before that my first ever out of state rental property that I bought ended up being a loser, and this is despite the fact that the turnkey provider and property manager that I was hiring for the property, they even told me not to buy the property because they couldn't keep it occupied in that neighborhood, and they told me to buy a different one instead. I didn't listen. I bought it anyway, and I lost we couldn't keep it occupied, so after a few years, I sold it to an owner, occupant, family for a small profit, but it was after years of negative cash flow, so there really wasn't any profit there, because, like I just said, we couldn't keep it occupied with a rent paying tenant that was back in 2012 near Fort Worth Texas. I bought it because it was cheap, just 153k and it looked pretty. It was brick. Those are both bad reasons to buy. Cheap doesn't always mean good. And the fact that a property looks pretty, I mean, I guess that's a somewhat good thing, but it should not be a deciding factor. I was never going to live there facts Trump feelings in investing. So my first bad experience was totally avoidable. I can only blame myself. Let me tell you about some other fatal mistakes to avoid, as we talk about some turnkey real estate investing due diligence. Since turnkey means all done for you, or another way to describe the property is a rent ready property. You know that word turnkey? It's sort of this compelling, even seductive buzzword, and it just might make you think that, ah, everything is just handled now and forever. It's gonna sail along just fine. No, it won't. Now, this is the type of investing that can change your life. This is the real estate pays five ways. Compound leverage Trumps compound interest, type of vehicle. Financially free beats that free type of vehicle. You're winning the inflation Triple Crown all those great, formulaic GRE mantras, but you better check to make sure before you get too far into it. And that's why we're talking about vital due diligence here. I think you know by now that turnkey, it means a property that's really just got three things. It's already renovated or new. Secondly, has a tenant in it, and it has professional property management from day one. Now, the property providers at GRE marketplace, they are some of the good ones. They have good reputations. Many have been in business for a long time, but some others do not. So what about a provider? Provider that's in, say, Oklahoma, but you live out of the area on one of the coasts, and this Oklahoma provider, they're trying to pass off a property in Oklahoma City or Tulsa to you, it's actually in a class D neighborhood the worst. And they're sort of presenting it like it's a Class B minus neighborhood, right? How can you hedge against that? How can you know that things are not being misrepresented to you? Well, of course, everyone knows about Google Street View. You're probably going to look at that first that's going to tell you about the street scene. It's free to use a paid service that gives you neighborhood analytics. Is it neighborhoodscout.com you want to verify crime rates in areas, income levels, poverty levels, education levels and school quality to make sure that the property characteristics are what you are being told, and some of those attributes always matter with property. I mean, crime rates matter because even though you're not living there so you're not going to be able to retain respectable rent paying tenants that would tolerate a high crime neighborhood. Understand, though, that not all crime data is the same. Violent crime is probably the worst shoplifting, I'll call that in the middle. And then most traffic violations, they're light crimes. Now, if you're buying a single family rental type, of course, the quality of the school district, well, that's going to matter more than if you're buying a building of little efficiency apartments where the school district hardly matters there, because you're not catering to families. I've mentioned before that we go look.com. Is a service where you can hire an independent inspector, not even a real estate related person, necessarily, but just an independent on the ground inspector to just go check out a neighborhood at any hour of the day or night. Now, if you have any question about the out of state neighborhood that you're buying in an easy way to get a check on the decency of the neighborhood is something really simple. Make sure the turnkey provider owns properties in the area that they're selling to you. This helps ensure that they're not offloading their problem properties onto you. That's something that's probably only going to happen with an inexperienced provider that doesn't have a reputation to protect yet. But when it comes to neighborhood quality, once I'm pretty serious about buying a property, do you know who I usually get reliable information from? And it's virtually free, and you're contacting this party anyway, so it's so easy for you that is just simply ask your property inspector. I mean, you always want that independent, certified Property inspector to walk inside every room of your prospective purchase, and they make that punch list for your seller before you close that's on either a renovated or a new build property always get that inspection. I've talked about that before, and that often costs $500 or less on a single family home, and today it's about $800 or less on a duplex, well before my inspector even checks out the place. I like to let them know that I live outside the area, and I want their insight on the neighborhood as well. I mean, inspectors live locally there, so they'll probably be able to give you a good answer before they even do your physical inspection. They already know the area really well, and it doesn't even cost you any more above your normal inspection cost to just get a little on the ground intelligence. And of course, your inspector works for a company independent of your property provider, so their information should be unbiased. They work for you. Now after the inspection, how about your appraisal and some due diligence with that, what if your appraisal comes in low. Everyone wants to talk about if your appraisal comes in high, that's instant equity that you have, but see if the appraisal comes in low with a turnkey property where everything was renovated, that may or may not be a problem, because the comparables that were used for your valuation, they don't have everything renovated in them like your property does. So the subject property, the one that you've got under contract to buy that could very well have a lot of say, new plumbing, electrical, HVAC, the roof, bathrooms, paint, flooring, lighting, kitchens. I mean, most, or all of those components could be new in yours. It's common for yours to have all those components, and then the comparables do not have those now, you and your seller, you will have to negotiate on who's going to close the appraisal gap. I've discussed that part on a previous episode, but I'm point. Out how you can still be getting value even when your appraisal is low and it's worth it. Down the road, you're going to have less maintenance headache than your appraisal comparables will most of the time. Turnkey properties are renovated to cover major systems, and that means you do not have major expenses. Soon these expenses get wrapped into your mortgage payment, and that's a lot better for you than coming out of pocket three years later to replace an entire roof. Another thing to keep in mind is that a property provider that's been in business for a lot of years, they do not have interest in selling you a lemon of a property and hurting their reputation, but that seller does have a little interest in getting the maximum dollar. I mean, that's almost intrinsically natural in human beings. I mean, everyone has that motivation, just like you do when you sell your property down the road. So these rent ready or turnkey properties, they're almost always better if you're a busy professional or you just want to spend your time doing something else. I mean, I think that's a pretty well established concept in the investing industry, but I really think these rent ready properties, they are better for even more people than just busy professionals. I mean, consider the alternative, if you try to screen and identify a property yourself and do all the rehab and manage the contractors. I mean, first of all, you can be dealing with a hard money loan where you're paying four or five points plus a 12% interest rate, since that's all that's available for distressed properties, and unless you have experience managing contractors, oh, boy, you could have construction timelines that go over by several months. Well, now that can eat a huge portion of your investment that you thought you were making. You're paying 12% and you have no tenant all this time, but instead, when you buy a rent ready property, and you've got the best mortgage rates and terms from day one, and you've got a rent paying tenant from day one, and not all these headaches and time lost and contractors are trying to manage with turnkeys at GRE marketplace, those rehabs are done by crews that work full time for the turnkey provider, so they work at more affordable rates than what you could get as an out of state buyer if you're trying to patch together contract and crews yourself. So at scale GRE marketplace providers, they're also dealing with the same material types over and over again, so they're faster at doing it. The materials are also reliably sourced. You won't have the 10s or hundreds of hours managing all this, checking with the rehabbers, checking for quality control, making sure the amount of work that you were paying for was actually done. I mean, some people listen to this show and they had that real estate pays five ways, epiphany, that big light bulb moment, but then they try to do this rehabbing and investing themselves to save a few dollars, is what they thought, and it's rarely worth it. So avoid the massive time commitments with all this. I mean, you're also going to be doing other things, coordinating inspections and permits with city municipalities. I mean, what a nightmare. GRE marketplace providers, they've already done all of that for you and more now that you've bought the property, all right, what about the potential for poor management? Choosing your property manager is of utmost importance, because that person or firm, they're going to vet your tenants, handle the repairs, collect your rents and take care of any other issues at your rental property. They'll understand the local landlord and tenant law, you're going to be seeing the property infrequently, if you ever see it at all, so keeping an eye on things becomes key. Now, once you own the property and you have the tenant in there, there is always the potential for your property manager to do a poor job, costing you money, making your investment less lucrative, I like to ask my manager if they do regular property inspections, like getting inside the unit every six months. Now, you can read online reviews, like the star reviews, the number of stars for property managers. I mean, that could be helpful. It can also quickly get misleading. You can get a lot of bad reviews on an adequate manager. Because property management is such a tough job, I think that one of the best things you can do when vetting a property manager is to ask a friend. A lot of people don't have that option. So then do a search on the bigger pockets. Forums for your prospective property manager. So read reviews. Don't just look at star ratings. And I'll tell you, property management is one of the few areas in my life where I am willing to accept a service level of adequate or mediocre. Almost no one raves about their property manager, but I do have managers because they are the guardians of my quality of life, of your standard of living. We want them to serve our tenants, but I don't want 80 tenants being able to text message me. So there you go, armed with a number of due diligence items that can help you make sure that you buy your next income property, right? GRE marketplace, we typically connect you with the experience providers, but I'm telling you this because it's prudent to do some checking on your own and inquiring like this too, in case you have any doubt. Now, you notice on GRE marketplace, where you can connect with free investment coaching as well, that the properties, at times, they seem less expensive than you would expect. Why is this? Well, investor advantage markets, they have low prices. I mean, that's just one reason that they are investor advantaged like Ohio, Indiana, parts of Pennsylvania, Michigan, Missouri, Kansas, Nebraska, Tennessee, Arkansas, Georgia, Alabama, Oklahoma, Texas and some of the other Mid Atlantic states And Florida, another reason the GRE market prices seem low is that there is no agent that has to be compensated. It is a direct model. Another reason is economies of scale. Providers provide homes in bulk, so there are savings that way, and there also aren't any owner occupied emotions evolved with income properties. Those emotions can run up the price, or what they really do is they keep it stuck at a high price. So to help you review what you've learned today, a seven figure income is the new six figures. Real estate prices and rents just keep moving up, but modestly for the time being, a car loan can be good debt when you have a reasonable expectation that you can create arbitrage and sufficient liquidity in your life. And though income property is perhaps the most proven wealth generator ever, there are some mistakes to avoid when it comes to buying right between the guidance that you have today and the help of our completely free investment coaching another safety layer. If you're confident that it can benefit you, I encourage you to engage and move at the speed of instruction. It's the only way that you'll benefit I built this resource. I really wish it existed when I started out, and it's available for you at GRE marketplace.com, until next week. I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 1  43:18   Nothing on this show should be considered specific, personal or professional advice, please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  43:42   You know, whenever you want the best written real estate and finance info, Oh, geez. Today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long. My letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text GRE to66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866.   The preceding program was brought to you by. Your home for wealth, building, getricheducation.com.    

Keith shares some historical perspective on inflation highlighting the cost of a Taco Bell meal in 1999 to its cost today. He also touches on the concept of service inflation, where services like mail delivery and self-checkout at grocery stores have become less convenient but not cheaper. Keith reviews the historical performance of real estate during the last eight recessions, noting that housing prices usually rise during recessions. He explains the concept of the Inflation Triple Crown: asset price inflation, debt debasement, and cash flow enhancement. Housing prices usually rise during recessions, as demonstrated by historical data. Resources: To learn more about the Inflation Triple Crown go to: getricheducation.com/itc. Show Notes: GetRichEducation.com/547 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, is higher inflation or even hyper inflation now in our future, and is an imminent recession, or even worse, a depression lurking. What's it all mean for your investments and your real estate? We'll investigate exactly what happens to real estate during recessions, historically today, on get rich education,   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold rights for both Forbes and Rich Dad advisors and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:19   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:35   Welcome to GRE from Hartsdale, New York to Springdale, Utah and across 488 nations worldwide. I'm Keith Weinhold. I think you know that by now, you are inside one of America's longest running and most listened to real estate investing shows. This is get rich education. Most people have two plans. Plan a get rich. If that doesn't work out, the alternative is Plan B, which is hate rich people.   We are firmly rooted in plan a for you here. So yes, we're about building your wealth, but ultimately we are a lifestyle improvement show. I'm going to get to high inflation and the potential for a recession or depression in just a minute. But I recently got a reminder on the fragility of life and its finite nature. My oldest friend recently died. He was almost like a mentor to me, a friend of mine's grandmother recently died, shattering her world, and it's a reminder that you won't be remembered for the money that you make. You won't even be remembered the real estate portfolio that you build. I mean, that surely won't last. The tennis that you serve, they'll die as well. I will be forgotten. This show will be forgotten. The people that love you, their opinions will die with them. Your Haters, their opinions will die with them. You can confirm that this is true right now by naming your eight great grandparents for me, there. Go ahead. You can't do it. I can't either. So what can you do, at least in this finite life that you have on earth? What you can do is enjoy your existence. The good news is, because you can control this, you can control enjoying your life and existence as get rich education is ultimately a lifestyle improvement show, and we are squarely helping you do that right here. And one way that I've done that over the years is by pointing out how inflation is actually advantageous to real estate investors. Well, it impoverishes most people. You're initiated on that by now. That's something that you really found out tangibly back during the pandemic. Now today, though, wow, people are frightened. I've got some contemporaneous material to share with you today, but I'll give you some lessons so that even if you're listening to this 10 years from now, you're going to learn some lessons. Americans inflation expectations for the next five years. They just hit the highest level since 1993 Yeah, expecting a lot of inflation, tariff pressures are a huge concern now. Last week, inside our newsletter, I sent you something that gave you some perspective on inflation. I sent you a photo of a Taco Bell receipt from 1999that might have left your mouth agape if you didn't see it. I'll tell you about it here and expand on this. And yes, it could leave you aghast, stupefied, gobsmacked, or even flabbergasted. In a sense, 1999 was not that long ago. It's sure not like ancient history. I mean, I was alive then, yes, I am here, and I'm from the 1900s. Well, this 1999 Taco Bell receipt that someone found perfectly preserved in the pages of a book. It shows a complete meal that was purchased for $3.50 it was actually just $3.26 and then the rest was tax added in. That's 350 for a chili cheese burrito, a taco nachos and a 16 ounce Pepsi. That's not the price for each item. That is the combined total from 1999 All right, how much do you think those same items would cost today? I don't eat there. I went to the Taco Bell website and found out. I mean, what an inflation measuring stick. This is what cost, 350 A Taco Bell in 1999 costs $11.44 today I use the same sales tax rate to come up with that. So today it's 1144 and today they also ask you a question a Taco Bell, if you want to round up for the kids or something like that, and then just watch, pretty soon, they're gonna request a tip too. That's a 327% price increase, and few people's wages have risen that much since 1999See, I told you that you would be left slack job and flabbergasted. All right, so let's look at where we are today. Now it's not an apples to apples comparison, but you know, Taco Bell is a fast food restaurant. Let's look at the price of a consumer item at a sports stadium today. All right, because both are places that everyday Americans frequent college basketball's March Madness tournaments have been taking place the last few weeks. Well, for the first time ever, the SEC is selling beer at its tournament. The price for one large premium draft beer is $17.50 so before tax or tip, 1750 for one beer all in that might be $20 or more, and I doubt that the beer is really that premium. I mean, you know what kind of beer you get at stadiums. So we look at inflation, one beer today is at least five times the cost of a complete Taco Bell meal in 1999   that's price inflation, and that's the stuff that's highly perceptible. Okay, you've been seeing that effect all of your life. It's making most people poorer. It's making real estate investors wealthier. And then there's the inflation that few people consider the less perceptible stuff, service inflation. And what are some examples of service inflation growing up the postal service delivered mail right to my parents porch, and they still do deliver mail right to my parents porch. Their neighborhood was built more than 100 years ago, but look, when new neighborhoods are built today, like places I've lived and perhaps where you live now, the postal service doesn't deliver your mail right to the individual mailbox on your porch. Today, you've got to walk both ways to your neighborhood's mailbox cluster. Some people even have to drive to get their mail. So your mail is no longer being delivered. Really, you have to go pick it up. Well, they don't lower the price for that reduced service level. That's service inflation. A second example is more obvious, grocery self checkout. You're taking the time and doing the work of scanning your groceries, but yet, they sure aren't lowering the prices of your lettuce and your beef jerky. And look service, inflation is here to stay. That is because companies make investments in it. The Postal Service bought those mailbox clusters, the supermarket bought those self checkout kiosks.    All right, so with this ramp and price inflation and service inflation, along with it, and the other forms of inflation that I've talked about on the show before, like stagflation, tip inflation and Shrink flation and skimpflation. What is an individual investor like you supposed to do? Well, stock and mutual fund investors get killed by inflation. I mean, think about it this way, just killed if the Sp5, 100 gains 10% but there's 5% inflation. That's a 50% hidden tax on your gain, plus you might pay capital gains tax. On top of that, savers really get obliterated. I mean, just destroyed if your bond yield or your savings account pays 4% interest, and there's 5% inflation. That is a 125% hidden tax on your gain, and then you might pay regular tax on top of that. So stocks and mutual funds and savings accounts are not the answer. What is the answer? Real Estate and borrowing the opposite of saving. And let me address now, whenever people get fearful that another wave of inflation is coming, whether that's tariff induced or otherwise, let's not get carried away and think that Hyperinflation is right around the corner, although definitions of hyperinflation vary, the most accepted one by economists is a 50% inflation rate per month, not annually, per month. So that would be over 600% a year, with compounding. I mean, that would be really hard to get, but what we do know is that inflation is still elevated above the Fed's 2% target. It's 2.8% today. And what we do know is that more inflation is coming at what rate nobody knows. These facts almost necessitate that you have either got to start your own business, which is tough, or become a real estate investor which is easier, in order to escape this and acquire some lasting wealth. Any devoted listener here knows that the formula for beating it is luckily, not highly sophisticated, not esoteric, not anything that you need a degree or certification for, just own income properties with loans, and that's when inflation produces three profit centers. As we know that is something that I coined as the inflation triple crown. So if you're new, you're learning something. If you've been around here for a while, here's a little comprehension test for you. What are the three crowns in the inflation Triple Crown, you win with asset price inflation, debt debasement and cash flow enhancement. Asset price inflation benefits you because you have leverage gains debt debasement passively lightens our debt burden for us, and then cash flow enhancement, that boosts our cash flow above the inflation rate, because our principal and interest payment stays fixed. And you can learn more about that totally free. You don't even have to leave your email address or anything. You can watch the three videos of the inflation Triple Crown at get rich education.com/itc. For inflation, Triple Crown, it's just good free learning for you there I've made available at get rich education.com/itc, it is a foundational financial education. Is a recession or even a depression eminent, that's straight ahead. I'm Keith Weinhold. You're listening to get rich education.   You know what's crazy? Your bank is getting rich off of you, the average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom. Family investments. Liquidity fund again. Text family, to 66866   hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties, they help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Chaley Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com   you   Dani-Lynn Robison  15:45   This is freedom. Family investments. Co founder, Danny Lynn Robinson, listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  16:00   Welcome back to get rich Education. I'm your host. Keith Wynne Holland, you are inside episode 547. I'll tell you, being a landlord or real estate investor can really change you now. I was using the stair climber at the gym just before talking to you today, I like to set up a big fan down on the floor to keep me cool before running or climbing. Plug it in, set up a fan. When I'm done, I turn off the fan. It's just a habit. I don't pay the electricity bill at my gym, but it's just the way that I would want to be treated. But you know what? When I find a fan that's already set up before I grab it and start on the treadmill. That fan is always running when no one is using it. No one turns off their fans when they don't have to pay for the electricity. And this reminds me of when I owned apartment buildings in Anchorage, Alaska, and tenants kept their windows open, even during the frigid winter, so that they could get fresh air. Yeah, you can guess who was paying the heating bill. It wasn't the tenant. It was me. The larger the apartment building is, the more likely that the owner is the one that pays for more of the utilities. And of course, in that case, you can look into utility sub metering. That process can be costly, but it might be worth it. It can increase your cash flow and your net operating income, which, when it increases your net operating income, that means that it also increases the apartment buildings value. And you know, in real estate today, you've got to look for where the opportunities are. There are opportunities in every market today. For places where there are specifically good opportunities are apartment buildings where their values have fallen 20 to 30% in some markets, it's wise to invest in beaten down sectors that you just know are going to come back like you know, the demand for apartment buildings is going to be there long term. This doesn't mean that you want to invest in any beaten down sector, like Office real estate in general. I don't see how that's coming back. A second strong real estate opportunity today is to find over built pockets, especially ones that exist in Texas and Florida. I mean, this is why they call them buyers markets. A Texas or Florida seller might make you a deal, and that doesn't mean everywhere in these states. For example, Southwest Florida is one area that's specifically over built, even amidst the national landscape that's under built. A third and a fourth area of specific real estate opportunity today are two that I have mentioned before, but they persist. That is still brand new, properties where many builders are still motivated to buy down your mortgage rate to about 5% even 4.75% in some cases, and new builds have low insurance premiums too. And then a fourth opportunity. That's something that we've covered a good bit here these past few weeks. BRRRR, real estate investing, buy, rehab, rent, refinance and repeat. That's a specifically good strategy if you don't have, say, hundreds of 1000s of dollars in liquidity to invest. Now you might ask, do those four strategies have validity? Do they have cogency in today's market, where there are these fears of an economic slowdown. Oh, yes, they do, or I would not have gone over them, but these palpable recession Fears are growing, and some are even asking, is a new Great Depression eminent? There is tons of bad economic news right now, not just in the US, but the global economy is on the edge, starting earlier this month, stock market tremors have turned into full blown convulsions. Trillions of dollars in wealth have just vaporized, wiped out. Investors are rattled, consumers are anxious. Business owners are confused, and those in power in the administration, they insist that tariffs and policy swings are all just part of a transition period, but a transition to what some have even asked, Is the everything bubble finally about to pop. Is this the brink of a recession or something even deeper, a D pressure? Well, one thing is undeniable, from stocks to crypto asset prices recently made a free fall, and I've got some long term lessons for you today, even if you're listening to this years from now, including what a phenomenon like this historically means for the real estate market, it's about what really happens to property values during an economic recession. Stocks recently had their worst week since 2023 barreling toward an all out bear market crash. A bear market means when 20% of the value has been lost from a recent high. Even Bitcoin, the poster child of speculative excess, has cratered. The carnage has been everywhere. But yet, instead of taking steps to prevent an economic meltdown, the administration in power, whether you like them or not, they have introduced more and more radical policies that could accelerate the crisis. Now, some of the tariffs could help long term, but the short term pain is perceptible, and you've got to be able to survive it. We've got new tariffs on multiple countries, and these are our biggest trading partners, even if these import taxes diminish, this is already strained friendships long term, especially with Canada. These countries keep retaliating with tariffs of their own, Canada, Mexico, China and the EU government spending is being slashed. Mass layoffs of federal employees have been underway for a while now. This is not just an economic experiment. I mean, this is a high stakes gamble with global consequences. So is this a detox period, or is it an economic freefall? Treasury Secretary Scott tebescent described this economic shift as a necessary detox period. That's the phrase that he used, and yes, I need to acknowledge there is no more grandma Yellen running the Treasury for long time, listeners, that is a reference to the long running joke about how my late grandmother resembled former Fed chief and former Treasury Secretary, Janet Yellen, but anyway, according to Besant, the US must break free from what he calls its addiction to government spending in return to private sector growth. Now, hey to me, that sounds good. Actually, that sounds like a good plan for the long term. But here's the problem, that addiction has been the lifeblood of the US economy for decades. And you know, this is something that regular GRE guest macroeconomist Richard Duncan has talked about when he's here. Remember what he's told us for over a decade here on the show, if the US doesn't have 2% real credit growth, credit expansion, well then we go into a recession. Well, what happens when the government cuts spending during soaring consumer prices due to trade wars? What happens when businesses hesitate to invest in the face of extreme uncertainty? Well, the bad news is that tariff whiplash and massive layoffs mean that businesses can't plan, and when businesses can't plan, they freeze. Look, just the other day, I talked to the President of a manufacturing company they make stainless steel tube valves and fittings. Due to all the tariff uncertainty, he's had to set up a reserve account based on what happens next, all right. Well, with that reserve account, that means that that's not money that's going into equipment reinvestment, that's not money that's going into making new hires. What happens when more confidence shatters and markets spiral lower? We may be about to find out. So has the recession, which is a precursor to any depression, already begun? Well, the warning signs are multiplying. Most ominously at last check, the respected Atlanta Fed tracker is now forecasting a more than 2% contraction in US GDP this quarter. That is quite a drawdown and two negative GDP quarters in a row. I mean, that is the definition of what a technical recession is. And here's a quick history piece for you in 1930 to try to quell the effects of the Great Depression, tariffs were passed. Alright. Do you know how badly that turned out back then in 1930 it was called the Smoot Holly Tariff Act. It raised tariffs to try to collect more revenue for the government. It didn't work, and the US sunk deeper into the Great Depression, with rampant unemployment and poverty and social unrest. There was a rise in crime, there were bank failures, even hunger and malnutrition. That's what a depression looks like, right there. Well, back to today. Right now, consumer confidence is collapsing. Retail Sales are plunging. The bond market is signaling distress, and yet those in power appear kind of oblivious to the magnitude of the risk. So what if it's not a transition and it is a start of something far worse? And see, this is just part of what's made investors raise their bets on a recession. Stocks are down like a global trade war has begun. Crypto has fallen like risk appetite has collapsed. Bond prices are rising like inflation is declining, and experts have priced in a 52% chance of a recession in the next 12 months. Okay, 52 that's like flipping a coin and just hoping that it lands on good news. Now in the real estate world, when we talk about direct threats from tariffs, as I've touched on before, the biggest direct threats are tariffs on lumber and on gypsum board. The lumber is used in house framing and trusses. Gypsum board, that just means drywall, the base case for tariffs on Canadian lumber alone, that adds about $10,000 to the cost of a new build typical single family home, which in turn jacks up all existing housing prices and their replacement cost. But let's look beyond that now at market factors. How is real estate adversely affected if the economy slows? Though historically. Let's look at how recessions really affect housing prices, and this is, again, as I like to say, where we take history over hunches. It's easy to have a hunch about what you think is going to happen, but let's look at what has really happened. How do real estate prices perform during recessions. When we look at the last eight recessions, okay? And the most current of those was in 2020, and then when we go back eight recessions ago, that is the 1960s Okay. Well, let me move along in chronological order here, during those eight recessions, starting in the 1960s leading up to today, housing prices, and this includes single family homes up to multifamily apartment buildings, they were just rounding to the nearest whole number here, up 5% there in The late 60s, in that recession, and then up 18% up 14% in the next recession, and then no change, down 1% and then up 6% and then down 13% that was during the 18 month recession, around 2008 and then finally, home prices were up 8% in the latest recession, alright. So in our total of eight recessions since the 1960s home prices only fell significantly one time, and they usually rise that one timethey fell. Let's explore that. That was during the 2008 global financial crisis, which involved more than just the recession. It was a deep recession, that's why it's called the Great Recession, but it also involved more than that. 2008 was special because that was a time of housing oversupply and low homeowner equity positions and a complete mortgage meltdown backed by flimsy liar loans. Well today we are in the opposite of all three of those conditions. We have a housing under supply. Americans have a record 300k plus in protective equity that they are not going to walk away from. And more.   Underwriting is stringent, the opposite of a liar loan. So housing prices usually rise in recessions, and if we're teetering on the brink of a recession, there are a lot of reasons to think that housing prices will go up yet again. And by the way, I felt what was happening back in 2008 I invested through it. I think I let you know before that, that's when I owned two four Plex buildings, 2008 but it didn't feel that bad to me, because my properties were temporarily suppressed in value, and that part didn't feel good, but my rents and rental demand went up because no banks would give loans to borrowers to buy properties, so I wouldn't want to sell when the buildings were paying me a higher than ever monthly income. But let's not lose the greater point what I'm telling you here that housing only fell significantly one time through the last eight recessions. That demonstrates the resilience of the housing market. And by the way, those stats were sourced by the NAR and the NB er National Bureau of Economic Research. All right, so why is this? Why is housing resilient in the face of a recession? There are a few reasons, but a main one is see, even if and when times get tough, people still need a place to live, and they will pay for it, especially now, when they have record equity, people are motivated to make mortgage payments and make rent payments, or else they are going to be homeless. So tough times when consumers they get less likely to pay for their car loan are less likely to pay for student loans, and when they default on credit card payments, that's when this stuff happens, but people will fight like heck to avoid losing their home. I mean, people will pay for food, shelter and safety. And also, when it comes to recessions, let's not forget how many bad just God, awful, wrong recession calls there were from over the past two to three years. I mean, the so called experts were wrong, wrong, wrong. Today, the economy is actually starting from a good place. And what do I mean here today, consumers still have money to spend, and they probably will. This is huge, because consumer spending is 70% of the economy, but how will they respond when these higher tariff induced prices hit more shelves at Walmart and Target? We'll see unemployment is still so low that it's practically down there doing squats. But you know these numbers, they're always backward looking, so it does only aim to get worse. The labor market is firm. Interest rates have been pretty steady. They've fallen a little. Energy prices are still down. So really, the bottom line with what I've shown you so far is that federal policies have induced economic trauma, and it does increase the chance of recession over the next 12 months. During recessions, housing is a top performer, and interest rates usually fall as well, and specifically interest rates of all types, including the Fed funds rate, mortgage rates, pretty much every interest rate type, they tend to fall in the mid and late stages of a recession. So this is what you can expect based on history, not hunches. But as for a depression, that is super unlikely. We haven't had one in 90 years, and today. I mean, come on, we have seen what the powers that be do. We can see how they respond to crises. They will just print and print and print more dollars to help pave over any problem. And that's not responsible long term, and it creates more inflation, but that's exactly what the government did to pull us out of the Great Recession and to pull us out of the COVID slowdown. We'll review what you've learned today in just a minute, but let me tell you, though you may very well have the majority of your capital smartly invested in real estate, since that's where the long term wealth creation is, those funds are not very liquid. So what about your liquid funds? Like I pointed out early in the show today, amidst higher inflation expectations, inflation really destroys those in the stock market, and it absolutely crushes savers. Savers really get destroyed, because if your bond yield or your savings account pays you 4% interest, and there's 5% inflation, that is a 125% hidden tax on your gain. And if that's the. Damaging enough there might be tax that you have to pay on that gain, which is not really a gain. This whole thing was a big loss.   So for some people, including me, what I do is become a lend. Lord, yes, I get a higher yield by lending to others a lend. Lord. I mean, why settle for just a, say, four and a half percent yield on your liquid funds? I mean, that's the level at both the 10 year bond and the savings account yield today, about four and a half percent. I've parked my own liquid funds for a steady 8% yield that I've been getting for years with a long time established real estate company. I make the loan to them, they have paid on time, every time, for that steady 8% return. And see, when you understand that directly investing in real estate pays five ways, and that a 20 to 30% total ROI, therefore is common and even expected. You can understand how they can pay you and me an 8% return on your liquid funds. You can see where the arbitrage is. Just a little insider tip here. It's called Freedom family investments. If you want to learn more, text family to 66 866. Their minimums are pretty low to 25k and you don't have to be accredited. So for steady 8% returns from the same place in the same vehicle where I've been getting my 8% you can just do it right now. What's on your mind? Text the word family to 66866.    Let's review what you've learned today, Americans have higher long term inflation expectations than they've had since 1993 a 1999 Taco Bell receipt really brings to light how much inflation you have experienced in your life. Though, higher inflation can come. Hyper inflation is unlikely. Let's not get carried away. The prospects for a recession are 52% in the next 12 months, per a plurality of experts, but a depression is really unlikely. Now you know how real estate performs in recessions and why it holds up so well it even tends to appreciate coming up here on the show are some prominent guests, including the leader of rezzy club. You might know about them. Sometimes I share their great charts in our newsletter. Yes, rezzy Club's Lance Lambert will be with us. Also, Legacy finance expert Laurel Langemeier will be here with us on another upcoming episode. Thanks for being here, but you weren't here for me. You were here for you. I'm Keith Weinhold. Don't quit your Daydream.   Dolf Deroos  37:53   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC exclusively.   Keith Weinhold  38:16   You know, whenever you want the best written real estate and finance info. Oh, geez, today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read. And when you start the letter, you also get my one hour fast real estate video. Course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text. GRE to 6866 while it's on your mind, take a moment to do it right now. Text, GRE to 6866   The preceding program was brought to you by your home for wealth, building, get rich, education.com.    

Today, Corey Coates, CEO and Co-Founder of Podfly Productions, LLC, joins Dots Oyebolu to talk about high-level, B2B brand marketing. Corey shares his decade-plus journey helping executives and brands embrace podcasting as a vital component of their content marketing strategies. In this episode, Corey explains how executive-level podcasting often begins in unexpected ways, the importance of kindness in navigating complex B2B structures, and why treating podcast content as purpose-built — rather than simply repurposed — leads to deeper audience engagement. Key Takeaways:(01:18) Podfly — a support system for executives and brands looking to incorporate podcasting into their media mix.(03:27) Many B2B podcast initiatives begin with a junior executive being “handed the podcast folder,” often without clear strategic direction.(05:59) Early discussions with clients help define podcast KPIs.(09:23) Podcasting has evolved from a side project to a core component.(09:56) Instead of "repurposing" content, create platform-specific assets from rich podcast interviews.(13:16) Specialized teams for branded shows allow for scalable, expert-driven content creation.(15:08) Unique collaborations spark executive partnerships.Resources Mentioned:Corey Coates -https://www.linkedin.com/in/corey-coates-2a3aba34/Podfly Productions, LLC -https://www.linkedin.com/company/podfly-productions/Podfly | Website -https://www.podfly.net/In the Hot Seat Podcast -https://enfuce.com/in-the-hot-seat-podcast/ Insightful Links:https://www.desantisbreindel.com/insights/unlocking-c-suite-executives-content/ https://www.marketingprofs.com/articles/2021/44825/best-practices-for-reaching-and-marketing-to-the-c-suite-audience https://longitude.ft.com/campaigns-hook-c-suite/ https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/marketings-moment-is-now-the-c-suite-partnership-to-deliver-on-growthThanks for listening to the “Marketing Leadership” podcast, brought to you by Listen Network. If you enjoyed this episode, leave a review to help get the word out about the show. And be sure to subscribe so you never miss another insightful conversation.#PodcastMarketing #PerformanceMarketing #BrandMarketing #MarketingStrategy #MarketingIntelligence #GTM #B2BMarketing #D2CMarketing #PodcastAds

Keith hosts a discussion with Pastor Jon Sanders on the Bible's teachings about money.  They explore the context of biblical verses, emphasizing that wealth itself is not sinful but how it's used matters. They discuss tithing, noting it's a principle of generosity, not a legalistic rule. The Bible does not condemn real estate or property ownership, as it is not explicitly forbidden. Wealth can be a tool for doing good and providing housing for others. Resources: Explore the EntrePastors platform to learn more about Pastor Jon Sanders' work in helping pastors with entrepreneurship and financial management. Show Notes: GetRichEducation.com/546 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE, I'm your host. Keith Weinhold, what does the Bible say about money? Is it virtuous to acquire wealth, or are you going to hell for that one Bible verse reads, "it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God". I asked Pastor John Sanders all about it, as well as what other religions say about money today on get rich education   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, who delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:19   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:35   Welcome to GRE from Bel Air, Maryland to Bel Air, California and across 188 nations worldwide. I'm Keith Weinhold, and this is get rich education. I hope that your week's off to a good start with 546 weekly episodes. We've approached investing from a lot of angles. Commonly, it's a strategic approach, but there are other wealth building approaches we discussed here, like mindset, what type of vehicle you're going to use, the academic perspective, the protective approach, then there's a mathematical angle. But today, for the first time, it's the theological perspective. Now, even if you're not a Christian or religious at all, what the Bible says about money has import, because the Bible is the number one selling book of all time, so it surely affects the mindset and the approach of those around you. I've got a pretty inflammatory question for you, if money is the root of all evil, then why do they ask for it at church? Now I say that a little jokingly. We're going to debunk that in fact and more as Pastor John joins us shortly, I will hit that verse head on and ask him about it, the verse that says it is easier for a camel to go through the eye of a needle than for a rich man to enter into the kingdom of God. I'm really interested in what he says about that. I mean, in fact, that's actually something I wanted to know about for decades. That's always piqued curiosity inside me, and especially since I'm the 10 plus year host and founder of a platform called get rich education. There's a lot I'd like to ask about that. There is more that I'd like to ask about, if we get time. I'd also like to know what the Bible says about tithing and real estate and gambling and more. Let's meet Pastor John.   With over 20 years in pastoral ministry, this week's guest, also has a passion for using his voice to motivate and inspire ministry leaders. His father was also a pastor. He is non denominational. Hey, welcome to GRE Jon Sanders.   Jon Sanders  4:04   Keith, this is my pleasure to be here. Man, been looking forward to this conversation, so thanks for having me on the show   Keith Weinhold  4:09   me too. We're doing something really different this week. I've been anticipating it, and I sure have some specific things I want to ask you, even some Bible verses later that are somewhat antagonistic to wanting to build wealth. But before we drill down and get into that, just big picture, John, when we talk about what the Bible says about money broadly, what should we keep in mind    Jon Sanders  4:34   with anything when it comes to Scripture? One of the greatest principles to keep in mind is that context matters, because without context, you can make the Bible say about anything you want it to say. And that's probably what we're going to dig into a little bit, is that if you just read a verse in one little snippet and divorce it from not only its context, but the rest of Scripture, you can come away with a pretty skewed view, as many people in the world. Have, as well as many people in the church, many Christians have a skewed view about money and about wealth because of some, you know, certain verses that I'm sure we'll get to today, I would say just an overarching principle, context matters, and hopefully we can show a little bit of that context in our conversation and just see that maybe what you thought the Bible says about money is not, in fact, what the Bible says about money. We'll see where this goes.   Keith Weinhold  5:24   Context matters and mindset matters. You know that we're a real estate investing show, but episode number one of the get rich education podcast from 2014 is titled, your abundance mindset. Do Christians worship a God of abundance, where he would want you to use your God given talents to flourish and produce and make more in this world. Or do you not see it that way?   Jon Sanders  5:53   I 100% see it that way. And what's interesting to me is that as believers, we would say, many of us would agree with things like we believe in this limitless God who spoke the universe into existence by nothing more than the power of his spoken word and just the abundant world in which we live like we believe in that God who can do all kinds of miraculous things. And yet, then, when it comes to the subject of money, so often, we live out something very different than that. With such scarcity, we act as though there's such limited resources at our disposal, and our thinking is so enmeshed in poverty thinking and scarcity thinking. And I think as God's people, we ought to be some of the most abundant thinking people there is because we are supposedly tapped into the most abundant source the world has ever known. So there is a discrepancy there, but I'm 100% with where you are on that we serve an abundant God, and we would do well to think in abundant terms, because I think we're gonna find that his resources never run out.   Keith Weinhold  6:57   Right? We're here to think abundantly in flourish. One thing I like to say is, don't live below your means. Grow your means. Christians should when I'm asking you as a pastor, I would think they would believe that God was an abundant creator. He created the earth that we live on a gigantic piece of real estate.    Jon Sanders  7:17   Yeah, and so much more. And like I said, it never runs out. Whether we're talking about his physical resources or we're talking about the more intangible resources that we can't necessarily hold in our hands. There is always more than enough with the God that we serve. And yet, how then do we come to such places of scarcity and limitation? I would contend this Keith that if someone is actually reading the Bible, applying the principles to their life, they will inevitably, more and more grow in their wealth and in their abundance and in their ability to manage well the resources that God has put into their hand. Now that's not the same as what some might put into the category of what they'd call the prosperity gospel, where God wants everyone to be rich and never to have any sickness or financial difficulties like those are not the same messages. We're not all promised the same exact outcomes, but I believe if we follow the timeless principles, the laws that have been established by the Creator that he's shared with us through His word, I think we can expect to flourish and thrive and prosper and do well and continually grow whatever resources he's put into our hands. As a matter of fact, I would point to a parable that Jesus told, many of the parables that Jesus told in the Gospel accounts of Matthew, Mark, Luke and John, many of them deal with money. Now, all of Jesus's parables got to a deeper, like more Kingdom spiritual lesson. But in many of them, he used something that all of us can relate to, and that is money. Because scripture has a lot to say about money. And then, specifically, in one of those parables in Matthew 25 I believe Jesus told a story of the master who represents God in the story how he gave differing talents or financial amounts to three different servants based upon their own abilities. And right in there, there's some truth that we can learn and apply, that we don't all have the same abilities, but God allows us, He gives us certain things that are in our capability to handle, and then with that comes an expectation that we manage that well, because it doesn't actually belong to us. That's a big principle of money in Scripture is that none of it actually belongs to us. All of it belongs to the Lord, but we are stewards. That's kind of a Bible word. We are the managers of the resources He's given us. And even from that parable I mentioned in Matthew 25 there is an expectation that we take what has been entrusted to us and we multiply it. And if we fail to do that, the words of the master that Jesus. In that parable, were you wicked and lazy servants? The words of the master to the one servant who basically squandered what had been entrusted to him, he was called a wicked and lazy servant. So there's an expectation that we are not wicked and lazy servants, but that instead, we take whatever resources have been entrusted to us and multiply them for the good of God's kingdom and for His glory. So that's just one. I mean, there's countless stories that Jesus told that we can learn principles like that from.   Keith Weinhold  10:30    I think building prosperity is being the opposite of laziness or sloth. Is it bad to be wealthy?    Jon Sanders  10:39   I would say, according to the Bible, 100% No, it is not wrong or immoral or sinful to be wealthy. We can point to many heroes of our faith who were men and women of great wealth. We can also point in Scripture to wicked people who also were men and women of great wealth. So the question is not whether or not someone has money. That's not what sets them apart as righteous or wicked. It's what they do with that money. It's how they live. It's their character that really is what we measure that by. And so here's what I would contend without money, it's really hard to do good things in the world. You're very limited when you put money in the hands of good people, those people can use those resources for all kinds of good purposes and to help a lot of people. I mean, that's just common sense, and so it's not a bad thing for righteous people to multiply their wealth and to grow in their wealth in order to be in a position to help even more people.   Keith Weinhold  11:39   The way I think about it, is that producers and entrepreneurs, they need to give first before they can create any prosperity for themselves. And what's foundational in our mission here at GRE is to do good in the world, provide housing that's clean, safe, affordable and functional. You're giving you're qualifying for a loan, you're buying property, you're taking on risk before anything can possibly come back to you and John here, I've often touted, hey, we provide housing that's clean, safe, affordable and functional. We can maybe abolish the term slumlord, for example. So that's what I'm talking about with doing good in creating prosperity for ourselves as a result of that.   Jon Sanders  12:24   Yeah, and I'll point out another biblical principle that you just outlined, whether you realize it or not, and that is the law of sowing and reaping. It's the law of the harvest. You don't have to believe in God for this to be true. If you go plant something, you will get more of the thing you planted, if you tend to the soil well, and if the conditions are right, and you mentioned it, that is risk. Like there's risk involved. Every time a farmer goes and sows seed into the soil, like there's no guarantee that I'm going to get that back, things can happen. It's a believable risk. It's a relatively manageable risk. It's a risk, nonetheless, to take a great amount of seed and put it into the soil in faith. And I want to point that word out. There's faith when we as entrepreneurs go out, we're acting in faith when we take that risk. And again, it's something that we have to kind of weigh it out, is this a wise risk to take? But at the end of the day, there still is no guarantee. But there is that law of sowing and reaping and the law of the harvest. And I think God honors that, I know he honors that I believe he is honored by our faith. It literally can be an act of worship done to him was we go start businesses, as we invest in real estate, as we buy properties like that, actually can be part of our worship, and us fulfilling the very purpose for which God put us here, to manage what he's given us, to multiply it, and then to do good with it, as you're describing. I agree totally.   Keith Weinhold  13:48   that's a good point. It really is an act of faith to provide an income property, faith that you're going to have a rent paying tenant, faith that you're going to be able to maintain the place, faith that you're buying a property in a market where you have a good expectation that you're going to be able to have future rent paying tenants. Yeah, it really is an act of faith. Well, John, there are some specific verses in the Bible that are really well known and deal with money. One is the often misquoted verse that everyone is familiar with. And what's misquoted is that people say that money is the root of all evil. But as we know, that verse from the book of Timothy is misquoted. It is for the love of money that is the root of all evil. Can you tell us more about that, why it's misunderstood, and actually, just what that really means for the love of money is the root of all evil,   Jon Sanders  14:42   by the way, just stepping back a second in the conversation to your question, is it wrong to be rich? Here's another supporting text where the answer is no, because the verse you're speaking of the apostle Paul wrote this in a letter to Timothy. He's telling Timothy again, in the context, he's telling Timothy. To address the rich people in the church and say some things to them, teach the rich people some things, and he didn't tell them, you know, shame them for having wealth and for being rich. Instead, he's teaching them how to be rich, how to be a good rich person. And it's in that context where that line is found, that the love of money is the root of all evil. Fast forward to modern times. We've kind of thrown the word love out of it, and we just said, There it is. Money is the root of all evil, and we say it with a sense of self righteousness. As I'm sitting here, broke, living paycheck to paycheck, I don't want to be one of those evil rich people. That's not what it says at all. It's saying the love of money is the root of all evil, and we do need to step into this for just a moment. There are warnings in Scripture about money, because if we don't realize and recognize the power of wealth and the power of money, I believe probably one of the reasons God's word says more about money than it does so many other topics is because the danger that money has to compete with God himself. I often say I don't think it's God and the devil that are in competition with each other. In many ways, it's God and money, because Jesus even said you can't serve both. You can't have two masters. You'll either love the one or despise the other. That doesn't mean you can't worship God and have money. It says you can't worship them both, because your allegiance is going to go one way or the other, and the more wealthy we become. There is a danger in that, or maybe even before the wealth shows up. If there is this just burning desire to be rich above all else, it can pull us off course. It can pull our focus away from the Lord. So there is a warning in that that we should heed and listen to. Apparently, according to Scripture, money is powerful, and it's powerful for good and it's powerful for evil. And so if we're going to have some of it, and if we're going to grow the amount that we have, it sounds like it's a pretty powerful tool that we ought to know how to use and how to use properly, no different than when you throw the keys to the car to your teenage driver, like we just put a very powerful tool in their hands, and we pray and trust that they're going to use it wisely and not drive it off the cliff, you know, or kill someone in the process. And money's very much the same way. So the warning is good, but what's not good is to take it out of context and build this paradigm of somehow, the less money I have, the more righteous I am. And in the platform that I'm building, we have a online community. We call it entree pastors, that specifically helps pastors do better financially through entrepreneurial business man, we combat this mindset all the time, because we're dealing not only with people who've been in the church most of their life, but people who have led in the church, and there is so much scarcity thinking around money that we have to address so many of these themes that you and I are unpacking right now. So yeah, often I have found myself taking people to this Scripture and having them read it again and again until they hear themselves say that the love of money is the root of all evil, not having money that is not the root of all evil, it's the love of it. So hopefully that helps shine some light on that confusion   Keith Weinhold  18:15   yes, so one can take it too far if it becomes the love of money? Well, there is a verse in the Bible. In fact, I think it occurs in more than one place. That verse is it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God. How does someone that's building wealth for themselves square that up. We're going to talk about that more when we come back. I'm talking with Pastor John Sanders about what the Bible has to say about money. I'm your host. Keith Weinhold,    you know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk, because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text family to 66866, to learn about freedom. Family investments, liquidity fund again. Text family to 68866    Hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group and MLS 420, 056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage, you can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lending group.com, that's Ridge lending group.com   Chris Martenson  20:40   this is peak prosperity. Chris Martinson, listen to get rich education with Keith Weinhold, and don't quit your Daydream.    Keith Weinhold  20:56   Welcome back to get rich education. We've got a pretty special episode today. Our discussion is what the Bible has to say about money, and we're talking with Pastor John Sanders. He's breaking it down for us. John, this is the one thing I thought about more than any other before chatting with you today. It is that well known verse about the camel going through the eye of a needle. And John, I first remember my mom telling me about this verse. Perhaps I was as young as age 12, and that verse is, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God. Here I am a 10 plus year host of a show called get rich education, helping people build wealth ethically through real estate investing. But how do we square up that verse if we're looking to make more of ourselves financially?   Jon Sanders  21:53   Yeah, and like we said at the beginning of the show, if that's all it said, and if that's the only thing you knew, you would come away from that pretty convinced that Jesus thinks it's impossible to love God and also be rich, like there's just no way a rich person can enter the kingdom of heaven. But as we said, context matters. So if we kind of zoom out a little bit and look at the greater context of what's happening in that passage of Scripture, you will recall, and maybe some are hearing this for the first time. But there was a rich man who approached Jesus, and he basically was kind of wanting to justify himself, and so he asked the question, you know, what good things must I do to inherit eternal life and inherit the kingdom of God? And Jesus starts by saying, follow the commandments. And this rich guy basically says, I'm paraphrasing all of this. You can go read it for yourself, but he's saying I've done all those things which, by the way, side note, No, he hasn't. None of us have followed all of God's 10 Commandments and more, like we just I've broken every single one of them. We're all sinners. Probably you have too Exactly. So he's already off base, this rich guy. So then Jesus hits him where he knows it's gonna hurt, and he says, Okay, here's the one thing you're still lacking. Go sell everything you have and give it to the poor, and then come and follow Me. And what it says is that the rich man turned away very sad, because he had great wealth, and see Jesus exposed what this man really worshiped in that I don't believe that that is a commandment from Jesus to all of us to go, sell everything we have, give to the poor and come follow him. That was a specific statement spoken to this specific man, and it did exactly what it was meant to do. It kind of smoked out the real heart issue that was happening here. So then Jesus turns to his disciples after this man walks away sad because he was not willing to pay that price. And that's where Jesus makes this statement that is so classic, where we all know, you know, it's easier for a camel to pass through the eye of a needle than for a rich man to enter into the kingdom of heaven. If you keep reading a few verses later, Jesus goes on to say, with man, this is impossible. But with God, all things are possible. So it is possible for a rich man to enter the kingdom of God. It may be more difficult. It may be more challenging because, as we said a minute ago, when we do have great wealth, that wealth competes in many ways with our heart for the place that God wants to hold in our heart. It is easy when we have margin and we don't need God as much, or we don't think we need God as much. We don't necessarily have to humble ourselves as much when I have all these resources. But that's not impossible. It is possible for godly people to have great wealth and to bow in humility before King Jesus, and to worship Him, and ultimately, to inherit the kingdom of heaven and be better for it, and not, you know, worse off. So again, I hopefully that explains that a little bit or gives some more light to that, because if you just take that little snippet, you're essentially taking it out of the greater context and missing the point, and you're. Making the point something that Jesus never intended, which was to say, rich people can't get to heaven. That's a mishandling of that text   Keith Weinhold  25:08    yeah? Because I think it states that, or something close to it three times in the Bible, in the Quran, the Muslim holy book, also has something similar in it, yeah.   Jon Sanders  25:19   And again, I know in in the New Testament, where it's mentioned multiple times, it's probably because it's found in those Gospel accounts that basically tell the same story just from four different authors. So that's sometimes where you see that repetition in the New Testament is because it's the same story being told just from a slightly different vantage point a different author. But the principle is there, to try to say that scripture forbids people from being wealthy or from pursuing wealth, would be a complete misstatement. It's simply not true. You know, to read scripture in its entirety, you can walk away from it with this understanding that God, not only is he not opposed to wealth, but God is the source, because he owns it all. It all belongs to him, and he actually the more I walk in faithfulness with what he's given to me and what he's entrusted to me, the more I can actually expect will be given to me, because I will see the fruits of those labors multiplied. That's the path I'm on right now, unashamedly, unapologetically, I am working on growing wealth, not only for my family in this generation, but scripture says a righteous man leaves an inheritance to his children's children and man, what if we started telling that story more than trumpeting these verses that make it sound like God is really upset with people who have Money? What if we actually encourage God's people to go build wealth and create more of it? Yeah, because   Keith Weinhold  26:46   I've heard a few different takes on that verse, John, about a rich man not being able to enter the kingdom of God. You know, some have joked, Oh, does the church just want you to put everything in the offering plate and not have anything for yourselves? Another take on it, I guess. If I read the verse closely about how a rich man cannot enter the kingdom of God, well, don't die rich. You be wealthy and then bequeath everything to your heirs upon your death. So technically, you're not dying rich. There are a lot of takes upon that verse. Really appreciate getting your perspective and your interpretation on that context piece being really important, John, when we think about what the Bible says about money, in the intersection of both money and the Bible, oftentimes we think about tithing, which I think of that is giving a 10% of your income to the church. So do you have any thoughts about tithing, or just some of the other general things that the Bible says about money.   Jon Sanders  27:41   I certainly have some thoughts, but more importantly, Scripture says some things. So it really doesn't matter what John thinks about it, but tithing is a controversial subject, so let me start with maybe something that's not so controversial, and we can jump into the tithing. Here's something that is not controversial from Scripture. The more we give, the more of a blessing it is for us. The more that we can give, the more God blesses us. God blesses generosity. So hopefully we can all agree upon that For God so loved the world John 316 that He gave His one and only son. So there's a direct correlation between loving and giving. And the more that I give, the more God seems to bless my life. And I know it sounds cliche, if you grew up in the church, we always heard statements like, you cannot out give God. The more I give, the more God gives back. And again, I'm careful to say that because I don't want to treat God like a cosmic slot machine where I put in $1 and pull the lever and hope to get 100 it is, again, it's just one of those laws that God has established that he blesses generosity. So then the question just becomes, what does our giving look like? What does our generosity look like when we look to Scripture, Old Testament? Bottom line tithing was, I mean, it was commanded. It was part of the overall giving that God required of his people. And a tithe is a 10% of the first fruits 10% off the top. And it's like when people argue that, or they say, Well, I'm tithing 2% that's like saying you ran a three mile marathon. My marathon is not three miles, right? Yeah, tithing is 10% the question is, is tithing for modern day believers? Are we supposed to be doing that? I will share my quick thoughts with you. I believe we are under grace. We are no longer under law. So I don't think that this is a matter of salvation. It's not at that level. But I will say this, I believe Jesus commended tithing, and I'll tell you where it took place, and you can go look at this on your own if you want. I think it's in Matthew 23 again, the context is not really about tithing. The context is Jesus is dealing with the religious establishment. The people he had the harshest words forever were the religious leaders, and he's taken them to task. And he says in there, like you guys tithe off of your mint and your dill, like you're tithing off of everything, like the illegal. Stick level, and yet you're ignoring the greater elements. You know, mercy, love, sacrifice. And then he goes on to say, You should do the first without ignoring the second. And I'm paraphrasing again, so go read it for yourself. What many people look at that passage and they say, here it is, Jesus commended tithing. He basically said, No tithing is good. You should do that. One other case I would make for New Testament, tithing is simply this. When Jesus stepped onto the scene in the New Testament, He never lowered the bar that was set in the Old Testament law. He actually elevated it. I'll give an example. Jesus said something like you have heard it said, You shall not murder. But I tell you, if you hate your brother, you're worse than a murderer. So he elevates it from just the physical act of killing to the heart condition of hating that leads to the killing. He did the same thing with adultery. You have heard it said, Thou shalt not commit adultery, but I tell you, if you look at a woman with lust, you've already committed adultery in your heart. So he raises the bar, not lowers it. So my question has always been, when it comes to tithing, would we believe Jesus to lower that bar and say, Ah, it's not important. Don't do it. You don't need to do it. Or would we expect him to raise the bar? I actually think the bar has been raised. He commended the poor widow that gave everything she had, and it wasn't much, but it was 100% sacrifice, and Jesus praised her. Now I don't think he's that's prescriptive of all of us to go drain our bank accounts, but I think what God is celebrating in the New Testament is sacrificial giving. For me personally, my personal opinion is that tithing is just kind of a good starting place for biblical giving. But I don't hold it up as a legalistic rule that says Thou shalt tithe based on what we see in the Old Testament and how we see it transition over into the New Testament. That tithing is not a bad idea, but if you're a modern day Christian that says I don't believe in tithing, I don't think I need to tithe. Okay, cool. I'm not mad about it. My challenge to you then would simply be this, what does generosity look like to you, and are we lowering the bar? Are you pushing back on tithing because you desire to give less? And if so, maybe there's a heart condition. There of you wanting to cling to something instead of being open handed. It's not my place to sit and look over your shoulder and go. You need to give more of your income. I mean, the Holy Spirit does a better job of being the Holy Spirit than than I do. So really, that's between you and the Lord. But my question and my challenge to modern Christians would be, what does generosity look like for you. You know, what is your discipline or your habit, your system around giving? If there is none, I personally think that's a problem. I think there ought to be some level of generosity happening in your life, because you'll be blessed, and God will use you to bless others. And that's a pretty cool thing, when God gets to channel his resources through you to someone else. So I don't believe everything that God allows us to have in our hands is 100% for us to hold for ourself. I think some of it is he's using us as a channel or a conduit to flow those resources in other directions. So those are just a few kind of high level thoughts of not only what Scripture says about tithing, for sure, but also maybe how we might look at it in a New Testament context,   Keith Weinhold  33:23   there's some good questions for you, the listener, to ask yourself when it comes to the framing and the importance of your giving and your tithing. John, what does the Bible say about real estate or property?    Jon Sanders  33:35   There are places I can't tell you you know exact location in Scripture off the top of my head, but I know there are places in Scripture that talk about going and purchasing land, or somebody owning land, and so I believe scripture upholds the idea of personal private property, and private property ownership, obviously, under the context of what we said earlier, that all of it ultimately belongs to the Lord. But I think it's a good thing. I certainly will tell you this. It's not condemned in Scripture. I know of nowhere in Scripture where we are forbidden from pursuing real estate or pursuing land. Is it like I say on the flip side, I could find examples where people bought and sold land. I'll give you one. Just popped into my head. In the early church, Ananias and Sapphira, they actually were put to death. And it's a really deep story. The issue, the reason they were judged instantly is because they lied about it. But they had land, they went and sold it, and they did not give all of it to the church leaders. And that was not the issue. The issue was they lied about the fact that they were giving all so they wanted to look a certain way, and that's the sin that God was kind of rooting out of the early church. But right in there, I think it's in like Acts chapter four, maybe or five, right in that area, it says directly, was not the land yours before you sold it and after you sold it, was not the land the money yours to keep. Why have you done this wicked thing? And the thing, again, that they were being judged for was lying to the Holy Spirit. And it was kind of like in that moment in the early church, the Lord was saying, we're not doing this like we're not going to live this fake, hypocritical life. And he judged it instantly, kind of grateful that God doesn't still deal with us in that way. It's not to say that he could not. That's a quick story that popped into my head as an example of buying and selling land. So if you do buy and sell land, just don't lie to the Lord about about how much you sold it for, because he knows it was his in the first place. He knows how much you sold it for. So just be honest in your dealings. There you go.    Keith Weinhold  35:39   Well, I'm grateful that the Bible doesn't say you have a limit of five rental properties. That's really good to hear. Right? Well, John, as we're winding down here, we've talked about Christianity and what the Bible says about money. Are there any non Christian religions that, just if you could spotlight one, that have a really interesting approach to money, whether that's Muslims avoiding debt, or anything, Hindus or Buddhists believe just any one thing. That's particularly noteworthy with non Christian religions approach to money.    Jon Sanders  36:09   I'm going to acknowledge a lot of my ignorance when it comes to other world religions. I can speak of one thing very locally to where I live, I don't know. It's kind of a religious thing. It's kind of a cultural thing. So where I live in South Dakota, I'm surrounded by, you know, an Indian reservation not too far from me. And the Native American culture is very prevalent here. And one thing that's been interesting to me to learn over the years is that, as I understand it, the Native American culture does not believe that you can own property. So they don't own land. They don't believe in owning land, at least historically, traditionally. So again, is that a religious thing? Is that a cultural thing? Not exactly sure. I don't share that belief, but it's an interesting take on things. So I'm sure there's so much more that a different guest could give you in terms of insight on other world religions when it comes to, you know, their view on certain deaths and philosophies around finances and things like that. For me, I really have studied one very deeply, and that's Christian faith. So I don't really feel like I'm much of an expert to speak from those other perspectives.   Keith Weinhold  37:18   Well, John, this has been enlightening to me. I've learned some things, and I sure might now know how to explain my way out of the whole camel in the eye of a needle. Verse there, if someone wants to learn more about you, tell them how   Jon Sanders  37:34   you can look me up online. I have a website called entrepastors.com me and my partner, les Hughes, as I said earlier, we help pastors provide better for their families through entrepreneurial business. If you want to connect with me, if you just go to entrepasters.com all of the links to connect with my social media and everything else are right there, and I'd be happy to jump on a call or serve you in any way that I can. So I would welcome you reaching out.    Keith Weinhold  38:01   Oh, thanks a lot for offering that to our audience. It's been a pleasure hosting you.   Jon Sanders  38:05   Thanks, Keith. Been a fun conversation. I appreciate you having me.   Keith Weinhold  38:15   Oh, yeah, good stuff from Pastor John today. I did not know that Pastor John would agree with me this much. I guess I'm frankly, a little relieved I learned some things too. Check out his platform again. It's called entre pastors. This was definitely an anticipated episode here today. The good news is we've got more anticipated episodes amidst an expected economic slowdown in potential recession. What actually happens to real estate in a recession? I will cover that and then with a lot of political turmoil and policy change coming from the White House that promises to massively swing the economy. I would like to have someone that's inside the White House and advising President Trump himself on his economic policy to come here on the show so that I can go ahead and ask them about it. Well, that's hard to do while they're in office and the administration is in full swing like this. So speaking of anticipated shows coming up here on the GRE podcast in future weeks, we have the financial advisor, the budget director of a past president that advised that president in the White House. He will be our guest here on the show. You'll learn what you can expect from him for the next nearly four years. And you know, something that might be even better to have that past president's White House Advisor here on the show, because he will feel emboldened to be more critical. Perhaps. Stay tuned for that big thanks to the terrifically knowledgeable John Sanders today in. Till next week, I'm your host, Keith Weinhold, don't quit your Daydream.   Dolf Deroos  40:07   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC exclusively.   Keith Weinhold  40:31   You know, whenever you want the best written real estate and finance info, oh, geez, today's experience limits your free articles access and it's got paywalls and pop ups and push notifications and cookies disclaimers, it's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters, and I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video, course, it's all completely free. It's called the Don't quit your Daydream. Letter, it wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text GRE to 66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866.   The preceding program was brought to you by your home for wealth, building, getricheducation.com

Register here for the live online event to learn about ‘Cleveland's Amazing Cash Flow Opportunities' on Thursday 3/20. Keith discusses the potential elimination of property tax, highlighting its impact on home affordability, rent stability, population influx, and retiree financial relief. Florida Governor Ron DeSantis supports a constitutional amendment requiring 60% voter approval to abolish property tax.  Hear about the broader economic implications, including the potential for increased sales tax and widened wealth inequality.  GRE Coach, Naresh, analyzes the impact of federal layoffs on the DC housing market, predicting a decline in home values and increased private sector job opportunities. Both emphasize the importance of the BRRRR strategy for real estate investors. Show Notes: GetRichEducation.com/545 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, there's a proposal to eliminate the property tax. Is a Washington DC real estate crash upon us, then a terrific guest and I are talking about the future of interest rates in inflation. And finally, an event you won't want to miss all today on get rich education.   Speaker 1  0:23   Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with get rich education podcast, sign up now for the get rich education podcast, or visit get rich education.com   Corey Coates  1:09   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education. You Keith,   Keith Weinhold  1:25   welcome to GRE from Fort Carson, Colorado to Carson City, Nevada and across 188 nations worldwide. I'm Keith Weinhold, and you are in for another wealth building week at get rich education. I don't like to predict interest rates, because it's really hard to do. But it does get interesting today, because our guest says that he will with his tight read on the economy, this is a unique time, perhaps in my entire life, where we have more new policies shaping the economy and real estate. Then, anytime I can remember, policies are made by politicians, but we don't get into the politics here, rather the policies and how it affects you and her. Any of these policies spicier than this one from earlier this month. Be mindful that this voice is from a person that made his name as a real estate investor.    Donald Trump  2:29   I also  have a message tonight for the incredible people of Greenland. We strongly support your right to determine your own future, and if you choose, we welcome you into the United States of America. We need Greenland for national security and even international security, and we're working with everybody involved to try and get it. But we need it really for international world security. And I think we're going to get it one way or the other. We're going to get it. We will keep you safe. We will make you rich, and together, we will take Greenland to heights like you have never thought possible before. It's a very small population, but very, very large piece of land and very, very important.   Keith Weinhold  3:17   Yes, the long time New York City Real Estate Investor there has gone well beyond Gotham now with plans to expand America's real estate empire, if you will.   Is this imperialism or America First policy? Or is it abject comedy? I guess that it could be all three. I'll let you decide. Well, the federal policy shakeups like that, also what they seem to be doing are emboldening others, including at the state level, where Florida, interestingly, recently proposed eliminating the property tax, taking it to zero. What is property tax free? Real Estate coming to you as well. Let's look at the prospects for this and what the effects would be of eliminating the Property Tax with some things that you probably never thought about before, and yes, your mind might shoot ahead. You might anticipate saving 1000s in lost tax dollars every year, even saving over 10,000 bucks a year per single family home in high tax areas. And you know, property taxes, sharpest critics, they say you have got to get rid of this thing, because you basically just endlessly rent your house from the government, and the rent goes up every year, and so therefore it's like forever rent that you have to pay. What's even worse is that the. Amount of property tax you pay is based on your homes or your apartment buildings market value. Well, because the government prints so much money and creates inflation that pumps up all the housing values, many of which are fake, inflated gains, and then your property tax goes up based on this phantom gain. And we've really seen that over the last five years, both real gains and Phantom gains. And then, plus, of course, each full dollar that you earn from your work right now is already taxed, say, down to just 70 cents, is what you've got left over. Well, then your 70 cents is further whittled down by property tax and all the other taxes that you have to pay out of that currently, all 50 states have a property tax every one of them, and you might already know that property taxes, they're basically highest in really two main places. When we look at property tax as a percent of your income. Those places are Texas and the Northeast, where they're upwards of 4% even 5% in fact, it's more than 5% of your income every year that goes to property tax in the state of Maine, but it's 4% or more in a number of states. And of course, if you don't pay them every single year until you die, the government will repossess your home from you. And almost 5 million Americans lose their home every year, many of them to this tax foreclosure. And in the US, the property owner pays the property tax, of course, but effectively, renters do too, because as landlords, we pass it along to tenants. It's embedded in that market rent amount, all right. Well, can we end the property tax? Well, former presidential candidates like Ron Paul and Herman Cain have proposed it. They didn't get elected. Texas has discussed it a lot, but yeah, it's Florida that has newly and boldly proposed eliminating the property tax. And like falling dominoes, if this gets abolished in one state, it increases the chances that more will follow. And Florida is a big state, the third largest in population. Well, Florida Governor Ron DeSantis came out and said this, taxing land and property is the more oppressive and ineffective form of taxation. That's what he said. Now let me tell you why he says that before we look at the chances that property tax will be eliminated, DeSantis says it's oppressive, because look see, you can personally dodge your income tax by making your paycheck smaller, although that might not be desirable, you sure could, and you can certainly avoid sales tax by consuming less, but see there is no escape from property tax. That's the oppression that's being referred to here. Let me tell you where we're at with eliminating the property tax, and then what the absolutely Titanic impacts of this would be DeSantis goes on to say, property taxes are local, not state. So we'd need to do a constitutional amendment which requires 60% of voters to approve it, to eliminate them, which DeSantis supports, even to reform or lower them. Right? But he goes on to say this, and here we go. We should put the boldest amendment on the ballot that has a chance of getting that 60% that's the end of the quote. Okay, so that's what it's going to take to eliminate property tax in Florida, where, if it happens, it could be a model for other states to follow, like we're seeing a little bit with the zero income tax states. All right, here's what I think would happen if they were eliminated. First home affordability would massively improve, skyrocketing property values. So many more people could afford the lowered monthly payment without property tax making prices soar, especially the values of lower price to median priced homes. They could really bring those into the affordability range, and they are the exact ones that make the best rental properties. What about rents? If property taxes went to zero, rents would stay stable. Landlords would do little or nothing to drop them. That's just how it works when people are already used to paying a certain price. Also population influx to the affected area. I mean that population influx that already works for states in attracting residents. That have zero state income tax, it would with property tax too. I mean that would clearly be desirable for people to own property tax free homes, especially in the beginning, before this settles in and those home prices soar. Also, retiree financial relief would take place. Those people on fixed incomes would really be helped. But you know what would not happen with governments slashed property tax revenue. They couldn't reduce their spending proportionally. I have no faith that they could. They would have to get their income from elsewhere and see shifting away from property tax over to beefing up your sales tax, that would hurt poor people the most. For example, in Florida's case, it's been studied, and they discovered they would have to increase their sales tax from the current 6% up to 12% to maintain the same services. Can you imagine 12% sales tax, and another effect of abolished property tax is that wealth inequality would widen because the property owners are the ones that benefit the most. So those are the big effects. But look, there are more problems eliminating property tax, that means the areas would need to find another way to pay for schools and roads and parks and local services like police and emergency responders. Maybe some of that stuff could be privatized. But if the tax, if that were just shifted away from local government and that went toward state and federal government, well, then local control would be lost. So that is a really undesirable side effect. But as a real estate investor, come on. The prospect of an abolished property tax that has got to excite you. I wouldn't count on it happening anytime soon, but now you know more about the prospects for it happening and what the impact would be with an elimination of property tax.    coming up soon. Here on the GRE podcast, what the Bible says about money when Pastor John joins us, it's going to be a show unlike any we've ever done before, and maybe will ever do again. You might not be a Christian or religious at all, but this is still relevant to you, because the Bible is the top selling book in the history of the world, and it has an indelible influence on the people around you. The book the Bible, says some things that make you wonder if wealth accumulation is even virtuous. We're gonna face those verses head on and get pastor John's insights there. That's a really anticipated show. I'm also gonna ask him what other religions have to say about money. Also some well known guests down the road here on the show, including the get rich education debut of Laurel Langemeier and more. LAUREL she was known as the millionaire maker since back in the days when a million dollars was actually a lot of money. To be sure that you don't miss these upcoming episodes on your pie catching device, hit the Follow button right now while it's on your mind and you'll be all set. Let's meet with this week's guest.   This week's guest is a familiar one, because he's on Team GRE, yeah, it's an in house chat with our super helpful investment coach. What he does is he helps you devise your big picture real estate strategy all the way down to connecting you with the exact right property addresses. He does that free at GRE marketplace business speaker Jim Rohn said, formal education will make you a living. Self education will make you a fortune. He's got both with an MBA from Duke. Then he worked at both banks and financial publishing companies before landing here at GRE in 2021 but importantly, for years now, he's been an active real estate investor, just like you and I are. Hey, a big welcome back to the show. Naresh Vista,   Naresh Vissa  14:13   hey, thanks for that wonderful, wow, amazing introduction, and thanks for having me back on. It's been a few months.   Keith Weinhold  14:20   Yeah, we haven't heard from you since October here. So what's going on in the real estate and economics world? From your vantage point, everyone's got a different slant on it based on what they see.   Naresh Vissa  14:32   There's a lot happening. As you know, Keith and our listeners, I'm not sure if they're following, but we're seeing tremendous, tremendous changes in the financial markets in general, and the financial markets include the real estate markets, and the impact is going to be widespread for better or for worse, I think, for better over the long haul. So what I'm talking about right now is, for example, interest rates, mortgage rates, home value. Use inflation, those are all very important parts of the economy. And we have this new government department called Doge, the Department of government efficiency. And Doge has gone in. And I loved your newsletter where you talked about Doge a little bit, and the walk that I took, as you called it, the awkward walk with a box full of your stuff or something like that. The sure, because I've been fired before. Yep, yep, it's happened to me once too. I took the awkward walk with the box of of random stuff. Yeah, lots and lots of of layoffs are happening within the government. The private sector continues to lay off people as well, like it usually does, and this is a big deal. The reason why it's a big deal is because aggregate demand. I don't want to say it will be killed, but we're already seeing an impact on home values in places that are very dependent on government workers, places like Washington, DC, Virginia, Maryland, there's actually a 10% year on year decline in home values in those areas. I don't know if you knew about that, Keith, but that's been the impact, and that's based off of the February statistics, the February numbers. So we've seen a decline, and that decline will likely spread to other areas that are dependent on federal workers, or where federal workers make up a good chunk of the local economy. I bring this up because we have providers in Maryland who we work with, who GRE has worked with for three or four years now, and they're seeing somewhat of a decline in the area as well. Because just you don't have to work in DC to be a federal worker. You can work in a major city like Baltimore or in a suburb in between Baltimore and BC. So we're seeing somewhat of a decline in our investors have all of a sudden gotten interested in investment property in the Maryland area because they knew, hey, we know GRE works in the Baltimore operates in the Baltimore area, and just want to scope out some homes. So previously, two years ago, three years ago, when list price was not negotiable. Now all of a sudden, the sellers are open to offers when there was no budging on offers three years ago. So I bring this up because the Department of government efficiency, I believe, to my knowledge, we're up to six figures. More than 100,000 workers have either been laid off or taken the buyout package, so we're somewhere in the six figures of people who got that now, they do have eight months severance. But with that being said, you would think that most humans, they'll immediately start looking for the next job. They're not gonna just enjoy for eight months and then scramble to find that next job. So this is having a widespread impact on housing, home values on it's going to have an impact on interest rates. We're seeing that interest rates are coming down, and if there's any sign, which I don't think there is, but if there's any sign of a recession, if there's any sign of bleeding, then the Fed is going to start cutting interest rates again. So I think we saw peak interest rates a few months ago, those interest rate values, those mortgage rates, aren't going to be going back up anytime soon. We know that almost it's almost a fact that we know that, because the Fed is not going to be raising rates, the most punishing thing they can do is just keep rates steady for a long period of time. But I didn't anticipate that later this year, they're going to start cutting again because of these widespread mass layoffs.   Keith Weinhold  18:32    And of course, Washington, DC is essentially ground zero for these federal layoffs. Federal jobs account for about 25% of DC jobs. You the listener, probably find it to be no surprise that that is the highest in the nation. But of course, this can also affect private companies, those private companies that have federal government contracts as well, and Naresh, before we open it up to the nation, we just think about DC. Do we have any idea of what properties are going to be hurt the most? A lot of times you might think of that in the case of what is the income range of these federal employees that are being laid off now, a lot of them are probationary employees, meaning that they're in their first year of employment.   Naresh Vissa  19:19   Well, it's a huge mix keep. That's a really good question, because I think a broker, like a real estate broker who's trying to sell will try to beef up the price and say, Oh, this doesn't affect us, and this only affects very high income folks. Well, that's the fact of the matter. Is there, if you work for the federal government, you're not necessarily ultra high income or ultra high net worth, you get the perks, and you get perks of working a government civil servant Job while taking somewhat of a lower pay. So it's actually a mix, because you have people in the first two years of employment. So the youngsters. Now, those aren't your homeowners, though, the 2223 24 those. Just say the people in their mid 20s, they're not the homeowners, they're the renters. So you can expect them to leave. They'll probably if they can't find a job, which it's going to be much harder to find a job in that DC area, they may move to Philadelphia or New York or California or wherever they can find a job. They'll just get up and move and move, and that's one of the benefits. I did that when I was in my early and mid 20s, many times where I just packed up and moved. I was more than happy to do it. So they're not your homeowners, but the homeowners are going to be the people who are getting laid off. So there are mass layoffs happening right now, and those people are homeowners, and then the people who are taking the buyout packages very likely, because they're either approaching or at retirement age, and it remains to be seen whether those people it's like a retirement gift, like, Hey, this is a great party. You know, getting eight months of free pay. Like, that's pretty amazing and happy retirement. Or maybe folks were like, they didn't say for retirement all that much, and they were planning to work another 10 years. Those are the people who could be sellers. Bottom line is, when you have this amount of mass layoffs, and we're seeing it in the data, there are more homes for sale today in that DMV area. I By the way, I used to live there. I used to live in in Maryland, great. More homes for sale today than I believe in the lab, definitely over the last five years. And it could be even over the last 15 years, to my knowledge.   Keith Weinhold  21:29   And for those that don't know DMV, that means Delaware, Maryland, Virginia, that area, yep. So   Naresh Vissa  21:34   there are more homes for sale, and the home values actually are now. This is a crazy thing. The home values in on average are back at 2020 levels. So basically, the peak of 2020, is what the home values are at today. And just my prediction. I don't think it takes a genius to predict this, but the layoffs are just getting started. They're just scratching the surface, and they're going to continue, because this Doge is a an 18 month program or an 18 month project. It's supposed to, it was called the Manhattan Project of our time. So they're just scratching the surface. And I'd expect home values in those areas to continue to fall. And you're gonna see it's not immediate. It's not like there are mass layoffs one day and then home values fall the next month. A lot of these effects, we won't start seeing them where the DC area won't start seeing them. 678, months down the road,   Keith Weinhold  22:27   Doge is more than just a meme coin. Now our own in house investment coach, Naresh Vissa and I are talking about the state of real estate today. More we come back, including nuracious thoughts on the future direction of inflation. This is Get Rich Education. I'm your host. Keith Weinhold   you know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back, no weird lock ups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing. Check it out. Text family to 66866, to learn about freedom family investments, liquidity fund again. Text family to 6686    Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com   Jim Rickards  24:34   this is author Jim Rickards. Listen to get rich education with Keith Weinhold, and don't quit your Daydream.    Keith Weinhold  24:49   welcome back to get recidiation. I'm your host. Keith Weinhold, it's an in house chat with our own GRE investment coach, Naresh Vissa. He's been talking about the fallout on DC area. Jobs with the regime shakeup that we had in the White House starting earlier this year. And Naresh, I know that you have some thoughts about what this can do to the future direction of inflation. Tell us about it.    Naresh Vissa  25:12   Well, the first thing Keith is, if you look throughout history, or even your lifetime, what we saw from 2021 until today, really, because inflation is going up. I don't want to say it's going back up, but it is going up. We've seen an inflationary cycle that I've never seen in my lifetime. It's worse than any short term inflation cycle that this country has faced, at least in my lifetime. And I was born in the late 80s, let's just say 1990 and moving forward. So I bring that up because this is some pretty bad inflation that the world and that the United States has seen, and we don't need to get into all the details about how it happened or the mistakes that were made at the time when the Fed should have started raising rates, when the government should have stopped spending. That's all history. Moving forward, I'm actually very optimistic now that we've actually reached peak inflation. And when I say peak inflation, I mean during this micro cycle where inflation has gone back up from a 2.4% rate to a 3% rate. I think that's the highest we're going to get during this micro cycle. It did reach some I believe it was above 9% in 2022 yes, we're definitely not going to going to reach that. But 3% is still too high for the Federal Reserve. It's still too high for Americans. It's a major reason why Americans went to the voting boots and or the ballot boxes and made the decisions that they made because of inflation. It's the most important issue on most Americans minds. And I bring this up because I'm very optimistic that we've seen this 3% peak and that we're going to be going down moving forward because of the first half of this interview, the fact that all of a sudden, it is a sudden thing, because a lot of people weren't expecting this, I was, but a lot of people weren't expecting these mass government layoffs. And these mass government layoffs, they hit corporations. They hit private businesses. Anyone with a government contract is going to be hit anyone who was profiting off of waste, fraud, abuse, which you'll be surprised how many private and many times this is legal, like it's legal waste, it's legal abuse, and all of a sudden those checks are going to stop coming in, or the way of doing those business practices are going to stop because the government is clamping down on it. Why? Because it's taxpayer money, and taxpayers are upset. So the pullback or the elimination of waste, fraud, abuse, is definitely a good thing, but also the mass layoffs, we're going to see a decrease in aggregate demand. And when we see a decrease, I'll just say demand. I mean, that's more common, so we'll see a decline in demand. So when there's a decline in demand, what happens? Prices go down, and we're already seeing it. There's already proof of it. I already I brought up the housing market in the DMV area, and I can also tell you oil prices, for example, which is one of the main drivers of inflation, oil and gas energy prices one of the top three drivers, along with government spending. So you got mass layoffs, which will kill a lot of that aggregate demand, you have the oil, gas and energy, and then the reduction in government spending. So all that combined is going to lower inflation, going back to the energy prices, oil is down for really since the inauguration. That trend should continue, given the policy change, and that drives it drives inflation, it drives deflation, it drives pricing, because any good that you need, it's probably going to be transported with the use of energy the microphone you're using, Keith, how was it shipped? Maybe in a truck, and the truck is powered by fuel, or maybe something was sent in an airplane or in an actual ship. All that requires energy and fuel. So if you can lower energy costs, then we're going to see a continued decline in inflation, and energy costs continue to fall, continue to plummet. So I think this is good for inflation. Yes, it is. There is pain. We talked the first entire half of this episode on layoffs. Layoffs are they're painful. Taking that Walk of Shame is painful. There is going to be pain. But at the same time, remember, there are more than 10 million available private sector jobs, and we already have more than a million jobs that are opening up as a result of investment within the United States since January, 20 of this year. We have companies like Apple. We have Taiwan, semiconductor, Eli Lilly, the list goes on and on and on, of major corporations, big corporations, mid sized companies, who are opening up more operations within the United States. So the private sector jobs, which are really the innovative, long lasting jobs, they are growing there is just a tremendous. To opportunity, especially for young people. If I was young again, I wouldn't want to work for the government. I'd want to go work for one of these companies, where they're essentially going to be recruiting and begging youngsters to come work for them   Keith Weinhold  30:12   to corroborate nourishes lower inflation expectations. Since the beginning of the year, we've had a fairly sharp decrease in bond yields now. GRE listeners know by now that mortgage rates somewhat move with Jerome Powell's federal funds rate, but they're more closely tied to bond yields, specifically the yield on the 10 year T note. Okay, so then what makes the 10 year go lower? Hence, mortgage rates along with them, that is lower inflation expectations in a slowing economy. And another reason that bond yields and hence mortgage rates with them, fall, is when people sell stocks and make a flight to safety into bonds, that pushes up bond prices and lowers bond yields. So again, those are two factors that move bond yields and, resultantly, mortgage rates. And that's what has been happening.   Naresh Vissa  31:08   absolutely. And the important thing to remember something you touched on and what I talked about earlier, which is, yes, there is going to be a reduction in federal government and federal government jobs, and I think this is going to pass on to states as well. I think many states, in fact, I know that many states, even blue states, are taking a look at their books and saying, hey, you know what? We should be making cuts too. Because states, they operate on much tighter budgets, whereas the federal government, they basically have access to a printing press. State governments do not so the point that I'm making here is that, yes, it's painful. We're going through some pain right now. The DMV area is going through some pain. The stock market has gone through some pain. The Crypto markets have gone through some pain. Everyone's gone through some pain, but they say no pain, no gain, and the jobs are being transferred, as I brought up earlier, from the government sector to the private sector, and the private sector is where we can see tremendous, tremendous growth. Look at GRE for example, we're a private company, and we've seen tremendous growth, right? Tremendous growth in just innovation and and our services and our offerings. Now, imagine a bigger company that, and how much growth they can have. I think overall, I'm very optimistic and about inflation coming down, hitting that 2% target by the end of this year. In fact, I think it'll hit that 2% target a few months before the end of the year. And once we hit that target, then the Fed is going to start cutting rates again, and there's a chance that they may even start cutting rates before we hit that 2% target. I don't think they should. I thought they made a mistake doing that last year when they started cutting, when inflation hit 2.4% I think or two and a half percent, they started cutting again. I think the inflation rate has to hit actually 2% across the board, and then they can start with their gradual cutting. So if somebody asked today, hey, narration, which many do as, hey, how low do you think interest rates are going to go this year? My answer is not very low. This here, you'd have to have a cataclysmic Black Swan event, which it's called Black Swan because none of us can predict it, none of us can see it. So you'd have to have an event like that for the Fed to just basically slash rates overnight, which I don't see anytime soon. The other most popular question I've gotten this week is, are we going to go into a recession? You know, it seems like the world is falling apart and world war three and and stocks are tanking, and crypto is tanking, and this is tanking and that's tanking. This is when people told me a few weeks ago, actually. And my answer is, No, I don't think we're going to see a recession unless there's a black swan event. But I don't think so. And the reason is because of the tool that the Fed has. The Fed can cut, cut, cut. That's one of the Ben now, if we were at low interest rates, if we were at, let's say, historic low interest rates, and we were in this situation today, I would be very pessimistic and say it's not looking good. But any sign of a recession, the Fed is going to act at their next meeting. They won't even need to call an emergency meeting. They'll act at their next meeting, whenever that may be, they'll act and start cutting rates, and that's going to quickly stimulate the economy and get investors like our folks, because that's going to affect the bond yields, that's going to affect the mortgage rates, and investors are going to jump in to buy real estate, and people are going to jump in to buy discounts in the stock market, et cetera, et cetera.   Keith Weinhold  34:44   To your point, thank goodness the Fed has some ammo. Since the federal funds rate is about 4% they do have some ammo, and they can cut that rate down. You can imagine if the Fed funds rate was zero, like it was a few years ago, and they couldn't make cuts because they don't want to. Make it negative. So Naresh and I here talking about a number of forces that are largely outside your control. So these are the sort of things you can keep your eye on. However, there is something you can do that's very much in your control, and it happens this Thursday, where you can join Naresh and a co host on our upcoming live event. Tell us about it, Naresh.   Naresh Vissa  35:22   well, like you said, it's this Thursday, we're going to be talking about the BRRRR strategy, which has become the most popular real estate investment strategy. GRE has seen in its existence. Our investors are almost hooked onto this burst strategy. We're going to talk more about it on the webinar. Burr stands for buy, rehab, rent, refinance, repeat, and we'll get into all that in the webinar. It's a great way to build equity in a property very quickly, and to use that equity towards your down payment, so that you're not paying that standard, traditional 20 to 25% down. Some of our investors have done BRRRR's in markets like Tennessee, where they put zero down, or where they even made money on the if you want to call it the flip, so we're going to be talking about them. It's specifically geared towards we've done a burr event before on the Memphis, Tennessee market. This is a burr online event that covers the Cleveland, Ohio market, and that's a market that we have not touched on much here at get rich education, we've promoted some properties here and there. It's a really popular market, and it's a state that is growing and looking if someone were to ask me, Hey, Naresh what's the one state that you think can become the next Florida. And we've covered Florida here before. I live in Florida. Politics aside, Florida has boomed Since 2020. Or so. The number of how you can judge a state's growth is by its GDP numbers. And most importantly, are people moving there? That's the key. Are people moving there? And I would say Ohio is that next state where I think many people in the Midwest are going to say, hey, you know what, I want to go move there, because they're looking to make a lot of changes that are pro growth, that are pro real estate, including potentially eliminating the property tax, school choice programs there. That's huge for kids, universal school choice, and, most importantly, potentially eliminating the income tax now, these are all long term plans. It's not happening anytime soon, but those are the visions and the goals for Ohio, and I think they're going to happen by 2030 I would expect many of these plans and policies to happen. And what that means for real estate is it's going to boom because people are going to move to Ohio because of that, there aren't a lot of states that offer no income tax. So those are my thoughts on Ohio, and we're going to talk a little bit more about that on the webinar.   Keith Weinhold  37:50   Many expect Vivek Ramaswami to be the next governor of Ohio. If that comes true, Vivek has a lot of the same pro business policies that Ron DeSantis does in Florida, for example, Ohio has a high population, a stable population, America's seventh largest population, and a slow growing one with a great diversity of industry there in Ohio and Cleveland.   Naresh Vissa  38:15   So Keith, we have we're approaching record numbers of registrations for this event. We still have room for several more people. So I highly recommend people go to GRE webinars.com. That's GRE webinars.com. You can register for the event. It's going to be fun. All of our webinars recently have been a ton of fun. We've gotten great feedback, a lot of engagement. I think you'll learn a lot for sure. So I'm looking forward to seeing everybody there.    Keith Weinhold  38:42   Your co host, Phil, was on last week's show with us, both you and Phil, we'll be talking about this burr live event in Cleveland. I really suggest you, the listener, attend live. You might get a better Property selection that way, and you'll surely be able to ask questions, and sometimes with the other participants, they ask a really good question that you had not even thought of previously. It's our live burr event for Cleveland cash flow properties. You the listener probably remember when Phil was here last week, we gave an example of where you can get eight to one leverage and up to $500 cash flow on a single family home in Cleveland. I really recommend that you attend, and you'll be hearing more from the race, then you can sign up at GRE webinars.com We'll see if we break that record of, I think, 538 registrants last webinar that we had late last year. Do you have any last thoughts about the event? Naresh,   Naresh Vissa  39:41   like I said, before our events have it's free to attend. That's the first thing. You don't need to pay us anything. But we sell out these events. So I highly recommend that people go once again to GRE webinars.com. We can only hold a certain number of people. It's a few 100 people. So we want to sell out again. We hope you can. Join us and you will not regret I think you're gonna really like the Cleveland market. We're gonna talk more about that, the Ohio market in general. And I think folks are really, really gonna like this strategy. I know a lot of you have invested in Burt, in other markets, or have been researching Burr and you really like what you hear this is the market. I think that you should pay really, really close attention to our team is really strong there. Phil's team, really strong, very honest. They're quick, they're reliable. So if you've had a bad experience doing a burr elsewhere, I think you'll have a better experience with our team over here.    Keith Weinhold  40:35   We'd call it a sellout crowd, but you don't have to pay anything. We'd call it a standing room only crowd, but you don't have to stand up. You can sit down and enjoy it from the comfort of your own home this Thursday at 8pm eastern at GRE webinars.com. Thanks for coming on to the show. Naresh,    Naresh Vissa  40:51   thanks a lot, Keith.   Keith Weinhold  40:57   Yeah, strong insights from our own new race today, inflation expectations cut back and forth like a knife with big policy decisions on layoffs and tariffs and more tariffs on lumber and gypsum board. I mean, they are two of the major inputs that can increase the cost of homes. Gypsum board just means drywall tariffs, slow trade, less fuel is used to ship things like we touched on. And a lot of people ask, well, doesn't an economic slowdown mean lower prices, but yet don't tariffs raise prices? Well, you got to take on that from Naresh today. Now, sometimes I am asked, where is the real opportunity in today's real estate market? I've been a guest on other business shows lately, and I've been asked that question, where's the opportunity in today's real estate market? And I've got two answers. If you have more money and less time. Go with new build properties, because builders are still awarding you with massive rate buy downs, often to near a 5% mortgage rate. They are buying it down for you, but instead, if you have less money and more time, because you have to wait a few months for a rehab, then go with the burr strategy. That is the other opportunity. It's going to give you a higher return than new build in most cases, because what you get is in improbably high leverage along with strong cash flow. And those are two notions that typically don't go together. Well, on Thursday, we're bringing that to you with our live event. I mean, is there a more seasoned pro with the burr strategy in the entire nation than one co host for the event? Phil and then the mind spring of knowledge and ideas from Naresh as the other co host, and they're both active investors themselves, bringing you the opportunity in Cleveland in just a few days. And of the hundreds of registrants, not all of them attend live, but do attend live. If you can give yourself an advantage, you can be connected with available properties conducive to the burr strategy. If you're interested, or maybe you're just more interested in how it all works one last time it is GRE 's live event for Cleveland's amazing cash flow opportunities this coming Thursday, the 20th at 8pm Eastern, 5pm Pacific, healthy real world monthly rents that are more than 1% of the purchase price single family properties, many for under 100k in investor sweet spots. It's free to attend. It's from the comfort of your own home. Registration is still open at GRE webinars.com until next week. I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 2  44:04   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host, is operating on behalf of get rich Education LLC exclusively.   Keith Weinhold  44:28   You know, whenever you want the best written real estate and finance info, oh, geez, today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers, it's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters, and I write every word of ours. Myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video. Course, it's all completely free. It's called the Don't quit your Daydream. Letter, it wires your mind for wealth, and it couldn't be easier for you to get it right now. Just text GRE to 66866, while it's on your mind, take a moment to do it right now. Text GRE to 668666.   The preceding program was brought to you by your home for wealth, building, getricheducation.com.  

Register here for the live online event to learn about ‘Cleveland's Amazing Cash Flow Opportunities on Thursday, 3/20. Keith discusses the current state of the real estate market, highlighting that single-family rents have risen 41% since pre-pandemic times, while multi-family rents have increased by 26%. Single-family rents have been rising faster than prices for nine months, benefiting investors.  Austin, Texas, is an example of how increased supply can lower rents, as seen in their drop in rents after the city relaxed building regulations.  Real estate strategy expert, Phil, joins us and explains how this niche method can offer high leverage and cash flow. Show Notes: GetRichEducation.com/544 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE I'm your host. Keith Weinhold, build it and rents will fall. I discuss the direction of rents and prices. Then a real estate strategy for all time that can generate 8x leverage with investor cash flow and the exact city that could be the most advantageous for it today on get rich education.    since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit get rich education.com   Corey Coates  1:13   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:29   Welcome to GRE from elizabeth new jersey to Elizabeth, Colorado and across 188 nations worldwide. I'm Keith Weinhold, get rich education, founder, Forbes real estate council member, Best Selling Author and long time real estate investor, you are inside, get rich education. What's that all really mean? Ah, I'm just another slack jod and snaggletooth podcaster.nationally, rents for single family homes are growing faster than for multi family apartments. Okay, that you might have already known, because for a few years, we've been in this era where available single family rentals are scarce and apartments are closer to being adequately supplied across the nation. We're now at the point where median single family home rents are up 41% since those blissful and Halcyon pre pandemic days, and yet, multifam rents are up just 26% since that time. So it's 41 versus 26 and that's all according to a new report from Zillow. Now you probably listen to this show every week, so although that might be a helpful update, you probably don't find those facts surprising at all. But here's a more nascent trend that could surprise you. Every single month for the past nine months now, single family rents have risen faster than single family prices. Yeah, the John Burns home value index is up 3.3% annually, and the rent index shows that those rents are up 3.6% so 3.6 versus 3.3 really not a big gap there, but single family rents rising faster than prices for nine months. You know that's exactly what swings things into your favor as a real estate investor, it increases your ratio of rent income to purchase price. This has been happening because for someone that needs housing out there, paying rent has looked more affordable than buying a home. So then those things have to soon come back into balance. Now you remember that five months ago, I visited Austin, Texas, walked the streets and with all of the new building of apartment towers there, I called it America's oversupply, ground zero for apartments. Well, I'm not sure if you've noticed, but here, a few months later, major media sources are now reporting on the same thing that I was telling you about on the ground five months ago, and this is really insightful for real estate investors in a real world case study that will be on every intro to economics syllabus this fall, rents in Austin, Texas plunged. They fell 22% from their peak a couple years ago after the city accelerated permitting processes and scaled back the rules on building height, and this is exactly what created Austin's apartment supply surplus and therefore lower prices for renters. Bloomberg was the one recently reporting on this. So Austin's, if you build it, rents will fall mantra that created about 50,000 new units over just the past two years, a 14% increase. I mean, that is the biggest spike in supply of any US city. Over that time, just tons of cranes in the air. And by the way, the median asking rent in Austin, Texas is now $1,400 remarkably, though, that is down a full 400 bucks from the height of the pandemic. I mean, that is such an aberration That is so weird and rare. Yeah, Austin rents dropped from $1,800 down to $1,400 in in fact, that is so weird, and they've fallen so much that notoriously pricey Austin is no longer the most expensive city in Texas. It's now DFW. And you know, this is astounding on a few levels, because typically rents are even more stable than home prices. Gosh, but now to take off our investor hat for just a minute. Don't worry, we'll put it right back on. This is what society needs. I mean, how in the world are we the nation that put a man on the moon in 1969 yet we can't house our own people today. It's what I've discussed before. We need to build more. If you build it, rents will fall. If you build it, home, prices will become affordable. Again, we're not doing enough of that. Not enough places are following Austin's model. Up zoning, as I've told you before, up zoning. That's the name for allowing taller building heights. And you know what? That's something that both developers and environmentalists often like. Both types developers get what they want, and environmentalists know that housing and the economics of that are more efficient. There's less energy use in everything when we build up and we build apartments rather than single family homes, Austin relaxed regulations and they got it done. So congrats to them. I mean, that is a model for what we can do to address not only housing affordability, but the swelling homelessness problem like I enjoy talking about as well. So yeah, congrats, Austin, though you might have gotten too far ahead of your growth for the short term. America really needs the housing so thank you.    Now here's some ominous news for society and the economy. I wouldn't make too much of it yet, but the Atlanta Fed tracker has plunged. They're now forecasting a shrinking economy this quarter, minus one and a half percent. GDP is a projection which that gets us going down into recession territory, and part of the reason for that is this recent drag in consumption. But news like that can come and go, and we all know how frightfully just laughably bad recession predictions have been for years. We haven't had one in five years. So I want you to get the longer term lesson here, because things pop up like this over time. What usually happens to real estate in a recession? Because we know that there's going to be one. No one knows when. What happens is that unemployment rises. That is bad, home prices go up. Yes, home prices typically rise modestly in a recession. Just remember, since World War Two, home prices only fell significantly in one period, and it was a bad one in those years around 2008 what happens to interest rates? Interest rates of all kinds. In a recession, they fall. Interest rates fall. The Fed make sure that happens, and the reason for that is rates fall because the economy needs the help to review what you've learned so far today, single family rents are rising faster than apartment rents. Single Family rents are rising faster than single family home prices, although not by much. And Austin is proof that if you build it, prices will fall. And during recessions, residential real estate is a good place to be. Then let's say it's a widespread job loss recession as we pivot into the core content of today's show, you're probably quite familiar with the turnkey real estate investing model, where ideally on day one of your property ownership, your income property is either new or renovated. There's a tenant in it. It's under management, and you might even get a little trickle of tenant rent at the closing table. All right, but instead, what if you had six months of patience you own the property for those months through the renovation, and what's your reward for doing that? It is both high leverage and high cash. Flow, potentially, and usually those notions are antagonistic. High leverage means low cash flow and vice versa, but not with what we're talking about today, my expert guest and I discuss how you can have both the cash flow, which is like your spending money, and the leverage that constitutes your long term wealth growth, and he has bought, renovated and sold more than 2000 properties. And my guest and I go back more than 10 years before I go to break where you hear who sponsored the show this week, I have a trivia question for you, and you'll see what this has to do with our episode soon enough, Ohio has six cities with a population of 100,000 or more. Name them. Name those six Ohio cities. I'll give you your answer later. I'm Keith Weinhold. You're listening to get rich education.   You know what's crazy, your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back, no weird lock ups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text, family to 66866, to learn about freedom. Family investments, liquidity fund, again. Text family to 66866,    hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation, because they specialize in income properties, they help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com, that's Ridge lendinggroup.com.    Richard Duncan  12:46   This is Richard Duncan, publisher and macro watch, listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  13:02   We were last graced with the presence of this week's guest about two and a half years ago. Since then, we had dinner together in Boston. He is a long time experience expert in the real estate BRRRR strategy will explain, and he knows just the exact few markets where the strategy really works and where it doesn't, and he explains how this can deeply accelerate your ROI and your portfolio growth and get this he's been a real estate investor since he bought his first rental property in 1978 he's been working the burst strategy and mentoring others on it since before there even was a burr acronym, brrr, he has mentored and coached more than 5000 investors. Oh, it's great, Phil, welcome back onto the show.   Phil Alexander  13:54   Keith. Thanks so much. It's such a pleasure to be here. It's always great to see you, and the time really flew from when we were able to break bread together in Boston, which is my hometown. And as I recall, we went to America's oldest restaurant, the union Oyster House, which was a fun experience   Keith Weinhold  14:14   right, where there are lobsters crawling all over the place. Yeah, that was a cool distinction to meet with you in America's oldest restaurant there in Boston. Pretty unforgettable. Phil, though you're from Boston, well, that's not really where the cash flowing numbers work so much you're an expert in the art of the BRRRR  the real estate, buy, rehab, rent, refinance and repeat strategy, and then we'll discuss the market that you say is number one in the USA for this so really high level, big picture. For those that don't know, what is the burr strategy? What makes it so compelling?   Phil Alexander  14:55   There are a lot of different ways Keith to discuss the burr. Strategy. It really is nothing more than a turnkey property. However, in the old days, I'll say, you know, I've been in the business for over two decades, we would sell turnkey properties, and a buyer or investor would come to us, and we'd show them a number of properties that were available. They'd pick one, we'd renovate it, and then they would have it inspected, and then we would correct against that ugly inspection report, and then they probably would be using leverage, so there'd be an appraisal, and then we'd put a qualified tenant in place. And after all that had happened, we would close on the property, and they'd be cash flowing from day one. There's nothing wrong with that approach and strategy. It's very conservative, but relative to the burst strategy, Keith The one big element that's missing in the classic turnkey model, there's no built in equity. And what the burst strategy does is it allows the investor to create value through that renovation, and it's nothing more really than a developer himself or herself does when they renovate the property to create value, and in doing so, you then wait a prescribed period of time, often called a seasoning period, and then you do a cash out refi to pull out that built in equity that you created yourself. And the idea then is to recycle that cash and buy into your next property.   Keith Weinhold  16:35   Why don't you give us a real example with some numbers?    Phil Alexander  16:40   Let's say you could find a place. Now, anybody in California is going to listen to this say this doesn't happen because you can't buy houses for this. But trust me, you can't. You buy a house for $60,000 you renovate it for $40,000 that means you have $100,000 invested in that property. However, you bought that house because you knew, once renovated, it was likely to be worth, let's say, conservatively, 120,000 and yet, when you go and do the cash out refi often at six months from the time you acquired the property in the first place, you're going to be able to pull out up to 75% of that appraised value. I'll do the math for you quickly. 75% of that $120,000 is $90,000 you only put 100,000 into the property in the first place. So at a glance, that suggests that you've gotten this property for $10,000 Well, to be fair, you do have closing costs. So let's say the closing costs and the finance fees on that cash out refi loan are about $5,000 so in essence, for $15,000 you now own a property worth 120,000 now an illustration of the value of this BRRRR strategy is if you were to go and buy that very same house, 420,000 renovated, tenanted, cash flowing, it would cost you 20% down, which would be $24,000 plus finance fees and closing costs would push it to or over $30,000 here's the bottom line. Would you rather get it so it's cash flowing from day one after closing, no built in equity and 30 or $32,000 out of pocket? Or would you rather get it where you only have 15,000 out of pocket? And I can do the math on that and tell you that you're more than doubling your cash on cash return with the BRRRR strategy   Keith Weinhold  19:07    yes, and you've also increased your leverage ratio in the example that you gave after waiting six months, much of which includes waiting for that rehab to take place, you have A 120k property. Like you said, you only have 10k into it. Maybe add five more K to that for closing costs and such. So you've got 15k into a 120k property. That is an eight to one leverage ratio,   Phil Alexander  19:33   exactly. And there are numerous other examples, typically speaking, Keith in good investor advantaged markets with the burst strategy. You can expect after leverage, after that, cash out refinance loan to be netted in the range of 200 to $250 per month cash flow. That's the rental property the. Less all of the direct expenses, less your monthly payment on the loan. Your net positive cash flow every month is between 202 150 in most good markets,   Keith Weinhold  20:13   that is really good on a single family home, because typically when you have a higher leverage ratio, when you're borrowing more, that really crunches your cash flow. But in this terrific example that you gave, it does not So Phil to help distinguish the burr strategy from an investor buying a turnkey property. To make that distinction, I think of the turnkey provider is really already doing the first three letters of the BRRRR acronym for you, because the turnkey company, they buy it, they rehab it, and they rent it before selling it to you. They're doing the first three for you here, when you hang around for all five letters of the acronym, you can be the beneficiary of what you just described.    Phil Alexander  20:58   Spot on, Keith, that's exactly right. The bottom line is, I think a game changer for our company of late is that we have found a market where you could earn two to three times the net positive cash flow on a monthly basis with the BRRRR strategy.    Keith Weinhold  21:19   Yes, we're going to get into just where that market is, the number one market in the USA for the burr strategy, in Phil's opinion. But Phil, I think before some people wrap their head around the BRRRR strategy, sometimes they consider the investor doing this themselves. What's intimidating about doing BRRRR by yourself is that first R in the burr strategy, the rehab, it seems like a nightmare, especially across state lines for an investor to find and retain and to manage contractors, but you have a system where this is all integrated.   Phil Alexander  21:57   exactly, you Know, Keith, I consider the two biggest pain points for an early investor is actually that first letter the B. You can buy properties anywhere, but the trick and the key is to buy a property that you know, with proper renovation of a rental standard, in fact, will be worth, generally, 20 to 30% more than your out of pocket cost. The second pain point is the construction component, finding a contractor, managing a contractor, keeping the contractor on the job and productive and not running away with your money.   Keith Weinhold  22:44   We make you lose faith in humanity. Yeah,   Phil Alexander  22:48   yeah. We don't really even need to go into detail more on that, but you're absolutely right, and what we do, which I think has made a significant difference, we have our own crews. We're able to have the projects managed. We have detailed scopes of work, for example, that detail line by line, item by item, the scope of work and the draw schedule to renovate a property and deliver it on time, on budget, without exception,   Keith Weinhold  23:21   tell us about the track record of the team in the contractors. I think most people's bad experience starts with day one, when the contractor shows up 45 minutes late with beer on their breath.   Phil Alexander  23:35   It could be, it could be, I am blessed. Currently, I'm active in three markets, although during my career, I've worked in 19 different markets around the country, not become fickle, but because markets do come and go. But I'm in Baltimore and Philadelphia and Cleveland right now, and the bottom line is that I have cruise boots on the ground in every market, and my one general contractor that oversees all three markets, he's been with me for over 15 years. As you mentioned earlier, I've been in the business for over two decades. We've just been doing this, like you said, since before there was an acronym to what we were doing. It's just a sensible thing to do. We know each other well. We get the scope of work done accordingly. That's something that we, with pride, say is a guaranteed number, which you don't often find in this business. Meaning if we have not gotten it right, if we have screwed it up, if we find something that we missed when we were, you know, reviewing the house and drawing together the scope of work, that's not the client's problem. That's our problem. If we say the rehab is 50,000 the rehab is 50,000 period there is no cost overrun.   Keith Weinhold  24:58   We don't want. Contractors smelling like Michelob Ultra we want contractors smelling like sawdust and WD 40. But Phil, you talked about the specific markets that you work in because they're burr advantage markets, Cleveland, Philadelphia and Baltimore. Tell us about the one that is number one in the nation right now, and why   Phil Alexander  25:21   Cleveland, Ohio. And it's not because my dad was from Cleveland. When we were kids, we all played I haven't met one person who hasn't on a seesaw, if you recall, you know, and now in your mind's eye, imagine the seesaw. One end is home prices and the other end is annual return. When the home prices are high, the returns are low. When the home prices are lower, the returns are higher. That's why, sadly, for virtually everybody on the West Coast, my hometown of Boston, New York, Washington, DC, South Florida. These are amongst, to put it bluntly, the worst markets in the country to try and cash flow positive. What makes Cleveland, however, especially unique. I'm oversimplifying, perhaps, but it is blessed to have both lower home prices than most markets, but very healthy real world rents, and that's a juxtaposition that causes extreme cash flows. I think at the current moment, I might have one property that doesn't cash flow 500 or more dollars per month, net positive cash flow, as we were discussing, 200 to 250 is normal for a good market, even in my other markets of Baltimore and Philadelphia. But you come to a market like Cleveland, and it's absolutely extraordinary. This is a perfect segue, if you'll allow me to the thing that makes us and me different. There's a billionaire car dealer by the name of herb chambers in Boston. In fact, he just sold, I understand his business for $1.58 billion massive car dealer. That's not important. What is important is his whole marketing mantra, Keith, is I don't sell you cars. I help you acquire your next vehicle. I don't just sell investors houses, Keith, I have taken an approach, and I've been doing this for a number of years, where I help investors achieve their goals. I have a very specific process, and I'd be happy to share, if you'll allow me, yeah, I first ask people about their war chest. To me, that's the amount of liquid capital they have to invest when they're ready to pull the trigger. It's not just cash in the bank. It can be equity in a home that they can pull out with a home equity line of credit, a HELOC, maybe they have a retirement account that they're able to borrow against. It's their money, after all, but that amount of cash is your war chest, and frankly, I'm not one of those people who says, You can buy real estate with no money, if you have maybe $30,000 or more, I can get you in the game. The second question I ask is, what's your goal? Because every one of us in this business has a goal. Every one of us, I don't need to know the specific goal. But whether it's to have your partner give up the nine to five job, or you want to give up the 90 to five job yourself, every goal has a cost. So what I seek to find out or learn is, what is your number in terms of a goal, how many 1000s of dollars of passive income every month are you looking to achieve? And then the last question is, time frame? Are you looking to achieve that goal in? What three years, five years, 10 years. And then, simply put, whatever the answers are, I show you how it's going to happen.   Keith Weinhold  29:18    See, these are the types of questions that your everyday realtor just doesn't ask you. I mean, Phil doesn't just sell you houses. He helps you achieve your stated goals for passive income. There's nothing wrong with an everyday realtor, but that's just not the lane that 98% of them are in. And what makes this burr strategy so compelling? I'm just doing calculations, not even on the back of a napkin, but in my head here, if you've got eight to one leverage, like we do in the example here, even if you have 3% annual appreciation on a property, that's a 24% return on the 15k of skin in the game that you have here. And then additionally, if you achieve $500 Dollars of monthly cash flow once your burr property is done, that's $6,000 a year divided by only 15k of skin in the game. That's a 40 or 40% cash on cash return in addition to the leverage depreciation that stepped up. And these are two of only five ways you're paid. This is why people love the burr strategy, if you've got the patience to wait six months,   Phil Alexander  30:25   here's the other thing too. A lot of people say, Is it possible to cash out earlier? And the answer actually is yes, but you have to be prepared to decide what's that worth to you. Meaning, if you wait six months, you can expect 75% of the appraised value. However, I have some lenders that I can introduce that will do a DSCR loan, debt service coverage ratio loan, which is against the cash flow capability of the house rather than the credit worthiness of the borrower, and they'll do it at three months, and yet it'll be at 65% perhaps of the appraised value, a lower loan to value or LTV. But still, it's a cool way to roll plain and simple.    Keith Weinhold  31:18   Yes, so Phil, here, he offers you total solutions. It's not just helping you with the Property selection, it's renovation by his license, then insured crews, introductions to the financing needs that you might have hash out, refinance introductions and that all important professional property management, unless you choose to manage the property yourself. And Phil, I want to ask you more about Cleveland and just the neighborhoods that you're selecting in a moment, but I've got great news here. You get to join Phil live. He and a GRE investment coach are co hosting Cleveland's amazing cash flow opportunity with the burr strategy, and you can join from the comfort of your own home. It is just 10 days from today, Thursday, March 20, at 8pm Eastern. Registration is open now at GRE webinars.com I suggest you register. We had hundreds of registrants for our last BRRRR event, which was last year. But Phil, tell us more about what you'll let us know on that webinar when it comes to Cleveland areas and neighborhoods.   Phil Alexander  32:26   Sure thing Keith, Cleveland's a pretty dynamic and interesting town. Of course, most people know it's the home of the rock and roll, Hall of Cleveland rocks and Exactly. And there are so many things about Cleveland that I think are really kind of cool to get to know. First of all, we talk or you mentioned appreciation, home price appreciation in Cleveland last year, 7% Yeah, crazy, absolutely crazy. The cost of living is well below the national average, it's at 6% below. Now here's the interesting thing, too, the rent to own ratio of people who rent versus own, very strong 59% rent. And of course, if you're a landlord, what does that mean? It means a greater opportunity to have qualified tenants in place with very low vacancy periods regardless. Now the average rent is $1,433 a month, which, again, when you're talking about properties, the average price of which, even with the renovation, is between 100 and 130,000 let's say 14 133 is even ahead of that cool little metric that we sometimes call the 1% rule, where the rent is at or above 1% of the value of The property. It's a small city only about 360,000 people the metro area, of course, a bit larger, at 1.7 million. And there are a number of top employers, and you know, the Cleveland Clinic, obviously well known Progressive Insurance. Love their ads. Sherwin Williams, you think about that the next time you want to go paint, but it's as to where we're investing principally we target Keith. What often are called C and C plus neighborhoods this week, yeah, often on the eastern, southeastern side of the downtown. Of course, to the north, you've got Lake Erie, so you don't want to get wet, so that you stay east, west or south. And yet, there are a number of places, maybe areas, if you're familiar with Cleveland, like Shaker Heights, Maple Heights, Brooklyn Heights, Cleveland. Heights, University Heights, all of these areas are considered suburbs with high taxes, uniquely so we tend to stay away from those, but in close proximity, we're all around them, and we benefit in terms of appreciation by being all around them, but not being in them, because you don't achieve any higher rent in those suburbs, but you do have the higher taxes, and in that respect, we're able to enjoy these outsized returns.    Keith Weinhold  35:37   This is a rare opportunity for you to meet Phil, someone with this wealth of experience. And of course, the benefit of showing up live, if you so choose, is you can ask a question yourself and have it answered. Phil, do you have any last thoughts overall with anything, whether that's the burr strategy or Cleveland itself, or anything else?   Phil Alexander  36:00    First of all, a lot of people ask me, Keith, you know, with rates mortgages and this and that, what do you think I heard? Maybe they're going to go down in the spring or the summer? Should I wait? The answer is no, the best time to invest is yesterday, and you will always be able, in a market like Cleveland, for example, to enjoy strong, positive cash flow. And you know something, as I said before, I've worked in 19 different markets. As soon as Cleveland stops being such a cash cow, I guess I'll have to move on and find the next great thing. But until then, I'm in Cleveland.    Keith Weinhold  36:40   It is supply demand. Our listeners know, as I've shared with them, that the Northeast in the Midwest are under built markets. So you have the opportunity to own an asset that everyone is going to want in the future. It ought to be great. Phil, it should be terrific 10 days from now. Thanks so much for coming on to the show.   Phil Alexander  37:01    It's my extreme pleasure, Keith, I have to say, in all the years that I've known you and known your listeners, they are easily amongst the best educated and most serious investors I have the pleasure to deal with. So it's always a pleasure to come back and thank you for having me.    Keith Weinhold  37:19   That's really kind. Thanks for saying that.   Yeah, excellent. BRRRR. Breakdown from Phil the consummate expert. In fact, when we had dinner at America's oldest restaurant, we sat just across from JFK, his favorite booth. He used to dine there. He was also a Bostonian. Of course, which six Ohio cities have a population of more than 100,000 people? They are Akron, Cincinnati, then, of course, the subject of today's show and our upcoming live event, Cleveland. Also Columbus, Dayton and Toledo of all 50 states, Ohio has tons of industry diversity. They had the nation's seventh largest population, and Ohio's population is slowly growing. A number of GRE buyers, just like you, have already connected with our investment coaching, so therefore you got the introduction to Phil and have already bought BRRRR through Phil, including in Cleveland, but he is sourcing more of them for this event. Phil and I looked at some Cleveland single family rental pro formas together that utilized the burr strategy that cash flow over $600 even two properties that cash flow over $700 but I would say those results are not typical. The ARVs after repair values have been pretty good. What Phil does is he runs comps of properties within a quarter mile before the appraisal. And you know, to give you a little behind the scenes. He bought the same software that lenders use to run valuation reports. So he has it himself. Phil has shown me proformas where you get cash back at closing, and therefore what that means are infinite returns. Though that's not an expectation that you should have, though it's nice when it happens, people are often buying two or three properties at a time. And to give you a little more, behind the scenes, Phil has his own in house wholesale unit for helping source these properties. And for every 100 properties, he buys two to five of them, Cleveland rocks. But even if you're more into rep, it's completely free to sign up for our webinar. You'll learn the nuances of what makes the burr strategy so lucrative, what makes Cleveland advantageous, and have any of your questions answered. It's coming up next week, already, March 20, at 8pm Eastern. I mean, this is the kind of event that can alter the trajectory of your entire investor life. Sign up is open. Save your spot now at GRE webinars.com that's GRE webinars.com until next week. I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 1  40:20   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively. You   Keith Weinhold  40:48   The preceding program was brought to you by your home for wealth, building, getricheducation.com  

Register here for GRE's live online event to learn about ‘Cleveland's Amazing Cash Flow Opportunities' on Thursday, March 20th. Keith discusses the impact of recent federal job layoffs, emphasizing the importance of diversifying income sources. 40% of Americans experience job loss at least once in their careers, with men more affected. He advocates for real investing in real estate as a safety net. Seth Williams joins the conversation to discuss the use of AI in everyday life and real estate investing. Hear a practical example of how AI can help with real estate due diligence, such as reviewing municipal regulations and zoning rules. Resources: Check out Seth's resources, including the Pulse Inner Circle community, to learn more about practical applications of AI. Show Notes: GetRichEducation.com/543 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, amidst 10s of 1000s of federal workers recently getting fired. It's not rare, because throughout their working career, layoffs hit 40% of Americans. How do you hedge yourself against the danger of losing your job? Then get a fascinating understanding of how you can use AI to improve your everyday life, and some applications for AI in real estate investing today on Get Rich Education.   Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads in 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:19   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:35   Welcome to GRE from Sunbury, Pennsylvania to Sun Valley, Idaho and across 488 nations worldwide. I'm Keith Weinhold, and I'm grateful to have you with me here for another week. This is get rich education. I'm known as the guy that back in 2015 was the first person to explain how real estate pays you five distinct ways at the same time when mass federal layoffs hit recently, you know you can learn something really important at a time like this. And no, it's not about the Washington, DC real estate market. That's not where I'm going here. That's not the bigger lesson, unless you're perhaps in the DC real estate market, it's shaping up to be 10s of 1000s of federal workers that are getting the boot as the result of the new administration in charge. We'll see where the number lands. But the thing is, is that federal jobs have long been deemed as the most secure, and yet more firings are coming. So if they're the most secure jobs, then what does that say about you and the safety of your job in both your near term future and your long term future, whether you're in the public sector or the private sector. I've worked in both sectors, and yeah, sadly, this is not such a rare occurrence. Many sources cite that roughly 40% of Americans get fired at least once during their working life. Job loss is more likely for a man than a woman, and it's happened to me. Yep, even I've taken that awkward and awful feeling box full of desk stuff, walk. The big lesson here is that you need to grow a second source of income, Experian and fed data. They cite that the average debt per consumer is about $39,000 worth of student loan debt, and another $24,000 worth of auto loan debt and another $6,500 worth of credit card debt. Well, those are not good debt types, like real estate debt is where you can outsource the debt to a tenants. Instead, you are the one that has to pay these type of debts, and that's why a lot of job losers are going to decline into a financial tailspin. They will default on their payments. They will become delinquent, they will descend into bankruptcy, and they will have a destroyed credit score, and the incidence of depression and suicide that even goes up for these people. Now, as we know, most of the so called financial advice out there that targets budgeting, how to cut your expenses. That's okay. You can do a little of that, but if you lose your job, a bundled cell phone plan in ditching your $7 latte is hardly going to help you. See, here's the thing that a lot of people fail around. Lies, even if you get a promotion and a raise at work, it still only pads a dangerous single source. It's still just a sole income source. Instead, what's powerful is, rather than budgeting, it is increasing your income, but it needs to be a source outside of your day job. That's how you get income diversification at the same time. I mean, you could take on a part time job or freelance work and accomplish that, but see the problem there is that you've lost your irreplenishable time. That's a one way street that time is never coming back. Don't live below your means. Grow your means. Owning an income property that can completely solve all of these problems, even a low cost income property of, say, $200,000 and Okay, a property like this, that might start with just 100 to $300 per month of residual cash flow, but that amount tends to rise even faster than inflation, because, as we know, your mortgage payment stays fixed. That's how that happens, and additionally, your 200k property at just 5% annual appreciation that grows to 255k in just five years. And if you only made a 20% down payment of 40k on this well, that property that grows to over 100k of equity in five years because you've got both the appreciation and the tenant made loan pay down. There is more to this. Besides increasing your monthly income, you can often take a chunk of this 100k plus equity with a cash out refinance that is a tax free windfall event, you heard that, right? Tax free, and you still get to hold on to the property. So a simple, low cost 200k property, just one of those, it increases your income now it gives you a second source of income, and it simultaneously gives you a leveraged windfall chunk that you can access in one nice, tax free cash lump. And one thing's for sure, you want to get a loan for income property and get that property now why you have your job? Because when you lose your job again, 40% of the time, no mortgage underwriter will qualify you when you're unemployed, relying on one income source that is kind of like playing Jenga on a wobbly legged table. So really, the bottom line here is that widespread federal job firings, they have really brought to light how many people are vulnerable with just one source of income. Why would anyone do that? Owning investment property solves the problem. Plant that second income seed now you can't have just one income stream that is too close to zero, that is precariously close to zero, and much of your life's thought pathways. They're about expectations, your expectations for the future, the way you think about your future, and if there's even a looming threat of losing your job in the future, you know that might not happen, but just the mere threat of losing your job that can induce stress. So that's why you want to do something about that, and I have a great resource to share with you shortly that me and the team here at GRE are going to help you with in you getting that vital income diversification a second source, but first Tax Day is next month. If you aren't getting an extension, you be pulling your tax documents together Trump tax changes are anticipated any time here, the highest federal income tax rate is expected to stay at 37% the standard deductions are moving up soon, indexed to inflation, $15,000 if you're single, $30,000 if you're married. Basically this means that things like your donation receipts. You know what? They are not worth saving and tracking unless they exceed those standard deduction amounts. And I like easy ways to remember things as you're pulling together documents for your tax preparer, if you are the tax preparer yourself, a w2 form shows. Income from your employer. A 1099 form shows income that's not from an employer, really. That's the distinction and an easy way to remember it. And to my point earlier about having more than just one vulnerable source of income, I hope that your 1099 income not from an employer, like the rents that your property manager collected for you that those 1090 nines are increasing faster than your w2 income, which is from an employer.    America's first car free neighborhood. I sent you more about that in our newsletter recently, and you said that you really liked learning about it. Yes, America's first car free neighborhood. It's had its share of detractors and skeptics and supporters since it broke ground in 2021 these are largely rental apartments in Tempe, Arizona, that is just the east of downtown Phoenix. Residents get around with light rail and E bikes. Studio apartments start around $1,300 a month, and three bedroom units around $2,700you can meet your neighbors more and get to know your community when everyone's not in their car and garage bubbles. So I found this really interesting. One resident of America's first car free neighborhood said We've probably made more connections here in six months than when we lived in the suburbs for 15 years. That was interesting to learn about in our newsletter.    Coming up on the second half of the show today, an expert guest and I are talking AI, think about all the time that this is going to save you. Think about all the brain damage that this is going to save you. Think about how much better informed you're going to be and how much smarter you'll feel. That's coming up shortly. Hey with what I mentioned earlier, I am announcing that coming up in just a couple weeks, here on March 20, it is our live online event for an amazing Cleveland cash flow opportunity. And why Cleveland now? Well, healthy, real world monthly rents are more than 1% of home prices. That is a lucrative ratio. And on top of this, we are layering the BRRRR strategy by rehab, rent, refinance and repeat, where cash flow averages more than $500 per door. This strategy, it allows you to put fewer dollars in the deal, and that's why it's really popular. Be sure to show up and learn more. Our last live online event was last year. It was for BRRRRs, and we had a record 538 registrants. We're going to examine single family properties in C and C plus neighborhoods. Those are the investor sweet spots here. And besides learning about real estate due diligence and the Cleveland market, there will also be a buying opportunity. Yes, the bur strategy allows you to invest with that low equity position, yes, both investor advantage areas, with the BRRRR strategy layered on top of it, it's the right opportunity for you if you need to build that second or third source of income. And besides all that, there's just the simple fact that amidst the well known national undersupply of housing. Entry Level homes, like these ones in Cleveland, they are even fewer. That entry level segment really has the scarce supply. I mean, you're going to own a scarce asset that everyone wants and needs. And this live event is one of course you can join from the comfort of your own home. It has two co hosts. You are going to be joined by one of our terrifically qualified GRE investment coaches and one of our top partners who has helped investors create wealth and grow their portfolios for over 20 years. I know him. I've had dinner with him. You can register now at GREwebinars.com Again, it is March 20. Our last one had 538 registrants. That was a record. Register while you can it is open now at GREwebinars.com more next. I'm Keith Weinhold. You're listening to GRE   you know what's crazy. Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I saw. Putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back. No weird lockups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing. Check it out. Text family to 66866, to learn about freedom family investments, liquidity fund again. Text family to 66866    Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com   Blair Singer  16:35   this is Rich Dad, sales advisor, Blair Singer. Listen to get rich education with Keith Weinhold. And above all, don't quit your Daydream.   Keith Weinhold  16:51   How do you really use AI? Can you believe if you have a question about anything in life, 90% of the time, it already makes more sense to ask chatgpt than a human being. That's what my longtime friend says. He's with us today, and he hosts the terrific R E tipster YouTube channel. Welcome into GRE Seth Williams,    Seth Williams  17:15   hey, Keith, great to be here. Thanks for having me. Seth, you've been interested in AI for years. Tell us how your perspective has evolved over time. A lot of people have pretty big variations in how much they use AI and how much they're even aware of it. Personally, I use it every day, like many, many times a day. Chatgpt is open almost all the time, and I use it for almost anything you can imagine, like when I have a question about almost anything, it makes more sense to ask chatgpt than it does to do a talk to a human, because I can get direct answers. It's armed with pretty much all the information that's publicly available on the world is an incredible resource. And when I talk to people and I ask them, like, Hey, do you use chatgpt? And they either say, What are you talking about, or they say, Yeah, I've used it once. It like, it just hurts me. You know, it's like, seriously, you have a superpower at your disposal here. You're not using it. It's kind of like what the internet was back in 1995 or something, where, like, some people kind of got it, but a lot of people didn't get it yet. It's pretty crazy when you can harness the power of not just chat GPT, but all of this AI stuff that's available now. Like, there's incredible, very powerful leveraging opportunity here.    Keith Weinhold  18:27   I use it about every other day. I bet after talking to you, it's gonna make me want to use it more. But, yeah, the guy that cuts my hair, he's only 25 years old. He doesn't seem very familiar with this. But like you said, it's a lot like Google in 1995 to maybe 1998 like, people just didn't automatically think of Googling something. And it's beginning to get that way, I think with using an AI like chatgpt to answer your questions, why don't you tell us about some of the biggest misconceptions that people have about AI?    Seth Williams  18:54   Well, that's good question. I guess it kind of depends on where they're coming from and what they are even aware of in terms of what is capable of. But I know one thing I hear from time to time is people will say, Well, I'm not a content creator, so I don't really have a use for that, like it makes sense if you're like a blogger or a podcaster. And I guess the good thing is that they at least have some awareness of what it can be used for. But things like chatgpt can be used by pretty much anybody who knows how to type on a computer or even speak to their phone, the chatgpt mobile app, for example, I just love this thing you do have to be a paying Plus member, which is 20 bucks a month. That is a laughably inexpensive price for everything that chatgpt could do for you, especially a mobile app. I can turn this thing on. I can use it as a camera to point to anything and have it give me insights and instructions on how to deal with this thing, whether it's a plumbing problem. I was just using it this morning. I had my phone set up on a tripod on my desk, pointed at Zapier trying to figure out how to make two complex softwares work together, and I just had to speak to it in real time. Time and ask it, this is what I'm trying to do. How do I do this? I don't get it, and it explained exactly what to do. And this was help that I could have paid a consultant money for, but it just came from this app, and all has to do is just look at my screen and it understands all of it. It sees things that I don't see. I know people that use chatgpt as the therapist. I've never done that, but I've know a whole lot of people that do that kind of thing. Yeah, and it gives them legitimate, useful feedback, and it's available 24/7, and it doesn't cost 100 plus dollars per session to talk to them.   Keith Weinhold  20:32   You the listener right now are thinking about all the jobs that this is displacing, surely, but why don't we pull back and think about no Seth. If someone is completely new to AI, what's the first thing that they should try to use it for?   Seth Williams  20:46    If you are a real estate person? Specifically, I don't know if everybody listening to this is necessarily, but as a real estate investor, the first thing I ever used it for was writing property descriptions for me, like when I had a property I was trying to sell. I know there's a great way to explain this thing, but I don't really know how to do it in my own head. Yeah. And you can just feed it basic information about the property and say, Hey, write me a beautiful, compelling property description that will make these things sellable and make people you know, respond with interest and that kind of thing. And just do that, and you'll see what I'm talking about it. It's an incredible writer. It does a great job. What's your question about where do they start with chat GPT? Is that what you're asking? Yeah, if one isn't familiar with it, where should they start? Well, another thing you could do daily use type thing. So something that I've used chat GPT for, I've taken a picture of my closet in the different clothes I have to wear, and I send it to chat gpati and say, Hey, what should I wear today? Like, what different articles of clothing would you recommend that I pair together? You could do this with your cupboard. Say, Hey, here's what I have in my cupboard. Tell me what I can make with this and then give me the recipe to make it. You could do this at the drug store. You'd go take a picture of the shelf and say, Hey, I have a splitting headache. Show me what on this shelf will solve my problem right now and get rid of my headache. I've actually got this problem worse than most people, where I can be looking right at the solution, and I don't see it like it's right there in front of me, but I miss it. But chatgpt doesn't miss anything like, if it's in the picture, or even in the the live vision camera, it's like a live video feed that you can point at anything. Like it will see it, and it will point out stuff that you very likely are missing.   Keith Weinhold  22:24   That's amazing. I haven't used its image capability that way yet, and really that brings up Seth. There are so many AI tools available, like an explosion these past couple years. How is a person supposed to decide which ones are worth using and which ones are not.   Speaker 1  22:41    It's very true, there's a lot of stuff out there. It can be a little overwhelming. I can tell you, I've used chatgpt, I've used Claude, I've used Gemini, I've used grok, bunch of different AI chat bots out there. They can all do some pretty amazing things, but if you just don't know where to start, like I'll see if I can only have one of them, chatgpt is what I would go to. I think part of that is just a level of familiarity, like I've just used it for so long now. It's like a comfortable old shoe, but it really is innovating at an incredible speed, and it's this AI boom has been happening for over two years now, and chatgpt is still arguably at the top. I mean, they've done a really good job of staying on the bleeding edge of what can be done now, and chatgpt is free, but if you pay for the $20 a month version of it, you just unlocks a lot more capability and usability. That's probably what I would do. But there's different Claude. I've seen this myself, and I've heard this from a lot of other people. If you're trying to, like, write a story, for example, Claude is actually a better writer than most things out there. So that's what you're trying to do. Like, go with quad you want, like, a one, all purpose tool that can do pretty much everything reasonably well. That's what chat GPT is, in my opinion,   Keith Weinhold  23:52   those are some great tips. And yeah, I thought it was pretty impactful last year, when even when you do a Google search, at the top of that, there is now an AI summary before you see your conventional Google Search sort of hits, which actually concerned Google advertisers for a little while. How about some of the most driest and esoteric reading that we can think of, and how AI can speed that up and make it more interesting, just say, doing due diligence in real estate, like reviewing municipal regulations or zoning rules and property restrictions. How does AI help you there?   Speaker 1  24:27    I've used it numerous times for that, perfect for that. For example, in the land business, one way that you can make money from land is by subdividing land. And one strategy within the subdividing business is to find properties that are they're called exempt subdivides, which means that you can essentially do the subdivide and not get anybody's permission to do it, like you can just split it up and not ask anyone. And you can do it, but you can only do that if the size of the property is over a certain threshold. In Texas, I think it's 10.01 acres or. Higher. There's certain places Michigan that are similar, but you can figure this out by looking at the county and the municipal guidelines to understand what is that threshold, or does that threshold exist at all? You can find these PDFs from the county or the municipal website. Upload it to something like chatgpt or Claude, and just ask the question like, how big does a property have to be before it's exempt from the subdivision rules? And it'll tell you, if it's in there, it can redo the thing in a matter of seconds and tell you what the answer is and where it found the answer, a very similar thing with like legalese and legal writing that's really hard for the average person to understand, probably by design, it can decode that for you. I've gotten this before. I've gotten really poorly written emails from people like electricians, or even just, I can't believe there's already happened exactly. They explain things using a lot of industry jargon and lingo, and I don't know what they're talking about, right? And I can copy and paste that email into chatgpt and just say, Hey, I got this email from an electrician. I have no idea what this means. Can you explain this to me? Like I'm a five year old, and it does it, and it works every time where it's like, oh, okay, that's what you meant. I can just know that instead of having to respond to them and say, Hey, can you rewrite that for me? I don't understand it, and they reply, and it's bad again. And it goes back to this a lot of questions that a lot of us have every single day. Historically, we've gone to people to ask those questions, and that's fine, but it wastes their time, and it wastes our time, and we still might not get the answers we're looking for, but with things like chatgpt, like you almost certainly will get the answer you're looking for very quickly, and it doesn't waste anybody's time other than the time you have to spend asking the question. So it's a big 8020, lever, you can get a lot more done without relying on the limits of humans to get the job done.    Keith Weinhold  26:50   We're talking about how you can use AI in your overall life and in real estate a little bit too. With Seth Williams, well, you're such a good resource. You're really pretty pioneering in learning AI and helping you with problems and solutions in both your overall life and in real estate investing. So tell us by now, what are some of the most unexpected or just like, totally impressive things that AI has helped you with, and how do you do that stuff?   Seth Williams  27:17   That's a really long list, but the thing that I have been most impressed with as of late is something that both chatgpt and Google Gemini can both do this now, kind of in different ways, but they can look at your computer screen and help you figure out all kinds of complex problems. Talked about this a little bit in part one, but earlier this morning, I had my chat GPT mobile app right here on my phone. I had it on a tripod pointed at my screen, and it was walking me through how to set up a couple new zaps on Zapier using a web hooks, which just right there I probably lost most people. It's just a confusing thing to figure out. I still don't fully understand it, but I was explaining my problem and what I was trying to do, and I could just talk for as long as I want, until I'm done talking. And then chatgpt chimed in, and in about 30 seconds, it solved my problem and told me exactly what to do. And Google has another way of doing this, where it's actually like on your computer, like seeing your entire screen, and it kind of does the same thing where a voice talks back to you. It's amazing, because I know how hard some of these things can be, the type of thing that would either make me give up and just not do what I'm trying to do, or pay somebody a bunch of money to come in fix the problem for me, or stand over my shoulder, either which way is not a great outcome. But with the help of these AI chat bots that can see everything going on, and they have basically all the knowledge in the world about how to solve the problem. They can do it really quickly and easily. And it's amazing. That's one of millions of different things you can do with chatgpt.   Keith Weinhold  28:51    Oh dear. If AI looked at my computer screen, the first thing they would probably tell me is to close half of the tabs that I have open. Oh, yeah, me too, yeah. How are you personally using AI in your real estate investing business today?   Seth Williams  29:07   lots of ways, but one thing that has been particularly useful to me is the use of what's called Custom gpts, which basically just means, right, you are training chat GP T to respond to you in a very specific way based on certain instructions you give it. So every time you start a conversation like it already knows why you're there, what you're looking for, what assumptions you want it to make. One example of a custom GPT I've made is one that can very quickly analyze big commercial projects like whether it's a self storage facility or industrial outdoor storage, I've explained to it how I want it to run the numbers based on certain information. I give it like square footage and pricing and occupancy rates and that kind of thing. So I can basically feed it like six or seven key pieces of information and 20 seconds it can tell. A give me, like a one to 10 rating based on this is a great deal, you should move forward, or this is a terrible deal. Look the other way. And the reason this is a big deal is because the way I used to handle this was I had a giant spreadsheet, and I would go line by line, filling in all these different inputs, and it would take me, at a minimum, like 30 to 45 minutes to get to the same place of understanding, like, Yes, this is good. I should keep going on this. Or no, this is a terrible deal. And it can just, like, look at a lot of stuff, a lot of data, very quickly. And it's not like the final answer necessarily, like, you don't just blindly follow whatever it tells you to do, but it can just get to the bottom of stuff, or, I guess, get further to the bottom of stuff, wasting a whole lot less time. So, you know, the real estate that's super helpful, and people in, like, banking and accounting and all this stuff fields where, like, there are full time analysts that look at this stuff all day long. And it naturally takes humans a lot of time to figure this stuff out, but AI can get there much faster.   Keith Weinhold  31:03   Yeah, that is pretty remarkable, and it sounds like you're finding a pretty high degree of reliability and not getting what we call hallucinations in the AI world.    Seth Williams  31:15   Yeah, that is sort of a developing thing. So hallucinations, it's definitely a real issue where basically we'll just make up stuff that sounds viable, but it's not right, and the only way you would really know that is if you knew better in the first place, which means, why am I even asking the question if I already know the answer? So it was kind of an issue where chatgpt and Claude and Gemini would just make stuff up. One of the ideas with some of the newer models that are coming out with, like, oh one or oh three mini now is what they've got. They use a lot more logic in these models. And the difference is, when you ask it one of these questions, and if it doesn't know the answer, it'll just say, I don't know. That's a great answer. They're hallucinating. Yeah, absolutely. And you know, chatgpt Four, oh, it's kind of like the difference between if you hire a very polite VA in on the other side of the world who's trained to be a yes man or a yes woman, like they want to make you happy, and they're going to tell you what you want to hear, whether it's right or not, whereas, you know, these more advanced logical models are more like your account or it's like, I'm not here to impress you. I'm just going to tell you the facts and how things really are, I think, depending on what you're trying to do, like, there are certain situations where you'd want the more creative four, oh, version of the situations where you'd want the logical ones. So I'm trying to, like, do code or analyze numbers or do something where accuracy is very important. That's where I want to use those logical models. But if I'm like, writing a story or song lyrics or whatever, and creativity is more important, that's what I'd want to do four Oh, so it's not that either one is like better or worse. It just depends on what you're trying to accomplish and what output you want from it.   Keith Weinhold  32:54   Sure, part of this is knowing which tool to apply. There might be a grain of gratefulness, that there are such thing as hallucinations, right? I mean, it still takes you a human being thinking to confirm, does that answer make sense and it's just simply a good idea? Or could that be inaccurate? So the human component sounds like isn't completely displaced yet at this point, starting probably more than 10 years ago, Seth, when people began to look for answers to everyday questions, oftentimes, they would go to YouTube and they would just like to get their answer that way. Why is this faucet leaking or anything else? And watch a YouTube video about that. What's your process though for using AI to take a YouTube video and summarizing it and extracting key insights that way?   Seth Williams  33:39   Well, there is a free chrome extension called glasp, G, L, A, S, P, that I just used it this morning. All the time. I've heard of it. It kind of sits on top of YouTube. So when you're on YouTube and you have this chrome extension there, this little button appears, and you can copy a transcript of the entire video and then take that and paste it into chat, G, P, T, and you can ask it whatever you want about what that video is about. You could say, summarize it in one sentence. Or you could say, Does this video talk about this issue? And if so, where or what does it say about it? You could say, take this video and turn it into a blog post for me, literally, like, whatever you can imagine that could violate come from that video. You could get that information from it. And that alone is is amazing. And it kind of goes back to, like, what is the purpose of this video, or what is my question that I'm trying to get answered? Am I looking for entertainment? You know, for example, I've been watching a lot of videos about guitars and guitar pedals and amps lately. I want to hear what this guitar sounds like. I kind of have to watch a video for that. Like, a transcripts, not really going to help me chat. GPT is not going to help me. Like, I just actually have to watch the video. So this doesn't totally render videos useless. It just depends on why you're watching it and what information you want to get, and how can you get there faster.   Keith Weinhold  34:50   This has been great. Seth, are there any last things that we should know about? Ai, whether that's misconceptions or making sure that we're using the right. AI tools and avoiding the wrong ones. Any last thoughts? Seth, if   Seth Williams  35:04   people are really interested in this stuff, I mean, there's plenty of places you can go online. This is a huge trending topic on YouTube, lots of good information out there. We actually put together a school community intended primarily for real estate investors and business people. It's you can find that at Pulse inner circle.com, P, U, L, S, E, inner circle.com. We're talking about this stuff all the time. My friend Mike balcom and I did a couple different courses on this stuff, like a guided course that was awesome. I mean, we even learned a lot of stuff going through the process. But it is a rapidly advancing area right now, and it has been ever since chatgpt came out, like, every week, there's some huge new thing out there. It's something that's worth paying attention to, because even, like, right now, it's incredible the stuff you can do. And interestingly, like, most people aren't doing it. So if you are up to speed and educated on it, you've got a superpower that most of the people don't know exists or aren't willing to learn.   Keith Weinhold  36:01   That's a great point. If you just learn 1% of this, you're going to be ahead of the general population, and it's really easy to do. Seth, I've done some learning about AI myself. This has been a great chat. Thanks.    Seth Williams  36:14   You bet.   Keith Weinhold  36:21   Check out Seth's resources and his own R E tipster podcast. Always love to chat with my man, Seth Williams, Super Down to Earth guy, and also he does not look like a dork like you might think an AI expert would. Yeah, like I told Seth, the guy that cuts my hair is 25 years old. He's a SoundCloud music artist. He mentioned to me about how he writes his own lyrics for his music. I asked him how the results were when he asked chatgpt to write his lyrics or write him some rhymes, he told me he never even thought of that. I couldn't believe it. So yeah, AI, it's just still not top of mind for people.    The two platforms that I use the most are chatgpt and venice.ai last year I told you about how you can turn any document into an AI podcast with notebook LM, and you'll remember that I also played a minute or two of that AI generated podcast right here on the show for you, you can book your travel with AI as well. Have it put together in itinerary for you. Have you asked AI who you are? I hope that you've tried that by now. When I go to chat GPT and ask it, who is Keith Weinhold, let's see, is it accurate? Well, the answer starts with Keith Weinhold, is a real estate investor, author and the host of the get rich education podcast. Well, then it goes on for a few paragraphs. It goes on to say he founded get rich education, a platform that offers educational content through podcasts, blogs and resources about real estate investing, personal finance and wealth building. His teachings emphasize the benefits of leveraging real estate as a long term wealth building tool while highlighting strategies to maximize cash flow and minimize risks. Okay, yeah, I would say that's accurate. No hallucination there. You can also ask chat, GPT or an AI, of course, about your properties. In fact, I'm going to enter the address of one of my rental properties and ask it how much cash flow it generates. So to skim the answer for you, it's okay. It looks pretty accurate. Here. It says that it is a three bedroom, two bathroom, single family home with 1300 44 square feet of living space. It shows the property was last listed for rent at $1,625 per month in March of 2024 Yep, that sounds right. Zillows rent, Zestimate estimate estimates the current rental value at $1,898 per month, is what it says. Okay, and then here's what it says about the property's cash flow. Because I asked that about the cash flow, it writes to determine the potential rental cash flow, consider the estimated monthly rental income of 1898 subtract operating expenses such as property management fees, maintenance insurance, property taxes and any mortgage payments, the resulting figure will represent the net monthly cash flow. All right, well, then it goes on with more info that's less interesting, okay, so therefore, at least this basic question that I've asked it chat GPT, I mean, it cannot know my cash flow unless they know what my loan amount was and what the mortgage interest rate is and those sorts of things. But maybe another AI knows that, though I am not sure.    Hey, coming up here on future episodes of the get rich education podcast, some well known names that haven't been here on the show. Before and another interesting upcoming episode down the road. Here is when a pastor is going to join me on the show. Here, this pastor is an expert in what the Bible says about money. You might be familiar with the Bible verse that says it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God, gosh. Well, how does that make me feel about how the pastor and I's conversation is gonna go here on a show that's called get rich education that ought to be super interesting, and I really look forward to that show. Now, even if you're not a Christian or you don't believe in the Bible, this is going to be a significant conversation, because you cannot deny the Bible's influence. It is, in fact, the greatest selling book of all time, and even if it doesn't personally affect you, it does impact other investors around you and just billions of people across the world. What the Bible says about money coming up, which could have, I guess, some uncomfortable moments here in future weeks on the show, along with a lot of other great content. If you want to be sure that you don't miss that on your pod catching app, be sure to hit the Follow button. Also, if you would please, simply tell a friend about the show until next week. I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 2  41:41   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  42:09   The preceding program was brought to you by your home for wealth, building, getricheducation.com      

Keith Weinhold and Caeli Ridge discuss the benefits of a type of loan that combines mortgage and banking features. This loan allows deposits to reduce principal first, every deposit acts like a payment, minimizing interest accrual. And can be used for cash-out refinancing, providing flexibility and potential tax benefits.  Hear about the importance and the difference between open-ended and closed-ended loans. If you pay down the loan balance over time, you can have a spread that allows you to access that equity without having to requalify or pay additional closing costs. Resources: Explore the loan simulator at RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Show Notes: GetRichEducation.com/542 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold a discussion about the future mortgage rate direction. Then there's a property loan type where you don't have to make any monthly payments, and if you do make a payment, it all goes toward principal, and nothing is lost to interest. It can save you lots in interest expense over the life of the loan today on get rich education.   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors and delivers a new show every week since 2014 there's been millions of listener downloads in 188 world nations. He has a list show guests include top selling personal finance author Robert Kiyosaki. Get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit get rich education.com   Corey Coates  1:13   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:29   Welcome to GRE from flaccid County, Oregon to Lackawanna County, Pennsylvania and across 188 nations worldwide. I'm Keith Weinhold, and you are back in for another wealth building week here at get rich education, just another shaved mammal with the microphone here, I have a real estate analogy for you. Growing up, my dad told me, whatever you do, do it well. And that was broad guidance for life. I like things that are easy to remember. Our simple home in Appalachian Pennsylvania was headed with a wood fired stove, so we couldn't just turn a dial and feeding the stove with those logs took time and work. It was a family effort. Dad split the firewood. My chore was to regularly move firewood from the wood pile into the home, and then Mom or Dad would start the fire and constantly tend to it and get it up to the right temperature. But you know, when that fire finally roared, it felt like it could have heated five homes. And this is like buying an income producing rental property. You can't just point and click to make income reliably appear. It takes time, and even some of this admin type of work before you feel hot returned the spark that can ignite the fire means first putting your financial house in order. Those are things like getting pre approved for a mortgage loan, and then they're stacking the firewood, which means finding a deal, making an offer, booking a property inspection, scheduling an appraisal, perhaps signing a property management agreement if you're not self managing, and then, of course, placing a tenant. But see when that investment property fire roars after a year or two that can create enough returns for five retail investors, just like our roaring wood fire could have heated five homes, even though you're only one investor getting like 5x returns, and by now, you probably felt, after a year or two of owning it, the profitable warmth of the five ways you're paid that you know so well. Those five ways are leverage, appreciation, cash flow. Tenant made principal pay down a tax benefit basket and the quiet, whispering fire of inflation, profiting on your loan, but you can't get over leveraged, meaning that you can't make the payments, or else you burn the whole house down. This means embracing the right level of debt rather than avoiding debt altogether. So yeah, you know, if you want to be in the top 1% or maybe even top 5% Do you know what that means? It means being misunderstood by the masses. And when you do this right, it's not about getting rich quick, but it's about building wealth. For sure, feel the fire and whatever you do, do it well, just like my dad told me, and oh, by the way, today, my parents still live in that same. House, but they now just turn a dial for heat.    Well, you know, there's been a lot of real estate and financial news lately, just this constant feed of news. And I really need to tell you something about that. I am not a news reporter. If some news just broke an hour ago. A lot of times people are only overreacting to something like that. So here at GRE I infuse the news longer term into our content of the show, because some of it is just too big to ignore. But often let it settle down for a little while and filter out what it really means to you as an investor. I mean, being an educational platform rather than a news platform is what it's about. So I want to make sure you understand the relationships rather than just reporting the news. I mean, for example, what tariffs can do to home prices and rents and inflation. I mean, that really impacts you and your real estate long term. Rather than just doing something like reporting that the tariff on this nation that looked like it was going to be 25% is now only going to be 10% or something like that, that really doesn't affect you so much. So now that you know more about what to expect here, which are the stories that really affect you as an investor? The last inflation report did come in at a hot 3% that startled economists that it was that high. And what that does is that makes bond yields rise, because bond investors need a real return net of inflation, and in turn, that soon makes mortgage rates rise, and also it makes Jerome Powell be in no rush to cut his Fed funds rate after this hot inflation report, either. And here's another long term relationship that can help you learn the Fed's dual mandate is, what do you know? What it is, the two things I've mentioned it to you before, the Fed's dual mandate is maximum employment and stable prices. That right there is inherently volatile, because when employment is maximized, well then employers, they have to compete with higher wages in order to attract workers, and that makes prices go up, destabilizing the prices will stable. Prices is the second part of the dual mandate. So that's why it always seems like there's this lightning rod attention on Jay Powell in the Fed. It is because the dual mandate is inherently volatile. Now, you know what I think about predicting mortgage rates. I don't like to do it because it's an almost impossible task, like the myth of Sisyphus, that Greek myth about rolling a boulder up a hill wells, Fargo says mortgage rates will go down to just six and a half percent by the end of this year, so not much of a drop. And also by the end of next year, almost two years from now, they'll still be just six and a half percent. And other C rates rising from here. So there is broad consensus that there's zero reason to think that artificially low rates are going to return anytime in the near term, perhaps even in the intermediate term, coming up on a future episode of the show here and soon, how to use AI in real estate investing today, let's talk about mortgages and a special loan type.   Today, we are back with the national leader in providing Americans with income property loans. She runs the operation at Ridge lending group. She's been doing this 25 years she's an investor herself. It is their CEO and president, Caeli Ridge,   Caeli Ridge  9:06   Keith, thank you for having me.    Keith Weinhold  9:08   There does seem to be one US president. That makes a lot of news lately, but Caeli is still the most noteworthy mortgage type of President, I suppose. And just like GRE Ridge focuses on education and Caeli mortgage rates. It's the topic that everyone wants to talk about. I don't predict mortgage rates, but I know that you'll Talk That Talk a little. And previously, many expected Jerome Powell and the Fed to drop the rate four times this year, then two and now more and more expect zero rate cuts at all this year, even opening the door for rate increases if inflation persists. So tell us about the propensities of this year's mortgage rate direction.    Caeli Ridge  9:51   I think that I agree with a lot of the volume out there related to interest rates kind of stay in the course. I don't think we're going to see too much of a decline. There's. Certainly, Keith, we talk about this at nauseum. There's all kinds of things that could derail that statement that we can't prepare for, we couldn't predict for, but I think overall rates are going to stay steady. I think that whether you like them or you don't like them, the tariffs tend to come with an inflationary tone. And if that's the case, it's going to put Jerome and his buddies at the Fed in a tough position to do what they had hoped to do with the easing, the monetary easing. So I don't expect to see it, but I'm hopeful who knows. Who knows?    Keith Weinhold  10:29   Now, for you, the listener and viewer here, when you really want to know what moves rates around, Caeli talk to us about this persistently high spread, and what that means is that historic difference between mortgage rates and the yield on the 10 year treasury note.    Caeli Ridge  10:47   I feel like a lot of what that's going to attach itself to is the inflation, and then, more specifically, when we talk about llpas, and I think we've talked about this in the past, loan level price adjustments, mortgage backed securities secondary market, right? This is an investment that is bought and sold on the New York Stock Exchange, right? These are investments that carry value. And while the Treasury is usually the one that people will look at to predict where interest rates are going to go, I feel like in this higher rate environment, the secondary market understands that these mortgage backed securities are going to be paying off in advance of profitability. Now this gets a little bit complicated, but the easy way to explain it is is that if you secure a loan today at, say, seven and a half percent, if the anticipation is that interest rates over the next three years, maybe not in the next year, but two years, even three years, are going to decline. The mortgage that was closed today will likely pay off via a refinance. In that event, it's not reached the maturity date, such that when that initial mortgage backed security was purchased on the secondary market, it will have to pay off before the investor has been made whole or profitable. As a result, the margins it's called on in my world, it's called YSP, yield spread premium will not be met. So they're baking in certain levers, or they're hedging, as another way to say it, so that they're not left with those negative balances when these things do pay off when interest rates come down, because interest rates are not a straight line, they go up, they go down, they go east, they go west. So as a result, they're planning far in advance into the future. So I think that has a lot to do with it.    Keith Weinhold  12:33   Real Estate industries are shrinking, and it's all related to the fact that back in 2021 the number of existing homes sold peaked at almost 7 million, but last year, it was only about 4 million. That is a huge drawdown. The number of US Realtors is dropping since it peaked in 2023 and Caeli, from what I can see, the number of loan officers, even operating has dropped precipitously over the last four years, it's a reminder that the strong survive and in the mortgage industry, top service is what savvy borrowers need. You go with the people that consistently advise you to take your time and look at your long term strategy and make the correct decision, not always the one giving like 1/8 of a percent lower and an interest rate, so any lender can get you the next loan, and few are going to help you with your long term strategy. With this overall lower volume of transactions taking place, what are your thoughts about how it's impacted the mortgage and lending industries?    Caeli Ridge  13:37   It's such a good question. I'm glad that you asked it, and I really do think it speaks to the experts in the space consumers, our borrowers, as we call them, have to be, I believe, a little bit more discerning about who they want to align themselves with and who they want to work with as it relates to the interest rate. We've had this conversation off book. Ridge doesn't sell rate or cost. Now we're competitive, but we're never going to be the lowest possible lender out there. There's always going to be somebody that can undercut for an eighth, like you said, a quarter point, a few 100 bucks here and there. And we just don't get into that, our value adds far exceed an eighth of a point in rate, which, by the way, you probably can predict what I'm going to say next, if you're not doing the math, just as a sidebar listener, the difference in payment, and that's really where the focus should be. The difference in payment on an eighth or a quarter percent in interest rate on $100,000 is all of 5,7,8, bucks a month. Okay, so make sure you're doing the math, but the value adds that come with the education that we provide the 49 states, large footprint and the diversity of loan product, I think, far outweigh any eighth or few $100 difference when you're comparing side by side. I'm not saying that you don't want to get comparisons and you don't want to be a smart, informed consumer, but it really does matter that your lender understands known, owner occupied understands how to. Or take you from point A to point Z today and five and 10 years down the road.   Keith Weinhold  15:05   you've been a mortgage industry leader for a long time with this lower volume. Have you seen mortgage companies implode close shop?   Caeli Ridge  15:15   Absolutely, we have access to those data points and the number of loan officers just the individual in the doing the transaction, not including processors and underwriters and funders and doctors, but just the loan officers. I believe, in 2024 reduced by a margin of 53% gosh, yeah, that's a big number.   Keith Weinhold  15:35   Yes, this is really hit the industry substantially. Are there any other interesting industry trends in this environment where we have persistently higher rates, I make sure not to say high, because historically, mortgage rates are still not high. The long term average being seven and three quarter percent on the 30 year fixed rate mortgage Are there any other trends that this loss in activity has created?   Caeli Ridge  15:58   I feel like the informed investor is still finding ways to profit in real estate. They're finding diversity is key, which I'm a big proponent of as are you. That means single family residence to two to four units, cash flow versus appreciation, the short term rental, the long term rental, the midterm rental, making sure that they have a good, rounded portfolio is key. And there are some which I think we're going to be talking about today. There are some mortgage tools that I really feel like, for an informed investor, are allowing them to continue and propel further, even scale into the 25 and 26 years.   Keith Weinhold  16:36   What's happened to the volume of owner occupied transactions versus investor transactions. I would imagine that investor mortgage transactions really aren't down that much.   Caeli Ridge  16:47   not that much. I'd say there was a small blip, but I feel like we've made those up with some of the burr strategy loans we do, of course, all kinds of mortgage related transactions specifically for investors. And one of those products is a short term bridge loan, which would apply to the BRRRR method by rehab, rent and refinance. So we've been seeing quite a bit of that, where the investor will find a good deal on market or off market, where they can put a little bit of lipstick on it and then refinance it at the ARV or after repair value. So anything that we might have lost in just a traditional 30 year fixed straight purchase transactions, I feel like we made up in the other but it wasn't a big margin.   Keith Weinhold  17:26   What if there was a mortgage product out there that just didn't work like other mortgage loan products do? For example, your deposits or the payments that you make on this special type of mortgage is applied to the principal first and only. There are a lot of other interesting characteristics about this particular mortgage product. We're going to discuss that when we come back. You're listening to get rich education. We've got the CEO and President of ridge lending group back with us, an investor centric lender. I'm your host, Keith Weinhold.   You know what's crazy? Your bank is getting rich off of you. The average savings account pays less than 1% it's like laughable. Meanwhile, if your money isn't making at least 4% you're losing to inflation. That's why I started putting my own money into the FFI liquidity fund. It's super simple. Your cash can pull in up to 8% returns, and it compounds. It's not some high risk gamble like digital or AI stock trading. It's pretty low risk because they've got a 10 plus year track record of paying investors on time in full every time. I mean, I wouldn't be talking about it if I wasn't invested myself. You can invest as little as 25k and you keep earning until you decide you want your money back, no weird lock ups or anything like that. So if you're like me and tired of your liquid funds just sitting there doing nothing, check it out. Text FAMILY to66866, to learn about freedom, family investments, liquidity fund, again. Text FAMILY to 66866   hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation, because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind @ridgelendinggroup.com that's Ridge lendinggroup.com   Rick Sharga  19:48   this is Rich charga, housing market intelligence analyst. Listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  20:06   Welcome back to get rich education. We're talking with a steady guest over time, because not only are they an income property centric mortgage loan company that do mortgage loans in 49 of the 50 states, but they're also centered on education and looking out for you, the investor, over the long term. And cheyley, such an interesting product that you offer is called the all in one loan. It's been a long time since you and I have really talked about this. What it is is a first lien HELOC. It's a way for you to use the equity in your existing properties. You can do it with either a primary residence or investment properties. There are just so many reasons why an all in one load just kicks the butt on a conventionally amortizing loan, including that all payments are applied to principal first and only, and a lot of other exciting things. So Caeli, why don't we back up and just describe what the all in one loan is big picture.   Caeli Ridge  21:05   Now there is a lot to unpack, so we're going to take our time. Listener. First of all, let me just explain. Why is it called the all in one it's called that because it doubles as both a mortgage in the form of an open ended revolving HELOC and checking and savings. Both of those two features are combined, hence the all in one as a way of diminishing the amount of interest that can accrue over time. Let me explain so any revolving account, any account, including a credit card, for example, but first lien HELOC, second lien HELOC, whichever doesn't matter, open ended revolving is the key. Any open ended, revolving account will accrue interest daily based on two factors, the first being that day's balance and that months, in this case, interest rate, fully indexed interest rate. I'll come to interest rate later. As a result, you now have control largely over how much interest can accrue. Now let's take that statement and transfer it and look at it against an amortized, closed ended mortgage. You sign up for a 30 year fixed mortgage today. Let's say it's 7% whatever the interest rate is, is really irrelevant. Your principal and interest payment are defined on day one. There is no changing that monthly payment. Now you could certainly accelerate the payoff of that mortgage debt by doing what applying additional extra principal payments, right? But what happens to that extra principal payment when you send it off with your 30 year fixed mortgage payment,   Keith Weinhold  22:34   it drops your loan balance, but your minimum payment amount is the exact same the next month,   Caeli Ridge  22:38   right? And then what happens to all that liquidity that you had prior, it's now illiquid. Right? Exactly that off   Keith Weinhold  22:45   you've just transferred your cash flow into equity. Financial freedom is created by doing the opposite thing and changing equity into cash flow,   Caeli Ridge  22:52   very illiquid, and not the way an investor typically is going to want to run his or her business. So hence the all in one. Now for those of you that have heard the term velocity banking or infinity banking, maybe whole life insurance policy has a similar tone to this. The all in one, I believe, offers even more flexibility for variety of reasons that we're going to get into. But if you've ever heard those terms, that's similar to what this is. So I want to start by I usually like to give an example, okay, and provide some visual aid so that people can connect the dots. Let's start with the 30 year or a fixed rate mortgage. Just because I feel like, especially in the US, this particular loan product, or its concept is widely used in much of the rest of the world, in the US, I feel like we're sort of preconditioned here to really only understand that closed ended, amortized mortgage. So I'm going to start with an example there that actually highlights or leads into the concept of the all in one. So I want you to imagine a 30 year fixed mortgage and a 15 year fixed mortgage. Both of these mortgages originated or started at $400,000 as the balance on day one. The 30 year fixed mortgage locked at an interest rate of 4% and the 15 year fixed mortgage locked at an interest rate of 7% now, when I go through this exercise and I give this example to people, I ask them the question, Well, which one would you choose? And without exception, if they don't understand amortization, they are going to select that 4% 30 year fixed mortgage, because they don't understand that it's about speed. When you run the math and you look at an actual amortization table, you'll see that you'll pay $40,000 more in interest on a 4% 30 year or 360 month, versus a 7% 15 year or 180 month. So the point here, and what I'm illustrating, is it's speed. Now let's segue back over to the all in one. It's all about speed and how much interest we allow to accrue over time. So as you had mentioned, to start the kick this off, Keith, every deposit acts like a payment. Now here's where I struggled with this in learning. And when this was first introduced to me years ago, this part of it really caught me off guard. I had to really dig in and try to focus on what are they talking about? What do they mean? There's no payment due on the all in one. I'm gonna say that again. There's no payment due on the all in one. Think about your 30 year fixed mortgage. If you don't make a payment, what happens?   Keith Weinhold  25:19   You're defaulting, you're in trouble. You become delinquent,   Caeli Ridge  25:23   right? So that is not how this loan is set up. And it's not smoke and mirrors, okay? It's nothing fancy. The deposits that you make from ordinary income from all sources really Okay, so we want to talk about this is really special for investors, because we have access to gross rents, the rental income that's coming in before we send it back out the door, along with our net wages and every other source of income, deposits that we're getting can be utilized to your advantage. One of the ways in which I describe this is, I like to say you've become your own bank, so you have this line of credit, and your gross rents and all of your net wages are going to deposit into your checking account, driving that principal balance down, dollar for dollar, so that the interest accrual is diminished. Because remember what I said a few seconds ago, the interest is calculated on any open ended revolving account based on two factors, the balance for the day and the interest rate, so the more you have in depository income, and you drop it into your checking account, the longer it stays there, the lower the amount of interest is going to accrue within a 30 day billing cycle. Now let me just paint one more picture, and then we can open up to what questions come from this. So I want you to imagine this is I'm going to use easy, round math. I want you to imagine that you have an unpaid principal balance on your mortgage, on your HELOC of $100,000 just for round easy mouth, and that you bring in $10,000 a month in income from all sources. And just to keep it simple, we're going to say that that 10,000 comes in on day one of month one. Okay, so here's our 100 grand sitting there. My $10,000 is deposited into my checking account. Now my balance is $90,000 right? That 10 grand is not going to be touched. You will not touch that $10,000 for 29 days out of a 30 day billing cycle. And I'm giving you optimal tricks. Okay, this is how you want to use it optimally, yeah. Day one, instead of paying interest on $100,000 you're paying interest on paying interest on $90,000 and you're going to pay interest only on $90,000 for 29 days out of a 30 day billing cycle. Well, how am I going to make all my bills? And how am I going to eat? And how am I going to pay my cell phone? And what am I going to do? You're going to use a credit card, or credit cards of your choice, the ones that provide the best points, or whichever you prefer doesn't really matter. To pay all those monthly living expenses now we don't want to pay any interest on our credit cards. Right? 18, 28% whatever it is. No thank you. So now we're going to go to day 30 of that 30 day billing cycle. Right? 29 days that 10 grand has sat in there. Our balance has been 90. Our interest has accrued on that 90. On day 30, the credit card has amassed $9,000 in expenses. You've spent $9,000 for the month on food, gas utilities, car payments, cell phone, everything goes on that card. Day 30, you go into your checking account where your 10 grand has been sitting, and you write a check to pay off the credit card $9,000 so for one day of the month, we went from 90,000 in a balance to 99,000 right. 9000 had to come out of the 10 to pay off the credit card. We had $1,000 left over. Now I want you to fast forward into month to day one our starting balance, because that $1,000 leftover was our residual income, our discretionary our savings, it's what was not spent, but I have full access to it. Should I need it? So day one, month two 99, 000 is my outstanding balance. I drop in my $10,000 of income. 89,000 is what I'm going to be paying interest on for 29 days of a 30 day billing cycle. So this should allow listeners to connect some dots. There are two components of compound interest savings, the first being daily. We've got our income dropping in there. It's just sitting so daily savings, compound interest savings. And then that leftover savings, that residual, that $1,000 is going to be left in there month after month 24/7, access. That's monthly compound interest savings. So those are the two components that make this product profoundly impactful in diminishing that interest accrual over time. Why don't I take a pause   Keith Weinhold  29:30   so with the all in one loan, we're really integrating our consumer accounts with our mortgage. Absolutely right? Is there a way to automate these payments associated with this?   Caeli Ridge  29:43   Yes, I'm glad you asked. So everything that you have become accustomed to today in your checking and savings is going to be exactly the same with the all in one this mortgage is housed by an FDIC insured banking institution. It'll be one of two places depending on which. Which ends up picking up the rights. It'll be North Point or merchants, bank, those are the two that service this loan. Feel free to check them out when you think about the automation of your checking and savings accounts with your B of A, Chase, Wells, Fargo, whomever, credit union, whomever you bank with. Now there will be no difference to that experience and this experience so online bill pay, debit cards, routing numbers, paper checks. Should you still use those mobile apps? If you get a paper check, you take a picture and it uploads to the account. All the same exact automation as you have become used to today will apply with the all in one   Keith Weinhold  30:36   and you described how the all in one loan is an open ended loan versus your plain vanilla 30 or fixed amortizing loan, which is closed ended. For those that don't know, what do those terms open ended and close ended mean?   Caeli Ridge  30:48   So amortized is predetermined over the period of time that you've gotten the mortgage for. So whether it be a 10 year, a 20 year, 2515, 30, whatever it is, it is closed ended, so the interest rate that you secured against the loan amount that you've taken, they have come up with the formula, the calculation that says, This is how much interest you're going to pay over this length of time. And the longer the amount of time that you have selected, let's say a 30 or maybe even a 40 year. Those do exist, in some cases, the longer the amount of time that closed ended amortized mortgages in play, the more interest you're going to pay. Now, it keeps your payment lower for sure, but they're going to make it up in the interest that you'll pay in the long time. Now the open ended revolving just means that it is available to pay down and draw up, and pay down and draw up. It is not closed   Keith Weinhold  31:40   and then with those conventional mortgages, typically, especially when you originate a new loan for years, most of your payment goes to interest, which would not be the case with the all in one loan.    Caeli Ridge  31:53   Exa  ctly. Yeah. So anybody that's looked at an amortization table knows the first 10 ish years, we'll just keep using the most common, 30 year fixed first 10 years or so, maybe even a few years past that, 90% of your payment is going to go to the interest. You won't start chunking down any principal until the back end of that mortgage, 180 or complete flip to the all in one every dollar that goes in there drives the principal down first.   Keith Weinhold  32:18   That is huge, even if you pay a higher interest rate on your all in one loan, you can see how you have fewer dollars out of pocket in interest paid, which is what really matters to you,   Caeli Ridge  32:30   exactly, right? So think about a 20% interest rate. If you're paying 20% interest on 50,000 then 7% interest on 500,000 you can see how the math will work in your favor, regardless of the number in the interest rate in comparing side to side. And one of the other things that we haven't touched on, and maybe this is a good segue, Keith, it's not just the daily deposits. We have clients that take out a, you know, a million dollar line of credit, but they have $500,000 sitting idle for whatever it is their business needs. And in the E commerce. It doesn't even matter, but they have this amount of cash that they're simply going to take from this vehicle a regular checking account over here, and drop it in here, and that interest is saved. That $500,000 that was sitting idle doing nothing over here is now saving interest at an incredible rate. So it's not just the daily and monthly deposits. If you just have idle cash, or you know you're going to be getting a bonus or a tax refund, or whatever it is, those monies that would otherwise just sit in a one to 2% maybe interest bearing checking savings account can now be applied over here, driving down that balance further, dollar for dollar saving in that interest.   Keith Weinhold  33:39   So we are opportunistic investors here, when we see an accumulation of equity in a property or cash in an account, we want to get that moving with this all in one loan again, which is like a first lien HELOC, I would imagine that would we get plenty of room to borrow more in there, and there's been plenty of pay down, we might want to draw against it again for another purchase, and let this thing be flexible like an accordion back and forth as you're drawing the balance down and you're extending it out again. So really, the way I see the flexibility with the all in one loan is that you don't have to go through another mortgage loan origination each time you want to buy a property. You can just draw against this account.   Caeli Ridge  34:20   And we're still just scratching the surface in what this thing does exactly right? And I've said this twice now, you've become your own bank. Yeah, okay, if you pay it down over a short period of time, let's say that you had half a million dollars and you were able to reduce that down to 300,000 there's a $200,000 spread there that, at your discretion, do not have to re pre qualify and pay closing costs. Again, you don't have to ask permission or get it approved, for some reason, those are your funds, your equity, your dollars to do what you want, when you want, how you want. The other thing too is probably a good place to point this out, safety net, as long as there is a spread between what you owe and the credit limit. Whatever that is. If something were to happen That was unfortunate, some unfortunate set of circumstance befell the family, whatever, and no income was coming into the household zero. What would happen if you didn't have money to make your 30 year fixed mortgage payment? You're going to ruin your credit and go into default. Well, the reverse is true with the all in one if there is a spread between the balance and the limit and you needed to not make any deposits, the only thing that's going to happen in that case is interest is going to accrue on top of that balance. The only time a payment deposit is mandated with the all in one is when the balance is about to exceed the limit. That's the only time. Now I'm not saying that that's the way people are going to use it, but that's the reality of it. So what if this? Let's take this down the rabbit hole for a second. If you couldn't make a deposit, you're not going to go into default, right? You're simply going to add some interest on top of the existing balance. But what if you needed to draw from it for living expenses for a couple of months? Yeah? What if you needed, you know, $5,000 a month for three months until you got back on your feet, whatever it is you have access to do that. There's your safety net. You just simply draw from it, as long as there's a spread between the balance and the limit, those are your funds to do with what you choose    Keith Weinhold  36:13   if one takes out a HELOC, whether that's in an all in one loan form or not, something that I've advocated with my listeners for years is that now you do have this line that you can draw against to your point Haley, it's effectively another layer of insurance for that borrower or investor. So if you're interested in keeping down your insurance premium, you can get a HELOC or an all in one loan increase your insurance deductible, which can lower your insurance premium and increase your cash flow.   Caeli Ridge  36:43   Good point. You know, I hadn't even thought about that before. That is a new one on me that is actually brilliant. Yes.   Keith Weinhold  36:50   now we had a listener quite a while ago, Mark from Granite Bay, California, right in Mark's a great long time listener. When he found our show, he wanted to go back and re listen to all the old episodes. And he listens to several episodes multiple times. And Mark wrote in because he heard you on the show quite a while ago. And Mark says, I've been using the all in one loans, amazing mortgage balance deduction. But as a GRE listener, I know I can't be lured in by that alone. I also need to utilize its leverage. I just used my all in one loan Mark continues to say, probably, like a lot of others, to buy a duplex for mid south home buyers in all cash and then refinance that loan into a fanniefreda 30 year from my all in one loan simulations, and Caeli has an all in one loan simulation on her website that she'll tell you about. But to finish Mark's question, Mark says, I have gathered in these simulations that as long as properties are cash flowing, the best use of the all in one seems to be to keep repeating what we did on our first duplex purchase, use the all in one loan, to buy properties in all cash, and then later refi it into better debt or leverage, and then continue to repeat the process. Is that a valid way to use it? That's Mark's question.   Caeli Ridge  38:03   Absolutely. Mark, Well done, sir. And there's a few points here that I want to take a minute and peel back, Keith, so one of the first things that I would say that's really great about that philosophy or that strategy is going to be that on a cash out refinance of the property that was paid cash, using the all in one we get to use the appraised value. So under the circumstances, if you paid $100,000 for it, and perhaps it valued at 110, 151, 20, whatever it is, then we as the lender are going to refinance on a cash out refinance using that higher appraised value, so you have a little bit more leverage there, and potentially get more in that loan to value when you're comparing what you're getting back versus what you put in. The other thing, obviously, is that when you're dealing with a turnkey or a seller, an agent, whatever, everybody knows that when you can come to the table with cash, yeah, right, you become the more desirable buyer. There's that obvious piece, and then in terms of that strategy and that simulation. So please, yes, that is absolutely the first thing that I'm going to do with anybody that calls in is I'm going to get on the phone with them, a teams call, and we're going to do the simulator together. But I encourage everybody to get in there and play around with it. If you're not quite sure what data points it's asking for, let us know, or we'll do one together. But that simulator is going to allow you to compare the all in one to either an existing mortgage on a primary rental property or a new traditional mortgage. Let's say you're thinking about buying an investment property with a 30 year fixed and you want to compare that to the all in one, or maybe you want to refinance one of your existing properties, so you can compare it to existing versus new. And then within that simulation, it will allow you to forecast additional spending. That will allow you to say, I want to take out $50,000 in month 22 and it'll reformulate where the simulation of saved interest, payoff time, all of those things will be available to you within that simulator. It's very slick.    Keith Weinhold  40:00    And now that you, the investor, have the ability to pay all cash, not only can you close faster, but a lot of times, sellers are willing to give you a discount, since you can close faster and pay all cash, and then it's up to you down the road to go ahead and refinance that into a conventional product, or however else you want to do it. Caeli, what else should we know about the all in one loan?   Caeli Ridge  40:24    Couple things I would share. First of all, the qualification metric for the all in one is going to be a little bit more restrictive than a traditional 30 year fixed mortgage, so be prepared for a little extra brain damage. I know that getting qualified for mortgages is not everybody's favorite activity. I get it. There's a lot that goes on to it. It's not like the good old days where some remember you could fog a mirror and get a mortgage, but the all in one does take it to another level, even beyond what you're used to now. So debt to income ratio, I'll give you the specifics really quickly, so just be prepared. I like to set that expectation. Debt to income ratio caps at 43% on the all in one versus 50% that we would have from a traditional Fannie Freddie, 30 year fixed. The reserve requirement is calculated based on the line limit. It's dependent on the debt to income ratio. I'll just leave it there. It'll either be 10% or 15% of the line limit. So if the limit was 100 grand, 10,000 or 15,000 is the reserve requirement, and then the minimum credit score requirement. Owner Occupied is 700 non owner occupied is 720 so a little bit higher on the bar for qualification for the all in one.   Keith Weinhold  41:33   Who is this for? And who is it not for?   Caeli Ridge  41:36   It is for anyone generally that has at least 10% discretionary income at the end of the month. Typically, everybody's circumstances are different. I encourage you to play with the simulator. Get on my schedule. Let's do it together. But more often than not, we find that 10% left over at the end of the month is generally enough for it to work for the individual, and for those of you that got 2% interest rates during the pandemic, I just want you to know that I'm running the simulator against those loans day in and day out. And I would say, I'll give you a 65% of the time the all in one is beaten the, you know, what, out of a two and a half percent 30 year fixed mortgage   Keith Weinhold  42:12   that is really interesting. Well, there's a lot of opportunity and flexibility with the all in one loan. Is there any last thing that we should know about it.   Caeli Ridge  42:22   Start doing your due diligence. This does take a minute to unpack. Don't get overwhelmed by all the information. We've talked about some real tangible stuff here, but there's quite a bit that there would be to uncover. So take your time. Call us. We'll walk through it step by step   Keith Weinhold  42:36   and get started on that simulator and really see what it can do for you to make that actionable. Caeli, Where should one start?   Caeli Ridge  42:44   Head to our website, ridgelendinggroup.com you can email us info@ridgelendinggroup.com and obviously we're always a phone call away at 855, 74, Ridge   Keith Weinhold  42:54   and again, you can find that all in one loan simulator, where you can plug in some real numbers and see how it can benefit you. A friendly representative from Ridge can help you. Go ahead and do that there. So there's a lot of excitement about the all in one loan, especially, or an investor that has a GRE mindset philosophy and thinks about the opportunity of dead equity. But now that we've talked about that, tell us just quickly about some of the other products that you offer in there at ridge.   Caeli Ridge  43:23    So I think one of the real value adds for us is that we're not a one size fits all. We have an extremely diverse menu, as I like to call it, of loan programs. The all in one is at the top of a short list of my favorites. For some individuals, you got the fanniefriddies. You've got non QM, which includes DSCR, debt service, coverage ratio, bank statement loans, asset depletion loans. We have ground up construction for those that are interested in that. We have our short term bridge loans that I talked briefly about, where if you need fix and flip fix and hold, potentially, you need shorter term money, commercial loans for commercial products, commercial loans for residential in a cross collateralization way, if that is to your advantage. So as you can see, it's quite diverse.    Keith Weinhold  44:03   It's been valuable as always, and I definitely learned a few extra things that I did not know about the all in one loan myself. JAYLEE Reyes, it's been great having you back on the show, Keith. Thank you.   Now a mortgage company, of course, they have overhead and employees that they have to pay and so on. And you know, from talking with Chaley some more, I learned that they don't even make much profit from all in one loans. We wanted to discuss it together today for your benefit. However, though there are some real fees with the all in one loan, you pay points of three to 4% of the draw in closing costs only, but it's a one time fee, not every time you draw against it. She also let me know that it does not make your taxes substantially. More complicated, if you think that it can help you clear a few minutes, learn more and get hooked up with that all in one loan simulator, where they will help you through it. Big thanks to Caeli Ridge today, they really make themselves available. You can just call 855, 74, Ridge. Or if it's more your style, visit them at Ridge lending group.com Until next week, I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 1  45:31   Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  45:59   The preceding program was brought to you by your home for wealth, building, getricheducation.com.    

Keith discusses the impact of baby boomers on the housing market, noting that contrary to popular belief, many boomers are choosing to age in place. He also addresses the negative effects of gambling, particularly sports gambling, on young men, including financial ruin and increased bankruptcies. 54% of baby boomers state that they will never sell their homes.  People aged 55+ own more than half of U.S. homes. The overall population growth in the US has grown at its fastest rate since 2001, reaching over 340 million. Millennials and Gen Z, the largest generations, are driving future housing demand.  Resources: GRE Free Investment Coaching:GREmarketplace.com/Coach Show Notes: GetRichEducation.com/541 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host, Keith Weinhold. All the baby boomers are about to sell off their homes and downsize, unleashing a glut of supply onto the market, and housing prices crash. Is there cogency to that theory or not? I give you a definitive answer, the Trump bump, then later, a pernicious vice is destroying more people's lives today, especially young men and almost no one is talking about this. It's leading to lower credit scores, more bankruptcies and even more suicides today on get rich education   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com.   Corey Coates  1:25   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:41   Welcome to GRE from Hyannis, Massachusetts to Hiram, Utah and across 188 nations worldwide. I'm Keith Weinhold, and you are inside get rich education episode 541 just another slack jawed and snaggletoothed podcaster here now a popular, I suppose, media narrative that's been out there for a long time is this premise that US housing prices are going to crash hard because all the aging baby boomers are going to sell their homes, and Boomers are the biggest generation in all of American history. This is just going to magnify the price collapse. It means far more home sellers than buyers. So soon enough, sellers will have to keep cutting prices. Everyone's going to undercut everybody to compete with all of these for sale homes. So as a result, everybody's property values are going to collapse today. Let's look at how bad it will get. Should you get ahead of this and sell it all now and then? I'll even tell you when this popular narrative will supposedly happen with boomers selling en masse, or won't it happen at all. That's what we're looking at, the term silver tsunami. You've probably heard that thrown around in the real estate world. It actually refers to pent up housing stock that older homeowners will eventually choose to sell, which would have that effect of flooding the market with all this new inventory. All right. Now let's define what we're talking about here. Baby Boomers are the generation born just after World War Two, between 1946 and 64 that makes them between the ages of 61 and 79 this year. Okay, so basically, these people are in their 60s and 70s. That's their age. My parents are baby boomers. President Trump is at the upper age limit for a boomer, but they're not all as old as you think. I mean the youngest baby boomers include Michelle Obama, Sandra Bullock and Rob Lowe. So not all boomers are like super old, but see, it is a big generation of over 76 million people. So whatever they do really moves the economy. And maybe you've heard it been said, My gosh, what if we have more dyers than buyers? But now a more nascent trend is that you hear about more and more boomers and people older than boomers not selling their home instead wanting to age in place. And that just means they want to stay in their home and not go to a nursing home or assisted living. And that was recently quantified in a survey that Housing Wire reported on it found that 54% of baby boomers say that they'll never sell their homes, some of them passing homes along as inheritance and see often that's because their home is paid off and assisted living care costs are through. To the roof, more than half of boomers don't have any mortgage at all. All right, so we've established that boomers aren't as old as most people think, and then a lot of them aren't planning to sell. But still, let's look for trouble here, because boomers are a huge group, and some portion of them are going to sell is they age, even if a lot of them say that they won't. How about the almost half of boomers with a mortgage? You know what? Here's the thing, if they downsized, like older people have traditionally done. I mean, my grandparents downsized long ago. But do you know what would happen if boomers downsized? Today? For most, their monthly mortgage payment would actually go up if they downsized. That's because of today's higher mortgage rates and home prices. And see, that's a financial reality that keeps them in place. They're never going to downsize. All right, so a lot of boomers are just not going to sell. But still, this wave of selling boomers crashing the housing market, this has been a popular narrative for, I don't know, maybe more than a decade. Now there's been a lot of smoke, so then where is the fire. That's another way to think about this. So there's got to be more to this. And there is, in fact, people age 55 plus, own more than half of the homes in the US. Did you know that? All right? Well, if we pull back from boomers, and let's just take a look at all homeowners of every age, people are staying in their homes longer, whether they're age 30 or 50 or 80, Americans now stay in the same home about 12 years. That is twice as long as 2005 Well, what that means is that homes don't come onto the market and people cannot buy what's not for sale. And then, of course, you've got the well documented interest rate lock in effect. That's a contributor here to people of all ages with 4% mortgages, they are reluctant to sell. And now what we're talking about here are demographics. Remember that quote, demography is destiny, the three word quote from 1800s era French philosopher Auguste Comte, and that's because it's completely predictable. If you're 32 years old today, in 10 years, you'll be 42 totally predictable. All right, if demographics could possibly crash housing crisis, let's step back and see what's going on with overall US, population growth. You know what? It just grew at its fastest rate since 2001 about a full 1% growth last year, yeah, we broke the 340 million population mark for the first time ever. And now, what about the portion that our immigrants, and what if a substantial amount of them get deported? I mean, after Trump settled into the White House for his second term, deportations began almost immediately. Is there enough population growth to buy from the boomers that do sell their homes? Well, if mortgage rates come down into the low fives, then maybe more boomers will sell and bring some more resale inventory onto the market. See, you need a good chunk, though, of buyers to come in from somewhere in order to support future housing prices. Well, where are those buyers going to be? Well, some people still don't realize that the largest generation in American history is, in fact, not baby boomers, it's millennials. They became the biggest group more than five years ago. In fact, Statista tells us that Gen Z isn't far behind them either. Yeah, Gen Z is almost as big as millennials as a group coming right behind them. And of course, this varies a little bit. Demographers parse the generations somewhat differently, but here's what the rise of the biggest generation means, millennials. They're aged 29 to 44 now, and there are over 70 million of them, and then almost as big the next group right behind them, Gen Z. They're ages 13 to 28 they alone number about 70 million themselves, even if you just completely leave the surge in immigration out of the picture and all the additional housing demand that immigration brings. So we're mainly just looking at the domestic side alone here. So. What's happened is that there were 4 million plus births per year from 1990 to 2010 providing a tailwind for housing demand through 2035, 2045, or later. Yeah, we had more births during many of those years than we did in the peak of the baby boom, which was 1957 like I've mentioned on the show before, the average age of a first time homebuyer is now a record high of 38 years old, per the NAR it's really taken a long time for some people to stop playing the video games and moving out of their parents basement. Okay, well, the peak birth year for the US was 2007 I just told you it was elevated between 1990 and 2010 but 2007 was that peak, alright? So take that peak and add 38 years to it, and you know what? The first time homebuyer demand is just going to continue to build, build, build, and not even reach its peak. Then until 2045 or so, the peak birth year 2007 plus 38 years, that is where the crush of future demand is coming from because that person born in 2007 on average, they're not even going to buy their first home until well into the 2040s   In fact, the number of Americans turning 35 every single year is High, and it just keeps increasing. It's over 4 million now, already up 25% since 2011 and this number of Americans turning 35 is going to keep rising for another decade or two. In fact, this year, it's going to approach 5 million Americans turning 35 new record territory coming. And I keep bringing this up because 35 is a key age, because by that time, almost everyone has moved out of their parents home, and so that's the time where people either need to rent or own themselves, pushing up both rents and prices, and that's why this wave of demand and pent up demand is just gonna keep coming. And by the way, those stats that I gave you there, they're all sourced from the US Census Bureau. I mean, this is exactly where the housing demand just keeps coming from. It's a big factor about why prices keep going up. The demand just keeps piling on, even though affordability worsened, the demand just keeps coming. And it's just going to keep on coming well in to the 2040s now it could very well ebb substantially by, say, the middle of the 2050s but we'll see, and that is still three decades away. And remember, all of this doesn't even include the additional population growth from immigration and how many non deportees that is going to add to the housing demand on top of this, and then, if that's not enough, there is even more future housing demand expected to come from the declining number of occupants per household. Yes, the reduced household size that Stokes housing demand. I touched on this with you a little before on a prior show. But let me go deeper as we continue to corrode this more dyers than buyers. Theory, as we break this down, people have smaller families today. I think everybody knows that back in 1960 there were 3.3 occupants per household. Today, it's just two and a half. And to give you a simple example of how this itself keeps stoking the housing demand, just say that there's a village of 100 people with three occupants per household, they would need 33 and 1/3 homes over time, when that drops to two occupants per household, that's the direction we're going now that same village needs 50 homes just in order to accommodate the shift in household structure. Well, 50 homes is 50% more than 33 and a third, well, that means 50% more homes are needed, and that's even in a scenario where the population stays the same. Yet it's not staying the same, it's rising, and the population is really rising fast for that key household form. Population age range of 35 to 38 years old. Fewer Americans are living together. I expect the housing market to continue shifting toward smaller household counts. One person households will keep rising. I expect that to be one of the most impactful housing trends of this entire 21st century, and it's also really helping fuel a loneliness epidemic, which is another subject unto itself. Well, the three main drivers of this rise in single person households is that first people are delaying those major life events compared to previous generations. They're attending school longer. They're marrying later. They're buying homes later. They're having children later. And as these events are postponed, the time some young adults spend living alone or without children increases. They're playing video games longer as well. The second driver of these single person households is falling. Birth rates when people have children, many are having fewer than previous generations, reducing the average household size. That's pretty obvious. And then third the population composition is getting older. And older, people tend to live with fewer people. If life expectancy rises, this component of the trend would only intensify. Yes, the whole Brian Johnson thing, he is the health influencer that says we now have alive, the first generation that's going to live forever due to advances in longevity in technology. I mean, my gosh, if he is right, what would that do to housing demand? I mean, and it would also push up our average age even more. Gosh, yet, at the same time that all this demand keeps pushing up. America already has a well publicized overall housing shortage of several million housing units. You already know that story well, construction has picked up a little, but not enough to keep up with demand. In fact, American housing supply is still about 30% below pre pandemic levels. So suffice to say, let me give you a satisfying definitive answer here, when are selling boomers going to crash housing prices? It is highly unlikely that that can even happen at all. In fact, you see fewer stories about this than you used to. More people have come to realize that it is just not happening. And looking at us demographics over the next few cycles, a lot more people will need homes demand continuing to exceed supply. This is why home prices should just keep rising from here. In fact, I have been an active single family rental property investor here myself, single family is where perhaps the greatest shortage is and the greatest demand is at the same time I am owning something that people are definitely going to need more of. Remember, demography is destiny, and they're going to pay more and more for it. When mortgage rates fall, it's probably going to bring in even more buying activity, and now all of this continued upward, long term, future price momentum for housing, of course, that all existed before Donald John Trump step into the White House to start his second term last month. I think the Trump factor, or Trump bump, you know what often gets somewhat exaggerated for what it can do to the economy and housing prices, right? I mean, I've talked to you before, it's about the decisions that you make more so than decisions that a politician makes, but Trump is doing some things on a pretty seismic level these nascent immigrant deportations, that obviously can increase the cost of labor you're exporting away your low cost labor with immigrant deportations. I mean, that is inflation tariffs, though some tariffs have been negotiated away for the time being, that's more inflation. So deportations mean wage increases. That's more inflation. Increased wages mean increased rents. Trump talks lower taxes. Lower taxes can then mean higher rent payments. Proposals to eliminate. Made taxes on tips over time and Social Security, that means that Americans and retirees are gonna have more disposable income. More income means higher rent collections, fewer delinquencies, and potentially rising home prices as affordability improves. That's a lot of the good news. It's not all rosy news. You better look out for high tax states salt adjustments that state and local income tax and a deduction cap could harm their property values. We're talking about places like California, New York and New Jersey, the 2017 Trump tax cuts and Jobs Act that gave real estate investors some really juicy benefits, like 20% pass through deduction for LLCs and bonus depreciation on rental properties and lower corporate tax rates too. Combined this stuff, it all keeps more money in your pocket and allows for bigger deals with better cash flow.    We're talking about Trump bump factors on the real estate market here, other proposals on the table, other things like tax breaks for domestic production that could boost us construction, leading to more badly needed housing supply that could lower building costs and investment opportunities in niche in growth markets. Remember opportunity zones, and then what about targeting wealthy investors? We'll see what happens, but Trump's plan removes tax breaks for hedge funds and billionaire sports owners. But could real estate investors get hurt a little on that side too? Maybe look for changes to the 1031 or depreciation strategies. But you know, the 1031 exchange has been around for over 100 years. I would be surprised if it went away completely, and yes, though they have been postponed, if 25% tariffs on Mexico and Canada do go into place and the countries retaliate, as they've been shown to do, it would add point seven 6% to US inflation and subtract 410 of a percent from US GDP growth. Aren't those two projections Interesting? Yeah, those estimates were compiled by the Yale budget lab. So adding about three quarters of a percentage point to the overall inflation rate with these tariffs. I mean everything we're talking about the price of your housing or your car tires or your tomatoes and romaine lettuce. I mean, that effect could take money out of people's pockets. Yes, we know that Trump wants to bring down interest rates, but I don't know how he's going to do that. I mean, as you know, more inflation correlates with higher rates, not lower ones. See, you just can't get it all. You just can't have it all. And of course, mortgage rates are not historically high. They've simply been normalized after years of being artificially low. Rates are normal. So normalized is really a term that I like to use. So really, to help summarize what I've shared with you here in the first half of the show, a housing price crash induced by a boomer sell off is not a thing. In fact, almost Oppositely, demographics in this pent up demand should raise up future home prices, and to a lesser extent, a Trump bump can as well. Yes, gosh, Trump just has an insatiable fascination for tariffs. It is truly amazing, and it has more stick to itiveness than say, Mark Zuckerberg, recent fascination with masculine energy and gold chains, that's for sure.   Hey, before we get into the pernicious vice that's destroying more people's lives today, especially young men and almost no one is talking about this, it's leading to lower credit scores, more bankruptcies and even more suicides. First, I've got some cool things to tell you. About two weeks ago here on the show event, host Robert Helms of the real estate guys and I invited you to join us on the terrific Investor Summit at sea, that cruise on the Caribbean. Besides the two of us, there are a number of other great faculty members. Robert Kiyosaki recently announced that he's going to be joining us on the faculty as well. So you'll get to meet and learn from Robert Kiyosaki, and if you happen to be a new listener, he is the top selling personal finance author of all time the. Rich Dad, Poor Dad, author, and he's been our guest here on the GRE podcast four times. Now, I hope to meet you, the listener, in person on the summit at sea in the Caribbean this June, starting out of Miami. Gosh, what an outstanding time that is. It's not a low cost event, however, the minimum cabin in interior cabin is $5,900 and they are more expensive from there if you get nicer accommodations. But all the details are there on GRE podcast episode 539 two weeks ago. I really hope you'll join us and then I can meet you in person.   Earlier this month, Trump established a US sovereign wealth fund, and when he did, I congratulated our frequent contributor here, macro economist Richard Duncan, because Richard championed the establishment of that fund for years. He presented to Congress about it, and Richard was the first ever GRE guest with us back here in 2014 on the Panama coffee farm investing that we've discussed here on the show, Villanova University reached out to them, and they're now collaborating together. It's something I find kind of cool, as a Pennsylvania native and one of my tightest best friends is also a Villanova alum, as for future episodes coming up on the show. Here, imagine if you had a property loan, yet you didn't have to make any payments, and if you did make payments on your loan, then every penny of that payment goes to principal, not to interest. Wouldn't that be incredible? Well, such a thing does exist, and it's not new or experimental or avant garde. People just don't know about this vehicle. We're going to discuss that right here on next week's show, along with some other vital mortgage topics. There are three ways to connect with our education at GRE you're listening to one of them right now, our flagship podcast. Also check out our get rich education YouTube channel, because that is different content than this show. That's the second way, and that show is also on other video first, platforms like get rich education on rumble, and finally, you'll have it all, all three when you get our weekly Don't quit your Daydream newsletter if you don't already get it free now, while it's on your mind, simply text GRE 266, 86, more. Next. I'm Keith Weinhold. You're listening to get rich education.    Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS 420056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties, they help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com    Oh geez, the initial average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk, your cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And you know how I'd know, because I'm an investor in this myself, earn 10% like me and GRE listeners are. Text family to 66866, to learn about freedom. Family investments, liquidity fund on your journey to financial freedom through passive income. Text family to 66866.   Robert Kiyosaki  29:31   this is our rich dad Poor Dad. Author Robert Kiyosaki, listen to get rich education with Keith Weinhold and Don't Quit Your Daydream.   Keith Weinhold  29:50   Welcome back to get rich Education. I'm your host. Keith Weinhold, every once in a while, there's an investing adjacent activity that becomes. Is pronounced or become such a trend that it just can't be ignored, and you need to know about it. I recently presented on how gambling is financially derailing so many people today, especially young men and sports gambling and what makes California and Texas special here, the two most populous states, by the way, you'll see, once they legalize this, it's gonna get worse. There are two states where it's not legal yet now investing in gambling. They are two distinctly different activities. Investing is different from gambling. When you invest, you're purchasing a stake in an asset that has value in an effort to generate profit. But gambling doesn't involve taking ownership of anything of value. Instead, betters are predicting the outcome of an event gambling. It's really not a side hustle. I mean, people are constantly losing their families and businesses over this. This will be all new material here on the show as usual, except for a short snippet that includes super CPA Tom Wheelwright. This is about 10 minutes in length. Shout out to the media team here at GRE on the production side. And then after this, I have more to tell you about real estate.    Speaker 1  31:30   America is in the midst of an historic surge in legalized gambling.   Keith Weinhold  31:37   This is the worst thing that people are now doing with their time and money today, it's not losing it to inflation, it's not playing video games. It's being a slack jawed gambling degenerate. We are in the midst of an historic surge in legalized gambling, and the devastation on gamblers, especially young men is a lot worse than you think. I've also got a giant ominous warning for you that seasoned gamblers don't even know about when I bring in my CPA for just a minute here today on the seriously punishing tax implications that should scare anybody out of gambling.    Hi, I'm Keith Weinhold, get rich education, founder, Forbes real estate council member, best selling, author, and long time real estate investor. Almost 60% of 18 to 24 year olds have placed at least one sports bet now that's per the NCAA, and that has surged so fast. I mean, just less than a decade ago, major pro sports leagues shunned gambling, disassociating with it because it was illegal in most places. The big turning point was 2018 that's when the Supreme Court ended a decades long ban on commercialized sports betting. 38 states and DC have now legalized it most with minimum age requirements set at 21 and the two biggest platforms are DraftKings and fam duel. They've got about 70% of the market. But look, you can do this if you're under 21 on platforms like prize picks and flip they offer betting like experiences. They operate under fantasy sports or sweepstakes, and having these apps on your phone that just brings the gambling right to you. It keeps it in your face and addictive. Now it's like you're sitting in a casino when you're on your living room so far, or in your bed or even in the bathroom, there is no escape. Two thirds of Americans live in a state where they can access it on their phones. And look how young some of these gamblers are, what they have to say. And then who's showing up in these gamblers Anonymous meetings   Speaker 1  33:56   today's world is the 16, 1718, year olds, 1921, year olds that get addicted years ago, before, unlike casinos, if we had a person coming in and they're 24 years old, it was rare. All right, now the norm, the real norm, it's kids coming in at 17 years old. That's the norm.    Keith Weinhold  34:16   Well, one big reason why it's such a problem is, look, you can't hide it, so that therefore others can't tell if you're gambling, because you're not, you know, shooting it into your veins, or you're not acting drunk, or you're not smoking anything. See, you can gamble without exhibiting a physical change, so therefore others don't know that you need help. And it is all over the place. I mean, gambling ads air on TV over 60,000 times a year. Celebrities endorse gambling. I mean, some teams put gambling ads right on the field. Brick and mortar sports books are even built inside some stadiums now, Caesars and bet MGM. There are two other big platforms that you might see out there, but I mean, in their commercials, yeah, they can put that one 800 gambler help number on screen and tell you things like, gamble within your limits. But look, here's the thing these platforms, they're not going to cut you off if you continue to lose and they profit. In fact, if you win disproportionately big time after time, and these platforms can kind of tell that you're too smart. You know what they do, like a casino that identifies a card shark in Vegas, they're either gonna curtail your activity or just totally cut you off, alright? So then, by definition, if you have an account in good standing at FanDuel or DraftKings, and you bet a lot, and they keep letting you play well, then you have just signaled to the entire world that you don't know what you're doing, and you are going to lose big, or you already have. I mean, that is baked into the cake. That's how the system works. So therefore these companies are basically mining America to find anyone stupid enough to keep placing these sports bets. Companies are profiting from this, and then states are too. I mean, they've collected billions in tax revenue and FanDuel and DraftKings, see, they're publicly traded companies, so this means that they have shareholders, and those shareholders, they want to see profit and growth. I recently asked decorated CPA and mega popular tax author Tom Wheelwright about tax rates on gambling for just a quick three minutes here. I mean, you won't believe how punishing This is.    Can you tell us about sports gambling taxes and how it's treated   Tom Wheelwright  36:43   yeah. So remember, all income is taxable. So that includes gambling winnings. They are taxable. In fact, you'll get a 1099 just like you would if you rendered services, you know, you'd get a 1099 right? Or you have interest income, you get 1099 you get 1099 from gambling. What you actually have to show is that you actually have gambling losses. So you have to track those gambling losses to show the IRS that you've got gambling losses. But your gambling losses can never be more than your gambling winnings. In other words, you don't you never get to generate a tax loss on gambling. So that means is, is that if you win $10,000 during the year, and you can prove that you lost $8,000 during the year, you're gonna be taxed on $2,000 but if you can't prove the 8000 you're gonna be taxed on 10,000 Yeah,   Keith Weinhold  37:39   so you the gambler have the burden of tracking this, and I guess tracking your losses. I'm not a gambler. How would one track their losses?   Tom Wheelwright  37:47   Oh, I would keep a detailed ledger. Personally, I'd probably have a separate bank account just for gambling. Gosh, that's the way I would do it. I'm not a gambler either. So by the way, it's also a good way to budget your gambling so they, you know, get in trouble, right? So just set up a separate bank account, put whatever money you say, I'm comfortable with this money, I'm going to gamble with this money, put in that bank account, and then you have a ledger that shows the money that went in and the money you lost, the money you won, and don't do anything but gambling in that bank account.   Keith Weinhold  38:18   Hey, that separate account's a great way to hide it from your spouse, not that I'm suggesting.   Tom Wheelwright  38:25   Well, interesting. You went there.   Keith Weinhold  38:29   I'm not a gambler at all. Can't even believe I was thinking that far ahead. What are the gambling tax rates like? They're ordinary   Tom Wheelwright  38:35   income tax rates. So gambling winnings are just ordinary income they're they're the same as your wages. They don't have social security taxes their income, just like any other kind of income, nothing special, okay?   Keith Weinhold  38:47   And this all applies to whether it's sports gambling or general gambling, like lotteries and sweepstakes.    Tom Wheelwright  38:53   Just remember, all incomes taxable unless the government says it isn't all income, okay? And then there's some types of income that are taxed at special rates, like capital gains, but gambling has no special rate, so it's just your ordinary income rates.   Keith Weinhold  39:09   Gosh, to me, it seems like it's, it's hard to break even with gambling over time, and then when you take the tax adjusted earnings that you get from it, you know, over the long term, you know, I just don't think Harris and Bally's Casino is really incentivized to inform gamblers on how punitive this can be with ordinary income tax rates applied to gambling winnings.   Tom Wheelwright  39:30   No, but they will send you your 1090, 9g I guarantee that.   Keith Weinhold  39:34    So can you imagine tracking all that and then paying all that in tax, and this is even if you're on the winning side and then keeping a separate bank account as well. And note that Tom and I were talking federal. There. It gets even worse. Some state laws are punishing, like New York, which has a 51% tax rate on mobile sports wagering bank. Up 28% since states have legalized this and credit scores have dropped now, California and Texas are the two big states, and they still haven't legalized sports gambling. They're the two big ones, and when they do, that's when you'll see more bankruptcy and more people, especially young men in financial ruin. I mean gamblers, Anonymous meetings are filled with people hooked on betting and on stock options trading too, and you know, Worse still, among addiction disorders, gambling has a comparatively high suicide attempt rate. And you know, understand that, while both involve risk, investing in gambling are two different things. When you invest, you're purchasing a stake in an asset that has value in an effort to generate profit. But gambling doesn't involve taking ownership of anything with value. Instead, betters are predicting the outcome of an event. Now, I gambled as a teen on sports, and back then, it was just a friend and I, we would each lay a $20 bill on top of the television at the start of like a Mets versus Phillies baseball game, and then it sure made the game more interesting to watch. There wasn't any sort of app to make it easy, suck me in and make it a recurrent practice. I haven't gambled since. Now that you're aware of the gravity of the problem, the best thing you can do for yourself is to delete those apps off your phone. Because look, I mean every gambler that had their lies flipped over and turned catastrophic at one time, they told themselves, you know, I'm doing this, but it's under control. I mean, everybody once said that the best thing you can do is delete FanDuel DraftKings and any other apps like that off of your phone right now and vow to never do it again. I hope you like that. You know, it's sort of interesting and introspective to me that I would produce a piece of media like this because I am a sports fan. I watched more of the NFL this past season than I have in a while. You know, I'm in a phase of my life, or I'm a pretty productive person, doing research and interviewing guests and producing GRE media. But you know, I justified watching more sports lately because there's room for an entertainment bucket in everyone's life. That's how I feel. And you know, I don't really watch movies. Most movies I watch feel like a waste of my time when I'm done after two hours, because I'm usually disappointed in it. If I ever watch movies, I gotta watch movies on the plane, because even if it was lousy, I got somewhere in the process. So in any case, now, if gambling is controlled, well, then it might be debatable about whether or not it's a vice, like, say you go to Vegas and have your $250 spending limit or whatever.    But just remember, every gambling degenerate once told themselves and everybody that they know that they've got it under control, but yeah, often they didn't around here, we champion owning real estate directly yourself, that is something that is in your control. So we're not talking about REITs, Real Estate Investment Trusts. That's just a publicly owned company and a group of them. It's not real estate tokenization. That means owning digital fractional shares of a property or a real estate investment. I mean direct whole ownership also means it's not a syndication now that might be worth doing, though, that means that you're pooling other investors money. It's not direct whole investing. If you are investing in someone else's syndication, meaning that you're a limited partner and direct real estate investing, it means not being a flipper or a wholesaler. Again, those things might be worth doing, but they're really time consuming, and they're not tax advantaged either. But when you own rental real estate directly yourself, you don't even need to be a landlord. If you choose not to you, then will not be that point of contact for your tenants when others manage it. And yes, because of the five ways that you're paid, you can make the case that real estate has hegemony over other assets, and for the demographic reasons and the inflationary reasons, like the ones that I told you about earlier today, real estate appears poised to continue as the. Hegemon. In fact, recently, so many global hedge funds have dumped every stock that they have, except for the real estate stocks. I shared that article with you in our newsletter recently. That's largely a tariff response. Let me tell you about real properties on GRE marketplace right now that are ripe for owning directly. I mean direct ownership. That's also the easiest to understand. You are paid rent by a tenant that lives there, often through your property manager, and unlike the out of control sports gambler, this is very much in your control. A brand new build single family rental in Columbiana, Alabama, that's just south of Birmingham. Rent is $1,925 the price is $269,900 over 1600 square feet, four, bed, two bath. Now with the new build, expect low maintenance costs. Is currently vacant, get an interest rate of six and three quarters percent with a 25% down payment on this new build, single family rental in Alabama. Then another sample here. This is interesting. The rent on this old build Davenport Iowa duplex is $1,900 which is about the same rent as the Alabama single family rental I just described. But yet the price for this Davenport duplex is just $183,000 Davenport is part of America's Quad Cities with a combined population of about half a million with both duplex sides. It's a combined square footage of almost 2700 square feet, five, bed, two, bath. They're on Brown Street in Davenport, and now, as favorable as those $1,900 combined duplex rents are, since this property is vintage, in fact, it's over 100 years old, you better check closely on the renovations that were made to the property and have plenty set aside for any maintenance and repairs as well, with a 25% down payment, expect an interest rate of just six and one quarter percent. And there are more financing details there. And of course, rates are always changing. The last one I'll mention is this new build, another duplex, this one in Inverness, Florida. This is really interesting too. And now, what do you think when you think of Florida, real estate? Does climate change come to mind? For some people, it does. For some it doesn't, maybe even rising sea levels over the long term. Well, Inverness, Florida is 15 to 20 miles inland, and it's 50 feet above sea level. How about high insurance rates? Does that come to mind with Florida? Well, they're not so high on new build properties, since they're built to today's stringent hurricane standards. Is Florida temporarily over built, even though the nation, in aggregate is under built? Yes, some Florida markets are overbuilt, and that's how you could potentially snag a deal and get this with 25% down, you can get an interest rate as low as four and three quarter percent, yes, and that's showing with zero buyer paid discount points, the combined rent from both sides of this new build Inverness duplex is estimated at $2,830 of course, often you need to estimate a rent range or make an estimate on the projected rent for new builds, because often they're not occupied yet, since they were just built, sales price of just a touch under 420k on the Inverness duplex, and as just one of the five ways you're paid the cash on cash return is projected at 5% yes, your return goes up into the positive cash flow zone when your mortgage rate is as low as four and three quarters percent. I mean, that is really attractive. It also comes with a year of free property management. So there you go, a new build single family rental in Alabama, an old duplex in Davenport, Iowa, and a new build duplex with just killer incentives in Inverness, Florida, and that's just the sampling of real estate pays five ways type of properties. We either help you get started or continue on your path to financial freedom and help you do that. With our completely free investment coaching, we work with you to help you with these properties or others like them or none at all, if it's not in your best interest to invest now at GRE marketplace.com All you need to do to get started from GRE marketplace.com is click on the coaching area and you can get on the calendar for a free strategy session until next week, I'm your host, Keith Weinhold, don't quit your Daydream.   Speaker 2  50:35   Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively, Chris,   Keith Weinhold  51:03   The preceding program was brought to you by your home for wealth, building, getricheducation.com  

Keith shares the top amenities tenants want in rental units, based on a survey by GreyStar with over 90,000 responses. He's joined by long-time friends of the show, Terry and Liz to discuss investment strategies, emphasizing the importance of buying properties in the "sweet spot" and the benefits of allowing pets, which can lead to longer tenant stays.  They also touch on:  Trade-offs Between Buying Multiple Cheap Properties vs. One Expensive Property Quality of Properties and Tenant Demographics Screening Tenants and Handling Pets New Construction vs. Renovated Properties Investor Life Cycle and Exit Strategies Resources: Visit MidSouthHomeBuyers.com and explore their investment opportunities. Show Notes: GetRichEducation.com/540 GRE Free Investment Coaching:GREmarketplace.com/Coach For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE! I'm your host, Keith Weinhold. What are the features that tenants want in their rental units today, and what amenities are most profitable for real estate investors? Bedroom, count, bathroom, count, cover, parking, pet policy and more, what matters what doesn't, and how do you optimize operations to maximize your profit? It's a conversation with me and two terrific real estate pro guests today on get rich education.    Speaker 1  0:31   Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, who delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:17   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:33   Welcome to GRE from Tacoma, Washington to the took pony Palmyra bridge spanning the Delaware out of Philadelphia and across 188 nations worldwide. I'm Keith Weinhold, and this is get rich education, the voice of real estate investing Since 2014 I'm grateful for your faithful listenership. If you're new around here, join in at GRE we do this one big headline show every week, never more, never fewer, and truly, every single week for more than 10 years now, let's talk about amenities that tenants want in apartments today, before we pivot to discussing properties in general and single family homes in our conversation coming shortly. Now, you might have heard of GrayStar before they are international real estate developers and managers, well, they received more than 90,000 survey responses from apartment tenants on their most preferred features and amenities. So we've got a good sample size here, and Gray star compiled the top 20. Let's just hit the top five. This is important, because your tenant is your customer, and when you serve them, you're not only making them happy, you yourself are positioned to be more profitable long term. Here we go. The number one preferred feature is, do you have any guess what tenants want? It's the walk in closet. 51% of apartment tenants said that they are interested in this feature, and 37% would not rent an apartment without it. On average, they're willing to pay a $75 a month premium, and the survey shows that this is particularly important in Dallas and Miami, where over half said that they would not rent without it. The second most important amenity to apartment tenants is large windows with abundant natural light. 56% that they're interested in this feature. 31% would not rent an apartment without it, and on average, they're willing to pay an $80 a month premium for the large windows. When you think about how more tenants work from home today than five years ago? Well, big windows make more sense. Third most important is fresh air ventilation. 69% said that they're interested in it, and on average, they're willing to pay a $79 per month premium. The highest demand for fresh air ventilation is in Seattle, San Francisco and San Jose. We're talking about the top five amenities that apartment tenants want today in order, the fourth most important one is covered parking or a garage. 52% said that they're interested in this feature. Fully a third would not rent an apartment without it, and on average, they're willing to pay a $75 a month premium, and this is most important in urban areas with a covered parking or garage, where 42% will not rent a unit without it, in those urban areas. And then the fifth one is high efficiency appliances, 71% said they're interested in this feature. On average, they're willing to pay a $79 a month premium, and this, this high efficiency appliance thing, is more important for the high income tenant segment. So there they are, the top five features and amenities that. Apartment tenants want today. So to review, in order, it's a walk in closet, big windows, fresh air, ventilation, covered parking or a garage, and finally, high efficiency appliances. And listen in as I'll have a robust discussion with two season real estate pros. We're going to go beyond apartments about the features that tenants and real estate investors alike want today, and at times, they will talk about their home markets of Memphis, Tennessee and Little Rock, Arkansas, which are some of the most investor advantaged markets anywhere. And you'll have to calibrate some of these numbers to your market, because in these places, the typical single family rental purchase is just 100 to 200k and rent is between$900 and 1600 and at other times, we will talk more nationally and globally.    Hey, well, I'd like to welcome in long time friends of the show, with the emphasis on long time since they were first here with us, more than 10 years ago on episode nine in 2014 those ever steady quality property providers from Memphis, Tennessee, mid south homebuyers, it's the return of their principal, Terry Kerr and investor relations lead, Liz Nalen, Terry and Liz, welcome back.   Terry Kerr  6:25   Thank you, Keith. It's great to be here. Thanks so much, Keith, great to be back.    Keith Weinhold  6:28   Yes, it's beginning to feel like a high school class reunion or something. I anticipate my high school class reunions just like I anticipate our discussion today. Let's talk about your individual takes on investment philosophy, common investor mistakes, and is some investor conventional wisdom true, or is it not? Because there's probably some of that that we have to debunk, I think a common one. And I know you get that question in there from investors and our listeners, you had that conversation it was it better to buy two cheap properties or one expensive property talk to us about some of those trade offs.   Liz Nowlin  7:07    It's such an interesting thing, and there's so many factors you can look at. I broke it down for myself personally. Probably 12 years ago, I was asking myself that question as an investor and I ran 2 $50,000 houses, I'm dating myself against $100,000 house, and even when I manipulated the appreciation for the $100,000 house at the higher rate. And actually, we've been talking about investor conventional wisdom, and that is actually a piece of conventional wisdom I've not seen hold true as much, but that a higher end neighborhood is going to appreciate a more rapid pace than a more blue collar neighborhood. So that, as a side note, is a piece of conventional wisdom that I've seen a bit debunked, but it really ramping up the appreciation on the $100,000 house. I think I put it at reselling at like 180 or 190 down the line, and I put my $50,000 houses at maybe 90. You know, not as aggressive for me. Two houses beat one, every kind of way that I shook it out. And of course, the 50,000s had lower individual cash flows, but still, I think matching or higher than the 100. And the one thing I'm not sure that I put in there is two water heaters versus one water heater, two furnaces versus one, but running the same maintenance in general for them. Terry, what do you think   Terry Kerr  8:32   I started out buying houses a little bit lower than I should and what I mean a little bit lower like and a little bit lower quality neighborhoods, and quickly learned that you can't buy too low, you know, you got to buy them, you know, in the sweet spot. So I bought in the A class areas. I bought in the areas that were a little too low, and then found the sweet spot. And then within the sweet spot, I've got a bunch of houses that are in the mid range where we typically operate, and personally, I've also got a bunch of duplexes. I like duplexes. So whether that's duplexes or a little bit upper or a little bit lower, personally, I like a mix of them. And I'm a buy and hold guy. So the stuff that I buy and hold I'm holding for the extra long time, initially, right out of the gate, you've got to look at things like cost segregation, closing costs and all that kind of deal. So really, everyone kind of needs to run their own numbers, because what might make sense for one person just might not make sense for someone else. And again, I'm kind of all over the board. You factor in how much you're going to spend in closing costs, how long do you intend to hold the property? What's it going to cost to sell the property in 1015, 20 years. But again, the cost segregation and just everyone needs to kind of run their own numbers. I think.    Speaker 2  9:47   closing costs times two versus times one is an interesting point. Paying to mow a yard is paying to mow a yard. But then you get into another rub that I think I put them I don't think I did a square footage variation, but I like smaller Homes. It's less on paint. It's less on vacant utilities. The lower your rent is to a degree, the more people can afford to rent it, and the more recession proof you are, in my opinion. And I wasn't running through that as well, but in my antique valuation from 2012 that $100,000 house is going to be bigger often than the littler guys for the rent. Not you know, you can have a play between neighborhood quality and size of house with rents, which is a determining price. But Keith, what do you think two or one?    Keith Weinhold  10:33   Yeah, the two thing versus one thing has a lot of trade offs. As an investor, I think about the advantages of where one is going to have less management, even though I use a property manager, but with respect to the size of the property, I think a lot of us know, and the new investor doesn't know, say, a 1500 square foot unit versus a 3000 square foot rental unit. Well, with the 3000 you often have twice the maintenance, but you only get a little more in rent income. So depending on the market you're in, typically something more like a 1500 square foot rental unit is going to work out better.   Terry Kerr  11:06   Yep, I agree. And then also, another one of the things that I found out is buying houses a little too far up market going to be renting to folks that are more apt to buy a house, right? And so you might have more turnover and a more expensive house just because it's in, you're renting in an area where folks may just not stay as long. And one of the things that that, of course, we like about Memphis is it's predominantly a rental market, so we're able to kind of have the best of both worlds there. But    Liz Nowlin  11:32   kind of, going back to investor conventional wisdom, I think a common mistake, or maybe a mistake isn't the right word, but I hear investors say that they would not buy a house that they would not live in, and I find that they tend to be very expansive times of their life. They often have young children are possibly planning to do it. And one of the best renters I ever had was a little old lady on Social Security, on a fixed income. She lived in my house for seven years. She paid on time like crazy. She added a garden that my home didn't have, and she would have never paid the extra $25 a month that a second bathroom would have called for from that property. And people forget that you'd people downsize as much as they upsize. There's divorce or just retirement, there's empty nesters. Families shift down as much as they shift up. Because investors are often they're talking to me from their four bedroom, two bath house, and they couldn't conceive of renting a smaller thing long term. They just kind of missed that aspect.   Keith Weinhold  12:38    Right for me, it's definitely not a criterion. Would I live in the property myself? And that makes it eligible to hold as a rental? No, it's just the opposite. Really. I don't think any of my rentals are ones that I would prefer to live in, because it wouldn't upgrade my lifestyle. Yet, it's still doing the clean, safe, affordable, functional housing thing. We're talking about the quality of properties here. Class A, properties are deemed the best class, D, the worst. What are your thoughts? Is B class better than C class? And is a really the best of all? I mean, for example, do you get better renters in a class, or are they finicky and then they have the means to move out and go buy their own place, if they have a 790 credit score and they're living in a class a unit, what are your thoughts here?   Terry Kerr  13:22    I think c plus to b minus is the sweet spot. You get into the a plus. Like you said, there's going to be more turnover, because folks are going to be buying houses, and then you've got expensive appliances that you're going to be responsible for fixing in and a lot of A plus neighborhoods, but the C minus, and I can only really truly speak to Memphis and Little Rock, but the C minus the B plus I feel is the sweet spot that's for the size of the property, as well as the typical length of rentership.   Liz Nowlin  13:52   I managed a class for about a decade before I came to work for Terry in 2009 and we ran a great ship, and we had a great, beautiful high rise, but a year was really the average stay a class renters are more litigious. I was operating a building next to a law school, and I had young lawyers and law students, but that's going to be true in any kind of a class area. When you're paying a rent of that amount you are going to call in a work order because the doorknob is slightly loose, a lot of it. And very interestingly, I think we still had some collection issues, even renting to nurses, lawyers, just a small percentage. It's the dark side of property management. But I saw alcoholism, divorce just in a small percentage. But it doesn't wipe it out the way that you would think it would. I've seen college students going to WashU and Ivy League level stuff leave apartments in terrible, terrible conditions. Think that's another kind of investor myth around that    Terry Kerr  14:52   the blue collar folks that we're renting to here in Memphis and Little Rock, they're not going to call us for the loose doorknob. They're just going to pull out the screwdriver. And fix it, just to kind of piggyback on that. It's another one of the benefits of operating in that space   Speaker 2  15:05    lawn care. It's a little thing, but everything adds up, right? Like our renters are going to mow their own lawns and they expect it, and it's how it was at their last place. You're not pulling that off at the high high end   Keith Weinhold  15:16   when you're screening tenants. Do you have the ability to tell when someone is going to look after the place better, and because a lot of the single family home rentals that you do, I mean the tenants, for example, are even responsible for taking care of their lawn, or are they going to be responsible enough to call in a leak, but not so annoying that they're going to call you to adjust the kitchen cabinet door that's a little bit loose. So how can you help screen tenants to learn some of those things before they even move in.   Speaker 2  15:43   Our typical renter is coming to us from another single family home, and so one of the kind of unique ways that we screen tenants is that you have to have immediate landlord history. It's like with a lot of places, if you go rent somewhere for a couple years, you leave in good standing, you come and live with your mom for a year, everybody else in town would accept that positive rental history from a prior place. But one thing that that I love about working here and then what we do is that being in business for 24 years, we've had a lot of chances to kind of do things the wrong way and figure out how to do it right. And they Terry instituted a system in the early years, where any time a renter fell off the rails, they would look back through that file, was there anything? Was there anything that could have predicted that? And sometimes the answer is no, and it's just the first time somebody's hit hard times. But one of the things they found is, well, hey, this guy hadn't paid rent in a year. He did have good rental history, but he hadn't paid rent in a year, and then that bill, he'd gotten used to not paying so much, and so that just helps.   Terry Kerr  16:47   Absolutely   Keith Weinhold  16:48    yes, getting that reference from their current or previous landlord can give you so much on what the expectations are going to be for the tenancy there in their place. And then, of course, there's a whole thing where, if you're talking to the current landlord and they're trying to move out, you're really trying to get to the bottom of the things and just find out if their current landlord wants them to move out because they can't get pay, or they're doing something nefarious. They're not paying rent, or something like that. That's sort of something that one needs to decipher as well. But of course, the history is going to help project the future better than anything else. And one thing we're talking about the operations of properties, and you sort of touched on it. Liz, where you had that tenant that started her own garden, she's someone that wouldn't care to pay more for a second bathroom. So why don't we talk about some of the pros and cons with the bathroom? Are two bathrooms always better than one, or is it just one more place to have maintenance and repair problems?   Speaker 2  17:40   real quick, just back on the other thing, for all the philosophies that you can bring, the guy that I worked for before, Terry never did any landlord verifications, because the worst renter he ever had was personally dropped off at the property by the prior landlord.    Keith Weinhold  17:56   Oh my gosh, making it easy for him. And he said, I'm done   Speaker 2  17:59   so anyway, but the bathrooms is such a hot spot, there's definitely the second bathroom rules crowd. And then I've seen a seasoned investor that says that's just one more toilet to clog.   Terry Kerr  18:14   Yeah, but I would say that right now, I'm pretty sure that the property that I have on Powell is the longest resident I've ever had. She moved in 11 years ago, is still there. It's the smallest house that I own. It's like 794 square feet. It's tiny, and it's got just one bathroom. But she's single, and when she moved in, she said they're gonna have to carry me out of here. And I hope that's not for a long, long time. But like Liz mentioned, there are a lot of folks that just want one bathroom because they're just going to be living in their solo or even married couple. That is downsizing. So we have a mix, and we like to be able to have something, you know, for everyone. So our two bedroom baths perform very well, just like the three twos   Keith Weinhold  18:58   I once owned three rental properties. They were all built the same way. There was one bathroom in each of them, which would have been okay for one or two people to live there, except the only bathroom in these two story places was on the second floor for all three of them, and that did prevent some people from renting it. They didn't like the fact that the only bathroom was upstairs. Yeah, that sounds terrible.   Speaker 2  19:20   Another analogy that's too great, or something I experienced when people think that two bedrooms must be inherently less desirable than three. Kind of connecting to one versus two bathrooms. When I managed that a class high rise, I had a waiting list for my studio apartments. It was the cheapest way that you could live in that neighborhood, period. And I had a three or four month waiting list for the studio apartments. I had a little more trouble renting the one bedrooms and the most trouble renting the penthouse, frankly. And my point with that is that if you price it right, it will always work. You know, if my studios were the same price as my one bedrooms, and of course. Course, I would not have had a waiting list for them. And you know, we have that super unusual lifetime occupancy guarantee mid south it's that, you know, if your property is ever vacant for more than 90 days, we start paying your rent on the 91st day. And I'm often explaining to people that's not us actually being an insurance policy, though it's real, it's in writing, we will pay you if that happens. But what I'm really telling you is that these rents are real. The rent price is meant to perform, and that that's the point. Anything rents well and stays well rented if you price the rent correctly.   Keith Weinhold  20:33   Well, that's an excellent point. We're talking about conventional investor wisdom and the operations of rental properties for investors, with Terry Kerr and Liz Nowlin from mid south homebuyers more than we come back, including is saying yes to pets worth it. This is Get Rich Education. I'm your host. Keith Weinhold   hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind@ridgelendinggroup.com That's ridgelendinggroup.com   Oh geez, the national average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation, let the liquidity fund help you put your money to work with minimum risk, your cash generates up to a 10% return and compounds year in and year out. 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And one thing that seems to be increasingly popular, it sure isn't waning in the past few decades, is the prevalence of pets and tenants that apply and have a pet on there. So there are a lot of pros and cons here. What are your thoughts about pets? Is it worth it or not?    Terry Kerr  23:28   It's worth it as long as you know what pet is going into the property and you charge a pet fee, amen.   Speaker 2  23:36   I'm a dog lover personally. So I was a renter. I was a good renter with a dog, but you do run into the people I experienced this, where they had the one horror story, and they're like, I never want a pet environmental property again at the end of the day. And that's where you go into what type of pet and a non refundable pet deposit. But what you lose by excluding such a huge percentage of the population from retain your home is going to outweigh the risk of the one off bad pet owner.   Terry Kerr  24:11   I agree.   Keith Weinhold  24:12   We also get into questions of what's legal here. If one does say yes to pets, you mentioned a non refundable pet deposit, why don't you talk to us about the amount of that deposit in relation to the rent, and then can you, or do you also charge more rent monthly in addition to the non refundable pet deposit   Terry Kerr  24:33    we charge a $250 non refundable pet fee, and that it tends to cover any issues with the pet but one of The things that I'll kind of piggyback on, what Liz said, is, not only are you excluding a large portion of the market, but we find that folks with pets, they just tend to stay in the property longer. I don't know why that is. I can look at my portfolio. I've not like examined all the houses that were managed. Thing, but I know that from with my portfolio, folks that get into the property with pets. I don't know why, but they just tend to stay longer.    Liz Nowlin  25:07   I may have just had luck, but I have not had any significant pet damages from any of my renters with pets and and kind of more stable, stable folks sometimes. So I think it's worth it. You always understand the person that had the kind of the one bad story, but I really think you could mitigate it.    Keith Weinhold  25:23   How about hiking up the rent amount for pets?    Terry Kerr  25:23   We have not done that. It's not something that we've ever done before. I guess it's kind of a if it ain't broke, don't fix it, you know. But we want to be able to provide as much value as we can to the resident to have the leases renew. And so everything that we do, from a rehab standpoint and a property management standpoint, is geared towards resident renewal. I'm not saying we couldn't get maybe an extra 25 bucks a month, but at some point you cause yourself a longer vacancy because you're trying to find someone who's wanted to pay more because they have a pet or may not renew the lease, because they can find some place to go where the rent is cheaper and they're not being charged pet rent, if you will.    Liz Nowlin  25:25   We charge pet rent at my a class high rise that I managed for a long time. You know, it's not 100% No, it's people complained bitterly about it. I think a pet deposit. Just they stomach it a little bit better. The theme of the show might be, there's a lot of different ways to skin the cat. I got more pushback about that rent charge working directly with the renties than kind of anything else. So I would say we should up the non refundable before we layer it onto the monthly personally   Keith Weinhold  26:37   yeah, if it's paid one time, it seems to be less of an annoyance over time and forgotten. When we talk about pets and think about the long term, after a tenant with a pet moves out, can the place really be adequately cleaned for the next tenant? We know a lot of people are sensitive with allergies today.   Terry Kerr  26:56   Well, fortunately, we bought our own carpet cleaning van. We know what we're doing in regards to, you know, cleaning carpets, and so absolutely you can clean them. I mean, don't get me wrong, there's always going to be like the one off every once in a blue moon, but definitely, you know, we're not throwing the baby out with the bath water there. And fortunately, we're able to mitigate that smells with the right chemicals and our own carpet cleaning van. It's rare that we have that issue.   Keith Weinhold  27:22   Well, the other thing is, is that you're a turnkey real estate investing company, and for listeners that don't know what that means is you basically fix and flip properties at scale and sell them to investors. So what you do in that case, then, is you're using those resilient finishes that can stand up to pets better than if maybe a person were just doing this small scale on their own accord.    Terry Kerr  27:45   That is true. So I can't really speak to what other property management companies experience or other individuals, but I do know that that's what we've done to mitigate the risk, and again, like I said, increase the likelihood of a lease renewal, that's the name of the game, right?   Keith Weinhold  28:02   Saying yes to pets sure does increase your chances. And Terry and Liz, the three of us, have all been active real estate investors ourselves for quite a long time. And when we became real estate investors, new build properties, especially in the turnkey space, really weren't much of a thing, but today they are. There are build to rent communities and more. And you yourself, there have been more involved in new builds, although renovated properties is sort of your bread and butter business, but now that you've done both for a while, what are your thoughts with how you advise investors? Is the premium on new construction worth it? Are you just paying really upfront for the maintenance that you'd have on an existing property? So what are your thoughts with new versus renovated property?   Liz Nowlin  28:46   I love that. So you know, if anybody goes to our website right now and looks at the available properties, you'll see some really gorgeous houses mixed in with our already pretty houses with a new construction label across the front of that exterior photo, and you're going to see beautifully updated kitchens. Our renovated kitchens are also super nice. But I get that question, you are going to pay a little bit more for a new build than a renovated property? And you know, Terry and I talked about it, there's a really cool, detailed 15 year pro forma that you can look at with every property. And we did turn up the appreciation for a new construction house. And of course, nobody has a crystal ball, but I really think that will hold true for our properties only. We actually didn't change the maintenance metrics solely because our renovated houses have all new roof, all new furnace, all new air condenser, all new water heater, and they're just as new on the renovated properties as the new construction for our renovations. We're replacing all the any galvanized plumbing, you know. We're doing so much new I think maybe we could change it by a half of a percent or something, you know, but we actually didn't change it because. Because of the depth of the renovation on our properties. Now I am planning to have my next purchase from mid south homebuyers be a new construction home. There's the premium on the front end for me, my thought, and again, this gets into individual investor strategies, but my son is three years old. I plan to leave my entire portfolio to him, and my simple thought about it is that, you know, I have wonderful performing properties, the oldest of which was built in 1927 actually, and a lot of my renovated. It's a gorgeous one, by the way, a beautiful neighborhood, and it's been a great property for me. A lot of my inventory was built in the 60s and 70s. But when I think about Rhett, my son, baby, selling a house in 30 years. I have a feeling that 2024, build is going to do him very well. What kind of buy and hold investor Are you? Are you a 15 year or you will leave them to your kids? That's an angle to think about for sure.    Keith Weinhold  30:55   Well, actually, that's a great next thing to talk about the investor life cycle in the life cycle of a property that's in your portfolio. Talk to us more about when the right time is to sell an investment property. I mean, should we just buy and hold forever and leave it to our children, or is there an ideal exit time? So from your perspective, why don't you talk to us some more about that timing?    Terry Kerr  31:18   And again, that's just going to be case by case, we've got folks that'll sell a house to put their kids through college. We have had folks to sell their houses when they need to move their parents into assisted living, folks that'll sell their houses when they're looking at retiring. It's typically, life happens and you've got that equity there, and when the time is right to tap it, it's nice to know it's there    Liz Nowlin  31:44   lot of different ways to look at it. I've actually toured with selling my 1927 house in the next year or two, before that magic 100 year mark. Yes, for people, you know, and is that gonna do things? But really it's been a great little performer for me. I talk to investors so frequently, and I've heard more than one seasoned investor tell me they wish they'd never sold a single house they ever sold. Just wish, they wish they could hit a button and own everything they'd ever owned. And I'm a die hard buying holder, but I don't think there's a magic time in the sense of, you know, a question I get, maybe some from sometimes a newer investor is, when will my house need another renovation like the one you just did? And the answer is never right. We're going to cosmetically bring it back up between every renter every time. And so you're really just left working with the individual lifespans of those big components, right? And those are relatively staggered out, with maybe a water heater at the shortest, at a roof at the longest. And I think for the most part, this might vary per market. And Terry, I'd like to know your thoughts, but I think genuinely, you'll probably get a higher price by spending the money to replace versus selling for less having not replaced that item. You know. Say, trying to say, Okay, I'm going to sell in my roof is 29 years old, is probably better just replace it.   Terry Kerr  33:04    Yep, I agree. Because you know, if I'm a buyer and I'm maybe not a flipper, but a buyer, and I'd rather buy a house and spend 100,000 bucks on a house that has a new roof, than buy a house for $94,000 with an old roof. Because I know that old roof, if it leaks, it can cause a lot more damage than just the cost of replacing the roof. So I agree.    And from an ROI perspective, if I'm a financed investor, which about 80% of our investors are, I'm financing that new roof when I buy it with a mortgage, and I'm a great point pay out of pocket the next year. So that's a rub. And then very specific, of course, to our clientele. Terry, how much does it cost us to put a new roof on 1000 square foot house? 4500 bucks. That's we're putting on 700 new roofs a year. The roofers are paid by us by the hour. We are buying the shingles in bulk. And on top of that, we don't mark up maintenance and materials for our investors. So for that one story, 1000 square foot house, that's what my investor cost for us to put a new roof on for them is going to be but a potential buyer is going to look at that home and think it's a $7,000 roof that was great   Keith Weinhold  34:17   to learn about how you renovate properties for investors between tenancies there, so that properties don't get excessively dated. And we've been talking about a lot of the physical things that go into a property with that investor deciding what their exit strategy is going to be. Another thing that informs me are the numbers. When I get to about 40% equity on a property, I know my leverage ratio has now been cut down to two and a half to one, and that's when I look to do something maybe a 1031, tax deferred exchange. Or alternately, if it's a property that I really like, do the cash out refinance, get a tax free windfall with the cash out refinance, and get to hold on to the property at the same time. So of course, that's another way to approach it From the number side, rather than so much the physical side. But there sure is a lot to consider there. And you brought up heirs as well. This has been a great chat about the operations of a property, and just how you advise investors in there. Is there maybe any other question that comes up from investors a lot of times with how they should approach a property and the pros and cons within   Liz Nowlin  35:22   we've seen a lot of great growth, but when we're newer into a neighborhood that we've just kind of started putting our foot in as we stay we meaning mid south home buyers renovating and escalating those properties. That's where we've seen some of the biggest rent jumps and some of the biggest depreciation jumps, but it was kind of one of the lesser, prettier neighborhoods when we first offered that home to that investor, just kind of wrapping your head around all the different nuances to account for   Terry Kerr  35:49   yep, buying the path of progress. And fortunately, we've been able to create some of that progress in the neighborhoods that we've worked in throughout the years.    Keith Weinhold  35:56   If you're not sure where the path of progress is, and you buy on the line. A lot of times, you are the one that is creating that path of progress, and you've got enough bandwidth and volume in there to have actually done that on a number of occasions. How about something actionable? So many of our listeners have become investors there with mid south homebuyers. I imagine it is over 100 by now. So tell us about what you're doing, where you're active, between Memphis and Little Rock, renovated, new build. Really, where's the opportunity for an investor today?   Liz Nowlin  36:31   I'm pretty proud of us. I'll admit we just closed out 2024 having sold 680 houses. Wow. To investors, many of your listeners, and we're very careful. We've always done a little bit more every year. We don't buy everything we could buy. I always say my acquisitions team is not out there thinking about me and my wait list. One of my favorite sayings of Terry's is, you know, pigs get fat, Hogs get slaughtered. And I love the slow, careful way that we do things, but it was still pretty cool to do 680 we're still about, I'd say 75% Memphis, Tennessee, 25% Little Rock.   Terry Kerr  37:09   Yes, that's about, right? I would say also probably about maybe 15% new construction on 85% rehabs, maybe 20% new construction now, yeah   Liz Nowlin  37:20   And our sweet spot is still, well, still, it's that 100,000 to 200,000 that that window has slowly moved up through the years, very much to the benefit of investors as their investment seasons with time. I think we were 46,000 to 86,000 when I started in 2009 so been awesome to see the growth Memphis and Little Rock has had and so yeah, we're still kind of cash flow first appreciation is the icing on the cupcake. There are cupcakes have had more icing than we ever anticipated. If you go to midsouthhomebuyers.com and click on those available properties, they are under contract to investors at the top of the wait list, but they are identical to the houses I will have for anyone that is listening. We're so formulaic, 365 days a year, the cheapest house I may ever have is on that website. The same for the most expensive. We have just kind of figured out what works, and we hit it hard. And you can see the running theme with the kitchens and everything else.   Keith Weinhold  38:22   Well, congratulations on the total volume that you did last year. That's almost two homes a day, including weekends and holidays and everything else. That's really terrific. Yes, I, for the listeners here, have often, over the years, made these examples using a 100k property, but inflation and appreciation has also made it such that I can't do that anymore, maybe, just maybe in Memphis and Little Rock, I still can for a decent rehabbed property in a pride of ownership neighborhood for as little as 100k and that's one reason why so many investors have made mid south home buyers the place that they go for their First ever Income Property across state lines. They really know how to serve that audience, and you've been doing that for our audience for more than a decade now, and you continue to have this really robust interaction with investors. Liz, you do a lot of phone calls with people. You're really proud about what you do there. So proud that you offer field trips,   Speaker 2  39:19   please. I hope folks come so many folks never do so. If for anyone that prefers to do it from your living room, you are in the 95% norm if you never come to town. But man, it pushes folks confidence through the roof. So many of my investors are from high cost of living areas where you cannot get a parking spot in a war zone for the price that we are selling fully renovated houses, we have a deposit taken for a renter from every house I ever offer that really is cash flow from day one, and folks will really see the neighborhoods and that. I can't stress that enough. In fact, one thing that happens so if folks come up, you can sign up for the tours right on the website. It's on the far right, says, come visit us. This, you'll see a drop down with all the dates we do, monthly tours in Memphis and quarterly tours in Little Rock the day before. So you can come out and hit both. You kind of do a Thursday, Friday tour. You'll tour facilities. You'll see the warehouse and all that kind of stuff that I'll find. You know, our vans, we pull it, throw everybody in vans. We're listening to Memphis music and talking the whole tour, and people will want to pour out of that van right into the house. And I actually back everybody back out. I back them back into the front yard. I want to talk to you there and say, look left, look right. This is $120,000 neighborhood. Y'all. I can send you photos of the inside of the house all day, and you're going to get the same great house whether you buy from your living room. But I love it when people get to see that. I'll go ahead and say we do give gift cards to the best barbecue in town at the end of the tour, in addition to a $500 closing cost credit, just as a thank you for coming out and yeah, I love the tours.   Keith Weinhold  40:53   I really appreciate the two of you. Here we are, the three of us, more than a decade after we started talking about the properties and what you offer investors here, and it's just rare to have continuity like that. You can learn more at midsouthhomebuyers.com Terry and Liz, it's been valuable as always.   Terry Kerr  41:13   Thanks so much, Keith. Always enjoy it   Keith Weinhold  41:15   when we talked about pets, did Liz say something about skinning the cat? That would have to be one of the worst pet policies that I have ever heard of. And yeah, I think that long term, you know, the three bed, two bath style that has been so popular in rentals. But today, there are fewer occupants per household than there was 10 years ago and 20 years ago. Okay, that has long been a national trend. So in a lot of instances, two bedrooms can be better than three and one bathroom can be better than two, especially in that case of a sole occupant. And do you know where your best feedback is gonna come from? From what would most improve your unit's appeal to the market? It is not an online resource at all. It is from a showing where your tenant prospect did not want your unit. They know they are in the market. In fact, they are more aware and in tune with the market than you are, because they might have looked at, say, five units in just the last two days, and they might have done that in person. So they will tell you why they did not want the unit, whether the rents too high, or they don't like the parking situation, or your place needs to be closer to the train station, or your only bathroom is upstairs, something that reduced appeal for some of my own properties in the past. But yeah, this, I'll call it an exit interview of your prospective tenant. I mean, that is valuable, or you can have your manager do it well, the one place that really knows what tenants and investors want is with Terry and Liz there. That's why they have been in business since 2002 with 1000s of investors like you. And it's also why when there is an investor wait list for their properties, and you get to the top of the wait list and close on your property, so many investors just get right back in line on the bottom of their list and work the way up again for their next property. They get lots of repeat business. You can do this too. Get started at midsouthhomebuyers.com Until next week, I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 3  43:49   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively,   Keith Weinhold  44:17   The preceding program was brought to you by your home for wealth, building, get rich, education.com      

Professional real estate investor, author and host of “The Real Estate Guys” Radio Show, Robert Helms joins us to discuss the nuances of mid-term, short-term rentals, and hotel real estate investing.  They highlight the impact of interest rates on single-family home affordability and the role of institutional investors.  Mid-term rentals cater to travelers like traveling nurses and digital nomads, offering higher monthly rents. Short-term rentals face challenges due to oversupply, but can be profitable with strategic planning. Hotels offer consistent experiences, with key metrics like occupancy and ADR.  Resources: Join Keith and other faculty experts at the Investor Summit at Sea, a unique networking and learning event for real estate investors. Let the event organizers know if you want to have dinner with Keith during the event. Show Notes: GetRichEducation.com/539 GRE Free Investment Coaching:GREmarketplace.com/Coach For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   welcome to GRE I'm your host, Keith Weinhold, surprising facts about the institutional ownership share of the rental market. Then learn from a great guest tonight about how the midterm and short term rental models work and hotel real estate investing. Then you are invited to join us both on the most special real estate event that I've ever been a part of, and I'm going to return to it today on get rich education.   Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being the flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests include top selling personal finance author Robert Kiyosaki. Get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:17   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:33   Welcome to GRE from London, UK to London, Ontario and across 188 nations worldwide. I'm Keith weinholden, you are inside this week's episode of Get rich education, where we aren't day trading, we are decade trading with gradual patient wealth accumulation through income properties, yet with a path that lets you live the good life of options and freedom when you're still young enough to enjoy it. Now, the shorter the period of time that your guest or your tenant stays at your place, the more that the word hospitality gets involved. Hospitality, that word has little to do with hospitals. It almost means the opposite. Hospitality means that you're now giving a warm reception to or entertaining guests or tenants. Well, that's something that you rarely do at a long term rental, but you do if you're a hotel real estate investor for sure, or maybe even a little in a short term rental, then you're in hospitality like valet parking, having a restaurant, a pool with a swim up bar, a gym, a concierge desk, or even having a lobby with travel desks of various tour companies. Right there. That's hospitality, and today as we discuss mid term rentals, then short term rentals, then hotel real estate investing, think about how the level of hospitality that you give increases as the duration of a guest or tenant stay decreases. Hospitality is one reason that long term rental rates for durations of, say, a year or more, well, they had the lowest daily rates and the least hospitality. And hotels with, say, a two night stay, have the highest daily rates and the most hospitality.    This week's show is presented by ridge lending group and freedom family investments. I mean Ridge is where I get all of my investment property loans, and where I do all of my refinancings. And perhaps you should, too, because they specialize in working with investor borrowers there, so they know just what you need and what you don't Ridge lending group.com, and then freedom family investments, that's where you can make a private money loan and get a higher yield than you can with a high yield savings account. That's where I invest a share of my own liquid funds for a passive 8% return, 10% return. And now this is new. They've got offerings at 12% or more. You can learn more by texting family to 66866, next, we discuss mid term rentals, short term rentals and hotel real estate investing.   This week, I'd like to welcome in a good long time real estate friend. He's been on the show here with you and I before. Besides being a deeply experienced real estate investor, he also hosts the terrific real estate guys radio show, which was a substantial influence on the launch of GRE more than 10 years ago. I mean, how many times have I suggested to you over the years that you give his show a listen? He also speaks with some of the best pipes in the industry. Hey, it's great to have back on the show this week, the incomparable Robert Helms.   Robert Helms  5:07   Hey, Keith, so good to see you. Thanks for having me back.   Keith Weinhold  5:11   Let me share with you. Robert is on a very short exclusive list of people that I credit for being where I am today, from how to host a professional show to being a Go Giver and Robert before we discuss mid and short term rentals in the long term rental world generally, just what's important to know in today's residential real estate market, you can take that anywhere you like.   Robert Helms  5:38   Well, I think the big picture has been all about the loans and the interest rates, right? We saw rates go up, not only a lot, but quickly, and then kind of come back down a bit. Now they're headed back up, and that just has a big effect on single family homes, primarily to folks who are living in the homes, because they'll make that decision based on the affordability of their mortgage payment and the rest of the costs investors Well, you know, we think a little differently. We're not limited by a specific interest rate will pay? If I can make 9% would I pay 6% sure, if I can make 9% would I pay 7% well, I might, and so on. So I think that that's something to watch this year. For sure. There's lots of reasons to expect that we're not going to see interest rates get back down into the twos and threes and fours like we wish they would stay. Probably shouldn't happen in the first place, but you and I took advantage of it, and lots of your listeners did as well. But I think that's kind of a big picture thing. And then the other part of it is, you know, the inventory. So when people have this locked in effect, which really doesn't have anything to do with their needs or wants, they have a new job or they have another child and they want to move to a couple of notches up in a neighborhood, they don't want to get rid of their 3.12% loan and have to buy another property with 7% so we see less people moving, therefore less inventory, total inventory now somewhere just around 700,000 or below, and that's lower than it's been for the average of the last 10 years. For sure, I think that has an effect, less people are moving because of the interest rates. But at the same time, you know, there are houses that trade every single day. People do have to move. They have life situations and so forth. And then real estate investors, of course, we just look for opportunity. If we can make a spread and we can be in a property long term where the tenant pays down our mortgage and not us, well, then we're interested at almost any interest rate.   Keith Weinhold  7:44    Yes, that interest rate lock in effect will persist another year. That continues to get diluted over time. Of course, though you and I both know that mortgage rates are still below their historic rate, but because of the recency bias, no one's really acting that way. By the way, the first ever rental property I bought had a six in three eights percent mortgage rate 20 years ago, and people were raving about what an incredibly low rate that was back then. But this constrains supply. And another thing that constrains available supply in today's market is more institutional players own rental property today we're talking about outfits like invitation homes and even the California State Teachers Retirement System. But one thing a lot of people don't seem to realize is that institutions like this own less than 1% of single family homes in the United States, and that's all institutions combined. And now if you just isolate that to single family rental properties, they still only own two to 3% so where we have this period of low supply and low affordability, you know, Robert, I think institutions, in a lot of these media headlines, they tend to get scapegoated or being a boogeyman. Oh, all these big players are buying up the homes, and that's why you can't buy one. But really, that's pretty overblown. So can you talk to us more about what the institutional entry into the real estate investing space has been like, which really picked up steam after the GFC about 15 years ago?    Robert Helms  9:16   Yeah, it sure did. I think that folks who were managing big sums of money, and the institutional money comes from all kinds of places, real estate, Investment Trusts, insurance, pensions, funds, and then just big old companies that decide to raise money to go do something, and that money saw opportunity said, hey, you know what? This is a short term anomaly, all these prices that went down after 2008 and 2009 and when a lot of mom and pop investors were very hesitant to touch the third rail of buying more property after what they had just been through, these institutions are like that. Institutional money is not very emotional, right? It's just looking at the numbers at the same time where the nuances of institutional funds is that they also didn't have a ton of real estate experience, and so it was quite common for a couple of years that an institution would come in, and they would typically work through local brokers, and those brokers would know the market a bit. But if you could generalize, you would say that a lot of institutions overpaid. But here's the thing, when you overpay in the moment, you don't really notice that in the long term real estate investment that these guys did, it's interesting. I've been to a couple of conferences I go to almost every year that 10 years ago was mom and pop investors. And today it's a lot of suits, not too many ties. They don't send. Tend to wear ties, but a lot of suits, a lot of folks working for various levels of these funds, and they're looking at real estate as an asset class. Now I'm going to argue their real estate's not an asset class like any other, because every share of stock, every ounce of gold, every barrel of oil that anybody buys, is discretionary. You never have to invest in the stock market, in the bond market and cryptocurrency, but you cannot sit out the real estate market. From an economic perspective, I don't have to own real estate, but I'm going to have to interact financially. And so it really doesn't operate like other quote, unquote, asset classes, but I think the big folks did figure out is that there is stability in real estate. There's not the efficiency they would like, and that's a good thing for us. We like inefficiencies in the real estate market, but more and more we are seeing funds being put together, even today, to acquire property. But to your point, and it's an excellent one, you see the headlines and you see the name calling of these big, faceless, nameless corporations. They're buying up all the inventory. They're not it is a drop in the bucket compared to what mom and pops own and will continue to own   Keith Weinhold  11:53    yes, and of course, I'm talking nationally. When I bring up those one two and 3% institutional share numbers, it's going to be lower in some areas, it tends to be a higher proportion of buying that the institutions do in Texas and also in a lot of southeastern markets, like Atlanta, Jacksonville, Charlotte and Tampa. Robert you have a good bit of knowledge and some involvement in the mid term rental market. We're talking about rentals of one to six months in duration. Here, can you talk to us about trends in the midterm rental market?   Robert Helms  12:25    Yeah, it's a fascinating area. You know, back in the day, these would be referred to as corporate rentals, so a corporation might lease an apartment and furnish it, and then they would have different people stay there over the years, so the corporation would be responsible for the lease. I had some tenants like this many, many years ago, and it wouldn't be up to me. It'd be up to them who had the keys at the time. And a tenant might stay six or seven months. A tenant might make four or five weeks their stay. And so the idea was they needed a place for these contractors who would come in and work for a period of time to stay. But hotels were a lot more expensive. Well today you see even the folks who got involved in short term rentals making a decision to invest in people like traveling nurses who come and stay for four to six weeks, or these clients who will come in and work for two months in this location, two months in this location, two months in another location. And so they will simply stay in a short term rental type of property for a longer term. And you know, the most expensive things when it comes to real estate or turnover in vacancy. So if we can get the tenant to stay longer and pay a bit of a premium, these are often furnished units, and they don't have to worry about much. And we've had a few opportunities where what started out as a three week rental turned into a six month rental, because sometimes when they bring these folks on these companies, don't know exactly how long they're going to stay, and it's been a great kind of marketplace. There's a few folks that specialize in it. But my experience is that a lot of the people that have gravitated towards midterm rentals used to be in the short term rental business, thinking they'd rent for one or two nights, and lo and behold, they get a client that would stay for a month, and they'd say, Hey, this is pretty cool.   Keith Weinhold  14:13   Some conversion rate there from short term rentals to these midterm rentals here, as Robert touched on, you do tend to get more monthly rent for a midterm rental than you do a conventional long term rental. You're going to have some experience for furnishing there. But Robert, you bring up a great point. You mentioned traveling nurses. And of course, here as real estate investors, we're often interested in who we're serving and what that demographic looks like. I also think of midterm rental clients or tenants as students in digital nomads, and oftentimes it's a person relocating where they just want to check out a place for a few months before they consider setting down roots in an area with a long term rental or buying their own place. So can you talk? More about the demographic that we're serving there, because oftentimes you want to follow their trends.   Robert Helms  15:04   Yeah, very much. So, you know, today, I think there's a lot of folks that can work from a variety of locations. They do need some things, they need quiet they need a good internet connection, but they will come and go for weeks at a time. And I also think that you see more and more employers looking to contract labor. They have a job to get done. They're not sure they want to bring on a full time employee with all the cost of benefits and onboarding and all that. So they find somebody in the niche that comes in for six or eight or 12 weeks at a time, and they're the perfect candidate for short term rental. But we also see folks that are between gigs. So I might have a six week gig, and three weeks later I have another six week gig, and the three weeks in the middle, I want to go somewhere that's kind of fun to hang out. And so you do see those kind of rentals as well.   Keith Weinhold  15:55   Are most long term property management companies open to managing midterm rentals?   Robert Helms  16:02   Yeah, good question. There are certainly those that are, but I think we're starting to see a specialty on the aggregator side, folks that are reaching out specifically to the kinds of people who are candidates for midterm rentals from the tenant side and looking to accumulate inventory. So that's been kind of a neat thing to watch. So the focus of most property managers, they're hired by the owner of the property. Well, these groups are really their their salary gets paid for by the tenant, and they're able to negotiate on the behalf of some of these groups, you know, a better rate, better terms. They may negotiate some flexibility and the time for these folks that don't know exactly how long they're going to stay, it's an interesting new area of management, for sure.   Keith Weinhold  16:52   Now, of course, we're concerned about a high occupancy rate in midterm rentals, just like we are any type of rental. What does one look for when it comes to advertising platforms. And this could be, you know, going beyond just a well known website. It might be, hey, if you have inroads with the local hospital system, oh, well, can you then funnel some of the traveling nurses, for example, into your midterm rental?   Robert Helms  17:15   Yeah, most definitely, it is a specialty niche, for sure, if you're after a robust rental solution. You know, many people in midterm rentals, like in short term rentals, the vast majority of short term rental owners are not making a killing. They are. They're liquidating some cost of what they consider their second home. So the average short term rental landlord has just one property, and that's a property they bought, probably not as a rental. They brought it as a second home, and they're discovering that when they're not there, they can lease it out, and that pays for some of the costs. But there are obviously a few folks who have cracked the code and figured out which markets and where the best opportunity is, and what size units it takes to maintain a really healthy occupancy, and it's the same for this midterm rental. It's a different kind of tenant. It's mostly not families, so it's not larger units with lots of bedrooms. It's also mostly not your higher end rentals with views of the water or up near ski resorts, it's in the bigger towns where there is employment, and that employment triggers most of the midterm rental business.   Keith Weinhold  18:29   You, as an investor owner, maybe your cash flow negative on your midterm rental or short term rental, however, you might be using it for a few weeks or months yourself and getting back more of the benefit that way you're listening to get rich education. We're talking with the host of the real estate guys radio show, Robert Helms, more when we come back, we discuss short term rentals, including, is there an air be in bust? I'm your host. Keith Weinhold,    hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally, start now while it's on your mind at Ridge lendinggroup.com That's ridgelendinggroup.com.   Oh geez, the initial average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work. With minimum risk, your cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is. 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And you know how I'd know, because I'm an investor in this myself, earn 10% like me and GRE listeners are text family to 66866, to learn about freedom. Family investments, liquidity fund on your journey to financial freedom through passive income. Text family to 66866   Kristen Tate  20:39   this is author, Kristen Tate, listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  20:54   Welcome back to get rich education. We're talking about midterm short term rentals and hotels and hospitality with a long time friend of the show here, Robert Helms and Robert a few years ago, there seemed to be this word airbn bust that was beginning to be associated with Airbnbs. A lot of the difficulty in that market. So tell us, what was that all about, and where are we now with industry trends in the short term rental market?   Speaker 1  21:21    Yeah, great question, Keith. What I think happened is the allure of a short term rental, having a beautiful property that people would pay a premium on a nightly rate, sounded wonderful, and it was, and it worked for a lot of folks. But then what happened is, what happens people got the word, they got excited about it, and a lot of people started holding webinars, teaching classes, doing boot camps, and before you knew it, there was way more supply than there was demand. See, the hospitality industry is amazing. The hospitality industry employs 9% of all people in the world and accounts for nearly 9% of the GDP of our planet. Travel is a gigantic industry, and it's led by smart, big, storied institutions. So for folks to come and figure I'll just compete with them with my little apartment didn't necessarily turn out so well. So there was an airbn bust, and it is still lingering today. If you want to make a profit in short term rentals, you absolutely can, but you need to be super strategic. You need to think long and hard about where and what and why and how, because it's very specific. There are certain markets that short term rentals do very, very well, and there's a lot of markets, the majority of markets, where they don't. So as long as you're willing to study and take a look and be realistic and go kick the dirt a little bit, you certainly can get the upper hand. And the reason it's exciting is the average person who owns a short term rental is not professional in any way. They probably don't have too many other rental properties. It's not a big part of what they're paying attention to in their life. And they're simply trying to liquidate some of the costs of ownership. You know, I might rental here or rental there. And the way you can tell Home Away, VRBO, Airbnb, most of the hosts, the owners, make their calendars public, and so it's easy to tell how busy they are. It's amazing to me. I'll look at a marketplace and look at a property and see that month after month after month they're at a six to 8% occupancy, which I wouldn't be excited about myself, but for someone who's got a second home and they don't mind having people stay there for a few nights, they'll pay a premium for that. They legitimately can carve down a lot of their expenses just by renting six or eight or 10% of the time.    Keith Weinhold  23:58   Of course, the conventional guidance is before you buy a short term rental, you're really helping yourself out. If you have to fall back on turning that into a long term rental, it would cash flow. But of course, now you're really narrowing your criteria in what is going to work there. And Robert, when we talk about that demographic that we're serving, we touched on that in the midterm rentals. Who are we serving in short term rentals? I think conventionally, we think about vacationers and business travelers   Robert Helms  24:24   it's both of those things. I think that originally, people were certainly inspired by the vacation traveler who wanted to have a little more privacy, maybe their own kitchen, maybe a little more space for the dollar. And we still see that for a family, especially a family with small kids, staying at a hotel, ordering room service, eating in the restaurant, all that adds up. And if instead you can go to the grocery store and make breakfast at home, right, you can save the costs. And so there is definitely that clientele, but you also have people in short term rental that are visiting family. They're not really on vacation. In there, just going to an area for a short period of time. We see people that criss cross the country staying in short term rentals, two nights here, three nights there. And so it does have kind of a wide variety. A lot of the markets are very seasonal. Though. There are markets like Branson, Missouri that does really good at some parts of the year and not as well as other parts of the year. Then, of course, there's year round markets. So back to if I'm thinking about it with an investor's hat on, I want to be a little more specific, in particular about what and where I buy. But if I have single family house as my second home, maybe it's in a ski area, maybe it's in a beach area, and it's fairly expensive to maintain. Well, then considering renting it out on a short term basis might help the overall cost of maintaining that property.    Keith Weinhold  25:52   You know, my own personal experiences really started to get bad in short term rentals, when I would go stay in a place. And I think we've all seen those memes out there about, my gosh, I had to wash all the dishes and walk the owner's dog and still play some exorbitant cleaning fee. I think we've all kind of grappled with that at some point, but STRS are still a really viable investment for the majority of the operators. But yeah, Robert, most of my experiences in short term rentals recently, including showing up at a place where they had not done the turn. The cleaning person did not stop by. And, yeah, okay, they came over there properly. But it's like, you cannot unsee the mess that was left there before you were there. So I had a series of experiences lately that have actually steered me into staying in hotels more often. And hotels really fit my lifestyle pretty well. I like to work out at a gym. I like to have a gym on site. It's convenient to have a restaurant on site and so on. And you've been in the hospitality and hotel space serving that for a while. Why don't you talk to us about industry trends in hotels.    Robert Helms  27:03   Yeah. So travelers, to a great degree, love consistency. They want to be able to rely on cleanliness, on amenities, the very things you mentioned for sure. And so hospitality has a wide range, right? There's the lower end airport hotel where nobody stays more than a night, and it doesn't have a lot of amenities, and then there's the beautiful resort properties and everything in between. But what the hotel industry has done a good job of is providing a consistent experience, and that's what people crave more than anything else. You know, we would call a short term rental more of a unique or boutique or co chair kind of experience, and you don't know what you're going to get. You don't have that consistency. Some folks don't mind that, but for the majority, especially of business travelers, they want to know what they're getting. I can remember years ago, my sister wanted to take us on a family vacation to Maui. It sounded like a good idea. And then she was the one tasked with finding us a place, and decided we would stay at the Ritz Carlton and I looked at the Ritz Carlton website and said, Ah, you know, this is not exactly where I would probably stay in a she's a chiropractor. She says, in order for me to take a week off work, I'm losing $10,000 of the business. I'm not staying in some cheap hotel. I want to stay in a luxury hotel. And we did it, and it was fabulous, and I would stay again. So the point is, if you want to be able to work out, if you want to be able to have 24 hour room service, if you want grab and go that you don't have to walk outside in the cold or the heat, then hotels make a lot of sense, and it's not an either or. They're just both elements in hospitality. I would consider a short term rental property, a hospitality property, and I would consider a 1200 room, four and a half star hotel hospitality property as well.   Keith Weinhold  28:58   Sure. Of course, hotels aren't monolithic. There are so many different types. You might have a boutique hotel with a few dozen rooms to a large scale, something like you've been involved in. You've been in a large scale, ground up development for a hotel. And I don't know if you had a hope when you built your large hotel that a big chain like a Hilton or Marriott would buy it from you, or would brand it along with you. But that branding and that consistency of experience can be really important. That's something we especially associate with those larger hotels. So we have some of these things in mind. I mean, where does a new prospective hotel investor begin?   Robert Helms  29:40   Yeah, it's pretty difficult to get started, because the properties are big and expensive and risky upfront. So there's a terminology we use the hotel business, which is stabilization. And stabilization is when a hotel gets to the point where it's doing about the occupancy and rate that you would expect. Respect it too long term, and that might be anywhere from two to four years. Well, in the first year, boy, there's hardly anybody there. We have a 300 plus room hotel, and the first night we were open, we had two guests and 160 employees. So you don't have to be a rocket surgeon to figure out that that math doesn't work very well. Nor did it for the first month or the first year. Today, I'm happy to say it works a lot better, but you have to have patience. Now, there's a couple of ways you can get involved. Certainly, a smaller a boutique hotel. I stayed in a hotel a couple months ago that only had eight rooms. It was marvelous. And I thought, boy, you know, probably an individual owns this, but most of the hotel properties are owned by groups or syndications, and so that's another way to get exposure to hospitality. There's some things to love about hospitality, and to me, one of the same things I love about single families is you can find professional management, like folks that really know what they're doing, and create that guest experience that was perfectly possible for someone to buy a single family home as a rental. Maybe it's in their own town, and they want to manage it themselves. And you know, maybe at first that's a good idea, so you can figure out the game you've chosen, but ultimately, you want to hand that off to a professional, in my opinion. And in hospitality, like in multifamily, you have to, you have to have somebody come in with chops to be able to take care of it. And then there's the nuance of franchise which there are hotels that are just independently owned and operated. And then there's franchise hotels. And just like buying a franchise business, you pay a little more, but you get a lot. You get all the systems and the service and the training and the marks, and many cases, you get a big, dynamic engine that brings leads and fills your heads in your beds, which is what the metric we're interested in, in hospitality. And so when we started with thinking about it might make sense, the market we were in had no branded hotels, and we thought, Well, should we be the first? And after doing a bunch of research, I came to the conclusion that, well, it's going to cost something, and there's going to be a benefit, but I don't see it the benefit outweighing the cost. And we decided not to and then, lo and behold, through a strange set of circumstances, today, we are a branded hotel, and I'm thrilled about it. In hindsight, it was the right thing to do, but do understand that most real estate investors that I know are not going to qualify. It's pretty difficult to get a franchisee agreement with one of these hotel brands. You have to have some wherewithal, some experience. They're going to look at your assets and your balance sheet. They're going to look at more than you can imagine to make sure that you're worth betting on, that they'll put their story name on the outside of your hotel. But it does bring up another point in hospitality, which is there's just multiple streams of income in hospitality. I saw a study last year that showed that in the upper resort markets, the fancier hotels and markets you might go to that the average person whatever they spend on their nightly rate in the hotel, they spend 80 to 85% of that per day on all the other things associated with their stay. Now, some of those are going to be off campus, but the more that you can provide to the guests you've already brought onto the property, the more profitable it can be,   Keith Weinhold  33:25   from resort fees to valets and more. Yes, there certainly is plenty to add on there. Maybe the last thing in hotel investing is, if someone wants to get started, what should they even be looking at, as far as say, understanding some of the metrics, like rev Park. Can you give us a quick walk around that?   Robert Helms  33:45    Yeah, so  if you're used to investing in apartment buildings or single family houses, you've probably seen the basic income formula. You know how to calculate for loss to lease and maybe vacancy and those things. Well, there's just a few more intricacies when it comes to hospitality, but it's not that difficult if you just think that you're renting every night instead of every month or every year, and instead of having my turnover be one tenant every two years, it's one tenant every four days. There's just a lot more to pay attention to. And so the most important metrics in the hospitality industry are obviously occupancy, how many nights our rooms are occupied? And then ADR, which is average daily rate, and that is the rate for a particular unit type on average over some period of time, typically a year. And if you were to multiply occupancy times average daily rate, that gives you a revenue per available room or RevPAR. RevPAR can be affected, and it's the primary metric that we drive to in the two ways, you can increase occupancy to increase your RevPAR, but in many cases, you don't need to increase occupancy if. The market will allow you to raise your average daily rent. We've just gone through in the last year that our occupancy is down about 2% for the year, and our average daily rate is up more than 16% so the math works that follow me on this with slightly less wear and tear on the units our owners are making more money. So it is a balance. It's not like I want maximum occupancy. Well, not necessarily. Hardest thing to manage for any hotel is a sold out night. Sounds like a good idea, but you have no wiggle room, whereas when you've got even 3% vacancy and something goes wrong in the middle of the night with somebody's unit, you can get them moved somewhere down the hall, not somewhere across town. So I would say there are some really great resources. If someone's interested in hospitality. There's a big company called the hotel valuation systems, HVs, and they have a lot of great tutorial information available if you're really interested. Go to a conference, a hotel conference, and you'll pick up the lingo pretty quick and meet some of the folks that are in the business. It is, historically, one of the highest return properties, but also a lot of high costs, and again, expect some negative cash flow at the beginning.   Keith Weinhold  36:18   Yeah. Well, it was great. And you brought up something that I had not thought about before, about how 100% occupancy could actually introduce problems in the hotel space. And of course, there are a number of other things to consider, surge pricing, high seasons, low seasons, an awful lot that we don't think about when we're renting out single family homes one year at a time. Well, Robert, that's been a great walk around talking about the institutional space, midterm rentals, short term rentals and hotels, and you and I have a great collaboration coming up together. Why don't you tell our audience about it?   Robert Helms  36:55   Oh my gosh. I am so thrilled that you'll be joining us again for our 23rd annual Investor Summit at sea. This event we do once a year, and by its name, you can probably tell that the majority of it happens on a cruise ship. We spend two days in beautiful Miami at a great hotel, then we jump on a luxury cruise ship for seven days. On the days that we're at sea, it's workshops and seminars and panel discussions and round table lunch discussions and all kinds of fun. And on the sea day, on the land days, we go have a good time together. It's extraordinary. You've been with us before, and I'm super excited to have you back with us on faculty, and excited that we're going to get to brainstorm a little bit with a couple other podcasters. So some of the OGS are going to be on this particular summit.    Keith Weinhold  37:43   Yes, it is June 20 to 29th this year, where we spend the first two days on land in Miami, and then we spend a week cruising to the Bahamas, St Thomas in St Martin. We're doing it on a beautiful ship, the celebrity beyond. So as one of the faculty members, you'll get to see me do a 50 to 60 minute presentation, a couple of lunch, round table discussions. I might be on a panel or two, and also host a table for dinner each night where participants like you rotate around at the tables, and that way you get to chat directly with most or all of the faculty members. That way. Yes, Robert, I was there in 2016 as an attendee. It's great to finally come back as a faculty member. I will be putting the second pepper on the necklace.   Robert Helms  38:29   All right. Well, it's gonna be a ton of fun. And the great thing about it is we have people from all over the world that come and you get in these awesome conversations. You know, you go to a one day or two days seminar, and you get to connect with some people, but boy, and this week, you're going to have a chance to meet all kinds of folks. And the faculty is amazing. Our mutual friend Ken McElroy will be back with us for his 12th year. Peter Schiff's going to be back with us again. We've got the George gammon coming. Brian London, who runs the New Orleans investment conference that you and I usually rub shoulders at, and ton more, just a really great time. And if you're serious about collapsing time frames, you can get more done in nine days on the Investor Summit that you can probably get of two years of just haphazardly going to conferences and watching webinars and listening to podcasts   Keith Weinhold  39:18   you will see what we mean if you attend, about putting a pepper on the necklace and what that is all about. I can tell you from attending in 2016 just one previous appearance there. It is the greatest real estate event that I have ever attended. It's really immersive. It's really fun. Of course, you get off on these ports, and there's a beach component to it as well. It's not a low cost event, but as I like to say, it's not cheap, but neither are you.   Robert Helms  39:50   It is an investment, that's for sure. I think it's important that you approach it that way, right? As investors, we demand a return. On our investment, and you should do that on the summit. Don't just show up and have a party time. That'll be great. It'll be fun. But be strategic about who you want to meet, who you want to hang out with, and who you want to learn from. The faculty is like no other. We'll have at least 15 faculty members. There's a couple more that we're working on, whose names you would know, but we are not ready to announce yet, but it's going to be so much fun. Oftentimes, the best people you meet, you meet at dinner, or you meet at the beach, or you meet out on deck. So we'd love to have you join us and tell you what, if someone is listening to your show, Keith, and they would love to have dinner with you. All they have to do is let us know that when they register say, you know, I want a chance to have meal with Keith, and I think we can make that happen.    Keith Weinhold  40:45   Oh, that's great. And, you know, Robert, it's rare. It's the type of event where, even though it's been nine years since I was there, you developed such a close kinship with the like minded attendees that, you know, I might see a some of it's a Facebook friend now, you know, Steve or Dave or something. And I'll always remember, oh yeah, I met Steve on real estate guys Investor Summit to see it's almost like a relationship you would have with, like, a long ago high school classmate, to be around each other for nine days and all these places. It just kind of brings this different element to it. You can learn more at Investorsummitatsea.com, and get registered there. You can see my smiling face in the faculty section along with the other faculty members. Remember, it's really about all the other people that you meet. You have any last thoughts about the terrific Investor Summit at Sea Robert?   Robert Helms  41:36    I would just say that in life, we tend to regret the things that we don't do a lot more than the things that we do. So get on board. You'll have an amazing time. No matter how great we say it is. It's better than that. It's like summer camp for the affluent, summer camp. As a kid, you didn't want to go, you weren't sure, and by the end, you were lifelong buddies. It's like that. It's investing on steroids. The photo ops are amazing, and you'll meet super cool people, plus you'll get the hangout with Keith and I. So I would say join us for the 23rd annual investors Summit.   Keith Weinhold  42:14   There's wisdom out there that says you should say no to more things in life, and in one tranche, that makes sense, and you also need to say yes to more things in life that fits the category. Here with the Great Investor Summit at Sea I really anticipated. It's one of my biggest events of the year. And Robert, it's been great having you back on the show.   Robert Helms  42:35   Thanks so much, Keith, and appreciate your listeners. Listening in today. Don't quit your Daydream    Keith Weinhold  42:42   Well, said.   Next week on the show, we talk about how to streamline the operations at your rental properties. Is it better to own rental property with, say, two bathrooms rather than one, or is that just another faucet that can leak and shower that can leak and toilet that can clog, and the pros and cons of allowing your tenant to have a pet in your rental unit, it's those sort of operational things and more that we help you improve next week right here on The GRE podcast, it's interesting about investing in a hotel to such a large scale that you can court major franchise branding, like with Hilton, Marriott Wyndham or Hyatt, which Robert has successfully done. And I have visited that property of his with him in person, and it's amazing what he's done there. And you know something, I have rarely met an American, or any global resident that is averse to staying at a branded hotel. I mean, that only seems to be an attractant. Now in the US, some people, they used to dislike franchise restaurants. I even remember people saying, Hey, we don't need another chain restaurant in my town. But I've never seen people scorn chain hotels and today, I mean, in the here and now, people seem to want both franchise restaurants and hotels. I mean today, you're more likely to hear something like hey. When is our town getting a Chick fil A? Why don't we have one yet? And of course, there is plenty of opportunities in these shorter term stay spaces without ever attracting a branding deal, major thanks to the terrific Robert helms today for his keen insight on shorter term rental real estate. This event, June's investor summon at sea is such a good time, and Robert really knows how to host it and make sure you have a good time. After doing it for more than 20 years, it is a rich, immersive experience with people, places, learning and. And relationship building. It's the type of experience that you just can't get from an Instagram reel. It does draw attendees worldwide, although most attendees were from the US when I was there that one previous time. When you register, if you want to make sure that you get dinner with me, let them know, and we'll make it happen, because we know that you haven't heard enough of my voice every single week for more than a decade now, right? In my opinion, it is the crown jewel of world real estate investing events start at Investorsummitatsea.com until next week. I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker  45:46   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  46:14   The preceding program was brought to you by your home for wealth building. Get rich education.com  

Cost segregation studies can significantly reduce taxable income by accelerating depreciation on rental properties. They reclassify certain property components, such as flooring and lighting, to shorter depreciation schedules (5, 7, or 15 years) instead of the standard 27.5 years for residential or 39 years for commercial properties.  This method can result in substantial tax savings. For example, a $510,000 duplex study yielded $131,000 in accelerated depreciation, potentially saving $40,000 in taxes at a 30% rate.  Although the percentage has been stepping down, it may be reinstated to 100% under the Trump administration. Initiate a cost segregation study estimate here to determine the potential tax savings.  GRE Free Investment Coaching: GREmarketplace.com/Coach For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com Show Notes: GetRichEducation.com/537 Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, when you reduce your taxable income, that's a zero risk return on your investment. You'll learn how to do that today with any rental real estate that you own through what's known as a cost segregation study, even those without a giant portfolio can save 10s or hundreds of 1000s of dollars. An expert guests and I break it down with real life examples, see just how it can help you today. On get rich education   Speaker 1  0:34   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit get rich education.com   Corey Coates  1:19   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:35   Welcome to GRE from Berlin, Pennsylvania to Berlin, Germany and across 188 nations worldwide. I'm Keith Weinhold. You're listening to get rich education. And one way that I like to be positioned in real estate is the sense that I own it directly, yet I use a property manager so that I'm shielded from the day to day responsibility. I care, but I can still live my life now you might favor direct ownership like I do, yet choose to self manage your property instead. That's a viable way to do it. Self management is how I started out, but however you handle the management when you own directly, you can alter your effective post tax rate of return on your investment, and that's what we're talking about doing today with a cost segregation what this effectively does is increase your tax depreciation benefit. Though depreciation sounds bad as a word in the real estate world, even without spending any of your own money, it's still classified by the tax code as an expense that you can deduct from your taxable income. You don't want to reduce your income, only the taxable income reducing the portion that the IRS can get a piece of. Now, unless it's a condo, your rental property probably includes both a structure called the improvement and also the land. Now your improvement has components that wear out, and even the IRS knows that the land does not wear out yet. There are items on the land that you can get this accelerated depreciation on through a cost segregation, like fencing and lighting and carports. A lot of people don't know that, so there is therefore a land improvement segregation often on a 15 year schedule, but it's even more lucrative to get cost segregations applied to things inside your building or home that wear out faster, like countertops or flooring, as we'll see today, on shorter schedules, like five or seven years. Said another way what you're doing is that you are shielding more of your taxable income. And I'm going to ask today's Cost Segregation expert guest for an example near the start of our conversation, so he'll give us some numbers. And you want to listen to that part closely, and you might find yourself skipping back to re listen to some parts today as we give real life examples on how a cost seg works. Now, today is a Presidential Inauguration Day, so it's appropriate that we cover this today, because Trump is widely expected to reset 100% bonus depreciation, which, as you'll see, factors into our discussion today. And frequent GRE guest Tom wheelwright thinks that this is going to happen too this 100% bonus depreciation. What that means that, for example, all those land improvements that I mentioned on a 15 year depreciation schedule, where you could front load it and get it all in year one of your ownership and those components indoors. On shorter depreciation schedules, like five to seven years, you can get all those write offs in year one without waiting five to seven years. So that's. The sweetener that 100% bonus depreciation is, if Trump indeed brings that back, and you might say, wait a second, this sounds a little too good to be true. I mean, getting these amounts, you'll see they can be over 100k in tax savings, even for a small investor, that you can reduce your taxable income by Well, you know, it is just a little too good to be true, because when you sell the property down the road, you have to pay back 25% of what you wrote off this way in what's known as a depreciation recapture tax. So it's still worth doing. In a lot of cases, you would keep 75% of your benefit then, unless you do a tax deferred exchange on your sale, and then you could defer that 25% depreciation recapture tax. So yes, today's episode is deeper than most. And you know, being a Presidential Inauguration Day, and knowing that I like to drop a little levity here before we delve into deep topics, what does the outgoing presidential administration have to say about cost? Segregations get hot.   Speaker 2  6:13    I got Lana. I got hairy legs that turn that turnblonde in the sun, and the kids used to come up and reach in the pool and rub my leg down so it was trained, and then watch the hair come back up again.   Keith Weinhold  6:32   I don't know what just happened there. Let me just give him another chance to clear things up. I mean, you really can do a cost segregation,    Speaker 2  6:41   we have this notion that somehow, if you're poor, you cannot do it. Poor kids are just as bright and just as tall as white kids.    Keith Weinhold  6:51   Gosh, oh dear, I don't I don't know where to go with that. And hey, if you're a new listener, you know, over time, we poke a little fun at every president. We do with Trump as well. We do with Jerome Powell. No one is immune around here. Some people, hey, they might find it funny that a former real estate investor President like Trump wants to expand America's real estate portfolio by taking Canada and Greenland in the Panama Canal back too. Politics matter, but this is not a politically partisan platform in any way. What's politically partisan? It's saying that the economy is like absolutely awful, but then as soon as your guy gets sworn in, one hour later, you're willing to call that same economy. Now suddenly, a great economy. No, a national economy does not change in one hour. So free thinking and thinking for yourself beats polarizing political partisanship. That's a way it's been around here from day one. Yeah, a little levity, a good knee slapper now and then knee slapper coming up in future weeks on the show here, the real estate guys radio show host and a friend, Robert Helms, will be here to update us on what's happening in the short term rental market, mid term rental market and more. We'll also announce a big collaboration that he and I are going to do together this year, and you'll be invited to join us today, let's discuss cost segregation.   You can take your tax burden and put a huge dent in it by accelerating your real estate depreciation deduction with a cost segregation This could save you 1000s of dollars every year or more depending on the size of your real estate portfolio. We're talking about how to specifically do this with a cost seg expert. He's been a real estate investor for over 20 years. He builds new rentals to hold, and he and his son do that together. In fact, you're currently building a 24 unit complex now. But the reason he's here is because he started a specific cost segregation company in 2012 and he completes over 100 cost seg studies every year. So he's really the guy to talk to. Steve, welcome on to the show. Thanks for having me. I appreciate it. It's great to have an expert like you here and Steve, I think a lot of real estate investors, they're familiar with tax depreciation. That's where for rental property, with residential, there's a 27 and a half year schedule. And commercial has a 39 year schedule. We take the reciprocal of those numbers, and that means that, for example, in residential, you can write off about 3.6% of the improved property value every year. That's pretty nice on a 500k property that right there is 18k that can be sheltered from taxes annually. But most investors stop right there. So in a lot of cases, they aren't maximizing their tax benefit. You can write off substantially more than that, potentially. With a cost segregation. So tell us about it.    Steve Trussell  10:04   Cost Segregation. As you just mentioned, you have your regular depreciation, which most do take. Believe it or not, I've come across a few people that own property for a few years, and they're not taking it at all, which is, I don't understand that maybe they're doing on accounting, but we get them on track with that. But as you said, 27 and a half and 39 year depreciation, whether it's residential, 27 a half commercial, 39 that's all well and good, but there's a lot of money left on the table, because when you look at the the piece of real estate, there's a probably 22 to 32% of the asset itself, the depreciable asset that's shorter life, for example, cabinets, flooring, light fixtures, uh, outside the landscaping, retaining walls, things like that that are shorter life. So what we do in a cost segregation study, we go in and we rebuild the property through an engineered study, we pull out the five and the 15 year property and reclassified. And so usually you're going to wind up with about 70, 75% of it will stay on the schedule. It was on whether it be 27 and a half or 39 but then that 20 to 30% that we're going to bring forward is a huge number. So for example, I just recently did one. It was a duplex, $510,000 was the purchase 433, was the basis, after land, the depreciable basis. It was kicking out about 16,000 a year in regular depreciation. For the investor, which covered, you know, their cash flow and so forth, so forth. Most people know how that works. We were able to go back and accelerate it and get 131,000 or about 31% of it in 515, year property. So they had $131,000 depreciation amount sitting there. Then they still were able to write off the 302, that was left at 11,000 a year. So they're still getting their normal depreciation, a smaller number, but that 131,000 if they can use it with bonus depreciation, is $131,000 of money sitting there. They could offset $131,000 of income. That's a huge number. If they're not doing that now, they're leaving money on the table.   Keith Weinhold  12:01    Gosh, $131,000 of potential tax sheltering, which is, yeah, a huge number on a 500k duplex, like you described.   Steve Trussell  12:11   It's a substantial number. And if you're not doing cost segregation, then you're leaving a lot of money on the table, like I said. So then it comes down to it. It's a, I guess, cost versus benefits. So the first thing we do is, I get the data from your purchase of your piece of real estate or server, whatever it is, we put together an estimate of benefit to give you an idea of what that would look like for you, like in this example, that's what we produced. Was what we thought we could bring forward for this investor. And then at that point, once we determine that you look at 131,000 the cost of our study is $1,830 so 131 versus 1830 is a pretty good bargain. I believe. I mean, I know I'm selling my product, but that's a pretty good bargain. Yeah. And then the third part of it is, so we've established that it's probably makes sense. But then can you use it? If you're a real estate professional, if you're familiar with what that means, you can write that off against your active and passive income. If you're not, you're a w2 and you're not quite there. Yet it may be that you don't do it now. You do it in a couple of years, but either way, the process is there when you can use it. Probably 80% of my investors are able to use it the year we do it. And if you don't use all of it, you carry it forward. So it's makes sense, typically, to do a cost segregation study, but that's what we help you establish by one, the estimate, and two, discussing with you or with your CPA, does this fit you? Is this something you can use as from a tax standpoint?   Keith Weinhold  13:37   Yes, it was just a few episodes ago. I describe more about what real estate professional status is. The main thing is, typically, real estate needs to be you, the investor's principal activity. So it's not very likely that you're going to be a real estate professional if you still have a full time day job.   Steve Trussell  13:56   There are doctors and lawyers and people like that that have a full time job, and they just could not justify spending the amount of time and being a real estate professional. But sometimes their wife would be the candidate to be that. So their wife becomes or this, or the husband. If the wife is there's the breadwinner, becomes the real estate professional, and then they can take that and write it off against their active income. And I don't want to jump into the CPA side of this. That's more of a CPA question, but that's how I understand it works. And I've seen that happen before, where someone who has a full time job is able to bring their spouse in as their real estate professional, and they're able to use utilize it that way.   Keith Weinhold  14:34   Well, to talk more about this benefit of $131,000 on the duplex example that you gave, if all that is able to be deducted at a 30% income tax rate, that is 40k of savings. 40k is about 30% of this $131,000 number. So that's the money the increase in net income in your pocket.   Steve Trussell  15:00    yeah, which is substantial, and that's where you look at your individual tax break. I'm gonna save 40,000 in taxes, and I'm gonna spend $1,800 for the study. Makes sense to me to do that. It's pretty good return on your money, but it comes down to being able to use it. And so that's the things that we explore when I'm talking to a client.    Keith Weinhold  15:19   Now, Steve, I know in the past, I have talked to cost segregation engineers and their firms on the phone, where they've looked at some properties that I had, and I don't remember whether they charged me for this or not, but what I learned is it wouldn't be worth going ahead with a cost segregation study on and I'm thinking that they didn't charge me anything to tell me that, but really what I'm getting at is, can you tell us more about when it makes sense to do a cost seg on properties, and when it does not?    Steve Trussell  15:46   Well, there's okay if you're going to sell it the next few years, it does because you're going to recapture so you don't want to spend money for a study only to get the benefit for a year and then sell it and have to recapture it. Now, in my personal situation, I have done that because I bought more property and I was able to use the cost segregation to offset my gains versus a 1031 So by and large, it doesn't make sense. If you're going to sell it, that's number one. You may have owned it for eight or nine years, 10 years, maybe you've used a lot of your depreciation already. So that delta between the accelerated depreciation and which you've already taken may not be enough to make sense. It may be a property that's, you know, $80,000 probably doesn't make a lot of sense to spend the money. The mass just doesn't typically work there. I've done some as low as that because they wanted the tax benefit, and I'll do whatever the client wants me to do. But those are the three things that I would say probably would determine whether it makes sense or not. But that's where the estimate comes in. I mean, you bring me a property, and if it's $40,000 I'll tell you before I do anything, probably not worth messing with it. It's you're not gonna get much benefit. But if you bring me a property and it's $125,000 asset, we'll take a look at it. I'll do a quick estimate for you, no charge, and it'll either apply and make sense for you, or it won't. And I'll be the first to tell you, if it doesn't you know your individual tax situation, I'm just talking about the dollars that we create for you versus the cost. If it doesn't make sense, I'll tell you. I don't want you to waste your money doing a cost segregation study if you don't need it or can't use it.    Keith Weinhold  17:14   Okay, So there are a number of factors here, which could include how long the investors own the property, how soon they plan to sell the property. It sounds like there's generally a correlation here, with the larger the property, the more likely it is that it makes sense to do the study as well.   Steve Trussell  17:29   It does. I have a client that I'm working on right now. He has six properties, and I think they were 2021, acquisition. So that was it four years ago, and they're not on a depreciation schedule, he hasn't taken anything. So in this case, it's, you certainly would want to do a cost segregation study, and that you need to have your properties on a depreciation schedule anyway, for whatever reason they weren't there. So in this case, if you came across a client that had a property for 10 years or for some reason it was never on a depreciation schedule, which that's, I don't know how that would happen, but let's assume it did. In that case, you would make sense to do because you're going to catch up all that depreciation from back, from 10 years ago all the way through today, which would even be a larger number. So that happens occasionally, rarely it happens, but it does happen where someone has never depreciated a property.    Keith Weinhold  18:17   We're talking with a man that can greatly reduce your tax burden. I think for one thing, first, he's gonna check to make sure that you're taking the basic tax depreciation. But beyond that, as you can see here, there's a potential to do a lot more with a cost segregation. You're listening to get rich education more when we come back on cost seg studies, I'm your host. Keith Weinhold.    hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President CaeliRidge personally. Start now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com.   Oh geez, the initial average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk, your cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And you know how I'd know, because I'm an investor in this myself. Earn. And 10% like me and GRE listeners are. Text family to 66866, to learn about freedom, family investments, liquidity fund on your journey to financial freedom through passive income. Text family to 66866   Robert Helms  20:17    Hey everybody. It's Robert helms with the real estate guys radio program. So glad you found Keith whitehold and get rich education. Don't quit your Daydream.   Keith Weinhold  20:32   Welcome back to get rich education. I love talking about tax savings vehicles, because it's like a no risk instant ROI to you, that's what we're doing today, when we're talking about accelerating your depreciation and reducing your tax burden through a cost segregation. And Steve, in my experience, I know that you can't just ask anyone to go do this study, like your Slack John, uncle with a tape measure and sending him out there. It takes a person with a certain credential in a Cost Segregation engineering analysis. So can you tell us more about what physically needs to take place to have a cost seg done?   Steve Trussell  21:09   Yeah, you're right. People. You could try to do this yourself, but it probably wouldn't pass muster with the IRS if you were to, if they were to question the study. One thing that we do, and most firms like mine would do also, we do back up the study, and we do guarantee that we will defend the study on your behalf. If there's a question, very rarely does it come up, but if there's a question from the IRS, we step in in your place and defend the study and justify how we arrived at these and that's only through a call to an engineered study. So if you have your your uncle, as you mentioned, doing it, it doesn't follow the audit technique guide. Doesn't follow the guides that are required for cost segregation study. You're probably going to find it getting kicked out and wind up owing taxes and penalties. So you want to make sure you're someone who's qualified and they do an engineer study, same thing as a CPA. CPAs aren't qualified to do a cost segregation study because it is an engineered study. We're breaking down the entire property and rebuilding it with our software on commercial buildings. You'd mentioned. What do we do? Commercial building? We do a physical site visit. We actually go to the property. Those are more expensive because we're there at the property and travel time and so forth. That to do that with engineers on residential we have a unique program. We do a virtual site visit where I can do this or my desktop, and that's why I'm able to keep the cost down. But we still do a site visit, because there's so many tools available today to be able to do a virtual site visit, I mean, for anywhere in the United States. So we can do this anywhere in the United States, and I take the tools that we have, the data I get from the client, we can do a virtual site visit and create the study from that    Keith Weinhold  22:43   really what the IRS is doing, whether this probably isn't reality, but you're saying your property wears out completely in 27 and a half years. That means that you can take some portion of that and depreciate it each year, but with some of these components that you mentioned, like the flooring and like the bushes. I think even the landscaping is one of the components that you can do a cost seg on. Basically they're saying that wears out faster.    Steve Trussell  23:11   Correct. Pretty much everything outside the building is 15 year life, sometimes even shorter than that. But that's how it classes 15 year life. Like your driveway, your like I said earlier, your retaining walls, grass, landscaping, fences, things like that, outdoor lighting, stuff like that. The inside the building is the five year property, which is your countertops, your flooring, fixtures. Think of things. I mean, floor is going to wear out before 27 half years, you're going to be replaced. You do it in your own home. Typically, you know? Well, I would never keep it for 27 and a half years. I would I wouldn't thank him in my house, but because they do wear out sooner. Tile is a little different animal. There's some debate about that, but for the most part, it's components like that that we're able to reclass in a five year classification.    Keith Weinhold  23:54   That's pretty generous. Grass wears out in 15 years.   Steve Trussell  23:58   Well, it's a 15 year. Yeah, it dies. You know, things change landscape, things like that. So yeah, you do. Those can be classed at 15 years.    Keith Weinhold  24:08   All right, we've talked about the cost in terms of dollars a bit for what a cost segregation study might cost. How much time does it take from the time one is initiated?   Steve Trussell  24:16   It depends. We could typically work with your schedule. I get a lot of last minute folks that get with me in September and they need their October 15, or even this September 15 depends on what kind of entry Do you have it in. And so we can turn these as quickly as you need it, typically, if I have all the data and all the information, especially if it's a residential where I'm not having to travel, but by and large, I can turn these in less than 30 days back to you, and if you need it sooner, we'll burn the midnight oil and get it done for you. That's during crutch time for between January 1 and April 15. If you file early or on time, if you file in October and you extend your taxes and the automatic extension in April, you've got to have the study done before you file. Your taxes. So if you wanted it for 2024 you need to have a study completed by April 15 of 2025 if you're going to file it April 15, if you're gonna file in October, the automatic extension, you need to have it completed by then. So our busy season is January through April 15, and then probably starting July, August time frame through October 15. That's our busy season. So the point of it, if you're going to do a study and use it for your current tax year, it must be completed no matter when you purchased it, but it must be completed prior to you filing your taxes, so you can use it on that tax return.   Keith Weinhold  25:35   All right, so we're just getting into Steve's busy season. So if you think this can benefit you. You want to initiate that sooner rather than later. But Steve, when we talk more about the benefits, we've had a change in presidential administration. So tell us more about the bonus depreciation benefit.   Steve Trussell  25:53   Your bonus appreciation came out in the previous administration before this last one, Trump's first administration that came out of that. So the anything where you reclass is five, seven and 15, your property, but it's 100% bonus. In other words, if you go back to the 131,000 I mentioned on the duplex, all of that in between September 2017 through December 31 to 2022 you get 100% of that. It's starting in January of 2023 through the end of december 23 it went to 80% and the next year, 60, and in 2025 it's going to be 40. But there's been an extension that was passed last in 2024 in the house to go back to the 100% installed in the Senate. And we think with the new administration, we'll probably in the new tax cuts, we'll probably see this reinstated and go back to the 100% which is substantial. If you're getting, you know, 60% of the 131, what is that? 78,000 bucks, roughly, something like that. And if you're getting 100% that's a big difference. So we're hopeful that we'll see that sometime in the first quarter. And so even if you file your taxes in April and it hasn't passed yet and you've only gotten four, you only get 40% bonus depreciation. You'll get that extra 60 the next year. What's happening now, though, before it, if it without being stated, you're still getting a bigger benefit. Because, as I mentioned before, the 131 comes forward, and you get the percentage of that the 302 is left over. In that example I used earlier, you've got your regular 27 net fear depreciation, but that 131 is still five and 15 year property, so you're depreciating that much faster than you would on a 27 after your schedule. So you're still getting a benefit, just not as good as when you get 100% bonus depreciation.   Keith Weinhold  27:34   Okay. And again, when you're talking about five, seven and 15 year property, you're talking about those component lifespans, correct, where we reclass that bonus depreciation benefit started out at 100% a few years ago. It's been stepping down 20% each year, and that is set to most likely refresh here sometime this year, back to the full 100% bonus depreciation. And if that does indeed happening you the listener. You're going to be hearing about that from your real estate investor friends and your social media feed and everything else, and you're going to maybe be feeling left out of that unless you get on top of it and take part of this. That's exactly what we're talking about doing right now. Steve, why don't you talk to us about some of those other components that are included or excluded from a cost segregation study, whether that's lighting fixtures or parking lot asphalt, tell us more.   Steve Trussell  28:27   Exterior is the 15 year life we talked about, the parking lots, the big residential the driveways, the landscaping, the fencing, retaining walls, bushes, the things that are gonna be outside. Okay, everything outside is 15 years pretty much, yes. And then when you go inside, look at the things that you would typically change out. You're not gonna change your plumbing. It's in your foundation and your walls, unless it breaks. You're not gonna change your roof. Is also, even though you change it out, it's also a permanent part of the structure. The roof is but the inside the house you have your or even outside, you've got your brick on the outside of your siding, that's 27 half for your property inside the cabinets, your countertops, flooring, your decorative light fixtures, the your plumbing fixtures, things like that, glass mirrors, things like that, that are going to be naturally shorter life. And it's pretty easy to look at a piece of property and see what's permanent again, like I use the example, the foundation, the studs in the wall, the brick, the she rock on the wall, those things are permanent fixtures. It's the things that are movable parts, typically, that you could look at, and that makes up 22 to 32% I've had to go higher, but 22 to 32 is a good range of the asset from five year and 15 year.   Keith Weinhold  29:42   All right, so really, the dividing line for Cost Segregation is stated as what is a permanent fixture and what is not permanent.    Steve Trussell  29:50   Yeah, probably in the general sense, yeah, I would say that. Well, are there any   Keith Weinhold  29:53   other things that one should know about a cost segregation study, whether that's myths or misunderstandings that need. To be cleared up, or just anything else at all. One needs to know about a cost segregation study. A couple   Speaker 3  30:05   things. One, the myth is that a lot of people think that it triggers audits that you're changing your accounting or you're getting this big bonus depreciation that's in the tax law, and so you're just taking advantage of the same zero to depreciation. Putting depreciation on your schedule, on your tax return, doesn't trigger audits. I mean, that's just buying property and you're putting it on the return. Accelerated depreciation doesn't either, because you do an engineered study. So part of the myth people think that they're going to call it, it's going to trigger an audit. It doesn't. It's a standard practice that accepted by the IRS and the study. The only thing that might, that might trigger isn't the agent. If they're doing an audit of your taxes, they might look at the study and say, Why did you classify this as this but this amount? Well, we go back through our data and our study through our software, and we could prove out how we came up with that value, and that's what they would ask. Is something like that, but it doesn't trigger an audit necessarily, just because you do a study. Second thing I've said this, I'll save all my clients. I said a couple times here, it's important that you can use it, that you can use the benefit. It does not do any good to go spend money for a study and get $131,000 appreciation, like I mentioned earlier, and it just sits there your w2 income, and you can't use it towards that that's far exceeds what you're making on your property. There's still a point in doing that until you can use it. There are other companies out there. They won't discuss that with you. They'll just tell you, you know, let's do a cost segregation study, because you get all these great benefits, but it doesn't do any good if you can't use it. Like I said that 131 be sitting on your depreciation schedule. That's bonus depreciation, but you're not able to do anything with it. If you're a high earner and you're not a real estate professional, you can't use it. So just be aware of that. If anybody brings a cost segregation study to you, and they don't discuss with you how it benefits you, I just be aware of that it's got to benefit you. What's the point if it doesn't    Keith Weinhold  31:57   that's a really great reminder you want to have this done the right way with someone that knows it can benefit you and more than offset the cost of the study. Maybe I should just bring up one example here of maybe a common turnkey property that a listener might buy that's not very high cost. Say that someone buys a fully rehabilitated, just $180,000 rental single family home built in the 1970s two bed, one bath. I'm sure there are some. It depends factors, but in general, would that be a candidate for a Cost Segregation if that were a new purchase for an investor?   Steve Trussell  32:35   I do it all the time, because it doesn't matter how old the property is. What matters is when you purchases. That's when your start date hits and or when you sell it to start date for the next person as well. So yeah, in that case, you're going to take roughly 15% for land. We go to the county website and see what they're using for land, and if they're using 6% that's what we'll use. But 15% is acceptable by the IRS. So in that case, 15% is what $27,000 so your 147 I think, would be your depreciable amount in it, 25% of that is 25 and almost $40,000 of depreciation versus an $1,800 study. And so if you're in a third step bracket, you're gonna save 12,000 in taxes and spend 1800 to save it. I mean, I would swap 1800 for 12,000 Gosh, any time. So, yeah, it would work. But then that comes down to, you know, you individually. What do you do for a living? What's your income? Like it would what level of income you're at. But can you use the 40,000 and celebrate depreciation? And that can be determined between a conversation with me, you and probably your CPA, so they know your tax situation the best, and then I really like the CPA to be involved. It's up to the client, but I'd prefer them to be involved so they know exactly what we're doing. Some CPAs aren't that familiar with it, so we can help them with getting this on the tax schedule. If they need us to on depreciation schedule, they really want the CPA to be involved if the client is comfortable with it because they know your tax situation the best. I can create the benefit for you. They can help you determine if you can use it.   Keith Weinhold  34:08   That's a good point. I would imagine that there are some tax preparers that have never seen this on one of their clients returns before, so that's a great help. And that was an awesome breakdown of just how things might actually look for someone. It just kind of has that most basic, low cost, 180k turnkey property. Steve, before I ask you if you have any last thoughts or anything else that the listeners should know if you want to connect with Steve, do that in the same way that you learn about our properties and our providers at GRE marketplace.com, click in the coaching area, your investment coach is going to help connect you with Steve all of his resources and adjacent resources that are helpful with you. Steve, is there any last thing that someone ought to know?   Speaker 3  34:50   I just think if you own property at all, it makes sense to get an estimate for cost segregation. It doesn't cost you anything. And then we could decide to. Together Again, like I said, along with your CPA, here's my benefit. Can I use it? And they cost you nothing to do that. Your CPA may charge you some time, I'm not sure, but working with me to get through the estimate phase up to the benefit, what's gonna look like for you that we do that for free, and so if you own any property, it makes sense to take a look at it or just have a phone conversation, because if you call me, you tell me, I make $300,000 a year. I'm a engineer, doctor, whatever it happens to be, and I work full time. My wife works full time. I'm probably gonna tell you, you know, you're probably not a candidate right now, because, like, we'd be a great benefit, but you can't use this great benefit right now. Let's revisit it when maybe you can. So it's just worth a phone conversation and you get me the data that I need, which is pretty simple stuff. I could put together an estimate before you turn it around and you decide, what if it makes sense for you?    Keith Weinhold  35:48   Yeah, if you have that conversation with Steve and worst case scenario, you can't use it, you better believe you're going to come off being pretty well informed in knowing the next time that you can use it, perhaps on your next purchase. Well, this has been supremely helpful, Steve. A lot of people are going to benefit from it. It's been great having you here on the show to talk about cost segregation.   Steve Trussell  36:09   I appreciate you having me. Thank you very much.   Keith Weinhold  36:17   Like Steve said, it's about 22 to 32% of the depreciable assets value, which is that house or building, not the land, can be deducted at an accelerated depreciation rate, faster than the 27 and a half year residential or 39 year Commercial depreciation rate. And Steve told me that before some investors even buy property, they will ask him how it would look with a cost segregation and hold on the numbers, and that way you can use it for your pro forma ROI calculation. Yeah, before you've even purchased a property, like I said, you can't have your Slack John uncle do a cost seg study. Plus your uncle is in slack jawed. Anyway. In fact, I'm the only slack jaw you've ever known. Now, I personally plan to send Steve a copy of my depreciation schedule so he can tell me how things would look for my properties. He can do this for you just the same. There is no charge. It's best to submit everything by mid March at the latest, if you file your taxes in mid April. So we are now in their busy season at GRE marketplace, that's where you do more than connect with our investment coaches and properties. There are also service providers, including Steve. Our coaches are there to help you optimize your ROI. This is a type of thing where if you think it's a good idea, you know you're probably not going to pick this up later if you don't move at the speed of instruction now. So if you think that it can benefit you from GRE marketplace.com, click in the coaching area. Get that set up, and we'll connect you to Steve and help you with anything else that you might need in your real estate portfolio. Until next week, I'm your host, Keith Weinhold, don't quit your Daydream.   Speaker 4  38:13   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  38:41   The preceding program was brought to you by your home for wealth, building, getricheducation.com.

Discover the latest global real estate trends and untapped investment opportunities. Keith uncovers high-yield new build rental properties that can deliver impressive returns, even in today's challenging market. Don't miss your chance to build lasting wealth through strategic real estate investing. Tune in now to get the insider insights you need to get ahead. The podcast dives into dramatic global real estate trends, with home prices skyrocketing over 10% in countries like Colombia and the Netherlands. It also examines the alarming rise in U.S. homelessness, driven by factors like housing shortages and inflation. To counter these challenges, the show spotlights compelling new-build rental properties that could offer attractive returns for passive investors. GRE Free Investment Coaching: GREmarketplace.com/Coach For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com Show Notes: GetRichEducation.com/536 Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:02   Welcome to GRE. I'm your host. Keith Weinhold, we look at global home price change, the asset class rundown, then the homelessness crisis is mega bad. It just reached new, unprecedented levels, and real estate and inflation has a lot to do with the homelessness surge today on get rich education.   Speaker 1  0:28   Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, who delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show. Guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:13   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:29   Welcome to GRE from Kent Washington to Tashkent, Uzbekistan and across 188 nations worldwide. I'm Keith Weinhold, and you are listening to get rich education. One reason for a not just national, but global, rise in real estate prices is that you can't fake it. Real property is not a derivative, yeah, you can't fake it. So this really emphasizes the word real in real estate. It's not a crypto within infinite supply. It's not an NFT. You can't fake construction. You can't fake real materials put into property, from concrete to kitchen cabinets. So in the year recently ended, as we catch up to global home prices and select nations, per Fitch Ratings. Let's do that because it was not just a US centric thing. In the Netherlands, the home price change last year was 13% you had that much appreciation in the Netherlands. Colombia, 10% Mexico up 9.3% Brazil had 8% home price appreciation. Australia, 5.2% Australia has just seen year over year home price appreciation for such a long time. The UK had 5% appreciation. Spain, 5% as well. The USA, 4% just like I predicted at the end of 2023 for 2024 It did indeed come in at 4% Canada also had exactly 4% home price appreciation last year, just like the USA did. Denmark 3% Italy and Japan each at two and a half percent. Germany home prices were up just one and a half percent. And France had home prices that fell 3% China had home prices that fell 7.8% that supply versus demand thing in China, where they massively overbuilt, that's why home prices are down there. And as I unveil the depths of the USS homelessness crisis later here on the show, you will see that, yeah, those appreciated real estate prices, like I just mentioned, they have a lot to do with it. Now you might think of the youngest generation, the generation after Gen Z, as generation alpha, and that is true. However, they are no longer the youngest generation, because the babies born on New Year's Day of this year not only got to be featured in feel good local news stories. You know what? They are, also the first members of generation, beta, yeah, which will include children born from 2025 through 2039 so that is the future and the future demographic that's going to demand housing. But first of all, let's look at a year that was yes for years here on the show, we have our asset class rundown shortly after most quarters end, and certainly after a year ends. And today is no different, and this is because at times you've got to compare real estate with the other investment options that are out there. We now have music to play for our asset class rundown feature each time for today and. Future shows. And I know the GRE sound engineer has got to like this. He's also a DJ dropit, Vedrand. Here is GRE 's asset class rundown for the 12 months of last year, residential real estate values were up 4% per the NARS. Single Family existing home price, like I said earlier, single family rents up about 2% per core logic, apartment rents pretty flat, down six tenths of 1% for the year per apartment list, office buildings were down in value 9% the 30 year fixed rate mortgage. It started last year at 6.6% everyone, I mean, everyone, thought that they would go lower, but nope, they ended at 6.9% a little higher. That's per Freddie Mac survey. The s5&p 100 index was up over 23% topping out at 6100 last year. That is the first time the s&p has been up 20% plus in back to back years since 1998 and the s&p is meant to represent 500 companies, but it has become so concentrated due to the rise of the Magnificent Seven stocks that its effective diversification is less than 60 stocks. Morgan Stanley just announced that they expect the SP500, 100 returns to be flat for the next decade due to lofty valuations. Do you know that since 2000 gold has outperformed the s&p last year, gold shot up from about $2,000 peaked near $2,800 and then ended up about 30% for last year, the yield on the 10 year T note was up 63 basis points last year, basically rising from four up to 4.6% by year end. What that means is that that signals higher inflation expectations. Bitcoin up an astounding 111% to end last year around 95k and it topped out at an all time high of 108k oil up just 2% to 72 bucks and a wild card for you. Through October, Bible sales were up 22% compared to the same period versus the previous year. That is GRE 's asset class rundown. It was.    This is get rich education. Let's drop back and do some learning before I update you on housing and the homelessness crisis. Now, a lot of Americans don't really know history that well, and not very many have a good financial education either. But you know, it is quite possible that even the next person you spot in a Trader Joe's aisle has heard of Adam Smith in his landmark 1776 book The Wealth of Nations. Did you know that Adam Smith is the one credited with actually inventing the very concept of supply and demand? Yeah, Adam Smith, a Scotsman is credited with that. He is known as the father of modern economics. You might have already known that. Well, of course, supply versus demand seems to be a more relevant concept than usual. Here with the housing shortage crisis, Adam Smith, he proposed the idea of what he called an invisible hand, that is the tendency of free markets to regulate themselves using competition, supply and demand and self interest, a Darwinian sort of struggle. Really, did you know that he also created the concept of gross domestic product? Yeah, prior to Adam Smith's work, most people considered a nation's wealth based on the amount of gold and silver reserves that they had stored. But Adam Smith said no, it's more about productivity quantified in this GDP in a lot of his work. It also discusses the evolution of human society from a hunter stage with no property rights and no fixed residences, to nomadic agriculture with shifting residences. And then the next stage after that is a feudal society, where laws and property rights are established to protect privileged classes. And finally, that modern society is characterized by laissez faire or free markets, so a good chunk of Adam Smith's work revolved around real estate. Now, the history of economics like that is a phrase that sounds boring. Maybe it is to some people, but as an investor, the least that you should know about Adam Smith's landmark book The Wealth of Nations from the year 1776 is that to review, he invented the supply demand concept. He created the GDP concept, and he championed free markets. That's something you're going to appreciate knowing in your investor life. And also supply demand, as I discussed that in the homelessness problem shortly.    we are a real estate show, and, you know, I just don't hear other real estate shows talk about, well, the unfortunate, I guess, absence of real estate in an increasing number of people's lives now, even if you have a home, learn about how homelessness is gonna make your life worse, too. In fact, it already has. I'm not sure if you've noticed, I will get into that as well. First listen to these two spots, freedom, family investments for an eight to 10% return on your liquid capital and Ridge lending group, they specialize in income property loans. They can really help you, and I would know, because I use them both my self. I'm Keith Weinhold. This is get rich education. Here you go.   Oh, geez, the national average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk, your cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And you know how I'd know, because I'm an investor in this myself earn 10% like me and GRE listeners are. Text family to66866, to learn about freedom. Family investments, liquidity fund on your journey to financial freedom through passive income. Text family to 66866    Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage, you can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com   Ken McElroy  12:41   this is Rich Dad advisor, Ken McElroy. Listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  12:57   Welcome back. You're listening to get rich education Episode 536, I'm your host. Keith Weinhold, it is bad. America just hit a record high homelessness number, and it is up double digits, over 18% in just one year. It is even worse when we look at family homelessness and the rise in that and gosh, get this unaccompanied youth homeless, meaning like a 15 year old kid homeless and drifting by themselves. And this is all in the most powerful nation in the world. And even if you have a home. Homelessness is gonna make your life worse, too. We'll also look at how Trump wants to address this. It is major. And finally, are there any solutions to the homelessness crisis in America today? Well, there are now over 771,000 homeless in America, that's up from 653k just last year. And yes, the homeless can be hard to count, but as long as the methodology stays the same, I mean, there you go with the 18% increase. And here's the thing from all the years, from 2007 to 2023, all 16 of those years, we only saw a total increase of 19% during that entire span, and now 18% in just one year this latest year. I mean, talk about exponential and accelerating homelessness growth. And before I tell you about why this is happening, let's get a better idea of the gravity of this sad situation here, and this is all from HUD's newly released annual homelessness assessment report to Congress among subgroups families with children saw the biggest increase as. At 39% year over year. You think that's sad, but consider how sad this is. Unaccompanied homeless children, they're up 10% in just a year, and that was only up 3.4% all of the previous 16 years combined. Veterans are the only group to see a decrease, and the number of homeless people over 65 so we're talking seniors here that is expected to almost triple by 2030 that is just five years away, and it is just widespread too. I mean, nearly no US geography is immune from this spike in homelessness, from Florida to Maine to California to Alaska. Now, even if you have a home, the shoes of that are pretty good, if you're listening to me, you know, why does this even make your life worse? Well, of course, first of all, homelessness can make your city blighted. But beyond that, just think about how many ways it's just changing your week in and week out routine. I mean, have you noticed, like, just take, for example, when you or I walk into some grocery stores anymore. I mean, I notice how different things are than they were just say, five years ago. I mean, you've got to notice some of these things now, more often than there was just a few years ago, there's an armed guard when you walk into a store near the entrance. Well, someone is paying for that security, whether it's the store passing the price along to you, or whether it's a government or municipality paying that, well, that's where your tax money goes. And what about when you're shopping the aisles of a supermarket, or, say, CVS? Well, now even kind of moderately priced items like bottles of moisturizer, they are under lock and key behind a Plexiglas case. That's inconvenient while you're shopping if you need to use the bathroom, oh, now you need to go get a key or learn the door code to access the bathrooms. That's inconvenient when you're done and as you walk out of the store now, they are more likely to have an attendant that checks your receipts on the way out, and this is just one example at the supermarket. I mean, so many of your patterns are changing due to poor people getting poorer, and the homelessness crisis, if you're in a rural area, it probably affects you less. But just take a look around and notice the change. We're not talking about the change from your parents era, but just in your own life over the past, say, three to five years, homelessness is not good for an area's crime rate either. I mean, it is not good to have desperate people, hungry people, these people have nothing to lose if you're homeless and you commit a crime and go to jail. Hey, that might be an upgrade for some people now you've got a warm, clean place to stay in jail. So now that you and I understand more about why this even affects you and I let's talk about why is homelessness growing at this alarming rate, well, higher prices for real estate, which really accelerated in 2021 and they are not going to relent. As I've said elsewhere, home prices are not going to go down in a meaningful way anytime soon as just three weeks ago. Here on our forecast episode, I forecast another 5% of national home price appreciation this year. And it's not just higher prices, it's higher rents. Rents really started taking off in 2021 as well. Well. Higher rents, that means more evictions, and an eviction is the start of homelessness for a lot of people. And a third reason for this surge in homelessness is just that overall lack of housing. I have covered that extensively elsewhere. Yes, the housing supply crisis, and as I'm known for saying, the housing crash already occurred. Did you miss it? It was a supply crash that occurred about five years ago, and a lot of agencies think we're under supplied by 3.7 million housing units. Now, when you look at the new HUD supplied map of homelessness by state, you can very much see that it is about housing, because those regions with the highest home prices generally have the most homelessness. We're talking about the Northeast, the West Coast and Hawaii. And the fourth reason for the homelessness surge is that, of course, inflation started accelerating about four years ago, and people just cannot make ends meet anymore. CPI inflation peaked at 9.1% back. In June of 2022 and year over year, prices are still going up 3% today. Prices are not going down. They're just rising at a slower rate. And of course, inflation hurts the poor and actually helps the wealthy, exacerbating the inequality Canyon the wealthy have assets. Those assets float up in value with inflation and the prices at the grocery store are just a tiny part of a wealthy person spending. But the poor don't own assets that float up with the inflation and higher grocery prices and things like electric bills, well, they comprise a big part of a poor person's income. And fifthly, the massive arrival of immigrants pushed up homeless numbers these past, oh, three or so years. And it remains to be seen how many of those people really get deported. And you know, a sixth reason for homelessness. It's not something new, it's what I'll call all of these background reasons that have been there for decades and are not going away, like how a medical emergency can even drain a middle class person's savings and things like ongoing substance abuse. I mean, drug users often cannot stay employed. So there you have it. What was that? Six big reasons that I've identified for surging homelessness now let's see what Donald Trump has to say and understand that, due to last June Supreme Court decision, Trump now has got more power to clear out encampments and make life for the homeless more difficult, opening the door now to be criminally charged for trespassing and illegal camping. I mean, you really don't want to be homeless today as part of what Trump calls his agenda 47 his plan to tackle homelessness. Here is his preamble.    Donald Trump  21:57   Our once great cities have become unlivable, unsanitary nightmares surrendered to the homeless, the drug addicted and the violent and dangerously deranged. We're making many suffer for the whims of a deeply unwell few, and they are unwell. Indeed, the homeless have no right to turn every park and sidewalk into a place for them to squat and do drugs. Americans should not have to step over piles of needles and waste as they walk down a street in a beautiful city, or at least once beautiful city, because they've changed so much over the last 10 years.    Keith Weinhold  22:40   So that's the problem. Here's the solution. I'll boil down the meat of the Trump agenda, 47 homeless statement to just the most salient 40 seconds for you here. Just listen to this, and as you listen in closely, note that this is not a housing first plan for the homeless. Instead, it's treatment first.   Donald Trump  23:03   Under my strategy, working with states, we will ban urban camping wherever possible. Violators of these bans will be arrested, but they will be given the option to accept treatment and services if they're willing to be rehabilitated. Many of them don't want that, but we'll give them the option. We will then open up large parcels of inexpensive land, bring in doctors, psychiatrists, social workers and drug rehab specialists, and create tent cities where the homeless can be relocated and their problems identified. But we'll open up our cities again, make them livable and make them beautiful.   Keith Weinhold  23:43   Okay, it's not housing first, because, see, he wants to ban urban camping, something that parallels the Supreme Court decision. What this is not is that it is not giving the homeless hotels in the city, like some cities have recently done, converting their hotels into homeless shelters. Instead, this is designating large parcels of cheap land for tent cities, but outside the urban core, like in a big grassy lot, and then bringing in social workers and rehab specialists for them, and that way, his solution is that this city is free of homeless people, and really that is the crux of Trump's plan. But what are some other solutions here? And these are now my insights, not Trump's, that is, build more housing. That's really simple. I mean, this will naturally slow down, accelerating home prices and spiking rents, and we've got to relax regulation and zoning. We had a zoning expert, Nolan gray on the show here last year. Some scholars believe that we should just eliminate zoning in America completely. And one. One way to relax regulation is to Gosh, revisit some of these over the top safety concerns. I mean, look, it increases the cost of the most basic entry level housing when every home needs to have all these thick, fire rated doors and smoke detectors all over the place, and carbon monoxide detectors everywhere, and GFCI electrical outlets all over the place. I mean, hey, it sounds kind of funny to say out loud, but all this stuff contributes to making affordable housing impossible. And another solution is that you've got to kill nimbyism in a lot of cases, yes, that not in my backyard. Ism, you know, a person can act like they're all pro development, and like they're all free market, and they want to have their home built just how they want it, where they want it, but you know what, as soon as their home was built, they don't want others moving near them, yeah, somehow the free market's not so great anymore, okay? And they sure don't want apartment buildings nearby. Well, that is what we need, allowing taller structures to be built. That is called up zoning. It doesn't have to be a gigantic apartment building either. We need more, mmm, properties, multi families, missing middle. That means building more two, three and four unit structures in single family neighborhoods, duplexes, triplexes, fourplexes, because a lot of those can be built so that they look like single family homes. But yet it's something affordable and it helps with density. Another solution to deal with homelessness is to, of course, bring down inflation. The government needs to stop printing, say, $1 trillion to pay for a program, whether that's sending aid to foreign nations or whatever that program is. When more dollars are created like that, it debases the currency everyone else is holding on to, including your dollars, and it makes everyone from landlords to grocers have to raise their prices. And you know, here's the funny thing in the last election for president that we had last year, well, that administration got voted out of office, and many say that the number one reason was due to high inflation, but yet, look at what they voted for with the incoming administration. Everyone expects higher inflation. So there's a real paradox there.    On our YouTube channel, you can watch videos of me going out outdoors and interviewing the homeless. In fact, I'm surprised at how many homeless let me into their tents, and they wanted to show me their makeshift shelters and tell me about their life. I mean, that's kind of the good news. They were open. They were friendly people. I think they really wanted that to get exposed, because they were hoping that people would see that to come do something for them. I think that's why they've been so open with me. So that was good on the flip side, oh gosh. One thing that they have in common is that they all seemingly want to blame somebody else for the condition that they're in other than themselves, like the government or including telling me that landlords are greedy. But it really is fascinating to see from our get rich education YouTube channel, which is different content from this show. Just search the word homeless there on the get rich education YouTube channel and you can see it.    Hey, I want to ask you something. What is your on ramp to real estate investing? Like, how did you approach it? Or how did you get into it? I mean, mine was as a disgruntled employee. That's it. I didn't come from a complimentary professional place. I mean, that's how I became an investor, and there was nothing wrong with my job position. Specifically, I worked with good people and everything. In fact, I had an easy and safe job, and it paid a little bit well. But, you know, safe is not the place to be. Safety is the opposite of freedom. As an employee, you know, I could see that 401 K type plans. They were designed so that you don't get income from them until you're old. It's a salary reduction plan all those working years as well. Well, no wonder that your employer encourages participation in them. That way they're going to keep you working as an employee until retirement, because that's when they're designed to generate income. But see my point here, really is that I did not have a complimentary skill set to real estate investing, and if you do, it can be to your advantage. So you know what I mean. Let's take a couple of friends of. The show here, Robert Helms, host of the terrific real estate guys radio show. He came from a real estate agent family. His dad was an agent. Well, that can help you find deals. How about Ken McElroy, another frequent guest on the show here, very successful real estate investor. Well, he was a property manager before he became a real estate investor, totally complementary skill set. And by the way, two months ago in New Orleans, I was invited to participate in a collective inner circle mastermind group session that Robert and Ken help run. That was cool, but getting back to complementary skill sets, Michael Becker, a former guest here on the show, he was a lender, so he got to see the paperwork of all these successful investors. So he became one himself. I mean, as a lender, you keep seeing savvy investors leverage themselves with debt and then do cash out refinances, a tax free windfall event, all while they keep the asset too well. He wanted to get in on some of that. And I also know real estate investors that started out as handymen, okay, a hands on trade that can totally help when you're starting out as a real estate investor. So do you have a complimentary skill set that can help make you a successful real estate investor. If you don't, then don't despair, because you know what? I don't have one myself. I was just a former employee that wanted something else. I don't have a complimentary skill set to real estate investing. No transferable professional skill. Instead of that, I just became a reader, but not a massive reader. Of course, I was a learner before I was a teacher. I enjoyed learning this stuff, and I also got a good grasp on the numbers and how that works. But importantly, my advantage was I take action, I just keep adding property to my portfolio. You just got to keep doing that, regardless of what's happening in the larger economy or what prices are or what interest rates are.    And as you know, last week, I discussed the advantages of owning and building with brand new build rental property today, and you know, new build and these build to rent properties, those are things that that really wasn't even available when I started out investing. Well, it wasn't. I mean, with new build, oh, your maintenance repair costs are going to be low. You tend to attract a high quality tenant that also tends to stay for a while. Insurance costs tend to be lower on new build. And there's a bigger advantage than all of that in the market cycle right now that I'll get into shortly. Well, historically, the long run average. Do you have any idea what proportion of homes for sale are new build homes? Any guess, like, what share of those homes are new? It's only about one in eight. Yeah, the Census Bureau and the NAR tell us that it's 13% historically. Okay, well, what do you think it is today? Well, today, that number is up. Existing homeowners, they're not selling those homes aren't getting on the market as often due to the lock in effect, and we have to add supply. So in order to do that, we are building more new there's just no other way to bring it to market. Well, today, the proportion of new build homes for sale among all homes for sale is fully double that, at 26% although we're still undersupplied of homes in the US by about 30% you know there are pockets where they've overbuilt with new builds, including in Florida and Texas. So the time could really be right to expand your income property portfolio in one of those places, because builders that we work with at GRE marketplace are really willing to give you a deal now you've got them right where you want them if you're looking for a deal. How does a four and three quarter percent interest rate sound? Yes. Rates on non owner occupied property are about eight right now. They're about seven on owner occupied property, but we've got builders willing to buy your rate down to 4.75% and they're also offering one year of free property management and three months of rent guarantee protection in case your property is not occupied right away. The first one is a brand new build duplex in Inverness, Florida, two beds, two baths, each side, price of 420k projected rent from both sides at $2,830 and the size is 2100 square feet. I mean the. That sounds like it could make your cash flow thin, until you consider that 4.75% fixed mortgage rate the property tax is about one and a half percent and insurance get this projected at just $1,155 a year for an entire new build duplex, and now you might ask, what could the rate of return be on this Florida duplex new build? Well, I projected 5% appreciation for this year. New builds tend to appreciate better than existing property, but let's just use 5% if you have a 25% down payment, that's four to one leverage. So you've got a 20% return on your money. And let's just keep it conservative. When we look at monthly cash flow, that results in a 5% cash on cash return. Add that to your 20% leverage appreciation, you're up to a 25% ROI already. Add in the fact that your tenant is paying down your principal for you by $405 every month. That's 4860 annually, divided by your 105k down payment. That means you've got another four and a half percent return here. Let's just call it four. You're up to a 29% total ROI we haven't even added in yet, your tax depreciation benefit, and now you're up to a return in the mid 30s. Finally, your inflation profiting benefit on your fixed amortizing debt, and you are well into the 40s for a percent return on an annual basis. And of course, most of these are only projections. It could disappoint you at 30 or less, still a nice return, or it could over perform at 50% or more. I mean, this right here is how wealth is built. I mean, this is how you do something that disrupts your entire family tree that was the new build duplex. Then I'll share one other one with you. Here from GRE marketplace. Is a single family rental. This one is in Locust Grove, Georgia. Gosh, it looks really good in the photo here with a two car garage and some brick facing, its price is 339k rent is 2350 The size is 2164 square feet, so only a little bigger than the duplex here in this new build, Georgia, single family rental, four beds, two baths, beautiful looking new construction on the inside, open floor plan, stainless steel appliances, I can't tell whether the floor is LVP or wood laminate, but it's got a flooring type that's resilient, that tenants like, and your rate of return is going to be similar to the duplex ROI that I laid out, though probably not quite as high as the duplex. I mean, with these interest rate buy downs, these could very well be the property types where, in just five years time, maybe even as little as two or three years time after owning them, you look back and you consider how opportunistic you work in this part of the market cycle where there are now more new builds that you can choose from, and a builder was willing To make you a deal to keep their product moving, because they build a little too much in some pockets of Florida, for example. So yes, these and more like them are available, and there are more in Florida, Georgia, Alabama and a number of other states. And you know, something I don't think I shared with you earlier, it's convenient. You can get a spot with one of our GRE investment coaches right on their calendars, you can look at their calendar and pick a date and time that's convenient for you. For a free coaching session, they will learn about you. They'll let you know where the real deals are, if they're right for you at all, all you've got to do is visit GRE marketplace.com, and click on the free investment coaching area. There you are with some real opportunities and an actionable resource. Until next week, I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 2  39:17   Nothing on this show should be considered specific, personal or professional advice, please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively you   Keith Weinhold  39:45   The preceding program was brought to you by your home for wealth, building, get rich, education.com    

Keith discusses the pros and cons of investing in single-family rentals versus apartment buildings. He highlights that less than 10% of U.S. building materials are imported, reducing the impact of tariffs. Single-family rentals offer better tenant quality, lower vacancy rates, and higher appreciation potential. They also have lower financing costs and are more divisible.  Conversely, apartment buildings offer economies of scale and lower per-unit maintenance costs. He emphasizes the importance of owning more property, especially new-builds, which offer lower insurance premiums and attractive financing options Work with expert investment coaches to find the best off-market deals and maximize your returns.  GRE Free Investment Coaching: GREmarketplace.com/Coach For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com Show Notes: GetRichEducation.com/535 Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   welcome to GRE. I'm your host. Keith Weinhold, talking about how most home building materials are US sourced and not affected by tariffs, the little understood pros and cons of investing in apartment buildings versus single family rental homes, then what really makes sense to invest in in this particular era and more today on Get Rich Education.   Speaker 1  0:28   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:13   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:29   Welcome GRE from Tallahassee, Florida to Waxahachie, Texas and across 188 nations worldwide. I'm Keith Weinhold, and you are inside, G, R, E, we are here for you every Monday, without fail, 52 weeks a year, and we have never replayed an old episode either, always original content. Thanks for being here, but you're not here for me. You are here for you as another year dawns before we get into the meaty real estate content of today's show, including single family rentals versus apartments. Take a moment to check in with your own goals. Maybe you think about that is just buying your first investment property, or maybe you own 83 rental units, and you're looking to get to 100 this year. But no matter really real estate is just the fuel for your goal. It's probably not the end goal itself is your goal to have the time freedom to watch all of your kids basketball games this year. What about beyond this year? Are you really dreaming big enough you've got to question yourself on that sometimes, for example, forget flying first class. What if you want to own your own private jet, like Taylor Swift's luxurious Dassault 7x jet for $54 million? how about real estate fueling a dream that's even bigger than that? Yet, last month, the Philadelphia Eagles received the NFL approval for the sale of an 8% interest of the team to two different family investors. Okay, do you find say that interesting owning part of a major pro sports team. And by the way, what would something like that look like for you? I mean, do you even have the headspace to conceive of such a thing? It's good to ask yourself questions like this. Sometimes that sale was based on a valuation of the team of up to $8.3 billion and yet, after all that, the Eagles owner Jeffrey Lurie, he still maintains complete control of the team. Okay, so if each of the two family investors got a 4% interest at this valuation, that is up to a $332 million investment for each family. Maybe that could be a Weinhold the family goal. We'll see about that one. And you know, when it comes to making yourself a bigger you and dreaming a bigger dream, I like to listen to what the doers say. I found it so interesting in a Jeff Bezos interview at the deal book Summit, Bezos said it's human nature to overestimate risk and underestimate opportunity. Bezos also said entrepreneurs would be well advised to try and bias against that piece of human nature, the risks are probably not as big as you perceive, and the opportunities may be bigger than you perceive. That's the end of what bezel said. I really think that that's spot on stuff. now two weeks ago, when I gave GREs national home price appreciation forecast for this year. You might remember that I said that potential Trump tariffs just don't matter as much as people think when it comes to real estate. And understanding more about why I say this, it can help you understand real estate materials and sourcing and home building in the United States, America's overwhelming majority of sourced building materials are not imported, so therefore something like a supply chain bottleneck that's more worth watching, really. It's a huge misunderstanding of the home building market to assume that most building materials come from overseas. They do not, not even 10% of residential construction building materials are imported. The National Association of Home Builders will tell you so. And really, the majority of those few imports that do come from elsewhere, they come from, Canada in the form of timber. You might have heard about that before. Now, there are some things like finishes and fixtures that get sourced from, oh, various other countries, but yeah, the biggest potential tariff expense impacting home builders would come from enacting a cost on Canadian lumber. But I and a lot of economists as well, they're pretty skeptical that the administration would really enact a tariff on a close ally like that, on Canada's raw materials. In fact, Chief Economist Lawrence Yoon of the NAR he conceded that even potential lumber tariffs, they might be given a phasing in period, and that would encourage American timber mills to fill in any production gap. It's also important to you know, remember that doors, windows, cabinets that builders utilize, they are typically produced within us, borders. Windows, doors, cabinets made domestically, unless it's something that relies on raw materials that are imported, they ought to be little affected by tariffs. One example is that kitchen sinks now they largely went from being sourced in China, then Malaysia, then Indonesia, and one main customer is now talking about sourcing them out of Mexico or the Dominican Republic. So there are a few things that less than 10% that's imported. Another imported item is flooring, which moved away from China, went to India for a while, went a little bit back to Brazil, and now more is being sourced by Ecuador. But the important thing to remember is that these are outlier components. Not even 10% of residential construction building materials are imported. That's what you want to remember, concrete, us, rebar, us. So you know, as a real estate investor, you can feel good that as your portfolio grows, each one of your properties was chiefly built with us, labor that you already knew, but it is also built predominantly with us, materials as well. How likely are single family rental investors to say that they want to buy more investment property this year. Well, year ago, 60% of them said that. Today it is up to 76% yes, that many say that they are either likely or very likely to buy single family rental property in the next 12 months, and that same group that was surveyed is also unlikely to sell their property, and they also said that they are more likely to raise the single family rent this year. And all this is according to a joint lending one resi club survey. However, most fall in the range of raising the rent between just 1% and 6% this year, so pretty modest rent increases. In fact, in every region of the US, the majority of single family rental investors describe their rental market as either strong or very strong. But can you guess the weakest region? Okay, this region is the one that still has a majority of landlords that say that their market is strong, but yet the weakest of them all is the South West, and that is largely due to over building and in the survey, what expense increased the most the past 12 months? Well, number one is that 37% of respondents these landlords said it is still insurance premiums. Second place was that 23% say property taxes are increasing the most. And then third was. And 21% say that maintenance and repair costs have increased the most for them. So the top three expenses cited expense increases that is in order, are insurance, property tax, and then maintenance and repairs. And a few weeks ago, I discussed with you, you might remember about how upgrading or remodeling a unit that helps you in at least five different ways simultaneously. Let me talk about this, since I touched on raising the rent and a little comprehension test here. Do you remember what those five ways are? the five ways your help by upgrading or remodeling a unit. And no, these are not the famed real estate pays five ways when you upgrade a vacant unit for rent, or at times, you can even actually upgrade a unit while the tenant is still occupying the property, if it's not a disruptive upgrade type. Okay, I mean, sometimes that tenant can be appreciative that they're getting an upgrade while they live there, but the five ways that upgrading a unit helps you are, first, well, obviously it helps you be able to get more rent in cash flow. Secondly, you tend to attract a higher quality tenant. And then in a five plus unit apartment building, it also increases your noi, therefore a greater overall property value. Fourth is pride of ownership. And then fifth is that higher rents help you offset those erstwhile higher operating expenses.    And here's the thing, when you get free help from one of our GRE investment coaches, like you can do at GRE marketplace.com those properties are either already extensively renovated or they are completely brand new build. So because of that fact, this means that from day one, your rent income is already optimized. You already have the best chance of landing a quality tenant, and you get some sense of having a pride of ownership. And all of those things, they're already optimized for you. You don't have to tinker with anything else, because those GRE marketplace properties, more than 95% of them are either renovated or new build. I would say, using properties conducive to the BRRRR method, they would be the few exceptions there and on GRE marketplace, you can find lower cost renovated single family homes, up to million dollar apartment buildings, either new or renovated. And another pro tip here to help you with something actionable in a premium place to source your growing income property portfolio. You've heard me mention them before, is mid south home buyers, but I'll tell you more about what's going on with them. Yeah, they're an especially good place to add your portfolio if you either haven't invested outside of your home market before, or you don't have as much liquidity right now, because their prices are just 100 to 180k they are still in that range. And yes, that 100 to 180k that is indeed the entire capital price for the asset. So that means down payment and closing costs being about 25% therefore it's just 25k to 45k Yes, you can still get started for that little with a wonderfully renovated property in either Memphis or Little Rock. Those are the two markets where mid south home buyers operates, and they are some of the most investor advantage markets in the entire nation. And then the US is one of the most investor advantage markets in the world. And last month, I met and spoke with a 19 year old guy that lives in Dallas, and he just bought his first ever investment property from mid south home buyers in Memphis. And in fact, it was his goal to have his first income producing property at age 18, and he bought it the day before he turned 19, so he barely met that goal. But yeah, they are total pros at mid south they've been doing it for over two decades. They say that they are the nation's highest rated turnkey property provider. They might even be the first provider in the nation, if you like. They also manage the property for you, and their property managers are really aware that their investors, like you, seek a return on investment, so they often have a line a waiting list. To get their properties. Last I checked the line at mid south had shortened globally attractive cash flows an A plus rating with a better business bureau, and they've now renovated over 5000 houses. And over there, they do a lot of things with their management that you just wish every provider would do, there is zero markup on maintenance. Their average occupancy rate is almost 99% average renter stays more than three and a half years. And you know that three and a half years, that duration of tenancy that could be poised to go even higher now, with the affordability crisis for these want to be first time homebuyers now, most of what mid south has are single family rentals, quite a few duplexes too. Every home has brand new components, a full one year warranty, bumper to bumper, new 30 year roofs. And then the really important part expect a high quality renter that they screen and find in place for you. So let me give you an example of two real properties. And now, if these two aren't under contract already, they probably soon will be, since I'm mentioning them. And of course, duplexes cost more than single family rentals. This duplex is in Jacksonville, Arkansas. It's just northeast of Little Rock. It is 913 and 915 Ruth Ann drive, the combined rent from both sides is $1,775 the all in cost is about 210k 2099, in total, it's 1600 square feet. So 800 square feet each side, it's two bed, one bath each side. The Property taxes are really low, $1,300 a year, really nicely renovated with good quality materials. I mean, I love owning properties like this all day. So that's a duplex in the Little Rock market. Another one from mid south is this, Memphis single family rental. The address is 400 Bonita drive. It is $1,200 rent on a $148,100 purchase price. Gosh, those numbers work. This single family rental is three bed one and a half bath, 1164 square feet. Gosh. Again, low property tax in these regions, just $1,120 annually. All right, so that property tax rate is just three quarters of 1% of the purchase price. So really low on a national basis, a big backyard, eat in kitchen, separate laundry room, walking distance to schools. I mean, this is the type of property a tenant family could live in for five or 10 years, beautifully renovated. And I'm bringing these up because these are all at prices that Metro New Yorkers or coastal Californians can barely believe. So each property has hundreds of dollars of projected positive monthly cash flow. Each one increases your income 2000 to $5,000 per year. And I have personally toured mid south home buyers office in Memphis and their properties in person in Memphis. And I've seen their properties in each stage. I walked a tear down that they were doing, and I saw all the debris in the backyard. And I have seen their hardwood floors shine inside newly renovated property that I walked with both Terry and Liz from over there at Mid South. She is a pretty popular and extremely knowledgeable woman there. Liz, you can ask for her or one of her team members about getting on the list over there. Yes, these are 100k to 180k already renovated. Yes, that's truly the all in price, and they are in decent, working class pride of ownership neighborhoods in Memphis, Tennessee and Little Rock, Arkansas. And a lot of people get their start in investing there, I suspect it's now in the hundreds, with the number of GRE listeners that have bought from them. But even veteran investors, with dozens of units, they scoop up properties from them due to the low prices, some even pay gasp, all cash, yes, no leverage for them. And mid south homebuyers has investor tours monthly, where they load everyone on a bus, and you can check out the properties, because they are really proud of what they offer there coming up next, I'm comparing single family rental investments to apartments. But yeah, right there. That was a pro tip that really ought to help you out. Expect cash flow from day one. A 19 year old is doing it. You can start yourself at mid south homebuyers.com. More next. I'm Keith Weinhold. You're listening to get rich education.    Oh geez, the national average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk, your cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And you know how I'd know because I'm an investor in this myself, earn 10% like me and GRE listeners are. Text family to 66866, to learn about freedom. Family investments, liquidity fund on your journey to financial freedom through passive income. Text family to 66866.    Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 420056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com   Kathy Fettke  21:55   you this is the real wealth network's Kathy Fettke, and you are listening to The always valuable get rich education with Keith Weinhold.   Keith Weinhold  22:12   Keith, welcome back for the 535th week in a row you are listening to get rich Education. I'm your host, Keith Weinhold, and I'm really grateful to have you here if you self manage your properties. One software that can really simplify your life is called Hemlane, H, E, M, as in Mary, l, a, n, e, Hemlane. You might have heard about it before. I now know quite a few people that use it. It's been getting some really good reviews. You can manage your properties from anywhere, even through your phone. And Hemlane has got some really good integrations, and now it's more than just investors like you that are using it. Agents and property managers are using Hemlane too, from advertising to tenant screening to maintenance and repair and accounting, and I just learned that they recently got all of the state specific lease agreements integrated on their platform as well. That's why it was on top of mind. If you prefer to self manage and you want to make it easier, what you can do is book a free demo and they show you how it works. Over there, it's just hemlane.com where you can do that if you like. Let them know that I told you about it.    Before I share something else actionable with you, let's do some learning and talk about apartment buildings and single family rental properties, and compare the two, some pros and cons of each. And perhaps the most obvious advantage of apartment buildings is their economies of scale. A 12 unit apartment only has one roof to maintain and one insurance policy to maintain. Another efficiency is that shared common areas and plumbing and HVAC systems that can lower your individual maintenance costs on a per unit basis as well in those apartments. And right now, at this time in the mid 2020s, decade, another advantage of apartments is that this time in the cycle is where values are just about bottoming out. Apartment buildings in a lot of national regions have fallen 20% fallen, 25% or even fallen 30% or more from their highs that were seen two to three years ago, and that's due to those higher interest rates. And the reason that this is an advantage for apartments is that you might be able to buy low, buy the dip, apartment cap rate. Have settled in the mid five range. Now, well located Class A has dropped back into the fours. Long time investors already know about some of the advantages, but you know, even some long time investors, they often overlook some of the advantages that single family rental properties have over apartments. So let me share some of those with you. Now, as you know, I started off with my first two investment properties, both being four Plex buildings, and then after that, I added larger apartment buildings and single family rental properties, and I still do buy and own single family rentals. So let me tell you about why I love them. They might have the best risk adjusted return anywhere even after 2008 great recession. Those that bought single families for cash flow persevered with single families. You get a better quality of tenant than you do in apartments. They take care of the premises. They tend to be in a better neighborhood. Single families tend to appreciate better over time, and are also more likely to be in a better school district. Single families have a retention advantage. Tenants stay longer, and that creates less vacancy and expense, and the reason that they do stay longer are those aforementioned neighborhood and school district characteristics, common areas. You know, single family rentals, they don't have any common areas that you have to clean and maintain. I think I pointed that out to you before, because that's like an overlooked profit drag that I missed when I bought my first larger apartment building. Yeah, apartments have hallways and stairs and laundry rooms and commonal door grounds that a custodian has got to service. Single families have an advantage when it comes to utility payments, because tenants often pay all of the utilities and they even care for the lawn. The larger the apartment building is, the more likely that you are going to be the one paying the utility costs. Then there's divisibility. What if you've got a property that's underperforming out there and it just isn't meeting your expectations? Well, if you had, say, 10 single family rental homes, you can sell off the one or the two that aren't performing, but yet, with a 10 unit apartment building, you've either got to keep them all or sell them all. It is not divisible. What about fire and pestilence, something a lot of people don't talk about? I mean fire and pests. They are more easily controlled in single family rentals, even if you're adequately insured, these conditions often affect multiple units and families. They can spread in an apartment building. Financing is a huge one income single family homes, they have both lower mortgage interest rates than apartments and typically lower down payment requirements than apartments. I think you already know you can secure 10 single family rental loans, single 20 if you're married at the best rates and terms through Fannie Mae and Freddie Mac with just 20% down payments, you can even go less than 20% on non owner occupied in some cases, but apartments rarely, if ever, have 30 year fixed rate terms like single family rentals do, and this right here in particular, that really started bringing down a lot of apartment investors, beginning in 2022 and 2023 when their interest rates reset much higher, doubling, or even more than doubling. How about vacancy rate? It is true that if your single family is vacant, then your vacancy rates 100% if your say four Plex has one vacancy, well then your vacancy rates only 25% but yeah, the same is true if you own four single family rentals and one is vacant. How about management? If you hire professional management, your manager would likely rather deal with higher quality, single family residence. And if you're self managing, this is a demographic of people that you would likely rather handle yourself. Then there's supply and demand, there just absolutely still are not enough low cost, single families that make the best rentals nationally, demand still exceeds supply. That's the opposite condition for apartments, and this is something that's going to continue in the short and the medium term market risk that is an overlooked criterion. You've got to keep your properties filled with rent paying tenants that have jobs. If you think you'll be able to buy 10 rental units in the near future, well, your 10 unit apartment building that's only going to be in one location, and that's going to leave you exposed to just one geography's economic fortunes. But if you have 10 single families, you could have four of them in Central Florida, three of them in Fort Worth Texas, and three of them in Memphis. And you got to think about exit strategy. A lot of people don't think about this. Think about the exit before you even get in, because years down the road, when it's time to sell your income property, hopefully, after you've had years of handsome profits, and real estate pays five ways and all of that, you know what? Down the road, there is going to be a greater buyer pool for your single family rental than your apartment building. In almost every case, more buyers can afford the lower price, and unlike apartments, you even have access to a pool of buyers that might want to occupy the single family rental themselves. It might even be your current tenant that buys it, but the market and the numbers have to make sense for someone to want to buy an apartment building, but if an owner occupant buys it from you, that family doesn't have to have any numbers that make sense. So your single family rental is more liquid on your exit and professional management, that's another reason that single families can make sense. Because see single family rentals, they can be spread all over a metro area diffusely, and if you self manage, that is a lot of little trips that can get to be a hassle. But if you use a pro manager, well, they're the ones that have to manage the scattered sites. And a lot of times, managers don't charge you much more to handle your single families than they do your apartment buildings. So right now, there were a ton of advantages, a good 15 or 20 advantages there that single family rentals have over apartment buildings. And it's important I discuss them, because there are a lot of investors that don't factor all of those in. Even veteran investors tend to overlook some of those things. Again, I really like apartment buildings as well. They could very well be my second favorite investment to single family rentals, and I would like to now, with that understanding, really say something that I probably don't say quite often enough if you want to benefit from all these wealth building forces here that I've talked to on the show for for more than 10 years. You need to own more property, or get started with your first property.   Now I've already given you one great resource for that. And yes, what do they say? The turtle never got ahead until he stuck his neck out. Now the uncertainty, I mean uncertainty. That's just that condition that never completely abates. But in a sense, I think you can say today that the future is already here because we've got substantially more economic certainty and political certainty than we have had in recent years. The presidency was decided peacefully. Recession fears have abated. The Fed after screwing up with high inflation a few years ago, they have now engineered a soft landing, meaning lower inflation with still high employment. So now is a good time. What about real estate prices? I'll tell you something about that all of my investor life, every single property that I've ever bought, without exception, it felt aggressively priced at the time, and then, typically, it always happens when as little as one year or two years goes by, it already looked like a good decision. And I'd like to encourage you to do something else in this era, if you can swing it, buy new build property. That's something that wasn't always true. They do cost more. It's probably going to be 300k plus for a new build rental, single family home, but either way, be sure to own more property, existing or new benefit from what we talk about now. In some parts of the nation, including Florida, builders built a few too many properties, and they are willing to give you a discount for that. They might even cut the price a little and give you a rate discount, buying down discount points for you so that you can get a mortgage loan interest rate in the fives or even in the fours on new build income property right now in a volatile insurance market, new builds also have some super low insurance premiums because the property is built to today's more stringent codes. I mean, a. Just put an example out here. If you say, buy 10 rental, single family homes for $3 million total, 10 properties, 300k each. Okay, it's just 5% appreciation, which is what I projected for this year in our home price appreciation forecast. Two weeks ago, on $3 million worth of property, that's 150k per year, every year growing that you can pull out of the properties completely tax free. But to get that 150k per year tax free, you would have only had to make a 750k down payment and closing costs 25% on this that's not even counting the cash flow that the properties generate, plus your loan, of course, is simultaneously being paid down by tenants. And on top of that, inflation would just relentlessly debase your two and a quarter million dollars of fixed rate debt. Yes, all while the appreciation and the cash flow occurs, inflation debases your debt by another $67,500 every single year, and your tenant pays down some more principal on top of that. And then there are the other tax benefits too. And this is where you are massively getting ahead. All right, that was a $3 million portfolio, but if you can only do 1/10 of that own, just say one more new build, 300k single family rental, then you get 1/10 of those benefits that I mentioned, and either way, a total return on investment of 30% or more annually that is achievable. It's actually even conservative. I mean, just with the 5% appreciation, with four to one leverage, that's a 20% return just on the appreciation component alone.    And our GRE investment coaches can make this real for you. They can talk to you about these properties and others, including those mortgage rate buy downs into the fives and the fours properties in investor advantage markets in Ohio, Indiana, Illinois, Pennsylvania, Georgia, Oklahoma, Texas, Florida, Alabama, Mississippi, Tennessee, Arkansas and some others. In fact, let me give you two examples of what our investment coaches can help you with right now. This is pretty fun, actually, as I talk about these properties, because you might even end up owning the ones that I discuss right here on the show. The first of two is a brand new build, single family in Palma Coast, Florida. Gosh, it's a ranch home. Really good looking. Two car garage, is what I'm looking at here. It's 1200 square feet, three, bed, two, bath. It's called the Bing model, and it's got the type of layout that tenants really want today. I mean, your resident could stay there for a long time. $2,100, in rent for a purchase price of $289,900 I mean those numbers, along with the mortgage rate buy down to four and a half percent, plus new build insurance premiums that are going to be low. That really works today. That is really attractive there in Palm Coast, Florida. And the last one I'll mention is an older single family rental in Canton, Ohio. Yes, that's the home of the Pro Football Hall of Fame. The address is 2422 6th Street, Northwest in Canton. Rent of 1225, and a purchase price of just $135,000 The size is 1036 square feet, and it is four beds, one and a half baths. The renovations really look quite good. As you recall, those benefits of buying property that's already renovated, like I discussed earlier, all for 135k in today's market. So these properties and so many more like them, that's what our investment coaches can help you with. Their service is always completely free, but first what they do is they learn a little about you, and they can then put together an entire investment real estate portfolio for you, if you like. So they'll assess and evaluate what you've got, where you want to go, what property types are conducive to aligning with your strategy, and are there any best geographies for you? And more. So it's really important to stay in touch with your coach. I mean, we might find out, for example, tomorrow, that a home builder that we work with decided to offer some massive mortgage rate buy down incentives for you because, say, they built too much. So I really encourage you to set up that touch point for the first time, or to stay in touch and see what's happening, free coaching off market opportunities, and it's easy to set up a short meeting over the phone or on zoom with an investment coach. You can do that at GRE marketplace. It really can be quite a life changing venture for you from GRE marketplace.com just click on the coaching area until next week. I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 2  40:49   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  41:09   The preceding program was brought to you by your home for wealth, building, getricheducation.com.  

Keith unveils our 2025 National Home Price Appreciation Forecast. Learn the factors driving the housing market and discover why Keith's predictions have been spot-on for the past 3 years. Gain the insights you need to make strategic real estate moves in the year ahead. Don't miss this must-listen episode packed with actionable real estate insights. The Fannie Mae home purchase sentiment index rose, indicating growing consumer confidence. Trump's immigration and tariffs policies and their potential impact on housing demand and labor market disruption. Hear about the impact of the under supply of housing in the US and the potential impact on home prices. Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review” or for Spotify. Show Notes: GetRichEducation.com/533 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:00   Welcome to GRE I'm your host. Keith Weinhold, today is the day that I'm giving you our 2025 national home price appreciation forecast. You'll get the exact percent that I expect home prices to rise for Fall next year. Learn the factors that really move prices. Importantly, I follow up and you get the results of previous years forecasts too. Will it be a holly jolly forecast or more Grinch like today on Get Rich Education.     Mid-south home buyers. I mean, they're total pros, with over two decades as the nation's highest rated turnkey provider, their empathetic property managers use your ROI as their North Star. So it's no wonder that smart investors just keep lining up to get their completely renovated income properties like it's the newest iPhone. They're headquartered in Memphis and have globally attractive. Cash Flows, an A plus rating with a better business bureau and now over 5000 houses renovated. There's zero markup on maintenance. Let that sink in, and they average a 98.9% occupancy rate, while their average renter stays more than three and a half years. Every home they offer has brand new components, a bumper to bumper, one year warranty, new 30 year roofs. And wait for it, a high quality renter. Remember that part and in an astounding price range, 100 to 180k I've personally toured their office and their properties in person in Memphis, get to know Mid South. Enjoy cash flow from day one. Start yourself right now at mid southhomebuyers.com that's mid south homebuyers.com   you know, whenever you want the best written real estate and finance info. Oh, geez. Today's experience limits your free articles access, and it's got paywalls and pop ups and push notifications and cookies disclaimers. It's not so great. So then it's vital to place nice, clean, free content into your hands that adds no hype value to your life. That's why this is the golden age of quality newsletters, and I write every word of ours myself. It's got a dash of humor, and it's to the point because even the word abbreviation is too long, my letter usually takes less than three minutes to read, and when you start the letter, you also get my one hour fast real estate video. Course, it's all completely free. It's called the Don't quit your Daydream letter. It wires your mind for wealth, and it couldn't be easier for you to get it right now just text GRE to 66866, while it's on your mind, take a moment to do it right now. Text GRE to 66866.   Corey Coates  3:12   you're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  3:28   Welcome to GRE from North port, Florida to North Pole, Alaska and across 188 nations worldwide. I'm Keith Weinhold, and you are listening to get rich education episode 533 Yes, your favorite slack jawed real estate podcaster here is indeed the GRE founder. I'm also an active Forbes real estate council member, best selling author. I write our weekly Don't quit your Daydream newsletter. And perhaps most importantly, I am an active real estate investor, I am here to help you invest well in real estate, and that is because most Americans have enough saved for an absolutely incredible single day of retirement. Look the content that you choose to listen to will shape your behavior, it'll even gradually alter your identity over time and forge your dreams. Middle class financial advice will keep you squarely in the middle class. They get robbed of the fruits of their labor through taxes. Get robbed of their purchasing power through inflation, and they get robbed of their financial future by staying financially illiterate. I mean, if you're grinding hard and sacrificing experiences to be debt free at 36 well then that means you aren't using other people's money. You, it confirms that you've got no leverage. Why celebrate that? Celebrate financial freedom or a great vacation, or, you know, anything else, like with your friends and family to the Canary Islands. I mean, that's stuff that's worth celebrating, that's extraordinary in this one and only life that you got. I love the old African proverb, if you want to go fast, go alone. If you want to go far, go together. You and I are on this journey together. Dream of living the life where you just give a light touch to some of your investments while they are building your wealth, just adjust the sales of your ship a little here and there. Now. We'll get into the big picture real estate forces in my exact percent home price appreciation figure shortly. But doesn't that sound amazing where you can just do this? I mean, that's what I do. I just give a light touch to my investments. For example, at the beginning of this month, I looked at the statements as they came in in emails from my property managers in various real estate markets, like I usually do now when you have a perfect month as a real estate investor, US landlords, or should I say, housing providers, acknowledging last week's show we develop our own vernacular. A perfect month is when you have 100% rental occupancy and no repair items. Once though you have more than about five rental units, it's hard to ever have a perfect month. It's always good to budget something toward long term vacancy and maintenance. But I had a pretty good month last month. For some reason, my properties needed a few new appliances, a replaced fridge. Here, a new microwave. There, a lot of appliances like a fridge, you know, they can still look pretty close to new, even if they're used. That's fine for a rental. This was just a $280 fridge replacement, for example, in this one rental, single family home of mine. So yeah, just that monthly scan of your property manager statement, seeing that income and expenses look kind of reasonable to you, and then going about your day and the rest of your month. Now, it wasn't always that way for me. As I started and grew, I self managed my own properties for the first six or seven years, and sometimes, you know, something will happen where I want to get more proactive and maybe take, say, a 90 minute block of time to shop for lower insurance premiums if I see those rates rising in a certain market or something like that, but that's how it feels to give a light touch to your active direct real estate investments. Keep that going, because this is all happening while you keep other people's money working for you, the banks, the governments and the tenants.    Hey, something that's become newsworthy, an index measuring consumer confidence in the housing market, rose again last month, and that is the latest sign that potential property buyers and sellers are growing more accustomed to today's mortgage rates and prices. The Fannie Mae home purchase sentiment index that has now increased to 75 points. So the index has risen 11 points or more than 16% in the last year. So there is, however, not one shred of evidence, for example, that sub 3% mortgage rates are coming back anytime soon, maybe not even in this decade or in your entire lifetime. Who really knows? I mean, it's soon going to be three years since the Fed began their aggressive rate hiking cycle and the market and consumer expectations are finally adjusting and settling down, and that right there that factors in just the touch to the housing forecast that I'm going to deliver to you today. And before I get into that, since we are get rich education, do you know what the federal funds rate is like, what it really means? Let me explain this to you in a way where I think you'll not only learn, but I'm going to give you an example so that you can actually remember it. And I'm going to over simplify it, the federal funds rate, that thing that Jerome Powell and his committee set, that is the rate that banks pay other banks to borrow from each other. It's a little over 4% right now. Okay, let's just say it's 4% here's why the federal funds rate is typically lower than mortgage rates. Say that Wells Fargo pays bank of America this 4% federal funds rate to borrow so that Wells Fargo can then turn around and lend the funds to you for a real estate mortgage loan. All right. Well now you can see that Wells Fargo had to pay Bank of America 4% that's why, when you go get your real estate loan from Wells Fargo, you can understand and see why they'd have to charge you, say, 7% in order to make a spread. That is why mortgage rates are higher than the federal funds rate. Wells Fargo made the spread of 3% because they borrowed at four, and they lent it to you at seven, and you yourself you borrowed at seven because your tenant pays your interest and principal for you, and you get the leverage and all of the other benefits. So again, the federal funds rate is the rate that banks pay when they borrow from other banks, and since they need to make a spread arbitrage, this is why mortgage rates are higher. Again, that's oversimplified, but I think that's a way where you can really remember what that is and why that is that way. All right.    Well, with that lesson understood, let's talk about the big national home price forecast for next year. And here's what's interesting. Look at the forecasts that my peers have made. All right, I've already got the forecasts from 16 other housing analytics platforms here, and they have all predicted that home prices will rise next year, all 16 of them, but they've all forecast something different. And everything we're discussing today, by the way, is nominal, meaning, not inflation adjusted. All right. Note that the average of all these platforms, all 16 of them, is a 2.8% gain for next year. All right, if you look at all of them the range, the highest is Goldman, Sachs at 4.4% and the lowest is Moody's Analytics at just 310 of 1%   I'll tell you now that my forecast today, it wouldn't even fit on this chart, it is going to be off the chart. And this is something that might ramp up your intrigue. Maybe you think I would look at this and choose something safe, and since I have the benefit of seeing how 16 others have weighed in that, I'll just pick something in the middle of that. Oh, no, not at all. This is an independent forecast. So since our forecast is off the chart, then that means that what I'm going to tell you today either has to be higher than the highest, which is that 4.4% from Goldman Sachs, or lower than the lowest, which is that 310 of 1% from Moody's. Yes, it is outside of those brackets, busting the bookends today. And as I lead up to it, I will detail the reasons why the calculus that went into this forecast. So before we're done, yes, you will get the exact percent number that I expect existing single family home values to increase by or decrease by next year. It is the fourth straight year that I'm doing this. And now a lot of people make whimsical predictions, you know. But today, you're gonna get something that you rarely, if ever get accountability, because I'm also going to show you the results, you'll see how well my forecasts have actually performed each of the past three years. Sheesh, don't you wish everyone followed up on the prediction that they made now, oh gosh, most housing price crash Predictions Fail Faster than your average New Year's resolution. All right, we need first historic context in order to put this future that we're talking about into perspective. Let's look at how bad other predictions have been this is something that Yahoo Finance recently pointed out, the year by year, reasons that people thought housing prices would crash Since 2012 so we're talking about the past 13 years here, starting in 2012 it was shadow inventory. Remember that that never came true. 2013 higher mortgage rates. 2014 in that year. People thought that housing prices could tumble hard because QE was ending in October of that year. That is quantitative easing, which is dollar printing. I mean, basically QE, that's just the Genteel way of saying inflation. In 2015 they thought a manufacturing recession would make home prices crash. In 2016 home prices were back to their pre global financial crisis high. Well, people thought that seemed shaky. In 2017 I don't know what it was. No one had a good reason. But the word crash just gets attention, so some media tried to scare people with that headline. Anyway, in 2018 it was mortgage rates went from 4% up to 5% seriously like that was the top reason. In 2019 it was that home price growth was cooling off in 2020 of course, it was the COVID 19 pandemic in 2021 it was mortgage forbearance in 2022 it was that mortgage rates hit 7% that was the first time we saw those in a while, even though 7% is still below the long term average of seven and three quarters percent in 2023 it was historically low housing demand. People thought that would bring down real estate prices. In 2024 it was sustained higher mortgage rates and an uptick in inventory. And what's it going to be in 2025 I don't know. Clickbait artists will have some other farcical reason why home prices will crash. Just watch, all right, well, with that, look back every year since 2012 of course, real estate prices definitely don't always go up. In fact, when we look at a longer term history, the national home price appreciation rate every year since World War Two. Like I told you on a previous episode, there were only two periods where home prices fell, that's over a period of 80 to 85 years. There was just 1% attrition in 1990 and then the only appreciable loss period, of course, were those years around the 2008 global financial crisis, where you really probably could consider that an all out crash, prices were down more than 20% nationally, more than 40% 50% in some markets, all right. Well, how did that concerning period compare to now? Well, 2008 is when conditions were largely opposite of what they are now that is back 2008 we had an oversupply of homes, and it was all supported by poorly underwritten mortgages, meaning the borrower really couldn't afford the payment. And also that's when people had low or no equity in homes, so they just walked away, so borrowers had no equity to lose, nor any credit score to protect, and it was oversupplied there about 17 years ago. I mean, that era was so bad and also such an anomaly, that home prices actually fell below the replacement cost, if you can believe that, meaning that you could ostensibly buy existing property for less than the cost that it would take to build a property, then all right. Well, all three of those conditions are opposite. Now today, we have an under supply of homes. Secondly, we have carefully underwritten mortgages, and thirdly, we have record high equity positions, about 300k on average. People are not walking away from that unless things got absolutely dire. All right, with that historical context. So here we are building up to my factors for the forecast, and then the big reveal of the percent figure here, before we're done, to be clear, what I'm providing is the projected sales price of existing single family homes per the National Association of Realtors, stat set. All right, so why existing? And not include the new builds into that? Well, first of all, there are way more existing home sales. Then there are new build sales each year. And see, the thing is, though, that tracking new build that really skews the numbers, because what can happen is, one year, you might have a ton of luxury new build homes. Well then that skews the numbers up too much. Or then there's the more nascent trend of what's happening lately, building smaller homes this past year in order to help with affordability and building smaller that can skew the numbers down. So sticking with existing homes that allows us to keep things more same same. Today, you'll learn about what goes into my forecast and the factors that actually don't matter as much as you would think, like the incoming Trump administration. You'll also hear an important clip from Trump in a few minutes for the second week in a row, I'm bringing you the show from a fairly interesting place, Anchorage, Alaska. This city of 300,000 people, is at sea level. The west side is confined by a coast. The east side is confined by mountains. It's a modern US city. There are high rise buildings and convention centers and freeways and a really convenient International Airport. What's interesting about being in America's northernmost city right now? Anchorage is. That Saturday, just a couple of days ago, that was the winter Equinox for half of the globe, the entire northern hemisphere. And here, the sunrise time is about 10:15am, and sunset about 3:45pm, that right there is just five and a half hours of daylight. That's it, but it feels like more than that. It feels closer to perhaps seven plus hours of daylight, because at high latitudes, the sun barely drops below the horizon, so therefore you get more Twilight on either end of sunrise in Sunset. Well, this is a real estate show, so I hope that's not too much of an astronomy lesson for you here. But anchorage can never get 24 hours of daylight or darkness, because it simply is not far enough north. In fact, when I fly from, say, the center of the 48 states out here. I travel more west than North. The thing for you to remember is that the only places on the globe that can get 24 hours of daylight and darkness are inside the Arctic and Antarctic circles. They're at 63 and 1/3 degrees of latitude or greater, and Anchorage is just 61 I've been skiing here, but suffice to say, with a lot of darkness, it's been a good place for me to study research and put my effort into this forecast that I'm sharing with you today, which you'll hear after the break.    This week's episode is supported by ridge lending group. It's the same place where I get my investment property mortgages and refinancings, you can go ahead and originate your loans at the same place I get mine, that is Ridgelendinggroup.com.  Also freedom family investments, you can make a loan and get a stable return of 7% 8% or Even 10% yet still have some measure of liquidity. Why park your funds at a bank? You can learn about their private money loans by texting FAMILY to 66866, if you want 8% or more on your money while it's on your mind, just text FAMILY to 66866, and see if it's right for you. I'm your host. Keith Weinhold, more next you're listening to get rich education.    Oh geez, the national average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk. Your Cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And you know how I'd know, because I'm an investor in this myself, earn 10% like me and GRE listeners are text FAMILY to 66866, to learn about freedom. Family investments, liquidity fund on your journey to financial freedom through passive income. Text, FAMILY to 66866.   hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group NMLS, 42056, they've provided our listeners with more loans than any provider in the entire nation, because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com   Tom Wheelwright  24:08   This is Rich Dad Advisor Tom Wheelwright. Listen to Get Rich Education with Keith Weinhold, and Don't Quit Your Daydream.   Keith Weinhold  24:24   welcome back to GRE. I'm your host. Keith Weinhold, with the factors that are weighing into my home price appreciation determination for next year. Here now all of these factors matter, but I'm generally going to start with less weighty factors and proceed more toward the weighty factors Trump tariffs. Could Trump tariffs increase materials costs, the cost of materials that go into homes? Well, yes, of course, they could. Could it also increase the labor costs that go into those homes, if, say, businesses decide to onshore. Sure in order to avoid paying the tariffs, yes, and you would have to pay a higher wage to Americans. That's obviously inflationary, but applying tariffs is slow, and it takes a long time to trickle through, okay? But here's the thing, even the threat of tariffs can produce inflation, and we already have the threat that's something real. And now see if you're a consumer and you want to buy a new washer, dryer set or a microwave, well, you're more motivated to do that today, not in a year, because this threat of tariffs might mean that that appliances price will spike. You might want to buy your new car now, if you anticipate the terrace could be coming and it's going to affect that well, the apartment building owner feels the same way before she or he buys 48 washer dryers for their apartment building. Home Builders and remodelers they want to get their materials orders in now, in some cases, whether that's for concrete, drywall, lumber, any component that goes into a home where they think that a tariff could jack up the price, you really need to be paying attention to whether you think this is going to happen or not. So Trump likely means more inflation, and that correlates also with sustained higher interest rates of all kinds, including mortgage rates. And there's no certainty there. There is just that correlation. Now, a lot of real estate investors anticipate that a president with a real estate investor background like Trump Has he is going to return 100% bonus depreciation and extend his tax breaks, okay, all of these things, especially that bonus depreciation, can really enhance your tax situation, but that's not part of the home price appreciation forecast for next year. Okay, we're just looking at next year here. How about mortgage rates? How is that going to factor into home prices for next year? Mortgage rates hardly matter. And the newer listener that you are, the more of a surprise that is, rates are about 7% now, a lot of experts think they're going to go to 6% in a year. But who knows? I mean, a year ago, everyone thought rates would be substantially lower today. But here's the thing, it's not just a who knows. It's almost a who cares about what mortgage rates will be when it comes to prices. Because, like I've shared with you before, since 1994 mortgage rates have risen 1% or more seven different times, and home prices went up all seven times.  Long time listeners like you, you already know this, so for the complete backstory on the why, you can listen to earlier episodes, but the short story is that higher rates, you gotta look at what's happening when there are high rates that's a confirmation that the economy is strong, and when the economy is strong and people feel secure in their job, what do they do? They buy a home. So mortgage rates matter, but a person's personal economy matters more when they make a decision to buy a home or not. A sharp fall in rates that correlates with a recession. So higher rates usually lead to higher home prices, something that almost everyone in real estate thinks of oppositely. On weeks with lower rates this year, we did have lower housing inventory, and with higher rates, we had higher inventory. So that did affect that the next factor is more important than tariffs and mortgage rates, and that is Trump and immigration. Okay? Because this affects the supply versus demand component of housing, something supremely important. Well, more immigrants mean more housing demand, pushing up prices and on immigration, who really knows how many of this surge of fresh immigrants are going to be deported? Will it only be the illegals, or will it be others? Or will it be none at all? Or will it be something else, will trump deport everyone? I mean, that is not easy to do, and it's really expensive. Here are Trump's latest public remarks on how he's going to treat recent immigrants to the US. The interviewer is Kristen Welker from NBC, and she's heard shuffling some papers here too. So don't let that throw you off as you listen to Trump.    Speaker 1  29:39   You raised the point that the logistics are complicated. You said yourself, everything's gone. You mean you need 24 times more ICE detention capacity just to deport 1 million people per year, not to mention more agents, more judges, more planes. Is it realistic to deport everyone? First of all, they're costing us a fortune, but we're starting. With the criminals, and we got to do it, and then we're starting with others, and we're going to see how it goes   Keith Weinhold  30:06   well there, before Trump's first day in office for his second term, see he's already saying we'll see how it goes with deporting immigrants. He now realizes how costly that is. If there is mass deportation, housing demand goes down, but we'd also have fewer laborers, which a lot of those immigrants are, to build the new housing that our country needs. So there's somewhat of a canceling out effect there. It could mean higher home prices because it could even mean higher home prices because most fresh immigrants are renters. They aren't occupying homes that they own anyway, and just how many people we're talking about here, the Pew Research Center estimates that 13% of construction workers are undocumented. That disruption to the labor market that can produce higher inflation, because the slowdown in home building means less supply and higher prices. Now let's get to the biggest factor before I provide my track record, and then the big number, and that is more on the housing supply versus demand. So yeah, it's really fundamental economics. That's the core driver of next year's anticipated home price change. All right, let's start with supply. How undersupplied of housing are we still in the US? Well, an update on the Fred active listing count, and this is for single families, condos and townhomes. It's that we are up off the bottom, but we're still a good 40% or so below the equilibrium point where demand meets supply. America grew its available inventory 27% this year, pretty significant, and next year, it might grow another 15 or 20% that's my best guess. All right then, well, let's try to project future supply by what you have to do is look at new housing starts. That means shovels in the ground. That means taking a backhoe and excavating for spread footings, digging that trench that you're going to pour concrete into, starting homes from the ground up. Well, we don't have enough starts either not enough. In fact, we could be digging a deeper hole with the under supply at our current level of building, US housing under supply will grow by over 200,000 homes per year if we continue at this low level of building. And would you consider all housing types, single family homes, apartments, mobile homes, condos, ADUs, everything? Freddie Mac estimates that we are currently under supplied by a whopping 3.7 million housing units. Now, you probably heard figures like that before, but let me put it into perspective. At two persons per home, our shortage is greater than what could house the entire population of Libya. That's what we're talking about here. And some agencies estimate we're even more undersupplied than the 3.7 million homes. Now, of course, I'm making only a national forecast today. There are regional variations in some Texas and Florida sub markets, they have built plenty of new build single family homes now, let me tell you something scary. What if your income dropped by a third, making 1/3 less in the future than you do right now? Like that would be a moment of panic for a lot of people, you and your family, as you hold that thought when it comes to supply, this year had historically low home sales. When I talk about sales, these are not prices. This is different. This is the volume of sales. Next year, there will likely only be a few more sales than this year, and there weren't many this year. Now see for you, as an individual real estate investor and a consumer that goes grocery shopping, you know, you are interested in real estate prices, but the industry, if you work in the industry, like as a builder or as a real estate agent or even a furniture provider, they are more concerned about the number of home sales. This sales volume that I'm talking about, and here's what's going on, normal is about 5 million home sales per year. It was over 6 million during the pandemic, and now we're down at 4 million. So I mean, in a short period of time to go from 6 million down to 4 million, that is a drawdown of transactions by a third. So just imagine if you are a home builder or a real estate agent, or you're in the retail furniture business and your volume is down by a third. I mean, what would happen to you if your income were down by a third? And you're in one of those industries and you don't have a way to pivot, so that is scary stuff for that subset of people. Well, while all of that was happening to sales volume, lower and lower volume. Home prices have just kept ticking up these past few years. All right. Well, that was supply, and there is one last factor to weigh before I reveal the forecast number, and that is demand. There is a long way to go before there is enough housing inventory for the pent up demand in the housing market, pent up demand from these people that can't quite afford a home. Demographics is destiny. You know, it is one of the easiest things to project, because demographics is a known forget immigration here, because I already talked about that just domestically, the US had its own high birth rate years from 1990 to 2010 and most people don't know about this. Many of those years between 1990 and 2010 there were over 4 million births annually, and that peaked in the year 2007 All right, you might be wondering, so what? That's the past? What about the future? Well, in housing prices, that right there is the future, with today's first time homebuyer now being a record 38 years old, like I told you about a few episodes ago. Alright, if you add 38 to the year that they were born, 2007 that home buyer demand won't peak until the year 2045 so that is a big part of where the demand just keeps coming from, and is going to keep coming from this wave of demographic demand that might not slow down much until the 2050s and what could slow prices is if a major recession that included a lot of job losses were eminent, that could slow home price growth. But nobody expects that. you know something, on future demand, What if health and fitness influencer Brian Johnson is right, and Earth now has the first generation not to die. What would that do to real estate prices? Have you ever thought that through that would really expand housing demand, but that wouldn't affect things for a couple decades. All right, well, let's talk track record and understand that it is pretty difficult to predict the future, and I have made all these forecasts at the end of one year, just before the forecast year even starts, just like I'm doing today, and here's how I've done at the end of 2021 for 2022 I forecast 9-10% home price appreciation the year ended, and in 2022 they came in at 10% so I got that one right. For 2023 before that year even began, I forecast 0% just that home prices would stay flat. And by the way, so many people were calling for a housing price decline that year because mortgage rates had risen. But as we know here on the show, when mortgage rates rise, home prices typically do too. And I also said back then was supply so low, I don't really see how home prices could fall. Well, the year ended, and sure enough, they came in at 0% and all of this is published in on record. You can go back and find all this, in fact, for 2024 you can hear the forecast that I made near the end of last year for 2024 and you could do that by going back and listening to Episode 481 this is episode 533 that was 52 weeks ago, and you will hear that my forecast back then for this year's home price appreciation was 4% this year is not quite over, plus housing data lags somewhat, in fact, through October, however, they were 4.1%   we've almost got that November number, not quite, but it's very likely going to end up being 4% this year, just like I had forecast at the end of Last year, but it's still officially to be determined. Before I gave the awaited fresh forecast for next year with what looks to me like really nailing the forecast spot on three years in a row now you might be wondering something, how did I know? How did I have the foresight to know that and nail those. Forecasts. You know, at this point, I have to concede that there's probably a little luck that has come into play, but this is what I do. I study research and even participate in the National residential housing market. What you're getting is my best estimate. It's not any sort of promise or guarantee. I mean, like all other 8.1 billion human beings on earth, I don't have a crystal ball, and a streak like this has gone on for three years, but it cannot go on forever. So this is what I can best surmise. So really, for 2025 The short story is that I expect more buyers than homes, which creates bids and buoyant prices. I also expect continued inflationary pressure. Those are the two chief factors that went into this. We don't ever revise our forecast mid year. This is it. For 2025 I expect home prices to increase by 5%. Yes, there it is 5% projected appreciation for next year. And to be clear, that is the NARS national median existing single family home price, the same stat set that I have cited all four years again, it is nominal, meaning, not inflation adjusted, so at Christmas or New Year's or your next dinner party, when You see your slack jawed brother in law that thinks the housing market is always going to crash, give the dude a hug and a turkey leg and tell him that I expect plus 5% and pass me the wishbone for good luck on our fourth consecutive housing price appreciation forecast, I really hope that this helps with planning your own portfolio moves, whether that's you owning more income property next year or doing a refinancing, or how you think about your own primary residence. And do you like the forecast that I've done here near the end of each year ever since 2021 if you do let us know, write us or leave us voicemail at get rich education.com/contact let me know you can always get a hold of us there year round with any type of feedback or questions.    Hey, if you appreciate this show here, do you think that you could help me out in one small way? Call it my Christmas gift request. There's only one item on my Christmas list, and it should only take a couple minutes of your time and none of your money. Leave a podcast rating and review for the get rich education podcast on Apple podcasts or Spotify, or wherever you listen, the rating is the five star thing. The review is a few short sentences about why you like the show. I would really appreciate the gift from you, and I will read your review myself too. If you don't know how to do it right inside those listener apps, just open up a browser tab and search how to leave an apple podcast review, or Spotify podcast review, or whatever platform you prefer to listen on it would feel like a little Christmas gift to me after all these years, I'd love your feedback given that way. Tell me what you think, and thanks from me and the entire team here at GRE Merry Christmas and Happy Holidays. Until next week, I'm your host. Keith Weinhold, don't quit your day dream.   Speaker 2  43:46   nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  44:06   The preceding program was brought to you by your home for wealth building. Get rich education.com    

Are you a real estate investor looking to maximize your returns and minimize hassles with your rental properties? This is a must-listen! You'll discover proven strategies for quickly filling vacant units and attracting high-quality, long-term tenants.  Hear Keith share insider tips on leveraging rent increases to boost your cash flow and property values.  Plus, you'll learn about an innovative financial tool - a Home Equity Investment - that can unlock a lump sum of cash from your properties without any monthly payments.  Tune in to get the edge on managing your rentals like a true pro and building lasting wealth through real estate.  This episode is packed with actionable insights you can apply to take your investing business to the next level. Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”. Show Notes: GetRichEducation.com/532 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 For advertising inquiries, visit: GetRichEducation.com/ad Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   Welcome to GRE. I'm your host. Keith Weinhold, talking about the dynamic between rents and prices, how to keep your vacancy rate low and the relationship between landlords and tenants. Learn about how a newer vehicle can give you a big lump of cash from your property without you having to make any payments, then inflation is your wealth building, Friend, yeah? really today on get rich education.    Mid south home buyers, I mean, they're total pros, with over two decades as the nation's highest rated turnkey provider, their empathetic property managers use your ROI as their North Star. So it's no wonder that smart investors just keep lining up to get their completely renovated income properties like it's the newest iPhone. They're headquartered in Memphis and have globally attractive cash flows and A plus rating with a better business bureau, and now over 5000 houses renovated. There's zero markup on maintenance. Let that sink in, and they average a 98.9% occupancy rate, while their average renter stays more than three and a half years. Every home they offer has brand new components, a bumper to bumper, one year warranty, new 30 year roofs. And wait for it, a high quality renter. Remember that part and in an astounding price range, 100 to 180k I've personally toured their office and their properties in person in Memphis, get to know Mid South. Enjoy cash flow from day one. Start yourself right now at mid southhomebuyers.com that's mid south homebuyers.com    when you want the best real estate and finance info, the modern Internet experience limits your free articles access, and it's replete with paywalls and you get pop ups and push notifications and cookies disclaimers, ugh. At no other time in history has it been more vital to place nice, clean, free content in your hands that actually adds no hype value to your life. That's why this is the golden age of quality newsletters. And I write ours myself. It's got a dash of humor, and it is to the point to get it. It couldn't be more simple. Just type up a text message with the letters G, R, E in the body and send it to the phone number, 66866, and when you start the free newsletter, you'll also get my one hour fast real estate course, completely free. Subscribe to my Don't quit your Daydream newsletter, and your mind will be wired for wealth. Text GRE to 66866, text GRE to 66866,   Corey Coates  3:02   you're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  3:18   Welcome to GRE from Villa Lenovo, Pennsylvania to Villanueva, Columbia, and across 488 nations worldwide. I'm Keith Weinhold in your listening to get rich education. I'm really grateful to have you as always. When you invest, you are buying a day that you don't have to work. That's what we're helping you do here every single week own real estate, and it's going to allow you to buy back big chunks of time for yourself later. And that's a big deal because your very life is made up of chapters of time. It's actually really cool when you own investment properties in a few different places, then you actually own part of, say, Indiana and Tennessee and Georgia. You own parts of those states. That's what we help you do here. And that sounds cool. Sounding cool, though, is not enough. There need to be good fundamental reasons behind the real estate portfolio that you are building. It's kind of interesting. With rental property investing, you're kind of doing the little things in order to hold together the big profitable picture, because there are all these forces that are simultaneously creating wealth for you when you've got income property with a loan. So yeah, you're just sort of trying to hold it together. You say, don't get your vacant property rented as soon as you want. So you might drop the rent 50 bucks and add a nice new kitchen faucet and ta da, just like that. It's rented, and all while you're doing those little things. Things to hold it together. Whether your property is vacant or rented, you are benefiting from leverage and inflation. Profiting on your loan. You're benefiting from some big forces either way. Well, on today's show, first, we're going to be talking about the little things like the one on one relationship between you and your tenant, and then later on the show today, that's when we'll grow and talk about a more macro force, like new ways for you to think about how you're benefiting from inflation when we talk about rents prices and the relationship between a real estate investor like you and your tenant. Recently, on the show here, I talked about how the 4.6% growth in wages like we do have today, that is a harbinger of you getting future rent growth. And this can get rent growth to catch up with the growth that we've had in property prices. And note that this is what happens. You need to remember that the bid format of buying property that allows for more rapid price escalation than the first come first serve at a set price format that you have when you're trying to rent out your property. All right, when you put up a property for sale, or you're the person that's buying one, that's usually not in a first come first serve process that's more of a competitive bid process. And see that is exactly why, in a hot market, real estate prices can run up fast. But because, say, you're renting out a property, and you're doing that, you're usually not accepting offers from prospective tenants and then taking the tenant that has the highest bid. Well, instead with rents, you're just taking the qualified first tenant that agrees to your fixed rent price of, say, $2,000 Okay, your prospective tenant isn't saying, Oh, I really like your rental, single family home, so I'll pay you $2,200 for instead of the 2000 that you're asking. And see that right there is why, in a hot market, property prices run up faster than rents do. But see when prices run up faster than rents, like they did, starting about four years ago, what happens is that begins to make rents, oh, they look like a relative bargain to people that are seeking housing. So that is the time that pivot point when rents catch up with prices, which is the cycle that I hope we are getting into next. Now. Right now, we have to be at a time of year where tenants tend to stay put. There isn't as much turnover as you approach the holidays, but a few months from now, turnover tends to pick up in the springtime. And before we talk about the economics of what you do when you have a vacant unit, understand that despite the national housing shortage, the rental vacancy rate really is not that low nationwide. Do you have any idea what the historically average rental vacancy rate is? You have any guess there? That's about 7% 7.3% to be exact. That's why, when you run your cash flow analysis for a property using one month per year is usually pretty safe, that's about 8% Well, all right, we've established that the long term national rate of vacancy is 7.3% the current vacancy rate is 6.9% and yes, that number is just what it sounds like. It's simply the percentage of rental inventory that's available for rent, and it maxed out at 11% back in 2009 that's when housing was badly overbuilt, and now with the housing shortage, you'll see that today's vacancy rate is only a little below normal, 7.3 versus 6.9 maybe you're wondering, well, why isn't it even lower, like five or 6% Well, one big reason why vacancy rates are just a little lower than the long run average is all of the apartment over building like I discussed with you two weeks on the show and I told you about my walk on rainy street in Austin, Texas last month, where they're building gobs of 500 foot tall apartment towers that aren't going to be occupied for a while, and I called that area America's apartment oversupply ground zero. But as you know, there are so many ways to parse and dissect real estate markets. The vacancy rate for apartment buildings today is 7.8% nationally, but for single family rental homes, it's only 5.4% that's because their supply is more scarce. But since there aren't many new apartment projects just getting started now, they're just completing when they started about two years ago, I would expect the apartment vacancy rate to come down over the next couple of years. And then, of course, each local area is going to have its own vacancy rate too. I mean, there are so many ways to parse, to bifurcate real estate, and all those figures I gave you are per the US Census. Well, I've explained to you before that when you have a vacant unit, that is the time for you to really push it test the market. Start your asking rent up rather high in order to see what you can get for it. And this is what's known in economics, in the free market as price discovery. This is your time for price discovery, but you usually only want to keep the rent way high for just a few days, otherwise you might needlessly increase your vacancy period. But here's the thing, if your unit is vacant after a number of showings, is it better for you to drop the rent, or instead, is it better for you to make some upgrades to the unit and keep that higher asking rent? Well, like seemingly everything in real estate investing, the short answer for you is, it depends right the upside of you dropping the rent is that it's a lot quicker and easier to do than making an upgrade to the unit. I mean, just snap your fingers and it's done. Dropping the rent might only take a few seconds or minutes, but see when you keep the higher asking rent and you make upgrades, you do more than just increase your rent income. You get a better quality tenant, first of all, and secondly, if you get, say, 5% more rent depending on your leverage position, you might get 10% more cash flow, that money that you feel in your pocket every month. A lot of landlords don't even consider those two attributes right there. See, when you get 5% more rent for a unit your tenant, of course, they only have to pay 5% more, yet you yourself as the property provider, you're getting perhaps 8% or 10% or 12% more money in your pocket because of the leverage. And right there, I essentially just described the third crown of get rich. Education's inflation triple crown for you. That third crown is called Cash Flow enhancement. And really there's another, I guess, a third here wealth building attribute that you've accomplished through achieving a higher rent, and that is, if it happens to be a five plus unit apartment building, you also actually just increase the value of the entire property, since they are valued on the net operating income in the cap rate. So we're talking about vacancy, rent and real estate economics here with three distinct elements that I just described about how upgrading and achieving a higher rent gives you a lot of distinct advantages. The downside of it being that it takes more time. And there's another one. What are we up to here? A fourth upside to upgrading and achieving more asking rent, as opposed to doing the minimum for lower rent. And that is, well, it's your pride of ownership. I mean, you're providing good housing now your whole mission is not about altruism alone, but you'll feel like you're on a more fulfilling mission when you are like I often say, providing housing that's clean, safe, still affordable and functional. There's a fifth reason in that is that higher rents help you deal with higher operating expenses. But maybe it's beyond just the way in which you're thinking. And you know, a lot of people really don't understand this or put this together. In fact, I was talking with a real estate investor last month at the New Orleans investment conference. He was talking about rising insurance expenses on his properties, saying that he had one property that just had a insurance premium increase of 10% and he sounded a little disappointed, saying that, well, I can't get 10% more rent, but I've got this 10% higher insurance premium. So you know, he was thinking that he was losing? No, he's not necessarily losing, because in absolute dollar terms, you're charging your tenant multiples more in rent than what you're being charged in insurance. Say that you're charging 2000 bucks in rent on a unit. All right? Well, on a monthly basis, just say that your insurance payment works out to 200 bucks on that unit. All right. Well, with just 5% more rent, that's $2,100 a $100 increase, but if your insurance goes up 10% from 200 to 220 bucks, that's just a $20 increase. So right there in that example, your rent increase is half of your insurance rate increase percentage wise, but in dollar terms, your rent just went up five times as fast as your insurance did, and you are even more cash flow positive than you were previously. So the point is in your monthly profit and loss statement, your cash flow statement, on your property, even your pro forma, keep in mind that your rent amount, that is the biggest monthly number, and being attentive to it can cure so many ills. And when you realize this, this plethora of positives, if you will, it can make a decision to, yeah, do something like replace that old Berber carpet with new vinyl plank flooring, and make that look more attractive to you, and it's gonna look more attractive to your tenant, and you're probably gonna get a higher quality tenant than what you would have placed otherwise. And when you upgrade a unit, not only is your property worth more, but you usually don't pay a higher insurance premium as a result of making that upgrade at all, despite your higher valuation. In fact, sometimes lower rents are subsidized by deferred maintenance, like a leaky faucet or a big crack in a ceiling, all right, now all of these things are sort of hard economic facts when it comes to the relationship between landlord and tenant. Let me then tell you about a, I guess, softer sensibility. Okay, let's get touchy feely for a minute, and that is the words that we use. In fact, those very landlord and tenant words themselves. Back in 2021 there is a first of its kind, legislation that was proposed in Ohio to change references in their state law from the word landlord to housing provider and from the word tenant to resident. Now I think that the word landlord is a rather strange word. I mean, it's kind of weird that we're still using that term today. In fact, in the small town that I grew up in in Appalachia, it was not an affluent area at all, not even close. It was lower middle class. But even as a kid, I knew that my parents owned their home and that all of my friends' parents owned their homes too. It wasn't until I was about age 13 when the Petroski family moved into town, cowdersport, Pennsylvania. They were nice kids. I befriended them, and they soon started using the term landlord. I might have been about 13 until I had even heard the word landlord, and I still remember then that it struck me as a strange sounding term. Now it was all simple, small, single family homes where I grew up, like these 80 year old Victorian homes. No one tried to divide their yard with fences. People didn't lock their doors. It was great. And anyway, the petroskis lived in a single family home that the landlord, Mr. Hosley, had divided up into three separate, walled off units. That's before the term house hacking even existed. But in fact, landlord, it is a futile and perhaps outdated term, and I'd have to agree that, instead of landlord, the term housing provider, you know what better describes you and I's role and the relationship to our tenants or residents. I mean the word landlord that almost sounds like a person is totalitarian or dictatorial, when in fact, most landlords are people like you, smaller and family owned, not land barons. I mean, HUD will tell you that America has 10 to 11 million individual investor landlords, and they manage an average of just two units each. Okay? So hardly dictatorial, not some tyrant that's going around trying to evict everyone. Not despotic. Let me practice a little with you today, is, I'll try to use the term housing provider instead of landlord, as much as I can here see sometimes what happens in society is that the frustration of poverty gets loaded onto housing providers, and that sets up a system of enforcement that assumes that they have an interest in crushing the people that pay them to keep their property businesses running. And the reason that, say, a food provider like a grocer or an entertainment provider like a basketball team owner, you know, they just don't seem to be as unpopular as a housing provider. And one reason for that is because housing is expensive and it's also non discretionary, meaning that everyone has to have housing. So you might consider using the term housing provider more often than landlord, especially around your tenant, if your tenant thinks of you as a housing provider that has to pay. A mortgage and operating expenses every month, rather than a landlord that turns every dollar of rent income into pure profit, which is never true. Well, if they understand that, you're going to be doing better from a tenant relations standpoint, and that's also completely truthful as well. As far as that Ohio State law and changing the word tenant to resident. Yeah, over the years, I know that a lot of people favor that term, including a lot of our turnkey providers at GRE marketplace. I've rode around in cars with them, and they're talking about their market, and they prefer the term resident to tenant. Now, tenant is a feudal term as well. It refers to someone who occupies land from a lord. The more direct term from feudal times is the word vassal. You might remember that from high school, V, A, S, S, a, l, that means a holder of a land that pays allegiance to a lord. Somehow, to me, the word tenant, it just doesn't feel as futile or like it's almost part of a system of oppression, like the word landlord feels. Landlord feels like some king brooding over his serfs. In fact, the word tenant is actually helpful, because if you tell me that a person is a resident, I don't know whether they own or they rent, but if you tell me they're a tenant, I know that they're renting. So tenant helps, because it's more descriptive and tenant does not sound to me like someone is being oppressed, either. But in any case, consider using housing provider rather than landlord. Here in the soft skills department, it can be hard to remember to do that though you're listening to get rich education podcast episode 532 I'm your host, Keith Weinhold, education is in our name, and I've got more learning for you.    Let's discuss something new and learn about what H E i's are that stands for home equity investment, and see if one of them can help you now, HEI's. They're a pretty new way where you can access a chunk of your home's equity without you having to make any ongoing payments. I mean, does that sound amazing, or what? Okay, it does sound amazing. You get a chunk of money out of your property now without making any payments, but there are some downsides to heis, as you might have guessed, all right. Well, first, let's talk about the way that it works. Okay with an hei. What happens is that a portion of your home's equity is given to you in cash, especially given to you by an investment group. Hey, windfall moment sounds amazing, and it gets even better, because you can use the funds however you like. I mean, what could you do with an extra few 10s of 1000s of dollars or hundreds of 1000s of dollars in cash? Further, unlike some of the better known vehicles, like home equity lines of credit and home equity loans, there are truly no payments for you to make with these heis, again, home equity investment, that's what we're talking about here. And better yet, you can access your funds in as little as a few weeks. And, yes, I mean, this sounds amazing, but you have got to be wondering, what is the catch with HEI's, and there are some what is in it for the investor? Is this investment group? Well, when you're ready to settle the investment years down the road, they are going to be paid out their agreed upon share as the percentage of the sale price or the appraised value. All right. So as you balance that and think that through who is an HEI for, then it's good for a borrower like you, in case you don't have great credit, or if you have a high debt to income ratio, is especially great if you are house rich and cash poor. And the reason that I'm talking about heis now is that more people find themselves in that very situation today, house rich and cash poor, and that's because Americans are sitting on all time, record equity levels of more or less 300k today. All right, that is the house rich part and more Americans are cash poor today. That's due to higher inflation. All right. Well, now that you know the basics of what a home equity investment is and what the upsides are, what about the downsides? More downsides of feeling this near term windfall without you having to make any payments? Well, your mortgage company might block you from taking on an HEI because see what you're doing is you're taking on another lien holder. Understand that with. An Hei, you've now got more of a lien than you do a loan, and much like a reverse mortgage, heis can also have high fees, and additionally, down the road, that investor might take a big chunk of the home's appreciation, that stuff should all be laid out in your terms up front. So that's something you ought to be able to see coming. All right. Well, now we're a real estate investing show here, so you're probably wondering, okay, great, and you've been hearing me use the word home, but can you get it on your non owner occupied property? Yes, at times you can get an HEI on rental property, but the terms are probably going to be less advantageous, then they will be on your primary residence. Now you might see he is referred to as a product of financial innovation, which is sort of synonymous with another term, financial engineering. And you know, whenever you see those terms, you typically want to exercise caution. Now that alone doesn't mean that an HEI is wrong for you. And of course, with any investment type, although it's usually not your main decision driver, you're going to want to learn about the tax consequences as well. And you might note that home equity investments are also known as a Home Equity sharing agreement, and although that's a longer term, it is more descriptive, and it makes sense because you and an investor partner are essentially sharing in your home's equity together. Now, as a GRE follower, you're able to understand what an investment like this would mean to you and your financial future. Since the rate of return from home equity is always yes, always zero, with an Hei, now you can separate out some equity, and now you'll have the potential for dollars that can earn a return somewhere, and you're going to enjoy better liquidity as well. But Caveat emptor, buyer beware with heis.    The GRE studio has been mobilized a lot lately, as I am here in Anchorage, Alaska today. And what am I doing here? Well, besides studying the housing market, not any local one, but the national housing market. I have also been skiing this week. Hey, when it comes to subscribing to our newsletter, which I do write myself, you might not have realized something. I don't overwhelm your inbox. When you start subscribing, you'll get a welcome set of emails that send every other day for about 10 days, but that's just in the beginning. After that, my newsletter is only sent about weekly whenever there's something critical in the real estate investing world that you really need to know about. It's also brief. It's important to keep it short because your time is valuable. And have you ever noticed that even the word abbreviation is too long? Our don't with your Daydream newsletter is always less than a five minute read. It's usually less than a three minute read to get the letter just text GRE to 66866, right now, see even opting in to get my crucial letter is brief. Now you can text GRE to 66866, more. Next. I'm Keith Weinhold. You're listening to get rich education.    Oh, geez, the national average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk, your cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And you know how I'd know, because I'm an investor in this myself, earn 10% like me and giari listeners are. Text FAMILY to 66866, to learn about freedom. Family investments, liquidity fund on your journey to financial freedom through passive income. Text FAMILY to 66866    Hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualified. And chat with President Caeli Ridge personally. Start now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com.   Tarek El Moussa  30:17   What's up? Everyone? This is hgtvs Tarek El Moussa. Listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  30:34   Welcome back to get rich Education. I'm your host. Keith Weinhold, it's been said that in your life, what you're not changing. You're choosing loads of investors in the 401K or conventional investment plans. They aren't changing the fact that they're only getting their money to work for them. So they're choosing to deny ethically, getting other people's money to work for them, and that's why they have no option other than to work full time until they're old. Well, when you're that savvy borrower now, you're benefiting from both the asset leverage and the inflation profiting, as we know and the way to keep both your leverage high and the inflation profiting on your debt high is to intermittently change the fulcrum on your lever so that you don't have too much equity accumulating in your portfolio. And you also want to be investing in an inflationary environment be a debt DECA millionaire. Remember that term that I introduced to you here a few years ago, if you had ten million in debt at 3% inflation, you're profiting 300k per year just from that alone. Yes, the paradoxically glamorous life of having 10 million in debt, but it's all tied to income properties, so that your tenants make the pay down for you, and inflation pays it down even faster that debt DECA millionaire, he's obviously got to be a pretty creditworthy person in order to get ten million in debt in the first place. Yep, building lasting wealth is not conventional at all. And for the debtor, inflation is therefore your wealth building, friend. It's why, when you see your favorite can of La Columba cold brew coffee, which is a favorite of mine, gosh, it's nice and frothy. If you know, you know, in fact, I'm gonna crack this La Colombe triple draft latte to enjoy after the sh ow there. Did you hear that? No, I don't have any sponsorship with them, but when you see that cold brew price go from $4 to $5 well, that effect makes most people poorer. Some people think that effect makes everyone poor, but it's not making you and I poorer. It's enriching us. When you see consumer price inflation like that, there's a good chance that asset price inflation is occurring as well, and that's why seeing higher prices at grocery stores is probably a subtle signal that you are better off, not worse off. You're better off because you know how to arrange your financial life for inflation rather than being impoverished by it. Congratulations. Let's drink to that with a La Colombe coffee. What you're doing is you are swimming with the river flow, and almost everyone you know is struggling because they chose to swim against the inflationary river flow. See the way that almost everyone that you know goes about earning their income is that they only earn their income once, and they earn it at their job. In an inflationary world, you effectively have to earn your Fiat dollar twice, once when you work for it, and once again, when you invest to beat inflation, otherwise that dollar is just going to evaporate. And that seems so unfair. I mean, why should a surgeon or an athlete, engineer, programmer, accountant, why should those people that are successful in their field and serve society. Why should they have to develop expertise in a second field? Why do they have to do this just to maintain the wealth that they've already built, that they produced out on the free market? Why can't you have a store of value for the future? Inflation is the answer. So they need to develop expertise in a second field, and that's why listening to content just like this is therefore not optional, but it's actually mandatory in this cycle, CPI inflation peaked at 9.1% two and a half years ago, and despite that, has come down quite a bit. It's. A little elevated. It's still not down to the Fed's transparently stated 2% target, and by the way, there is another Fed meeting in two days. If the Fed cuts rates more, bond yields could go higher, which means mortgage rates tend to go higher. Inflation is powerful. A lot of people will tell you that it is the main reason why Jamie Carter wasn't re elected president in 1980 and today they'll tell you why. It's the main reason that it brought down the Biden Harris administration. But see, here's the thing, if you're able to obtain loans in the United States and some other developed countries, understand that you're in a sweet spot, and that sweet spot is a level of inflation that's actually low to moderate by world standards, and not hyper inflationary. All right. Now I know what you might be thinking. You're thinking like, oh, well, hyperinflation would be tremendous for a leveraged real estate investor. Now, why, though, would I say that we don't want hyperinflation? Well, there are countries with a history of hyperinflation, like Turkey, Argentina, Venezuela, Zimbabwe, Iran, they have a history of massive currency devaluation. Let's see what happens then is that financing becomes almost non existent in those places. When that happens, I mean history over hunches. History shows us that in places like that, forget about getting home mortgages, investor loans, a credit card, consumer debt, small business loans, unless maybe a usurious interest rates. If the US had a history of hyperinflation or even sustained bouts of really high inflation, then you know what cooperation between borrowers and lenders becomes nearly impossible. Even those governments of those countries, they have trouble borrowing money, except maybe at maturities of a few months. And you know, I always like to make a borrowing lending example with you and your friend. Okay, you don't want to loan your friend $1,000 for a year in hyperinflation, because if the inflation rate were 1,000% then, after a year, the $1,000 that your friend would pay you back, well, that's only $100 worth of purchasing power. Now, all right, that's why, if the US had one bout of hyperinflation, you know, maybe that would be good, because it would seriously wipe out all of your debts one time. If there became a history of that, though, then you might not get access to loans at all. I mean, who would be crazy enough to finance your growing real estate portfolio in hyperinflation? So the fact that globally, the US has low to moderate inflation levels. I mean, that can be a good thing, that inflation is most of the time, a more surreptitious force. It largely went without notice until the pandemic made it flare up and made that LA Columbia cold brew coffee go up, and made property prices and rents go up all while you're fixed. Mortgage payments stayed the same, totally sheltered from the inflation. All right. Well, if my solution to beat inflation by taking on debt and thinking about it that way, if that's not iconoclastic enough, I've got a different strategy for beating inflation, and I think that I did quickly mention this here about a year ago when Doug Casey was our guest on the show.    But yes, I do have another strategy for beating inflation, and it is controversial. It is almost blasphemy to say this out loud on any finance related show this inflation beating strategy, it's guaranteed to improve your quality of life, okay, no speculation here. A guarantee of improving your quality of life is so simple, anyone can easily do it. In fact, you even have companies competing with other companies to get you to do this, and the answer is to spend your money. Yes, I said it out loud. It guarantees that you'll improve your life. It's simple to do. Various counterparties are competing all over the place with each other. They're falling all over each other every single day to try to get you to do this well, as long as you've invested well first and you have ample liquidity by having a healthy relationship with spending there if that crew. Is to the Spanish Riviera in Majorca, is going to cost you $10,000 this year, but it'll be $11,000 next year. Then spend the money today and beat inflation. Yes, I said it. Spend some of your money if you've been listening to this show and following the guidance here, yes, you can afford to do it. I mean, what is money for anyway? And sadly, some like conventional finance professionals, they are reluctant to tell you to spend your money because they're compensated by the percent of your assets that they hold under management. Inflation makes borrowing and spending, then two irresponsible sounding things, borrowing and spending make complete sense when you do it right, like income properties tied to fixed rate loans.    Hey, why? I've got some cool announcements to share with you now and in future months here on the show, I've got a big collaboration coming up with long time friend of GRE here, Robert Helms of the real estate guys and I together. You'll learn more about that in the future. But first coming up this Saturday, the 21st at 3pm Eastern, over on YouTube, I am going to reveal GRE 's national home price appreciation forecast. So yes, to the nearest percent, I'll tell you exactly how much home price appreciation that you will get, an exact number, how much to expect in the US next year. Or, Hey, maybe I think that home prices will make a rare fall next year, what you're going to get that number, if that's what I forecast, you can go to our get rich education YouTube channel anytime here and make sure that you set a notification so that you are informed again. That's Saturday the 21st at 3pm eastern over on our get rich education YouTube channel, I expect that that information is going to benefit you.    Hey, if you appreciate the show here, do you think that you could help me out in just one small way? Call it my Christmas gift request. There's just one item on my Christmas list with you, and it should only take a couple minutes of your time leave a podcast rating and review for the show on Apple podcasts or Spotify. The rating is the five star thing. The review is a few sentences about what you get out of the show here. I would really appreciate the, I suppose, gift from you, and I will read your review myself too, if you don't know how to do it right inside those listener apps. Just open up a browser tab and search how to leave an apple podcast review or Spotify podcast review, or whatever platform you prefer to listen on. Yeah, it would feel like a little Christmas gift to me after all these months and years of listening, go ahead and provide me with some feedback. Tell me what you think, and thanks so much. Until next week, I'm your host. Keith Weinhold, don't quit your Daydream.   Dolf Deroos  43:10   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  43:38   The preceding program was brought to you by your home for wealth, building, get rich, education.com  

From railroad conductor to becoming a successful real estate investor and replacing his day job in just 3 years. On today's episode, Keith chats with one of our very own GRE listeners about what he did to build his portfolio to quit his steady union job.  Hear about the importance of having a clear "why" for investing and setting specific goals. We discuss the concept of inflation profiting on debt and how it contributes to wealth building Leveraging cash-out refinances and 1031 exchanges as a strategy to scale up and diversify.  Resources: Check out Grant Francke's book “The Unlikely Investor” here. Show Notes: GetRichEducation.com/531  For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com  GRE Free Investment Coaching:GREmarketplace.com/Coach  Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com  Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866  For advertising inquiries, visit: GetRichEducation.com/ad  Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  Best Financial Education: GetRichEducation.com  Get our wealth-building newsletter free— text ‘GRE' to 66866  Our YouTube Channel: www.youtube.com/c/GetRichEducation  Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:01   welcome to GRE. I'm your host. Keith Weinhold, it's a highly relatable show today because you're going to meet a fellow GRE listener and real estate investor like you that use the principles of this show to build wealth, and he reached real estate financial freedom even faster than I did today on get rich education.   Mid south home buyers, I mean, they're total pros, with over two decades as the nation's highest rated turnkey provider, their empathetic property managers use your ROI as their North Star. So it's no wonder that smart investors just keep lining up to get their completely renovated income properties like it's the newest iPhone. They're headquartered in Memphis and have globally attractive cash flows, an A plus rating with a better business bureau and now over 5000 houses renovated. There's zero markup on maintenance. Let that sink in, and they average a 98.9% occupancy rate, while their average renter stays more than three and a half years. Every home they offer has brand new components, a bumper to bumper, one year warranty, new 30 year roofs, and wait for it, a high quality renter. Remember that part and in an astounding price range, 100 to 180k I've personally toured their office and their properties in person in Memphis, get to know Mid South. Enjoy cash flow from day one, start yourself right now at mid south homebuyers.com that's mid south homebuyers.com   Keith Weinhold when you want the best real estate and finance info, the modern Internet experience limits your free articles access, and it's a replete with paywalls, and you get pop ups and push notifications and cookies disclaimers, ugh. And no other time in history has it been more vital to place nice, clean, free content in your hands that actually adds no hype value to your life. That's why this is the golden age of quality newsletters, and I write ours myself. It's got a dash of humor, and it is to the point to get it. It couldn't be more simple. Just type up a text message with the letters G, R, E in the body and send it to the phone number, 66866, and when you start the free newsletter, you'll also get my one hour fast real estate course, completely free. Subscribe to my Don't quit your Daydream newsletter, and your mind will be wired for wealth. Text GRE to 66866, text GRE to 66866.   Corey Coates  2:57   you're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  3:13   Welcome to GRE from Washington Crossing Pennsylvania to cross City Florida and across one area, nations worldwide, you're listening to one of America's longest running and most listened to real estate shows. I'm Keith Weinhold, and you're listening to get rich education here for you every single Monday, every week, without fail. This is the voice of real estate investing Since 2014 you know, being successful in real estate such that you can quit your job when you're young enough to enjoy it is counter cultural, even kind of Bohemian. I mean, just imagine telling yourself this or saying this to somebody else. First, I had a lot of debt, then my situation got even better, because we had a surge of high inflation, and it's all making me rich. To that, most conventional financial wisdom would reply like, Dude, are you nuts? Maybe. But I'll tell you what, I'm not normal. I wouldn't want to be normal. That's a real pejorative, right there. Normalcy is, like, slanderous. Yep, you gotta get iconoclastic. Well, it's all grounded in fundamentals. Yep, inflation dilutes your debt for you, and it's almost perfectly predictable that that's gonna happen too by following principles just like that aligned with GRE 's inflation triple crown, and that real estate pays five ways. The guest that you'll meet today, yeah, he did reach financial freedom faster than I did. You're gonna hear about how he did it. It's like I've said on the show here before. I am divulging to you the information that I wish I had when I started out, because if I had this when I began, I would have reached financial freedom sooner. You know, after I bought my first ever income property, that fourplex, I didn't buy my next investment property for almost five years. Okay, it was not a fast timeline for me, but after about four years from buying that seminal first property, I started analyzing what it was doing for me, and I well, not only wanted to buy more, but I would soon learn that really the lessons I extracted from that property, I ended up articulating that in ways that no one else that I know of has. Today's listener guest is from a Midwestern MSA of 343,000 people that we haven't discussed on the show before, at least in any detail. And that's also the market that he invests in. Let's meet him.   Keith Weinhold  6:05   From time to time, we like to have a GRE listener on the show to learn about how the show has changed their life, and also discover you know just what you're out there doing as a real estate investor. And this is because other listeners can find these episodes so relatable. Today's listener guest is from Nebraska, and he listened to GRE in the commute to and from his job for years back when he still had one, because he's a success story. Since he has replaced his day job income with rental properties in just three years, which is a remarkably fast timeline, and now he's got more time freedom for his passions or for his family and kids. So we're gonna learn about how he did that. Hey, welcome to the show. GRE listener GrantFrancke, Thanks, Keith. Honored to be here. Frankie is spelled F, R, a, n, C, K, E, and Grant, this is great that you've been on this fast timeline to produce financial freedom. But before we talk about that, let's back up. Tell us about your beginning like your family situation in your now, I guess former job.   Grant Francke  7:09   great question. So I started it out as a conductor for BNSF Railways. So I was a trained conductor. I started out there pretty much right out of high school. It's a great job if you don't have any family or kids because you're gone all the time you work crazy hours. Yeah. So it was great before I was married, but then I got married, I was like, I don't really love this as much. And then once we had our two kids, I was like, I've got to find something else that can get me that time, freedom to spend more time with them. And stumbled on real estate and started going that route.   Keith Weinhold  7:40   Some people don't have that mindset. They justify working overtime because, well, I'm away from my kids, but I'm working for them, but with financial freedom, you really can have both a time for your children when you want it and the income that you desire a railroad conductor. So I believe that's different from a railroad engineer, right? The railroad engineer is the person that kind of drives the train and changes the speed in the conductor. They're the one that's sort of making sure that the staff and the cargo and the passengers are taken care of. Is that what a railroad conductor does?   Grant Francke  8:12   Yep. So we only did cargo freight, so I was in charge of, like, how fast we could go, what was all in the train, talking to the dispatcher and making sure we're going the right directions and and taking the right sightings, and then if anything broke down on the train, we'd have to go back and take care of it. But yes, the engineer is the one who he physically drives a train, and we're kind of like the co pilot.   Keith Weinhold  8:32   You talked about how you were away, and it takes an awful lot of hours. You based there in Nebraska, geographically, what kind of routes Did you run?   Grant Francke  8:41    It's 300 miles from Lincoln. So I was based out of Lincoln Nebraska. So it's about 300 miles, yeah, so we did to Kansas City, cook Nebraska, some places out in Iowa, up north, to Sioux City. And those trips ranged from 36 to 48 hours, round trip for us to be gone and back.   Keith Weinhold  8:58   making the economy run there, but this was, you know, rather time consuming, obviously pretty disruptive to one schedule there when you're working long shifts or away for these long periods of time. So okay, it sounds like you got the idea that you wanted something where you could control your time better. There are so many ways to produce income in an informal sense, there's entrepreneurship, which might be something like you could have launched your own app or started a donut shop. Then there's something more passive when it comes to investing. I mean, most people that are working at a job, they even think, Oh, hey, I have my investing bucket covered because I invest through my employer in 401k and that's good enough. But somehow you must have had this notion in you that this wasn't good enough. So tell us about how and why real estate.   Grant Francke  9:42   I've always been like, somewhat handy. So I was gonna go and just be a GC or a handyman. I was Googling around, and I found a post that said that the best customers for handymen are landlords, because they keep you busy and they always got work. I was like, Oh, that's great idea. So I stumbled upon a podcast. Where it was a handyman who became a landlord, he recommended a book on there called Rich Dad, Poor Dad. So I went and got that book, and then my life was changed after that.   Keith Weinhold  10:11   It's amazing how that little purple book influences so many of us. Okay, so that sort of opened you up to the concept of real estate investing and Rich Dad content is terrific. A lot of times, though, it doesn't really get down into the nuts and bolts too much. So just in your educational journey, where did you progress from the rich dad school of thought?   Grant Francke  10:30   Yeah, so Rich Dad, Poor Dad kind of taught me about that not spending your giving your time for money is creating that loop of the money. So after that, you know, I started off just listening to all the podcasts. You know, I'd listen to your podcast, bigger pockets, Kathy Fettke, I'd listen to all those just on repeat, reading all the books that I could get my hands on. Because I was just once, I started learning about real estate. And it did scratch that entrepreneurial bug that I did have. It kind of gave me the both of the passive income and being able to build a business for myself as well. So I just went through all the education that I possibly could, podcasts, books, you name it. I was obsessed with it.   Keith Weinhold  11:08   Yeah, all right. Well, it's all about doing the right thing before you do things right, like we say here on the show. All right. So it sounds like you were confident that you were doing the right thing. You were in real estate. Tell us about the start, especially buying that first property. What was that like?   Grant Francke  11:25    Yeah, it was nerve wracking, right? It was a small, up down duplex in Lincoln, Nebraska. It's really one of my only properties I've actually gotten that's been on the market on the MLS. Just got an agent went and bought it and it was a good deal, like it cash flowed. Well, I took it down. I was managing it myself, and I still do manage my portfolio myself. I do vividly remember, like sitting in the living room of that doing my showings, and I just did after three or four showings, I couldn't get it rented, and I was listening to one of your podcasts, and you were talking about the different ways that real estate pays you, besides the income, and that really kept me motivated. This is a long term journey. This isn't a short term get rich quick thing. You know, by getting a tenant in there, it might take a month, but then they're going to pay down your note, you're going to get the tax benefits, you're going to get all those different items Flowing into you from real estate. So I remember that vividly from that first deal is listening to Keith in the living room.   Keith Weinhold  12:16   Yeah, being a profiteer in real estate, it's a little, maybe just a little like the iceberg analogy. Maybe only the top 20% of the iceberg is visible in what you see as profit. You're thinking about monthly income, and maybe you're thinking about appreciation. You don't see everything else below the iceberg that's underwater, I should say rather, like the inflation profiting on the debt and the loan amortization in the great basket of tax benefits, you sent me a paper letter earlier this year. One thing you wrote about is how the show influenced you, because you vividly remember sitting on the floor of your first ever vacant rental unit. So presumably it was in this Nebraska duplex, one of those units we're talking about here in this the show kept you motivated. You thought you were failing because you didn't get the unit rented after the first three showings, which I think we know now is sort of funny. That's really normal, even in a good rental market. You know, it could take more showings than three until you get the right match between a tenant that wants the unit and a tenant you'd accept. I mean, the tenant themselves, they have to accept all sorts of things. Uh, maybe they don't like the parking situation. Your unit layout has to be right. In my first ever property, which, as you know, was a four Plex, one problem I had is some tenants just didn't like the fact that the only bathroom in these four Plex units was upstairs. And then it's funny, as soon as you get the showing, say it's the sixth showing that you get it rented out, the problem's over. It's solved. You're back to 100% occupancy. And you wonder why you ever thought you had a problem. That's just sort of how that goes.   Grant Francke  13:43   Yeah, hindsight is always 2020. It's really stressful in the moment, but just keeping in mind that the different ways it pays you the different avenues of income that come from it, and that's even something like it was conceptually, I understood it, but it really didn't take effect for me till it was like five, six years down the road, and you go, look at your loan balance, and you look at what the inflation's done, you're like, well, that's a substantial amount of money that you've made just passively getting your tenants to pay down your debt.   Keith Weinhold  14:09   Yeah, some don't even think about the fact that your tenant is paying down your principal for you, an advantage that homeowners don't have, because homeowners, they just have $1 that goes from their cash pocket over to their equity pocket every month. But in your rental property, your tenant is doing that for you, and then inflation is, in almost all cases, paying down your loan silently, even faster than what that tenant is doing for you.   Grant Francke  14:31   It's amazing concept. Once you can can, can wrap your head around it   Keith Weinhold  14:35   all right, so you started with this duplex in your local area, Nebraska. Is there anything else to say about that first property, or is it more about the growth from there? That's more, yeah, it was   Grant Francke  14:46   the growth from there. That one was just like I said, kind of a base hit, and then we started scaling up after that. So my next purchase was another duplex, and I happened to find it on Craigslist, back when that was a thing, that you could find properties on Craigslist, and it was actually a retired engineer, rare. Order that was selling a duplex. I was like, Oh, this is great. We hit it off really well. Had a great transaction. I closed on time. I did what I said I was going to do, and then I was looking around on the assessor's website, and he had five more single family houses that were clearly rentals. I told him at the closing table. I'm like, Hey, if you ever want to sell those rentals, just let me know. You know, I'd love to scale our portfolio up. He ended up offering to sell or finance me those five properties with a minimum down payment. Well, just because we had just a great relationship, I showed up, I did what I said I was going to do, we ended up getting seven properties from that guy.   Keith Weinhold  15:33    Wow, that is huge, a way to scale up fast. So just with your behavior, your work ethic, the fact that you did what you said you were gonna do, you know, that engendered some sort of interest in the other party to offer you, seller financing. What percent down did you put on that next batch of properties?   Grant Francke  15:50   We did 10% down, great, and we had 5% interest on it, and we had a balloon payment due in, I think it was seven years so funny story about that. He sold all his rental properties. He was going to Florida to retire and just relax and and be a retired guy. He called me about two and a half years later. He's like, Hey, I still have the bug. I found a property I want to buy. Is there any way you could refinance the seller financing and close out my notes so I can use that capital to buy something? I was like, Yeah, Larry, I get it. Yeah. Let me see. I'll talk to the bank and see what I can do. But in those two years, I had done enough improvements in those properties and raised the rents, took care of them. When I went to refinance those five properties, I was able to pay two of them off, so I only had a loan on three and pay him back on the proceeds. So throughout that transaction, I pretty much had two properties free and clear, and then three houses on 30 year notes from Fannie and Freddie.   Keith Weinhold  16:44   How did you come up for the down payments with all this? Was this something you were able to do with income from the job as a railroad conductor?   Grant Francke  16:52    Well, that refinance was more like a burr model, so I was able to do all that with the equity inside that property. So those five single families that are refinanced. Was just all the equity inside those properties. So I didn't have to put any more money out. It was just the equity that was able to pay off the other two. And then I had the three on the notes, from appreciation, from appreciation, and, yeah, forced appreciation. So I was fixing up the units, raising the rents, you know, changing out flooring, redoing bathrooms, doing all that myself while I was still at my w2 job.   Keith Weinhold  17:21   Okay, really getting hands on, because you do have this bent of sort of a GC or a handyman, something that I personally didn't have, maybe this would have accelerated my wealth building faster had I done that. You're realizing that a source, you know, it doesn't have to be your own money from your own job. When you've got leverage, and you had 10 to one leverage on these, I believe it was what five single family homes that you had added seller financing that really multiplies you wealth substantially faster compound leverage, rather than compound interest. But a lot of people just let that equity die in their properties, rather than pulling it out a tax free event through a cash out refinance and moving it along.   Grant Francke  18:03   Yep. So we kept that process on. We buy a duplex that was needs some repairs. Nothing like crazy rundown, but you fix it up over 6,12, months, you do a refinance, and you just keep that ball rolling. And it makes the whole process really easy.   Keith Weinhold  18:15   I know that you are pretty open to discussing your assets, discussing your unit mix. So tell us about more of that expansion. What you brought it up to, and the exciting time when you've replaced your salary because you had enough income from the units.   Grant Francke  18:31   Yeah, so we would just keep that snowball method going of refinancing those two paid off properties we had, we had a line of credit against those as well, if we needed that for a down payment, or if we wanted to pay cash for something, we could use that leverage, that money from the bank and buy the property, do the refinance at the end, and pay it all back. And, you know, be out of pocket with minimal cash out of pocket for us. We just kind of kept that process going. And then once we had about 30 units, I would say so, about three years. So I started buying in 16, and then in September of 2019 is when I resigned from BNSF Railway and went full time.   Keith Weinhold  19:06   That's a great timeline. You mentioned some paid off properties there. And you know how I'm the proponent of leverage in good debt in all of them. But really you talked about despite the fact that you had, I think, two paid off properties, it sounds like single family homes. Early on, you were still able to leverage the fact that they were paid off as collateral for getting more loans. So you are still using those as other people's money despite the fact that they were paid off.   Grant Francke  19:31   Absolutely we still use it to this day. That's if we need a down payment, if we need a chunk of cash. That's where we go to is grab those from that line of credit.   Keith Weinhold  19:39   Talk to us more about sort of the sourcing of the financing. There were you getting together with some local banks in order to get good terms where you can collateralize some of your existing portfolios assets?    Grant Francke  19:52   So we used to use a small community bank here in Nebraska. I started with them, probably 2018 and I've been with them since you just create a really good relation. With them. They trust me. They know what I'm doing. They know if I bring them a deal like I'm not hiding anything, I'm not showing them certain numbers, it looks better like they trust what I'm doing. I trust that they're going to take care of me as well. It's always good to have a few in their back pocket. But if you have a really good relationship with one small community bank, it can take you pretty far.   Keith Weinhold1  20:18   Tell us about how you built that relationship with the community bank. I think a lot of people hear about how to do that. This doesn't mean going bowling with a banker and having to be your buddy for watching the NFL on the weekend. So I guess, how do you demonstrate that you're a capable business person to a local bank in order to get good treatment?   Grant Francke  20:37   That's a great question. So my first couple deals, I created a full deal pitch deck sheet that I brought in in a laminated folder of pictures, timelines, my past history of what I've done. So I started off on the right foot of showing them that I was very professional. And then the same thing, like with Larry, with the seller finance properties, I showed up. I did what I said I was going to do. I didn't close late. I always was on time. I was on time for my meetings. I was on time for my closings, just staying top of mind with them too. So if I didn't have a deal going on, I'd stop in when I was depositing some laundry change and just chat with my banker or chat with the check guy, and just make sure I stay top of mind with them.   Keith Weinhold  21:14   Yeah, it's a little bit like how people classically think about as interviewing for a job. It sort of sounds like you took a page out of that book, and you're sort of interviewing for a loan, if you will, tell us about your portfolio size now, and kind of what that asset mix is like.   Grant Francke  21:30   yeah, so we're up to about 120 units now, all in the Lincoln Nebraska area, all multi family, small, multi family. We saw those single family houses we hold on to. But otherwise it ranges from duplexes, four plexes, some six, eight units are mixed in there as well. So we're still just buying, like, just boring cash flowing deals. That's one thing I always say is, like, I just buy boring real estate. I don't want anything super stressful or super crazy, like, I'm not infilling to build ADUs. I'm just buying boring cash flowing rental properties.   Keith Weinhold  22:02   It really can be pretty boring. Real estate is really slow moving. Yeah, it's almost like the more boring the area of the nation that you invest in, the more likely that it's not a trendy place. And, you know, people are wearing Carhartt rather than Lulu Lemon. It's almost like that's an indicator of what a good market is we're talking with Grant Francke. He's a GRE listener. He's telling us how he built his portfolio from being a railroad conductor to going ahead and doing this on the side and leaving his day job. When we come back, we're going to talk about, was he nervous and like just what level did he have to get to before he had the confidence to quit his job and replace his salary. You're listening. To get rich, education more. We come back. I'm your host. Keith Weinhold.   Keith Weinhold  22:02    Oh, geez. The national average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk, your cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And you know how I'd know, because I'm an investor in this myself, earn 10% like me and GRE listeners are text FAMILY to 66866, to learn about freedom, family investments, liquidity fund, on your journey to financial freedom through passive income. Text, FAMILY to 66866.   hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation, because they specialize in income properties, they help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lending group.com that's Ridge lending group.com   Caeli Ridge  24:35   this is Ridge lending group's president, Caeli Ridge listen To get rich education with Keith Weinhold, and remember, don't quit your Daydream.   Keith Weinhold  24:55   Welcome back to get rich education. It's one of my favorite types of episodes because we're talking about a GRE listener, much like you, with what you can do, where he started, what the architecture of his portfolio building was, and a big part of that is you don't really want to be debt free in real estate. You want to be financially free. You want to build enough income in order to replace the income from your day job. I want to talk about that part grant replacing your salary. That sounds really good in concept, we know that's what you need to do. When I personally was at that point, I still remember how scared I was to walk out from my cubicle where I was employed at a State Department of Transportation and walk across the hall and tell my boss's boss, Therese, that I'm giving my two weeks notice. I've got to admit, I was still scared. My heart's still racing a little bit just bringing it up and talking about it. So why don't you tell us about at what point you replaced your salary?   Grant Francke  25:55   My wife's an accountant. She's really good at like, Excel spreadsheets, so we made an Excel spreadsheet that factored in the tax benefits of real estate that I would get as a full time real estate investor. What my income was. I went to the lowest paying job at the railroad just to see if we could live off of that paycheck. So once we hit that cash flow number, which was, it wasn't a great big number, it was like 4800 a month or something, once we hit that number, she said, All right, I think we can do it. We're good to go. So I went in, and I only had one of my buddies at the railroad that knew I was going to resign that day. I was going to go in and resign, then clean out my locker. I got there, it was like, well, I'll just clean my locker out first and then make sure this is exactly what I want to do. I got my locker cleaned out. Everything was in my truck, and I walked in, and it was the most terrifying thing that I've ever done, you're walking away from a great union job with a heck of a pension that I've been there for at that time, 13 years, you know. So I had some seniority built up. I just went back to like my family again and thinking about all the times I'm going to spend with my kids, with my wife, the trips we'll be able to take, the memories we're going to be able to make, and the hard work that I put in those first three years of just grinding doing all the work myself, managing all the properties myself, that gave me that push. I was like, No, I can do this. These numbers make sense. The math adds up, and we're going to make it work. That's   Keith Weinhold  27:13   great. And by the way, I also walked away from a union job with the pension guaranteed retirement benefits, and they were guaranteed in the state's constitution because I had a state government job, so that pension wasn't going to go away, and I just went ahead and walked away from all that. Yeah, it certainly is a scary thing. It takes a certain level of confidence in order to go ahead and quit your job. But here's what I think, Confidence comes on the person that you made yourself be to on the side, build this portfolio and become the type of person that can demonstrate to a local bank that you're credit worthy and that you're an ethical operator. That's sort of a skill set that you build, such that if something went wrong and you had to go get a job again, you just sort of have a skill set where you know you could get another job. That's the confidence to quit.   Grant Francke  28:05   Yeah, once I had that confidence, built up and confidence in myself, you're kind of trained as even a man, just to not be proud, you know what I mean. But once I was proud of myself and what I built, it gave you that confidence, that I could walk in and say, No, I can do this on my own. I don't need this job. I'm done with it.   Keith Weinhold  28:20   Right to not need an employer. So not only walking away from a union and pension benefits and a paycheck, you're also walking away from paid vacation days and paid holidays. But yeah, I mean, part of that confidence is like, I know that I can, you know, furnish this myself. I'm not dependent. I don't need someone else. And that's really that feeling of freedom.    Grant Francke  28:42   Yep, absolutely, it's a very freeing feeling.    Keith Weinhold  28:45   On this show, a lot of investors start out with single family homes and part of that scaling process, and I really help encourage, hey, the rate of return from home equity is always zero on doing a cash out refinance, or a 1031 exchange, and at some point, say, maybe your single family homes, you probably have a few that are less desirable than others. Maybe you have a few single family homes in your rental portfolio that have higher interest rates. You just have a few where you just can't seem to keep them occupied very long. They're the ones that are ripe for doing a 1031 exchange or a cash out refinance. Why don't you talk more about sort of those next sets of properties where you might relinquish a couple single family homes and get into some of those properties, a four Plex, a six Plex, an eight Plex, a 10 Plex, and just sort of some of the differences in managing, since you're still self managing, is that right?    Grant Francke  29:37   Yeah, we just actually completed our first 1031 exchange about two months ago. Great. Oh, yeah. So we actually sold two duplexes. So we sold four units and bought 17 in the 1031 exchange. The cash flow is going to be as we buy them right now. We're getting a little bit better cash flow. But you know, the ability to scale that and the management side, for me is much easier. If I would rather manage 117 unit than 17 single families, spread out all the way around. I only have one lawn to work worry about, totally on one roof. I have one sewer system to worry about. It seems scary in the beginning, but now that why I'm at where I'm at, I would much rather take down a 10 Plex than 10 single family houses.   Keith Weinhold  30:19   100%. oftentimes single family homes, you know, they tend to be scattered. They're probably not all going to be in the same development that introduces management difficulties. Of course, I circumvent that because I totally use professional management for all of my properties. So that's really not problem or a hold up for me, where it sure would be with you. Yeah, there really is that mental leap. I've owned a few properties that have been 10 plexes or in that area, and there are just things to do with there that we know we don't need to deal with in single family homes or duplexes, there might be one central communal laundry room that you have to manage. And you know, how are you going to keep that clean? I had one particular eight Plex building while the kids just had their bicycles parked here and there in the front yard, and it looked junky. And my property manager built a screen, just like a fence, where you had to keep your bicycles behind there, and that really increased the curb appeal of the place. If that's a single family home, you don't really care so much about that grant. I once had an 11 unit building. It had four units on the top floor, four units on the middle floor and three units on the bottom floor. There was a laundry room where the fourth would have been. So we had 11 families live there, and there were about 14 parking spots for this 11 Plex building. And figuring out who was going to park where was a real mess. Some people had more than one car. Some people had seniority, so they felt like they should have gotten some of the spots we had the building next door where people tried to park at our 14 spots. That was such a mess. I told my property manager to you, go figure it out. You go assign the spot. So my point is, there are a whole bunch of dynamics when you kind of get into this 10 or so unit area that you just don't have with rental, single family homes.   Grant Francke  31:58   Absolutely. Yeah, I've had to have many conversations with people telling them I manage properties, not parking. I don't just figure it out be adults. I don't want to hear about your parking dilemmas, which I get too. You know, you also have, you have noise complaints, and you want to make sure everybody's being respectful of their neighbors when you get into those bigger buildings. So there are definitely pros and cons. But boy, if I, if I could have a 10 single families on the same street, that would be, you know, ideal management wise, that would be a lot easier, but it's just tough to get everything together.   Keith Weinhold  32:24   Is there any other guidance you can give with scaling up? Because a lot of people just continue to let so much equity accumulate in any one property, and they're not scaling up, you're sort of leaving some meat on the bone. There any other strategic things one can think through?   Grant Francke  32:38   Just take advantage of your cash out refinances when you can, I'm a proponent of leverage, but not over leveraged to where your negative cash flow on it, if you can cash out, refinance, pull your equity out, and still be making some money off of it, that's really going to allow you to scale over time, a lot larger than just holding that one duplex and waiting for it to give you that cash flow, that financial freedom. You really got to take that equity out, spread it out over multiple properties, and then watch them all scale up at the same time.   Keith Weinhold  33:05   There's probably less risk when one does that. People are averse to making that move because they think about how they're taking on more debt. But the more you cash out and scatter it into more properties, you've got more diversification geographically, if you want to. And really, I think the mindset that helps people with this is, when you do a cash out refinance, you didn't lose any equity. You really transferred some of your equity.   Grant Francke  33:30   yep, tax free too, which is something you harp on, like it's tax free money. You get to walk away and not pay taxes on it.    Keith Weinhold  33:38   It's really amazing. All right, well, so you have a substantial portfolio of about 120 units in is it all in and around Lincoln Nebraska?   Grant Francke  33:47   Yep, Lincoln Nebraska and a couple small communities around there, some more college type towns that have industries in them as well. But all the Lincoln Nebraska area.   Keith Weinhold 33:55   we don't talk about Lincoln Nebraska here on the show very often. What kind of personality does the market have? Whether that's, you know, like you mentioned, is there a preponderance of student housing? Are there particular economic sectors that really help float and drive that market? Tell us about Lincoln as a real estate investment market.   Grant Francke  34:13   Like I said, with boring real estate, it's a great boring real estate town. We've got a couple universities in Lincoln. It's a big ag area, obviously, so surrounded by the the ag industry. But it's also got some great tech jobs that are coming in. It's just a very steady it doesn't have a lot of the ups and downs. You know, 2008 was obviously tough with everybody, but there wasn't this massive housing correction here. We're just kind of slow and steady, which is that's kind of my pace.   Keith Weinhold  34:39   typical of what I call a stable market, where, conversely, you tend to have the volatile markets that are on the coast. I'm going to imagine in 2008 it didn't go down in value nearly as much as markets, but in the big housing price run up in 2021, I'm going to guess you got some really nice appreciation, but probably not as much as a lot of the other markets as well.   Grant Francke  34:58   Yeah. Absolutely that depreciation, then that inflation run up, was pretty substantial. But, yeah, it's just a really boring real estate market that just steady. There's some great rentals. There's a lot of people that move into, move into town, from Lincoln, from outside, that go to school or start out here, and then they go somewhere else. So it's great town.   Keith Weinhold  35:16   What about some other things in the character of the market? What are property taxes, like one or 1.2% per year based on the value of the property. That's about a national average. How does Lincoln look that way?   Grant Francke  35:29   Yeah, it's a little bit higher. Right now, there's been some fighting in our legislature about how they're trying to fix that, because we have a really fairly good budget in Nebraska tax wise. So they're fighting to get us some relief now, but it's a little bit, I guess, like 1.3 or 1.4 right now in Nebraska.   Keith Weinhold  35:43   a little higher than the national average. But really, the more important metric, one I talk about a lot, because it's so simple, is approximately, let's say, for a rental, single family home, is what is the ratio of the rent income per month to the purchase price?   Grant Francke  36:00   Yeah, it's tough to find those 1% deals anymore. Those are tougher to come by. I think if you're buying a single family right now, you're probably going to be, at that .75% of the income to the property. If you get into multifamily. We're still finding deals that are decent around that 1%   Keith Weinhold  36:15   so with the 710, of 1% rent to price ratio as an example, on a $200,000 purchase price property, that would be a rent of $1,400 so you can find something like   Grant Francke  36:28   that. It sounds like that's usually about, yeah, for single family, I think that's what we're seeing. But like I said, multi family, we're getting pretty close to that 1% still with with some added rent.   Keith Weinhold  36:37   Do you think about branching into other markets? Like a lot of our investors do, not everyone lives in an investor advantage market like Lincoln, but even those that do say, if they live in a Columbus, Ohio or in Indianapolis, Indiana, they might want to add a couple markets for diversification, maybe Metro in Alabama and another one in Florida. Do you plan to continue to grow right there, since you have these great local relationships with local banks.   Grant Francke  37:03    I mean, it'd be tough. There is a couple of markets we've looked at, like San Antonio, I really like that one. And then Louisville, Kentucky. I've been there a few times, and it's just a great town. And I think there's some really good industry down there too. So those are the two that would be on my list. I haven't taken a massive action on getting down there yet, but if I were, that's probably be where I go.   Keith Weinhold  37:21   Of course, San Antonio is going to have those higher property taxes, but I just visited San Antonio last month. They really look to be the beneficiary of this near shoring movement, with more companies relocating to Mexico, this is great. We talked about how you grew your portfolio. Are there any other strategies overall that you employ any mindsets that you make actionable, either that you learned about on this show, or just anything else that you do in there grant your keys to success, your formula.   Grant Francke  37:49   The big thing for me is like, my why? Like, why did I do this? And why was I doing it that was huge for me in the beginning, and my, why was my wife and kids like? I wanted to spend more time with them. So when you know your why, like, all these tough things that happen, because, like, you know pipes are going to break, tenants are going to be tenants, and things are going to go wrong. So if you know your why and why you're doing that, it makes it so much more easy to get through those difficult times. So it's really a mindset thing, which is kind of odd thing to say, but it's a mindset thing, because things are gonna go wrong, so you gotta have a strong why behind you.   Keith Weinhold  38:22   Did you write down your why?   Grant Francke  38:24   I did? Yes, I'm big in goal setting as well, so I write goals and like, every year and then quarterly as well. So writing down my why and knowing that, it helped me when I was working on those properties and driving back and forth, listening to get rich education, just knowing why I was doing this, it made it a lot easier.   Keith Weinhold  38:42   Yeah, there's something about writing it down. I've even learned that using blue ink on yellow paper, somehow there is something about doing that in particular that really helps create this imprint in your mind. But however you do it, yeah, writing it down is so important, and that way this goal doesn't become a morphous or malleable when you do that.   Grant Francke  39:03   yeah, it sets it in stone. You can look at it. It's actually physically there. It's not something just conjestually in your head. It's actually something that's taken place.   Keith Weinhold  39:10   You have had such success. Gosh, congratulations on that, such that you even created a resource. But before I ask you about that, is there just any last thing that you'd like to talk about in your journey overall, whether that's goal setting and having a good why, or any GRE concepts, or just really anything else that's led to your success, to have 120 units.   Grant Francke  39:32   it really goes back to, like I said, my why, and then the education. So I do want to thank you again, like, for all the podcasts and and all the information you put out. It was uh very, impactful on me as I was learning the reason that why GRE always spoke well to me is like you would talk about conjectural things, about real estate and cash flow and all this, but it was also the larger economic process of how things worked, how things mixed together. So having that in my brain too and in my back pocket really gave. Me the confidence to attack these things when inflation started happening. I'm like, Oh, that was nothing I ever thought about. But I've heard you talk about it for hours and hours on the end. So I'm like, I understand how this works now, and I know how I'm positioned. I can use it to my advantage as well. So a lot of those things helped me out scaling up and just taking all those resources that we got from the show.   Keith Weinhold  40:17   Yeah, we're actually beneficiaries of inflation here, which is certainly pretty counter cultural. With your success, you put together a resource, and I definitely want you to share it with our audience, because this is something I really think they can benefit from, because they can relate to your story. I'm pretty confident.   Grant Francke  40:35   appreciate it. Yeah, so I wrote a book. It's called the unlikely investor. It's available on Amazon, but it's just a book that I took, kind of my story from a w2 employee to scaling up to where I am. Now, some of those tips and tricks in there. I have maybe plagiarized some stuff from Keith's podcast, and we talked about some the different pillars of wealth that you get from real estate. But it really just kind of goes into the mindset part too, of finding your why, goal setting, and then the basics of real estate investing on up through scaling up to a decent sized portfolio.   Keith Weinhold  41:07   Oh, I know, in every instance you credited me in the book.   Grant Francke  41:11   I do. I did, yeah.   Keith Weinhold  41:13   I really don't care. It's more about, you know, people getting the information, rather than me getting any credit for that. That's great. And you know the name The unlikely investor? When I learned that that was a title of your book, for a moment, that threw me off. I'm like, I wonder what that means. But you know what? No, I think I know what that means. You can tell me, but I'm an unlikely investor. I went to college for geography and regional planning. That was my double major. I thought I'd be a geography teacher. It's just really unlikely that I got into real estate, I didn't have this bent in me anywhere within academia. So why do you call it the unlikely investor?   Grant Francke  41:49   That same story, you know, I had a great w2 job, I had a great union, a great pension. There's really no reason that I had to go out and do this. It's very unlikely. You know, if you look at the numbers of our peers that actually do what we've done. It's extremely unlikely that we did it, so it was a great call to action of like, No, you can do this. It may seem unlikely, but it's possible.   Keith Weinhold  42:09   Oh, well, I think that title is 100% appropriate. That was good to talk with you more, and I really want to thank you for coming onto the show, because you're going to help out a lot of people with your story and you the listener. If you find it relatable, check out. Grant's new book just published this year. It's called The Unlikely Investor Grant Francke, it's been great having you here on GRE    Grant Francke  42:33   appreciate it. Keith, it's an honor.   Keith Weinhold  42:40   Grant mentioned the tax breaks when you leave your job quickly, so as not to gloss over that when you're at the point where you're getting close to leaving your job, if that's even a goal of yours, some people want to get in real estate just for some additional income. But like he said, it was at a point where he and his family needed just $4,800 of rent income per month. That was back a few years ago there, and your number will almost surely be higher than that with the inflation that we've had. But you know, figure that in once you quit your job, you're probably going to identify for what's known as the real estate professional designation, as outlined by the IRS, what that is, is the status that gives you some really nice tax breaks. And one way in which you qualify is that real estate needs to be your principal activity, meaning you expand more of your time per week in real estate than you do any other discipline. Now, I'm not a CPA, but frequent guests here, Tom wheelwright and I, we have discussed the real estate professional designation on a prior episode, and every year, there's a form that I quickly fill out myself confirming my ongoing real estate professional designation. Now you're probably not going to be able to qualify for that when you still have a day job, because that's going to be your principal activity, where you spend most of your time each week, and also before you do quit your job, if that's a goal of yours, well, it is a good time to first qualify for loans Fannie and Freddie like the steadiness of a w2 income. So qualify for your last few loans before quitting. There might even be a seasoning period in there as well. Now, when it comes to today's guest grant, when he reached out to the show here, you know there's something about his approach that engenders this willingness to want to collaborate with him. I think I shared with you before that we get 50 times as many requests to be a guest on the show as we have available slots, but Grant, I guess, exudes this professionalism while being humble, and it just makes you want to see him win, and yeah, no wonder his local banks want to make him loans. I gave a formal written endorsement of Grant's new book earlier this year the. Forwarders, written by Brandon Turner, the book titled The unlikely investor. I mean, I might be an even less likely real estate investor than Grant because he's somewhat handy. That's a skill a handle. He's got that I don't have. I am a writer and well then somehow became, I guess, an unlikely podcaster or two in the book. He also writes that if you're unhappy in real estate investing, it means that your system is broken. So if you're seeking an approachable, relatable book, one where you can really, like, put yourself in the author's shoes and tell yourself, you know I can do that and I can be that. Well, then check out grant Frankie's book called The Unlikely Investor. More great shows coming up for you every Monday here. I'm grateful for your listenership. I'm your host. Keith whitehold, don't quit your Daydream.   Speaker 2  46:03   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively,   Keith Weinhold  46:23   The preceding program was brought to you by your home for wealth building. Get rich education.com    

Keith discusses the paradox of falling home prices and rents in Austin, Texas, despite it being the fastest-growing city. He highlights the over-supply of apartments, with new towers next to old bungalows, and notes that apartment rents are down, while single-family home rents are up. He also explores societal attitudes towards wealth, noting the double standard of admiring celebrities while vilifying entrepreneurs like Jeff Bezos. The over-supply of apartments has slowed down rent growth, affecting single-family home rents. Wage growth has outpaced inflation, potentially boosting rents. Millennials are increasingly renting due to the inability to afford homes.  Show Notes: GetRichEducation.com/530 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 For advertising inquiries, visit: GetRichEducation.com/ad Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review” Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai  Keith Weinhold  0:01   Welcome to GRE I'm your host. Keith Weinhold, I just walked one of America's most interesting real estate streets. I'll tell you what I saw then what it takes to get rents to increase in the US more real estate investing content, then it's about jealousy and envy. Why we hate Amazon founder Jeff Bezos for his wealth, yet love performers like LeBron James and Taylor Swift for theirs. It's a case study on wealth, entrepreneurship and celebrity today on get rich education.   Speaker 1  0:39   Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests include top selling personal finance author Robert Kiyosaki. Get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit getricheducation.com.   Corey Coates  1:25   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:41   Welcome to GRE from sinking spring Pennsylvania to Manitou Springs, Colorado and across 488 nations worldwide. I'm Keith Weinhold, and you are inside episode 530 of the GRE podcast. What's the minimum wage? I don't even know. Around here, we don't talk about how to live below your means, but grow your means, and you're gonna learn how to earn maximum wage. Austin, Texas is the fastest growing city in America. I've got some really interesting real estate observations for you, since I walked it two weeks ago and well, touring the Texas State Capitol Building was cool. And then on Austin's Sixth Street, I hadn't seen that much beer pong since college, but you know, rainy street, R A, I N, E Y, just south of the downtown, near the river, that was Austin's interesting Real Estate Street, the fastest growing city in the United States has falling home prices and falling rents. What a paradox that is in the fastest growing city. I mean, how do you balance that weirdness? Yes, the census tells us that Austin is the fastest growing and even as a gentrified hipster Haven with murals on the walls, street corners, there food trucks, coffee shops. You know the coffee shops that make you feel like you're in an indie film. It doesn't matter. They simply built too much there in Austin. So all of that that cannot compete with classic supply versus demand dynamics, old fashioned Milton Friedman stuff. And really, what I saw in both San Antonio and Austin is emblematic of the new apartment supply surge. What's going on on rainy street? I mean, that's what I call America's apartment over supply ground zero. Cranes are in the air all over the place. They're building 500 foot apartment towers right across the street from one story bungalows there on Rainey Street. It's a weird scene. Well, the apartments, they're going to be vacant for a while, and part of the weird scene is that there are outdoor live country music acts on the east side of rainy street, and they're playing out of these old one story bungalows converted to bars. It just feels like they're going to be raised and knocked over anytime and then country music, that's something that you associate with, like cows grazing within a mile of you. But that is not going on here, so these huge, new, shiny glass and steel apartment towers are right across the street from it. So it's this weird cultural mix of both country flare and urbanism in Austin and now there were also some clubs with DJs playing. There something more modern. I mean, like 20 year old R and B songs that everyone knows the words to by artists like Usher and Akon. Remember. Or a con or Ja Rule. Remember Ja Rule? Maybe they were playing Jay Z and ice cube too. But, you know, maybe shabu Z would have made more sense on that scene. In any case, it is an unusual scenario there in Austin. So a lively place, a growing place, but apartment buildings got out ahead of the growth. And yes, it all comes back to supply versus demand. Yep, that age old rivalry between what we've got and what we want now broadly, America has an overall lack of housing supply and the under building that is the most prevalent in northern states. And of course, under building, what that does is it increases the number of buyer bids on the few available properties. Well, in turn, that pushes up their home prices faster than the rest of the nation. Now the states with the most appreciation, they generally have the least new housing inventory being built. And of course, conversely, states with the highest available housing supply have the slowest home price appreciation. Austin is ground zero for that. So with the eclectic rainy street there, it's really representative of how you have some cities that are over built with apartments. You have a lot of apartment completions, but not very many new starts of apartments like I mentioned before. No, in fact, let's zoom out nationally. Here. Apartment list tells us that apartment rents are really flat. In fact, they're down seven tenths of 1% over the past year, available single family homes? Well, they're in more scarce supply than apartments, and the CoreLogic single family rent index tells us that their rents are up 2% annually. All right, something that completely makes sense for a change. The overbuild of apartments has slowed down their rent growth even more. But here's the thing, the overbuilding of apartments that's actually slowed down the rent growth in single family homes somewhat. And you might think that those two things aren't related, apartment rents and single family rents, but they're a little related. Just say a tenant they might ideally want a single family home, but there just aren't many of them out there for rent nationally. So then if a good new apartment is substantially cheaper, well, some proportion are going to accept an apartment as an alternative, and that's one reason that single family rent growth is just a modest 2% rather than a more normal 4% or so that you might see as a historic average. But yeah, I mean, really, the story is all these apartment completions, where a lot of them are going to be vacant for a while in some cities now, long term, apartments are going to be fine. I'm totally confident of that the demographic demand for apartments is going to be there because our population is growing and because there aren't many new apartment starts. So really that means over the next couple years, apartment supply versus demand is going to come more back into balance, while we could keep having this ongoing deficiency, though over for the single family rental homes. Perhaps the best thing that you and I can have happen to increase real estate profitability is to get rents up. So let's take a look at that. Let's look at the prospects for getting rents up in, just say, the next year or two. And there is a real bright spot here for that, and that is the fact that wages have outpaced inflation every single month for almost two years now, yes, wages and incomes are up those higher wages and higher incomes can therefore afford higher rents. And like with a lot of things in economics, it moves slowly, and there is a lag effect. And this is, you know, it's really how it usually works when there is a wave of inflation. What happens is, first, inflation outpaces wage growth, and now that we've come down off the big inflation wave, we're in the era where it has flipped, and now wage growth outstrips inflation. Well, the most recent stats, they tell us that America now has 4.6% wage growth and just 2.6% CPI inflation growth. Now is wage growth higher than the real diminished purchasing power of the dollar, not just the stated CPI inflation, because you got to remember, CPI is only the level that the government is willing to admit to, but in a sense, who cares? Because look, as a real estate investor, while your principal and interest payment stays fixed every month and inflation can't touch it, we know that wage growth is up 4.6% and that's the part that really. Matters. So if that means that you can get a 4.6% rent growth in the near future, after some lag effects settle in, well that might increase the annual cash flow, the money you feel in your pocket, say, 7% or 9% annually. So this wage growth trend, it portends really well for rent growth, ultimately flowing through to your cash flow growth. So we know that home price appreciation is amazing and has been amazing for us, investors, leverage and all of that, but there expects to be more upward pressure on rents, and that is led by robust wage growth. That is really happening now, and workers are demanding the wage growth to cope with higher consumer prices. Now, when it comes to the prospect of more home price growth, let's listen in to Shark Tank shark Barbara Corcoran, she recently talked about what would make home price growth go ballistic, as she puts it. This was her on Fox Business Channel with Neil cabotto. It's about three minutes in length, and then I'll be back to comment.   Speaker 2  11:08   Barbara Corcoran. Now the Corcoran Group founder, Shark Tank aficionado, much, much more brilliant read of real estate too, Barbara, great to have you. A lot I'm throwing at you, Barbara, and you always handle it, definitely. But first off, on the rate environment right now, between all these headlines and everything, rates have been backing up. And, you know, we just saw a 30 year fixed rate mortgage. It's up to 6.84% from 6.78% last week. That was before the market rate run up. So how do you view the environment right now for lending?   Speaker 3  11:43   Well, I think what we're losing right now we desperately need is more first time buyers. Less than 24% of the people buying now are first time buyers at an all time low. So rates have been bouncing around a while. Now, 6 to 7% so people are confused. They don't have big expectations. They're no longer waiting for a tremendous rate drop. If that happens, got it would be incredible for the market. But in the last year, or pardon me, in the last month alone, we have sold three and a half percent more houses despite what's going on in the interest rates. But the first time buyers aren't much a piece of that.   Speaker 2  12:16   You know, I notice as well us existing home sales, like you say, up 3.4% October. It's the first year over year gain I think we've seen in better part of three years. So what was going on there? Because that surprised me.   Speaker 3  12:30   Well, it doesn't surprise me because there's more houses on the market, so there were 25% more choices for the buyer coming out into the market and looking and on top of that, the buyers themselves have gotten accustomed to the rates being what they are, and they just got tired of waiting. But I am wondering if we'll ever see a 5% number, because anything with the 5% in front of it is going to make this market go ballistic. But right now, you're already seeing the signs. In the last month.   Speaker 2  12:59   You know, you've reminded me in the past that sometimes it's psychological. A lot of folks, and a lot of them look at that 7% handle on a fixed rate mortgage get close to or over that it could tax this recovery or whatever you want to recourse call it. But what do you say.   Speaker 3  13:13   well if it went higher? Of course, it would slow down the whole market. Would slow down the whole economy. It would slow down all the support services for the housing market, it would be a terrible thing, but I don't think people are thinking it's going to go much up, if you really listen to the experts. That could happen. But I don't think you're going to see interest rates above 7% again. I'm hoping that it's going to go and hover around six, or even go lower.   Speaker 2  13:36   All right. Well, you have a better track record a lot of those so called experts. I'm going to go with you, Barbara. But you know, the one thing that is out there, the worry is that Donald Trump, say what you will, of him, he has aggressive plans to spur the economy, you know, the tariff thing, the talk that, you know, he is going to pour a lot into tax cuts that could juice the economy so much so that some worry it's going to, you know, get prices going higher. We don't know for how long or how much, but that that that will be the inevitable consequence of what he's offering. Do you agree with that?   Speaker 3  14:06   I do agree with that. I think inflation is on everybody's mind, and I think it's risky, so I think we're going to find out. I guess it's like a horse race. We'll see what happens.   Keith Weinhold  14:15   Yeah, Barbara thinks mortgage rates in the fives. I guess under six then that would make the market go nuts and really push up prices. She reiterated how first time home buying is at an all time low, that proportion of the first time homebuyers are down, down, down, keeping those people as renters. So we've got the Trump bump and still an inflationary bump behind higher and higher real estate prices going into next year, most likely. But I mean, now you've really got to be selective and filter the kind of information that you listen to and put credence in what. We just had a presidential election a month ago, and people love to speculate about the future and what they think say tariffs are going to mean for inflation and then what that's going to do to interest rates. And you know, all that stuff is just notoriously difficult to predict. It is really tough. I mean, look, I've attended two prominent economic and real estate conferences the last few months, and there are some good insights at meetings like that. But here's the thing you've got to keep in mind, everyone has an opinion, and no one knows the future. George Bernard Shaw's got a great quote. He said, If all the economists were laid end to end, they would never reach a conclusion. So I mean, we're still going to talk inflation and interest rates here on the show, because their effect on your economic life is profound, but guessing about where they're going to go, especially interest rates, that is almost an exercise in futility. There are some things that we know will almost surely affect you. I mean, I'm talking about something like demographics that is more predictable, or the benefit of leverage, where, if you have too much equity in your properties, you can do something about that right now, and that way, what you do is you actually create your future, instead of guessing and speculating about what it might be. Or say you can create your future. You can learn about a program like you know when the opportunity Zone program came out a while ago, or a new tax incentive program for real estate investors. These are things you can do. You can sink your teeth into them with what you have right now, the resources, the toolkit that you have right now, and actually do something about and one thing that we do know is that increasingly, millennials cannot afford to buy a house, and you know, it just basically means that their future is poorer. They have to live with other people into their 30s. Instead of forming a family, they don't have kids. The marriage rate takes a hit. I mean, these numbers have collapsed since the 1980s the home ownership rate among them has gone from about 50% down to 30% so millennials and Gen Z ers too, they know that their future is really shaky and it's concerning. So you have this same cohort, people in their 30s doing two jobs, taking on three jobs, some of them balancing four jobs. They don't want to do that. They don't want to work 12 hour days, six days a week, while they're trying to pay down their college loans. They're doing it because they have to. They can't form a down payment for a home. The average millennial is 3637 years old. And their parents, and my parents, they're all baby boomers. And, you know, they Baby Boomers were the richest generation that we've ever seen. So what we've got going on here now is the first generation that will not be as rich as their parents, and that's really strange. We're all used to this sort of human progress. I mean, if your parents were middle class people, and you're less well off than them, or your tenant is well, then what does that mean? Well, it means that you're gonna be renting for a while. See this demographic stuff. This is really happening. There is no speculation here, and it's why I want you to set up your investor life to provide rental property to others. It's a smart place to be positioned. In fact, a lot of media agrees. Yahoo Finance just published an article titled, rental home investors are poised to benefit. It basically details why rental properties are going to be next year's attractive option for would be home buyers. This month, analysts at Raymond James and Associates, they say that they see mortgage rates remaining higher for longer given the outcome of the election, again, no one can really predict mortgage rates. But anyway, they reiterated their outperform ratings. That's the rating that they gave it out perform on these two companies, American homes for rent and invitation homes. And they're these institutional homebuyers, they do the build to rent space, and they noted Raymond James that is noted that we are increasingly confident in the longer term outlook for single family rental fundamentals and the industry's growth prospects. That's the end of their quote. So that's what the analysts of financial planning firm. Raymond James and Associates, had to say. And suffice to say, there is a lot of positive momentum for rental property, especially in the single family space coming up next. Why we hate Jeff Bezos for his wealth, but love performers like Harry Styles, Rihanna, Taylor Swift, Dua Lipa and Olivia Rodrigo, despite their wealth.    Hey, check out all of our real estate investing resources at get rich education.com. It's the home per our podcast, this very show that you're listening to right now. Also videos, blogs, how to get our newsletter. Be sure you're doing that. Connections with our recommended real estate service providers, a way for you to contact us over there, and also how you can connect with our completely free, yes, truly free, real estate investment coaching, all of that and more. Is it get rich education.com. I'm Keith Weinhold. More next you're listening to get rich education.    Oh, geez, the national average bank account pays less than 1% on your savings, so your bank is getting rich off of you. 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They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com That's ridgelendinggroup.com   Dolf Deroos  22:48   this is the king of commercial real estate, Dolph de Roos. Listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  23:08   Welcome back to get rich Education. I'm your host. Keith Weinhold, a Taylor Swift loving friend recently said the weirdest thing to me, I don't buy from Amazon. I hate Jeff Bezos. He doesn't need any more money. Yeah, that's what they said that struck me as so odd. Well, Taylor Swift is a billionaire with a B and a net worth of $1.6 billion and going up. And you know, we're doing this everywhere in society. Why do we vilify wealthy entrepreneurs like Bezos yet glorify wealthy actors and athletes and singers like Taylor Swift? Let's look into this, because I've actually got some answers for why so many people apply this double standard to wealthy celebrities and well known people. And I know I've mentioned to you before that Taylor Swift and I were actually born in the same hometown of Reading, Pennsylvania, West Reading, actually vilifying business people yet glorifying performers. That seems to transcend, you know, any of these celebrity personality or character flaws. So let's put all that stuff aside that's distracting, that devolves and gets us off topic. Let's just focus on the wealth part and the resentment of that wealth, because often it's not that people dislike Bezos for say, the decline of small retail though there is that for any of his personal traits, but specifically they hate his wealth, but by the way, yet they have an Amazon account. Well. As a society, we just love celebrities despite their wealth, if they're stage performers like Rihanna, Taylor Swift, Dua Lipa, Olivia Rodrigo, Harry Styles, LeBron James. I mean, we applaud Stephen Curry's three pointers and show a otani's home runs when Philadelphia Eagles quarterback Jalen Hurts got a $255 million contract extension. We loved it. Fans plastered their walls with his poster, but yet, at the same time, while people are doing that, society often disparages successful entrepreneurs and business owners for their wealth, like Bezos or Barbara Corcoran, who we heard from earlier, or Spanx founder, Sarah Blakely, so I analyze why society does this, so let's see what we can learn from it. And I should add, of course, that like with most anything, you can find some exceptions out there, some outliers. I mean, Warren Buffet's net worth is over 100 billion and yet seems like everyone wants to sit around a campfire and listen to his sage investing wisdom, and some athletes are despised, for sure. And then there's a guy like Ryan Reynolds who kind of spans both worlds and lives his best life in Hollywood and in business, but really our emotional divide. It begins with the primordial human senses of jealousy and envy. And, you know, there's a cartoon floating around out there, and the cartoon has just two frames. In the first frame, it shows a guy standing in front of the room with a crowd of people that he's speaking to, and he asks, Who hates the rich? And everyone in the crowd has their hand up raised high. Everyone hates the rich. And then the second frame of the cartoon shows the same scene, and the guy in the front of the room is saying, Now, who wants to be rich? And yeah, everyone's got their hand raised up again. So let's be realistic. Ask most people that resent the wealthy, all right, what income do you think you'd need to be to be considered rich yourself? Oh, maybe they would answer say, five times as much as I make it now. Oh, yeah. Well, I bet if right after that, you offered them a 5x pay raise for the same job, they would take it, but yet they resent the wealthy, even though 5x would make them wealthy. Now there's a component of optics here, too. You, with your own eyes, get to see Taylor Swift perform at a concert. Her work is visible. It's satisfying. You might be emotionally moved by that. And from all accounts, Taylor does put in a ton of work to perform that well, sing that well, and put in the physical endurance of these three plus hour concerts. That really is amazing. I don't denigrate her for owning a Dassault Falcon private jet like she does. I mean, I don't disparage any wealthy person for wealth alone. I think deep down in your heart, it's where a lot of people want to be. Robert Downey, Jr. He performs his we'll call it his magnum opus, on screen as Iron Man Tony Stark in Marvel movies, and he's been paid up to $600 million for that role across many movies, but yet, you know, we find that satisfying, which is weird. I mean, Taylor Swift, she is herself, but actors like Robert Downey Jr actually pretend to be someone else. So we praise an actor like Robert Downey Jr, and he's best known for pretending to be someone else, but yet we despise say, Apple's leader Tim Cook, for his wealth. Why in the heck would that be I mean, how do you justify that? Well, it's because Tim Cook's performances aren't visible. It's optics. You didn't get to see the process of how Bezos revolutionized Amazon's 24 hour delivery to your doorstep or drone delivery. What bezels is doing on a computer is not exactly a spectator sport. Okay, we don't get to see the work that Apple Steve Jobs did for our iPhone, or what Tim Cook does for our iPhone or iPad or MacBook. So therefore it's less satisfying because it wasn't visible. And yet, Tim Cook's highest endeavor, it's less glamorous than that of an actor. And yet Tim Cook completely acts like himself. For all ways I can tell, unlike an actor and Tim Cook, he really shapes the world that you and I live in today. I mean, he has definitely influenced your life more than some fictitious superhero has. There's also an element of imitation here, and this is really important, because look, you and I really for all intents and purposes, we cannot be like Taylor Swift or LeBron James. But you know what we can be a little like Jeff Bezos or Tim Cook, at some point in your life, you get real and you tell yourself that you cannot be like Lebron James. You cannot sprout to be six foot nine and be the all time leader in NBA point scored, you're not going to be like Taylor Swift. And had the highest grossing musical tour of all time with more than 7 million tickets sold. Now you couldn't sell any tickets to people that would want to see you sing. I sure couldn't. But see, you can be a successful entrepreneur. You just have to do, and when you have to do, and you know you could do those things. See, this means that you and I don't have any cop out. So sometimes we refute an entrepreneur success to try to let ourselves off the hook from actually doing you know, I think it's human nature to sort of protect our ego and tell ourselves, ah, I can't be like them. But that's false, because being wealthy is a choice, something I actually didn't believe when I was younger. If you wanted to you, yes, not some other listener, but you could have a successful business and perhaps even parlay your success into being a yacht owner, you could actually be that now, yacht owner, that's not some goal of mine. But see, instead of resenting a yacht owner, you can be inspired by that success. You don't have to launch a space company and fly people to Mars. You can do something here on earth. You can own a successful e commerce company, or rent out cars to people, or provide what people truly need and righteously serve a lot of people with housing. As a real estate investor, you can do all those things, even if it's just 1% of the level that Bezos does with E commerce, even if it's 1/10 of 1% see, you can get a piece of that. This is similar to how popular culture denigrates landlords and yet over sympathizes with tenants. Sometimes the tenant is right, but the landlord is often not some mega corporation. They're usually a mom and pop investor that took on risk and took out a mortgage loan to provide property for a complete stranger. Now let's say that you achieve what we'll call success, quote, unquote, success as a real estate entrepreneur, because you just added your 20th rental unit, right? You had 19, as soon as you go to 20, then is that the right level at which you're supposed to start being denigrated? But up to that point, it was okay. I mean, see, this can sound a little silly. In fact, just last week, at the New Orleans investment conference, I met a GRE listener and investor, Jenny from Indiana. She actually owns 19 rental units. They're mostly single family rentals. All right. Well, is it okay to own 19? But then she should start being resented once she adds her 20th property and serves that many people, that doesn't make any sense, and neither does resenting Bezos, I mean, he grew up in challenging conditions with a 17 year old mother and An alcoholic father. Bezos worked, innovated, took risks, raised money. His Guiding Light at Amazon has been an ethical three words, serve the customer. That's a good thing. He came from disadvantaged conditions to serve the customer. And the good news here is that you can do this too. You don't need to have a certain body type or an IQ. Serve the tenant, serve the market. I mean, I have seen successful entrepreneurs that are overweight, short, old, young, tall, female, male, even dyslexic, and they have all crushed it in business among the world's 8 billion people. You yourself see life in a way that no one else sees it. So at some point you learn that you really can't sing like Taylor Swift, or jump over a car like LeBron, or be as funny as. Meet bargatsi, but you can be you, and that's enough, but you have to do and, oh yeah, not give up every time things get tough, but nobody's stopping you. An entrepreneur is a crazy person who risks their own money for freedom, rather than exchanging their freedom for money, you took the leap critics stand on the sidelines when they're disparaged only because they're wealthy. It says more about the critic than it says about you, the successful entrepreneur and real estate investor. So instead, you can ask yourself the question, what is stopping me from creating my own version of that success? We misdirect our emotions when we vilify entrepreneurs and glorify stage performers merely based on what's more visible, more emotional and more imitative, rather than the Creator of the products and services that put real value in your life. So don't be ashamed of applying yourself and using your ingenuity in your strategy, in your careful risk taking for earning more income for yourself. We shouldn't disparage Bezos, LeBron, Taylor Swift or Dua Lipa for the wealth, because it is the same kind of success that we all wish that we could have.    coming up in future weeks on the show here we're getting closer to the end of the year where I will reveal get rich education's home price appreciation forecast for next year right here on the show. And I'm gonna give you an exact percentage national home price appreciation number. You're gonna know what to expect. I've done that for you for a few years here now I think this is gonna be the fourth year in a row where I'm doing it. It's sort of becoming a tradition, but coming up before that here on the show, I've shared with you how you know it's usually going to take you five years or more to go from your day job to financial freedom through real estate investing, but we've had some nice appreciation the last few years, and some GRE listeners are doing it faster than five years pretty soon, here, I'm gonna have a conversation with the GRE listener that applied principles that he heard here on the show, and he quit his job for real estate in just three years, he's gonna be here with me and tell you how he did it. Thanks for listening.   Hey, go ahead andtell a friend about the show here, take a screenshot and post it on your social media. I really appreciate you sharing the GRE Podcast with your friends and others until next week, I'm your host. Keith Weinhold, Don't Quit Your Daydream.   Speaker 4  37:56   Nothing on this show should be considered specific, personal or professional advice, please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  38:24   The preceding program was brought to you by your home for wealth, building, getricheducation.com.

Former NFL player, Broadway playwright, best-selling author and in-demand public speaker, Bo Eason, joins us to discuss the power of storytelling and achieving greatness. Bo emphasizes the importance of setting high standards, such as aiming to be the best, and seeking out mentors. He shares his upbringing, where his father instilled confidence by telling him he was the best, which influenced his success. Bo highlights the significance of personal, physical, and unapologetic storytelling to build trust and connect with others. Adopt the mindset of striving to be the best, not just settling for mediocrity. Make the Gold Medal the standard, not the end goal.  Develop and share your personal, compelling story to build trust and attract opportunities. Resources: Text "PERSONALSTORY" to 323-310-5504 to receive a free video course from Bo on uncovering your powerful personal story. Show Notes: GetRichEducation.com/529 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 For advertising inquiries, visit: GetRichEducation.com/ad Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review” Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai    Keith Weinhold  0:02   Welcome to GRE. I'm your host. Keith Weinhold, how do you become the best in the world at anything that you want to do in your life? Today's remarkable guest will tell you how so you can become the best version of yourself. He's become the best in more than one endeavor, including playing in the NFL. We'll also learn about the persuasive power of story and how you can find your very best personal story that you do have inside of you. It's a show rated PG for personal growth today on get rich education   Speaker 1  0:41   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki. Get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit get rich education.com   Corey Coates  1:27   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education. You Keith,   Keith Weinhold  1:43   welcome to GRE from Europe's Iberian peninsula to New Iberia, Louisiana and across 188 nations worldwide. I'm Keith Weinhold. As always, I'm grateful to have you along this week. This is get rich education. Most investing is left brained, but most decision making for your investment, choice is right brain. If you don't know the difference, left brain is about the numbers. It's analytical and logical. So left brain people, they're good at math and critical thinking and language as well. If you're more right brained, then you are more creative and emotional, and you tend to be good at recognizing faces and the attribute of diplomacy that's right brained. And it's a right brained kind of episode. Today you're going to learn how to be a performer and be the best at whatever you want to be. I mean, the best, whether that's as a real estate investor, business person, apartment building syndicator, or a real estate agent that's trying to sell homes, it'll even help you become the best parent, child, best spouse, best at basketball, best at table tennis. And you know, you are part of a really well educated and influential audience that we have here. Maybe you're trying to be the best physician or politician or even social media influencer or the best church minister that you can be. And in fact, as it turns out, people that are trying to raise money end up consulting today's guest quite a bit. And as you'll see, this guest really can tell a story. You'll learn that he has achieved elite success, even best in the world, success in a number of different areas. He's had like, three or four successful people's lives, yet he's the same guy. He's sort of like, in a sense, President Elect Donald Trump. Love him or hate him. Trump found success in real estate and then in media, with his show The Apprentice and then as the 45th and 47th president. Well, those disciplines there for Trump, they're somewhat related. Well, today's guest became the best in areas that aren't even related to each other at all, which is even more amazing. So therefore, maybe today it's really more of an Arnold Schwarzenegger parallel. I mean, Schwarzenegger, he was first the successful bodybuilder, winning Mr. Olympia, then he went on to become a successful actor. He married into the Kennedy family, and he became the California governor. Well, before I introduce you to today's guest, well, we are a wealth building show here, and as we talk about being the best in something, you know, I really want to ask you a question, Are you content with being middle class? You know, despite the way that inflation has ravaged it us, middle class life isn't all that bad. In fact, it's pretty good in a lot of ways, from the iPhone to the luxury of having a gym membership. I mean, that's just middle class stuff. Sheesh. Life is so good that when it's time to reset a password, people treat that as some sort of existential crisis. And you know, this is the time of year that even the middle class indulge in, say, pretty elaborate Christmas decorations. In fact, I increasingly notice that it's more and more common to hire a Christmas decorating contractor to decorate your real estate for you. They'll get ladders and a lift truck to hang lights in your tallest trees. That's something that the middle class does. Here's a new one. There's at least one mainstream, I guess, paper products company that now makes toilet paper with perforations that are wavy instead of being straight across, because it's easier to tear that way. So I think that you could make the case that American middle class life really isn't too bad, but in your life, if you want to be all that you can be, or anywhere close, you're not going to settle for something that's just better than not too bad. You can want more, and you should want more because you're capable of more, if for nothing else create the type of value for the world so that you can have more free time for yourself. I expect to have a terrific time and learn some things here where I am today in New Orleans for the 50th anniversary of the New Orleans Investment Conference, we've got speakers and exhibits covering real estate investing, economics, a lot of gold investing material at this conference Bitcoin and even stocks. And of course, I invited you, the listener here the past couple months, to come to the conference and meet in real life. As this is about to kick off, I wonder if I will find someone to go running with me. I always go running along the Mississippi River. Here in New Orleans, there is a trail paralleling the river right here, close to the event site. Yeah, I think I'm recovered from a mild back injury by now. Gosh, it was so weird. I hurt my back at the gym last month. And here's the thing. Somehow I heard it while doing my warm up exercises, of all things, sheesh. In fact, this is a triumvirate of fitness paradoxes here in doing this. Number one, warm ups are activities that you do before you work out to prevent hurting yourself, but I hurt myself in the warm up. Secondly, I never seem to injure myself while running steep, rocky trails or skiing down slopes outdoors, but indoors where the floor is level, that's the place where I seem to get injured. And then thirdly, the gym is where you go to improve your fitness, not lose fitness. So yes, that is the triumvirate of paradoxes there. Well, our guest, you know, he really knows the power of story, and just listen to him. I bet he'll tell a better story than hurting my back at the gym. Let's meet him.    Today, we have a guy with massive ambitions who I know is going to bring out the best in you during his lifetime, he's chased what it means to be world class, not just in one discipline, but in five different disciplines, and he's achieved a true level of greatness in all of them. He has played in the NFL for four seasons with Houston, then went on to become a San Francisco 49er, next, a super successful Broadway playwright, then an in demand public speaker, most recently, an eight time best selling author, and he has gone on to write screenplays for movie stars, so get ready to hear him talk about the one factor that's been the driving force behind his success in all of these disciplines. Hey, welcome to get rich education. Bo Eason.   Bo Eason  9:13   Keith, thanks for having me.   Keith Weinhold  9:14   Well, it's the first time that we have a former NFL player on the show, and Bo played the same position that my favorite football player of all time did, Ryan Dawkins, that is the safety position. But we're not here to discuss football so much as how you can build the architecture of success like Bo has and Bo your success is astounding, and our listeners hope that some of their virtual proximity to you rubs off on them today, I do too, and it's remarkable because you've reached the pinnacle of success in some of these disciplines that don't even seem to be related to each other at all. So what can you reveal here? Is there one common driver that led to them all?   Bo Eason  9:58   Man, you know what? That's. A great question, going back the way my dad woke us up as kids. So I'm the youngest of six kids, so I grew up on a ranch, on a farm in northern California. My dad was a cattle rancher, and I four older sisters and a brother who's a year older than me, so every morning he woke up all six of us to go do our chores, you know, on this ranch at five in the morning, and he would wake us up by rubbing our backs. He pulled back the covers. He'd rub our backs really hard, like, not easy, not like gentle, like dads of today, like this was a cowboy, you know, with dirty hands and rough hands. And he would rub our back and he would whisper in our ear and tell us that we were the best. And so for the first 18 years of my life, every morning he'd come into me in my brother's room. He'd wake up my brother in the same way he woke me up by rubbing his back and whispering his ear, you're the best. Get up, you're the best. And after you hear that for 18 years, my brother went off to college. I went off to college. My sisters all went off to college. And I always think back to those eight first 18 years, because when I would come home and visit our parents. So my brother got drafted. He was the first round pick of the New England Patriots. He was the quarterback for the New England Patriots took them to their first Super Bowl. So that best term worked out for him. And then I was a second round pick for the Houston Oilers, and got to play with them for several years. And this term, I always thought back to it, like, Why was my dad saying that? Because when we were growing up, when we were playing Little League, and we're playing sports, when we were kids, we actually weren't the best. But he wouldn't say that we were like, I would strike out every time in Little League, I was so bad at baseball, and every time he would yell at me through the chain link fence that I was the best, and my teammates are like, You got to be kidding me, Bo What is your dad even saying You're the worst? And he's telling you you're the best for most of our lives, the first half of our lives, it was a source of embarrassment to me and my brother and I remember going on a date one time, a double date with my brother. In fact, I couldn't even drive my brother could, and we went on a this double date with the thomasini sisters. So we were going, and my dad walks out to the car with us, and we're like, What the heck is my What's dad doing? Why is he coming out to the car with us? He came out there to tell us that we were leaders and that we were the best before a date. And I'm like, Dad, go in the house, right? And then finally, you know me and my brother, we weren't recruited as football players coming out of high school. Not one person, not one college recruited us, but we had these dreams of being pro football players, and at that time, 350 colleges played college football, but no one wrote us a letter. No one recruited us. So my brother went to a junior college, and then he ended up, after that, got a scholarship to the University of Illinois, and then became a first round pick. Well, I went to a school called UC Davis in Northern California, which was division two football and no scholarships. So basically, no one was on scholarship. There. You just walked on and you played football for fun. Well, that's where I went. And then, you know, cut to four years later, my brother's a first round pick. I'm a second round pick, and we always looked back from that point on, deciding, like Dad always embarrassed us, friends in front of our dates, in front of everybody. But then at that point, 21, 22 years old, we looked back, we said, Man, you know what? We just kind of surrendered to, what he saw in us, and we were the best. We were the best at our positions, and the only reason we were is because we had somebody who saw our greatness and pretty much spoke it into existence. Now, when you grow up like that, Keith, you think you assume that every other kid has grown up like that too, right? But that wasn't true, right? We thought it was true. You know, it turns out that the other guys we were playing with, the other guys who are our teammates, they did not grow up like that. So I would say that that principle was huge for me and my brother, just somebody who saw something in us that we couldn't see for ourselves, and he did it up to a point where we began to see it for ourselves. He just was very patient. And, you know, I find myself doing this with my kids. I have three kids, and they're all going to be d1 athletes, two of them are already, wow. Yeah, and it's because that's how I woke him up, too, like so I know that's kind of a simple story, but it really set the foundation for us, and here's how it did, Keith, it told me what was expected of us, even when we weren't the best. He was expecting us to live into what he saw, and we did, and I found my kids to do the same, like I was looking at my kids, and I was like, Man, are they going to be athletes like me and my brother are at that level, because that was their dreams, right? But I didn't know if they had what it took. As I woke them up every morning, I could see them starting to live into their potential or live into their birthright. So I think to start off with Keith, that was a principle that is a mainstay. It taught me not only what was expected of me, but what I could set the standard for other people, and then they would live on into that standard, been able to do that. So those couple of things were huge in my upbringing.   Keith Weinhold  16:02   Well, this is remarkable, and I think you're already giving the parents in our audience quite a few ideas. Bo, this phrase, you're the best kind of got indelibly baked into your being and who you are, your dad even chasing you around on a double date, reinforcing you're the best and you know, Bo, I think that a person can be simultaneously grateful for what they have yet at the same time strive for more, as often say here on the show and adopting an abundance mindset with wealth building. Don't live below your means, grow your means. Now, I was watching an NFL football game just this past weekend, and a commercial came on for the IBEW, the labor union, and Bo it struck me as so odd that a trainee at the IBEW smiled, and they were all gratified that they were part of the IBEW. And they said, this is like now I have my golden ticket to the middle class, which I mean, because being middle class isn't like altogether awful in the United States, but it just sounded like this was the be all and end all, and hey, now I have a guarantee of mediocrity in my life that struck me as so odd. I don't think their father was telling them you're the best like yours did.   Bo Eason  17:21   No, they definitely did not. I'm always shook by that too, where people will sometimes come to me and they go, Bo, I want to push back on being the best. I just want to, you know, be kind of a good player, kind of medium wealth. And I'm like, Well, if you want to push back on me, you should take that up with Mother Nature, because if you just go back to the day that we were conceived, you know, if we want to have a little refresh of course on the day we were conceived, you were going to find out that there was the odds of us even being born were 300 million to one, and we were the champion of that first race that we entered right like 300 million to one odds, you're the champion, and yet here we are, you and me number one. You know, the gold medalists of those odds, and now we're supposed to be born into a world and be mediocre. I don't think Mother Nature set it out like that. I don't think that's how it happened. I think the standard is the gold medal, not the silver medal. You know, it's the gold medal. Now, some people win silver medals. If they lose the gold that's fine, that's great, but the gold medal is the thing. And I think the minute we lower ourselves from that. We're just trying to give ourselves a soft landing, I think, and then we don't ask enough of our potential, which is, if you're following Mother Nature, your potential is 300 million to one odds, and you already won that gold medal. So what are you doing? You know? What are you doing? So, as I progressed, Keith, so I went from football, I played in the lake for five years, and I didn't know what I was going to do, right? So I just started again. I just said, so instead of being the best safety in the world, because that was my first declaration, I just said, I want to be the best safety in the world. That's it. So I was able to achieve that. And then when football was over, I did the same thing for playwriting and performing. I just said, I don't care. I know I don't have any experience in this, but I'm going to declare right now, and I draw it up, that I'm going to be the best stage performer of my time. So that principle has worked every time, but I had to use the term the best. And I don't know why. I guess it was just locked in my brain. But here's the next thing, the next principle that I think is important for the audience. And this goes for wealth building. This goes for whatever you want to build, whether it's your family or, you know, an apartment complex. It doesn't matter we're building stuff. And here's what I did the second. All around I said, I want to be the best stage performer, the best playwright of my time. So I didn't know how to do that. So I moved to New York City because I knew everybody did plays there. They did Broadway, they did off Broadway. And I asked everybody in my class, who's the best at this this was in 1990 who is the best at this stage performance. And every kid in my class, and there were kids I was a little older because I was playing football, I said, Where is the best stage performer of our time? Who is it? And they all said, Al Pacino. And I said, Cool. Where is he? And they said, Well, I don't know where he is. He's on a movie set somewhere, or, you know, rehearsing for a theater show. And I said, I want to know him. I want to meet him, because only the best can tell me how to be the best. Only the best can tell me how to take his mantle of being the best stage performer. Wow, most people don't think that, or say that. You said Brian Dawkins, me too. I'm like, who's the best safety in the world? Let me go talk to that dude, because that dude knows what, like Ronnie. Lott, was that for me? Jack Tatum, Ronnie. Lott, those kind of guys I ended up playing with. Ronnie. Lott, you know you end up playing with these guys. You know the guys you're looking up to? Well, within a week of me asking these kids in my class, where is Al Pacino? I'm having dinner with Al Pacino, in New York City and I go, Dude, what do I do? What do I do? You tell me, I'll do it. And he goes, Okay, Bo, I'll draw it up for you. We'll draw it up. You know what that's going to take, but that's going to take you 15 years, and I go, perfect. That's my kind of timeline. I'm good like that, you know? And he goes, Okay, so he drew it up and I did what he said. He told me who to work with. Basically, he's telling me to put my butt on a stage. More than any other person can put their butt on a stage. So I go, I can control that, that I know how to control, because that's what I did. As far as training to be the best safety. I wasn't the best safety, but as the years went by, guess what? I passed up everybody who was ahead of me. You know, you're the top safety in the league. Well, same thing for being on Broadway, he told me what to do. I did exactly what he told me to do. And 15 years later, I am opening a play in New York City that I wrote that I'm the only guy in and I swear I was so nervous before opening night to run out and look Keith I had played against the biggest and baddest dudes on the planet. You know, I wasn't as scared as going out on a stage to face those dudes. I would rather face refrigerator Perry or Walter Payton than going out on a Broadway stage. And I went out on starting the play, I am having an out of body experience because I'm the only one. I'm talking to the audience. The New York critics are in the house. Everybody's in there. And I make eye contact with a guy right on the row. He's sitting right on the aisle. It's Al Pacino. I had seen him in 15 years. He told me what to do. I did what he said. He's in my play, I wrote, and I'm the only guy, Al Pacino, the best stage performer of all time, is sitting right there on the aisle. That's so cool. And he's nodding his head. He's like, Yeah, I'm doing you did it. And so a you have to have a declaration, and that declaration has to be the best. So the declaration of being the best safety, being the best playwright, being the best stage performer, those things actually come true because you have a declaration which you're living into existence instead of following some to do list, right? I did the same thing for playwriting. I did the same thing with Al Pacino, and that career really set me off because I performed that play 17 years. One play 17 years it immediately gets bought by Castle Rock pictures as a movie. Frank Darabont bought the play as a movie. And I don't know if you know who Frank Darabont is, but he's the guy who wrote and directed the Shawshank Redemption, The Green Mile Saving Private Ryan collateral. He's the guy who his team's TV show he created is The Walking Dead. So this dude was nominated for 12 Academy Awards for writing and directing. He bought my play to produce it for him, and so he hired me, who's never written a screenplay, to write the screenplay for him. This dude has been nominated for 12 Academy Awards for lighting, and he hires me. I go, Dude, don't hire me because I've never written a screenplay. I don't understand it. I don't get it. I'm not a great speller. In fact, I do. Don't even have a computer. And he goes, I don't care about that. I think you can tell the story. Yeah. And I go, okay, so he was hiring me basically based on my guts or my heart, and we did that. So he bought that. I wrote the screenplay for him. Then Leonardi DiCaprio and Toby McGuire come to the play. They come running backstage, they say, Bo, we want you to write a movie for us. And I go, You know what, you guys, I don't write movies. They go, we pay a lot of money for our screenwriters. We think you can do it. And I go, Yeah, based on that money, I think I can do it too. And so the crazy part about this whole thing is it all falls back to this ability to share myself, to tell a story, to tell a story that has physicality to it, that has heart to it, the ability to do that has really given me all these occupations. And then people came to me like business owners from Wall Street. They would come to the play like with their wife, because their wife wanted to go to the theater and they were watching my play. Well, they would come backstage, Keith, and they would say, Hey, man, I want you to bring this to my fortune 500 company. And I'm like, wait, what do you mean? What do you I don't this is a play. I don't take this to Fortune 500 companies. This play, you got to come to the theater. They go, No, we don't want to. I want our sales force. I want our leadership executives to learn to do what you do on stage. I was like, what? I couldn't believe it. Me and my wife, we're like, going, I don't understand what you read. They said it's the funniest thing, because typically, when you're on Broadway, the people who come backstage to see you, they shake your hand, or they get you autograph and they say, Wow, you're a terrific performer. Or what great writing. That's what they usually say, right? Not my play. They come backstage and they don't say, I'm great. This is what they say, Can you teach my people to do what you just did? Yeah, on stage, we're like, of course, because I was taught I could retrace my steps. And I can teach business people, leaders, doesn't matter the business coaches, whatever I can teach them to express themselves in front of other people, which then makes them wealthy, because in the end, I learned Keith that whoever tells the best story wins.   Keith Weinhold  27:33   Yeah, I want to get to the power of story after the break before we do that when one knows that the best that word is out there for them, I think oftentimes they're stricken with fear. Fear is a great obstacle. How do you overcome the fear from listening to you? It seems to me that your mechanism for coping with fear and becoming the best is facing it, getting in there and getting the reps.   Speaker 2  28:00   Yeah, 100% there's a great quote, the world was not created by great men, the world was created by a demanding situation where great men then rose. So we don't know our greatness until we're faced with a demanding situation. So if you're nine, you have no obstacles in your life, you're like, Wow, this is really fun. I'm living on a farm. There's pals, there's horses. What a nice life. And then Bo created his own problem. He created a declaration that said, I want to be the best safety in the world. Well, right then, right when I got creative. Now, Bo's life became a demanding situation where I had to grow strong and I had to eat right, I had to exercise, I had to run faster than anybody else. So I created all these demanding situations for my life. But that's the only way to reveal character. No NFL team is drafting anybody who doesn't have a characteristic that makes you a successful NFL player, and the only way to get those characteristics is to lose is to get your butt kicked, is to face your opposing players that's putting yourself in a demanding situation. So us, you know, as successful guys and successful gals, we kind of get satisfied and so that we forget to keep putting ourselves in demanding situations. That's where the fear comes in. Because once you're in a demanding situation, you get scared. You're like, oh, do I have what it takes to do this? And then you discover by going forward that you actually do. You do have what it takes, and fear is like a made up thing, and you start to realize that you're the creator of your own fear. So look, when I wrote the play in New York, I had never written anything in my life. Like I said, I couldn't spell good. I didn't have a computer, but here's what I did have. I had the ability, because I already did this in my life. I knew how to put myself in a demanding situation and then take a step forward. I knew how to do that based on my football career. I knew it so the principles of being the best safety in the world and being the best playwright in the world are the exact same principles. You have to have the declaration. It has to be at a standard that's way out of your comfort zone that puts you in that demanding situation. Then you have to start running the miles. Then you have to hire an expert coach that sees you clearly, and it is a critical thinker like can see you and go, Bo, stop that. Do that. Stop doing that. And do that just like a nutritionist. Hey, I want to live longer. I want to be there for my daughters when they walk down the aisle. Okay, then you better stop eating this and start eating that. You have to have these experts in your life to fulfill on your birthright of being the best. So now you just break your life down. I just broke my life down like five different times because I enter a new era, like screenplays. How am I going to write a screenplay? I don't know how. I don't understand, but here's what I do. Know how to do. I know how to work. I know how to be the best. Those principles are pretty much the same as safety and playwright. So the guy who buys my play to hire me as a screenplay writer is the greatest screenwriter in Hollywood. So he's the guy paying me, he's the guy coaching me, he's the guy looking over my shoulder going, Bo Don't say that. Say this, say less, do this. Those are just first three principles. We're talking about the best. The standard has to be sky high. Otherwise it's not going to be demanding. It's not going to require enough of your humanity to fulfill on yourself. So it's got to be there. Then you've got to take the time to run the miles to do this thing, and you cut your time in half, or less than a half, by having somebody who is an expert mentor or an expert coach. A guy like Al Pacino, a guy like Frank Darabont who just goes, Bo do this. Don't do that. A guy like Ronnie Lott, both don't do that, do this. And I just do what they say, because, guess what, they're the best in the world at what they do. You guys, those principles, I found I just keep repeating them over and over again. Now a lot of you might be saying, Bo, that's a little much for me, because I don't know Al Pacino or I don't know Ronnie Lott, and I don't know Frank darabonda. You guys, I didn't know him either. I didn't know him either, but I do know this the best in their field, whoever that is, don't say you want to be the wealthiest person on the planet. Well, the wealthiest person on the planet is more available than you think. Guess why? Because everyone thinks they're too busy and they don't ask of their time. You ask of their time. No one's asking of Al Pacino's time. Guess why? Because they don't want what he has. They want to be famous. I wasn't interested in fame. They want to get an agent in Hollywood. I wasn't interested in that. I was interested in what Al Pacino had, which was he was the best stage performer of his time. That they're willing to tell you, because they know if you're asking that question, they want to be involved with you.   Keith Weinhold  33:44   right, because you dared to ask. And they can probably perceive your ambition, and people can sense that, and they love that, and it sure can be scary to say, but fear should be your guide. You should follow your fear. We all know that that's where the growth is. It's like the gap in the game. It's been said that the gap between where we are and where we want to be lies our greatest opportunity for growth. We're talking with former NFL player Bo Eason about being the best. We're going to come back and talk about the power of story. Next. I'm Keith Weinhold. You're listening to get rich education.    Oh, geez, the initial average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk, your cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their. Investors 100% in full and on time. And you know how I'd know, because I'm an investor in this myself, earn 10% like me and GRE listeners are. Text FAMILY to 66866, to learn about freedom. Family investments, liquidity fund on your journey to financial freedom through passive income. Text, FAMILY to 66866.    hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties, they help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridge lendinggroup.com that's Ridge lendinggroup.com   Matt Bowles  36:08   Hey everybody. This is Matt Bowles from Maverick investor group you're listening to get rich education with Keith Weinhold and don't quit your Daydream.   Keith Weinhold  36:27   Welcome back to get rich education. We're on a mindset journey today to help you level up, be a better person and even be the best.Talking with former NFL football player Bo Eason, and Bo, you're such a powerful storyteller, and I think it's a really important time to be a powerful storyteller. Trust in institutions seems to be at an all time low, from the government to the media. This is partly why the rise of influencer culture has become a thing. So tell us about how a powerful personal story can build instant trust and connection in seconds. Even when it seems like trust is at an all time low.   Bo Eason  37:07   it is at an all time low. That's what Gallup does a poll every year on trust. The question they ask is, do you trust your neighbor? And it's at its lowest it's ever been. They started this in 1972 but it's down to single digits. This is your neighbor. This isn't somebody across the street. This is this isn't somebody in the next town or the next state you know, or the next country. This person you share a backyard fence with.   Keith Weinhold  37:34   right? Like you're afraid to ask them to check for packages on your front porch when you're on a vacation or something. Yeah, the trust   Bo Eason  37:41   below. But everybody gets depressed by the statistic. I get excited about it because there is one group of us that can restore trust. It is the storyteller. It's not just the storyteller, you guys, it's the person who can share themselves personal story, not just a story, although stories, you know, work, and they've always worked for 1000s of years, but personal stories move the dial the most. Give you the most Trust, the most credibility. Personal stories like if I say to you a sentence like this, when I was nine years old, I had this dream, so I decided to draw up a 20 year plan to achieve my dream. If I tell you a sentence like that, you and me, even though it's a simple sentence, right? It's personal to me. Well, personal equals universal. Whenever you're telling a personal story, it affects your audience that much more, because your audience locates themselves inside of your story. That is the science of storytelling, and that's why you earn trust by sharing yourself personally. Now most people don't want to do that. They push back, especially business people, especially left brain, analytical type people, they say to me, Bo I'm not going to share myself, because who cares about my story? And I say everybody, you're just telling the wrong story. You have to tell it very personal and very specific to you, and it has to be a pain point. It has to be a low point in your life. That's where you start the story, because if you start at the top, there's no place to go with story. It's like, think of rocky everybody. Sylvester Stallone was a very smart guy. He was an unemployed actor, and he said, I'm going to employ myself for the rest of my life. Guess how he plays the role of Rocky? He writes the role of Rocky. Who does he put in front of him, Apollo Creed, the greatest heavyweight champion in the world, a character named after a god that's called great storytelling. He put Mount Everest in front of him. And if you notice, that's what he's always done every movie he writes. He's given himself a career because he puts himself at the base of Mount Everest every time. Well, that's where I want you to put yourself. What is your story? Where did you get rejected? It's always at a younger age. You know, Michael Jordan's story is the same as Tom Brady's story is the same story that I have, which is, we all were rejected in high school. We all were told we weren't good enough to play a high school sport. So what did we become the best in our fields? That's what always happens. That's always the story of an elite athlete. So I want you guys sharing yourselves with these stories, and these stories are kind of the ones you kind of don't want to tell because they reveal certain things about you that are kind of humiliating. But humility is the best connective tissue that us human beings have. Isn't that weird? Embarrassment is a great connective tissue success. Isn't that connective? Isn't that weird?   Keith Weinhold  40:58   Yeah, I mean, embarrassment is self deprecating. Most people like that, and everyone can relate to failing.   Bo Eason  41:05   Yep, there's three rules I live by when it comes to storytelling. You guys knew. Number one, it's got to be personal. It's got to be personal. The more personal, the richer you are. It's got to be personal. Guys, I've talked you into this, if I haven't already. Number two, you guys, if you're thinking about wealth, I would think about it in those terms right now. Secondly, it's got to be physical. Stories are physical living things, living, breathing, human things. You can't tell a story like a boring people tell stories they Well, when I grew up, I was poor, and then I walked over to the store, they wouldn't let me have a candy bar. It's boring, it's stupid. It is not physical. You have to embody the story with your physicality. You have to become your story, you guys. I know this might sound crazy to you, but the more physical you are in your life. Now, listen to me, the more physical you are in your life, the more money you make. People don't trust what comes out of anybody else's mouth anymore. They don't trust it. They trust your body 100% of the time. I wish you could see my body right now, because it is alive, and you could probably feel it even though I'm you can just hear my voice. You can hear the physicality of the residents of my voice. Now, the more physical you are in your life, the richer you are, and that's across the board. I don't care if you're a ballet dancer, I don't care if your speaker. I don't care what your occupation is. If you are physical and unapologetic about your physicality, then you're going to make a lot of money. But if you're walking around on eggshells, people know it. If you're walking around apologizing for your masculinity or your femininity, and you're like, you know, you're just half stepping everything. You see people like this all the time. What do you do with them? You dismiss them. But when somebody walks in and you turn your head, you know to look. You heard somebody come in behind you, you turn and look, why? Because they have a presence and they're unapologetic. That is a learned trait, or I should say it's relearning human trait. I've been trained by the greatest movement coach in the world, you guys. The only reason I was trained by him 17 years I was trained by him because every time I saw somebody acknowledge when they won the Academy Award an actor, they would acknowledge this guy. And I go, who the hell this guy that everyone keeps acknowledging keeps thanking for their Academy Award for some performance. I want to know what this guy's doing. I want to know what he's doing with these performers. And he told me where I went and met him. He goes, No one has ever won an award for what they said. No one it's what they did physically. That's how you win. And he's the guy who taught me well. So you guys, number one, the story has got to be personal. Number two, the story has got to be physical, unapologetic. It's so attractive when this happens. That's what I train people to do, because that's what I was trained to do. And then when all these CEOs and stuff started coming to the play, that's what they wanted, that now, you guys, they didn't know to ask me that. They just said, Can you teach my people to do what you do on stage? I go, of course, because I was taught the thing they wanted most was they wanted people to trust their sales people or their leadership team. They wanted all their employees, including them, to be physical in the world, because that is powerful. And you're going to watch this. You can watch this in elections. You can watch this in politicians. The reason they hide behind those podiums is their body betrays them. Their body betrays them. If I ever got hired to coach them, which I've always turned them down, I would put them out in the open like an animal so we can see their whole body, because that we can trust but we don't trust somebody standing behind a podium. Very critical.   Keith Weinhold  45:23   Well, there's a lot there. Yes, so much is conveyed through body language. People like decisiveness and commitment. You talk about how to make a story personal. When you had mentioned when you were nine years old, you laid out a 20 year plan for your life. When you said that me as a listener, that just makes me naturally want to lean in and ask a question about that and let you go on, for example. But when you talk about how stories need to be made personal, why don't we wrap up on how does storytelling work in business? Then say that a real estate investor is trying to attract co investors to his apartment building deal. For example, how would you use story there?   Bo Eason  46:07   Oh, yeah, great question. So many of my clients are people that raise money, whether it's for profit or non profit. They are in the business of building a company, and so they're always asking for money. Well, there's a guy used to run a studio in Hollywood, I think it was Warner Brothers, and he did an experiment. He was building a studio. So he needed millions and millions of dollars, so he went to all his rich friends, and he put a contract out in front of them. One contract only had numbers and percentages and columns written on it. Here's how much you'll invest. Tell us how much you'll make after five years all that stuff. The other contract was the same deal, no numbers, no monies, no percentages, only story, a story of belonging, a story of making a difference. He says, 100% choose the story contract, not the numbers, purpose. There's nothing. There's nothing to connect to. Yeah, I work in the finance world a lot. You guys, people, you know, high wealth, they always want to talk about numbers. And I'm like, rich people are all right brain. You know that? So every billionaire, every millionaire in the world, is right brain, not left right their right brain. But the people managing their money or raising their money are left brain. So they want to talk about numbers. And I'm saying, you guys, you can't talk about numbers, because rich people don't know what you're talking about. Rich people want to belong. They want to see themselves inside the business that you're building. So you better have a hell of a story, and that best story wins no matter what, Best Story wins. If you and me are both building a skyscraper in New York City. If I got a better story than you, guess what skyscrapers gonna get built? Mine. That's got nothing to do with money, because money is everywhere. Money's like air. It's more abundant than air and water. There's money everywhere. But what are rich people attracted to story? Why do you think they call it show business? Show, I'm the show, you're the show. You're the storyteller. The Business People bring the money to the show so rich people don't know how to make movies, they don't know how to tell stories, but they want to give you the money so that you can tell yours. Of course, that's how this thing works. That's why show and business always go together. There's a great saying rich men, when they sit down to dinner, they speak of art. When artists sit down to dinner, they speak of money. Artists sit down to dinner, they speak of money. When finance people sit down to dinner, they speak of art. So they're completing one another. You've got to be an artist. You've got to be able to tell your story, because their dreams and their big bank accounts relying on your vision of what you're going to build that makes you an artist, that makes you here go build what you've got to build here. I want to be a part of it.   Keith Weinhold  49:28   Yeah, I've never heard that before that's remarkable in using story to connect with others, something that seems to be bleeding and so badly needed for connectivity today. Well, Bo this has been great, talking about the best, talking about the power of story. You do so many things to help people in their own growth journey and to expand their own mindset. Tell us about your resource for that.   Bo Eason  49:56   You know what? Because the first thing that when I say, look. Got to find your personal story. Most people go, I don't have one. Well, that's just not true. Everybody has a story. I've worked with 1000s of people, and everyone's got a great, dramatic story. They just don't know it. So I'll send you a free story guide. It's a video course. It's going to give you some prompts, and we're going to find your powerful, personal signature story, so you can begin to use it today. So all you got to do is text me. So text PERSONAL STORY, the word PERSONAL STORY, one word personal story. Text that to this number, 323-310-5504. that's text. Personal story. One word, personal story, to 323-310-5504, text me that, and I will automatically send you a story guide. To start to uncover this thing,you'll start to realize, Wow, I do have a cool story that I can begin to tell whether I'm in the Oval Office or whether I'm in front of 1500 people at us in a speech, you can open with your personal story. It works and it attracts people to you. If I was in your guys shoes, you're interested in building wealth. Me too. If I'm building wealth, guess what? I'm beginning with personal story, and then I just get to go right to the top, because people are only interested in other people who have a vision bigger than the people have for themselves. And that's you. That's you. And your personal story, you have a vision that is bigger than the people have for themselves. If you can do that, guess what? People got to buy into that, they got to invest in, that they got to be around that. They got to marry that.   Keith Weinhold  51:47   Oh, you're so right. I really think this is going to help a lot of our listeners. You the listener, you probably have several good stories inside you, and Bo can really help bring them out, who have the benefit of seeing him on video, he's a really powerful speaker. I've had that same benefit of seeing him on video. You've only listened to him so far. Check out his resource if you think you can benefit from it. Bo, he said, It's surely been valuable. Thanks so much for coming on to the show.   Bo Eason  52:15   Keith, thanks for having me.   Keith Weinhold  52:23   Oh, such sharp insights from a motivating guy, Bo Eason, this week. And hey, if you have kids, are you going to wake them up by hard, rubbing their back in the morning and telling them you're the best? Well, it seemed to work for a little review about what you learned. Bo talked about how the standard is the gold medal, not the end goal, but that the gold medal is actually the standard. That's his mindset. So Bo made sure he met Al Pacino. When they got dinner, he found out that Pacino was the best, so he sought out the best and made sure to get around him. And a lot of people are scared to do that or even ask about the best. And, you know, I just can't help but think that that's like my life experience with women. In high school, I was just so shy and deathly afraid to ask anyone out. But in college and beyond, you know, sometimes I would ask out the most attractive woman, and they would usually say no, but, you know, I can't believe some of them actually would say yes. And see, the more that you do this, the more confident you get. And women like confidence, and can feel that coming from you. And then, so therefore your fear dissipates and it becomes easier to overcome. You have a unique fingerprint in this world, and you yourself. You do have an interesting story. I just know that you have it in you, but the chances are you've never even told your highest and best story to one other human being on this earth, not even once, and perhaps I haven't either. Bo said his stories need to be personal, physical and unapologetic, and his video, course, helps you find your personal story. And if you didn't catch that again, you can get it by texting one word PERSONALSTORY to 323-310-5504.    Coming up in future weeks here on the show, it's probably Yeah, more left brain strategic real estate investing content than right brained emotional content like today's show. But one right brain topic coming up on the show that I want to share with you. I want to tell you why, as a society, we hate Amazon founder Jeff Bezos, because he's wealthy. But yet, society does not dislike wealthy singers like Olivia Rodrigo, Taylor Swift and Dua Lipa. We love them even though they're wealthy. We. Don't resent an actor like Robert Downey, Jr for making $600 million as an actor in the Marvel Cinematic Universe. So it's all about why we vilify successful entrepreneurs for their wealth, including landlords, yet somehow we glorify successful actors, athletes and entertainers for being wealthy. It's a case study that I've been working on. I shared some of it with our newsletter readers last week, and I'll have more on that here on the show. Signing off from the Grand New Orleans investment conference, the nation's longest running investing conference. I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 3  55:43   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively   Keith Weinhold  56:03   The preceding program was brought to you by your home for wealth building get rich education.com.  

Keith discusses trends in the housing market, including the rising average age of first-time homebuyers and the mix of markets seeing price increases versus declines. He analyzes the potential impact of the incoming presidential administration's policies on real estate, particularly around inflation and interest rates. He is joined by Investor, Co-Founder and CEO of Family Freedom Investments, Dani Lynn Robison to highlight high-yield investment opportunities available, including up to 10% returns. Home prices have fallen in six US cities. The average age of a first time homebuyer rose to an astounding 38 years old. Discover the top 10 states with the highest home price appreciation over the last 40 years. The Trump Effect. To learn more about Freedom Family Investments.  You get paid first: Text FAMILY to 66866. Show Notes: GetRichEducation.com/528 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 For advertising inquiries, visit: GetRichEducation.com/ad Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review” Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai  Keith Weinhold  0:01   Welcome to GRE I'm your host. Keith Weinhold, home prices have fallen in six US cities. The average age of a first time home buyer soars to an astounding 38 years old. Then we take the long view breaking down how real estate is up a jaw dropping 490% since 1984 the Trump effect on real estate, then how you can earn an eight to 10% cash on cash return, hassle free. All today on Get Rich Education.   Speaker 1  0:36   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests include top selling personal finance author Robert Kiyosaki. Get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:21   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:38   Welcome to GRE from St Louis, Missouri, to say Luis, Obispo, California, and across 188 nations worldwide, even Uzbekistan. I'm Keith Weinhold, and you are inside. Get rich education every week. It's the show where I pretend that I'm not wearing pajama pants while here on the microphone. Hey, if you want to get rich, then focus on one thing. If you're already there and want to stay rich, then that's the point in which you want to diversify, because then you're already living your Daydream and you don't want to lose it. We'll talk about President elect Trump later in this week's show, and what it means for the future of the real estate market.   Donald Trump  2:20   Thank you verymuch. So this outfit you know is when they when he called us all garbage. How stupid. What a stupid word. That blows deplorable away. Don't you think.   Keith Weinhold  2:21   well, our content will surely be more substantive than that funny piece I expect to host Donald Trump here on the show for you in the future. After all, let's not forget, before politics, he was most known as a real estate investor, but he's going to be busy for the next four years, so it could be a while until you see him here, before we get to the Trump effect. Last week, the NAR released their annual report. It's called the profile of buyers and sellers. My gosh, what a surprise when it revealed that the average age of a first time homebuyer rose to an astounding 38 years old. 38 I mean, we're not talking about a person that's like, severely underemployed or something. We're talking about the average here. So for many, I mean, they are still a renter into their 40s. That is common now. I mean, at this rate, pretty soon, are Americans going to become homeowners once they hit retirement? I mean, my gosh, is that where we're headed? Or when one looks at their rites of passage, the milestones in their lives, will one achieve grand parenthood before buying a first home? Where are we going here? Not only is 38 years old, the all time high, as you might have expected, but that is up from age 35 just last year, amazing. And like I've discussed before, of course, the major reason that that age is up is due to lower affordability, and that's from higher prices and higher interest rates. The housing shortage is another factor here too. And all right, if that's not enough, the average age of us homebuyers, okay, this is just overall homebuyers, first timers and everyone else. That was 49 last year, and this spiked up to 56 this year. 56 and now back to first time homebuyers, the average income has also hit an all time high, $97,000 that is the average income of a first time homebuyer now. So what's important to keep in mind here is people are going to have to rent longer they're already. Renting longer. And some will choose to rent longer as a preference, and for others, they must rent longer. You can be the one to provide them with this rental housing, not the big hedge funds doing it, not private equity doing it. Invest in real estate. These trends mean higher occupancy rates and upward pressure on the rent amounts that you're going to be able to charge over time. I mean, this is demand, demand, demand for rental housing. They wish that they could buy that $300,000 starter home in the Midwest in southeast, but they have a hard time affording the down payments and qualifying for the loan they're after so you can rent it to them and be a profiteer longer. However, right now, there are six US cities where home prices are falling and now these are pretty mild corrections, but let's see if you can guess what the top reason for this is the number one reason about why these prices are falling among the nation's 50 largest metros. These are the six cities that have seen price corrections. New Orleans leads the way down the most down 4% Austin, Texas is also down almost 4% San Antonio down 2.7%, Tampa, Florida down one half of 1% Jacksonville down three tenths of 1% and then finally, Dallas, Texas, also down three tenths of 1% and in fact, I am visiting three of those six cities during a 10 day stretch that I'm on right here, right now. Over the weekend, I was in San Antonio, Texas. Today, the mobile GRE studio is in effect again, as I'm bringing you today's show from here in Austin, Texas, where I'm spending four days, and then I'll be in New Orleans in two days here. Well, the top reason for these falling home prices is in a word, supply. In fact, it's an oversupply in a lot of these six cities. And again, those six are New Orleans, Austin, San Antonio, Tampa, Jacksonville and Dallas. In fact, here in Austin, they are a, basically a national leader in over supply, they simply overbuilt, and it's going to take some time to absorb all that they've built. In fact, due to overbuilding, you've even got rents falling here in Austin, and I may look at some vacant apartments while I'm here to get the temperature of the market. Now, for some context, understand, though, that I spotlighted six falling markets out of the 50. All right, well, what about the other ones? Yes, that indeed means that 44, of America's 50 largest metros have seen year over year price increases, and one big reason for that is that many metros have housing shortages. Shortages are the norm, and by the way, all these figures are per the Zillow home index. In fact, a number of markets are up over 4% 5% 6% year over year, and the leaders all have seven to 8% year over year. Home price appreciation, they are San Jose, Hartford, New York City and Providence and a lot of the appreciation leaders are, yep, under supply, the opposite of what I'm seeing here in Austin.    Now, before I get to the headline of this week's episode, how national home prices were up a breathtaking 490% over the last 40 years. Let's talk about the Trump effect. It's still two months before Donald John Trump will be sworn in as a 47th president of the United States, and like macroeconomist Richard Duncan and I touched on on last week's show, Trump loves tariffs. Everyone knows that, and a tariff is like a tax on imported goods. Now follow along here. Higher tariffs mean then higher consumer prices, because the company or manufacturer has to pass that cost along to you. Higher prices means inflation. Higher inflation means that the Fed tends to keep interest rates higher longer in order to combat that inflation. So a Trump presidency means higher inflation in interest rates. Again, yes, at least those two things are correlated. And now think this through. Do you sense some cognitive dissonance here, under Trump's first term, back from 2017 to 2021 he wanted lower interest rates, and Trump was like highly vocal about how he wanted Jerome Powell to keep rates low in order to keep the economy healthy so the higher rates that Trump Tariffs are expected to bring then versus the lower rates that Trump wants is dissonant, incongruent, not in harmony. Bitcoin surged on the news of a second Trump presidency, because Trump is pro crypto. No see treasury yields, they also spiked upon the Trump presidency news just two weeks ago, I explained here on the show why higher inflation means higher treasury yields, which means higher mortgage rates. And it turned out that that was quite a timely explanation. The Trump election can mean a lower tax environment. We are hopeful that Trump will extend bonus depreciation, a really nice tax break for real estate investors. We could see some federal lands repurposed for housing construction. Trump said that he wanted to do that in order to add more housing supply. And no, don't worry. I don't think they're going to shut down and pave over Yellowstone and plug Old Faithful Geyser or anything like that. Okay, there's a lot of federal land that's, I guess, less remarkable, land that's being grazed on, and land suitable for more housing. Look for more move to loosen up zoning and regulation, and that's something where you'll find bipartisan agreement we've got to build to address the housing crisis. I mean, Trump has actually called zoning a killer, like he used that phrase you might see Trump extend the opportunity Zone program as well. The result could be more apartment construction in some of these blighted or low income urban areas, no matter what, and no matter who our president would have been. I mean, you're still gonna see housing supplies struggle to keep up with demand, because you just can't build fast enough. And you know something here, you never really know the future. People always want to speculate about the future that can be worth talking about. And you know that makes people think that they have the answer, but they're often wrong about one thing leading to the other, like how tariffs will end up meaning higher mortgage rates. I mean, you just don't know that for sure. Policies can change. Promises might not get followed up on, Black Swans can interject, and interest rates are one thing that are just wildly difficult to predict. And if you ever want to make another person look wrong, like if you desire to do that, here's all you need to do, ask them where interest rates are going to go in the future, and make them put that in writing. Okay, that is a guaranteed way to make somebody wrong. So everyone wants to know the future, but you've got to think through this in terms of probabilities and not certainties.    Now here's something encouraging, California voters, they shot down rent control expansion, though you might live in California, we are not exactly passionate about investing in California property for pretty well documented reasons, but sometimes things that start in New York and California in those particular states, they can expand to the nation. So it's worth paying attention to some of these things, and California voters resoundly rejected what is known as Proposition 33 rent control expansion. Almost 62% voted no on that. So you've got bipartisan alignment on how rent control backfires on renters in this was the third time in six years that California voters shot down rent control expansion. Great. That is great because rent control, it's not good for you, the investor, long term. It's not even good for the tenant, and it's certainly not good for the community either. I mean, they are collectivist state price controls.    Well, let's look at another place where prices are not being controlled for sure, and that is the fact that overall, US home prices have appreciated a whopping 490% since 1984 Yes, 490% over the last 40 years, therefore almost a 5x price increase. Let's break this down, and then I'll tell you what it means for the future too. This is the shift in US home prices from August 1984 to August 2024 so therefore it starts from mid Reagan presidency, when the median home price was $81,000 at that time. Okay, so this is our starting point, 1984 that's the year Ghostbusters hit movie theaters. Kareem Abdul Jabbar broke the all time NBA scoring record. And shows that debuted on television that year were Miami, Vice night, court, punky, Brewster. Are Charles in Charge? Have you heard of these shows? Another TV oh boy, another TV show that debuted in 1984 Well, Chase, are you ready for this? Let me give you a hint, Temple University. And how about jello? Pudding pops? Yes, I'm talking about the Cosby Show, which just feels kind of different to talk about anymore, ever since Bill Cosby's illicit misconduct there. And no, we are not going to play a snippet of the Cosby Show theme music. Please don't play it. You know, we totally do something like that here, but we're not this time. Okay? Well, with home prices surging and astounding 490% since that year, 1984 Okay, let's break down the areas that have appreciated the most and least and see what that means. And you might remember that in our newsletter, I sent you this map that shows the level of each individual state's 40 year price search. Oh, this is great. It's just the best real estate map I've seen in a while. What it shows is that coastal states are where home prices have risen the most. In general, the top 10 in appreciation in order are Washington State up 810% yes, that's more than 8x in the last 40 years. The next highest home appreciation over the last four decades in order is Oregon, Rhode Island, California, and then it's Hawaii, Montana, Massachusetts, Maine, Idaho. And 10th is Utah, all right. Well, why have coastal states had this higher real estate run up over time? Well, it's where building constraints exist that limits the housing supply. That's both geographic constraints, like, for example, the ocean's edge literally limits build space there. Well, the coasts are also where you tend to have more building regulation. Coasts are where incomes have risen the most those residents can afford more for housing. So home prices are then higher. I mean, just look at the leader Washington state. That's where you've got the headquarters for Amazon, Microsoft, Costco, Boeing, Starbucks, Expedia and more. They're all there now, taxes, though, they do tend to be highest in coastal states as well, so you're paying more for property, and you're also paying more in all types of taxes in a lot of cases. And as we know, rental properties usually don't work as well on the coasts, coastal rents haven't risen as much as home prices, and these places, they tend to have those laws and regulations that often favor tenants over landlords. And if you're looking at the map here like I am, you're going to note that some Rocky Mountain states have flexed their appreciation muscles as well. Now, Tennessee and the Texas triangle, they kind of decided to join the appreciation party fashionably late, as you look over 40 years. Yes, Tennessee and Texas, they really only started their big appreciation climb about a decade ago. All right, so those are some of the big winners every year since Punky Brewster debuted on television. Well, with today's rise of remote work and lower home affordability, the nation's interior, that's what looks increasingly desirable for property ownership the Midwest, the Great Plains, parts of the south and parts of the inland northeast. That makes these areas look like comparative deals where prices haven't wildly run up over the decades. And though you hear about return to Office policies, because a few major companies announce these return to Office policies. I mean, remote work is still up fully 15% year over year, and housing preferences are shifting as employees look to suburban Metro outskirts for more affordable homes so they're freed from the need to factor in these lengthy commutes in their lives like they had to previously. Now, among states that don't have strong in migration, one that could really shine is a place like Ohio. Ohio has appreciated less than most states still at 334% over the past four decades. Again, 490% is The National number. Ohio boasts tons of diverse industry, a low cost of living. They've got the seventh highest population in the nation. They have a stable population count for rental property owners. It has strong laws favoring landlords and Ohio. Is just a day's drive from half of North America's population. All right, so a smart listener like you is probably asking yourself a question right now, like, Okay, how does this 40 year stretches 490% rise in national home prices compare to inflation, and how does it compare to incomes? Over this time there's been 201% overall inflation and us, median household incomes have risen 260% and yeah, that 201% inflation number is suspect, just like most any inflation figure is inflation could certainly be higher than that, because most inflation measures likely understate the true diminished purchasing power of your dollar, and see the 490% rise. Although it sounds like a staggering number, and it still kind of is. It's also like, well, of course, it takes almost five times as many dollars to buy a home today, because each dollar's value is way down. What else has changed in the last 40 years? Well, houses are larger now than they were then. The median home size has grown 150% since 1980 and at the same time, the family size is smaller, fewer people live in each home, so everyone has more space. And I discussed those types of things in detail with you before, so I won't get into all of that again. Today's homes have better amenities too. So really, the point is, if you are paying more on an inflation adjusted basis, you are getting more and it's also more likely that two parents are working today rather than one, in order to make those payments more affordable. And that fact right there that is not a great lifestyle outcome. Another way to say it is that it takes two to afford a home today rather than one. But yet, hey, that is society. All right. So with that understanding, let's look at the future. I completely believe that real estate values can soar another 490% over the next 40 years. I mean, even 600 or 700% is not out of the question, and there are a lot of reasons for this. I mean, chiefly, we're starting from a base here of a low housing supply, and we've got strong demographic demand, and we can almost certainly expect more monetary inflation the next four decades. The inflation rate is the one thing that nobody knows. 40 years ago, mortgage rates were 14% today, they're only at about half of that level. And see today's median home price of over 400k like that figure would have seemed unfathomable to people back in 1984 but indeed, the price nearly 5x So similarly, another 490% or about 5x again, means that it is completely fathomable for the median us home to cost $2 million in another 40 years. That's about 5x of today's prices. And although that might sound unrealistic Now, that sounds just as unrealistic as today's price did to anyone from 1984 so really a super interesting way to think about home price appreciation. There, you might even make the case that home values, not prices, home values, they're not up that much at all. I mean, most of that is just that prices have adjusted for inflation, the value is about the same, although I'd still say that the value is up somewhat. So really, that's my thought there, and I duly regret bringing Bill Cosby into this whole thing. I ruined it.    I've been coming to you here from Austin, Texas, where I've been checking out the real estate market. I've got more for you straight ahead. It is a really profitable idea. I'm Keith Weinhold. There will only ever be one episode, 528, of the GRE podcast, and you're listening to it,    oh, geez, the national average bank account pays less than 1% on your savings, so your bank is getting rich off of you. You've got to earn way more, or else you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk, your cash generates up to a 10% return and compounds year in and year out. Instead of earning less than 1% in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full or. And on time. And you know how I'd know, because I'm an investor in this myself, earn 10% like me and GRE listeners are. Text FAMILY to 66866, to learn about freedom. Family investments, liquidity fund on your journey to financial freedom through passive income. Text FAMILY to 66866    Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group  NMLS. 42056, they've provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridgelendinggroup.com, that's Ridgelendinggroup.com.   Robert Kiyosaki  26:05   this Rich Dad, Poor Dad. Author Robert Kiyosaki, listen to get rich education with Keith Weinhold,and there is I respect Keith, He's a very strong, smart, bright young man.   Keith Weinhold  26:25   Welcome back to GRE. We are grateful to have on the show today, the co founder and CEO of the whole operation, Freedom family Investments. They are seven, soon to be eight. I just learned real estate centric companies based in Centerville, Ohio. The other co founder is her husband, Flip, whom you've heard on the show before. Hey, it's terrific to have back. Danni-Lynn Robinson,   Dani-Lynn Robison  26:50   thank you so much, Keith. I love talking to you.    Keith Weinhold  26:54   It's the same here. You've been in real estate since 2008 and one of the things that you do is you have this perfect track record of always returning capital to your individual private investors, loans that they make to you, and paying 100% of the returns as promised, even if you yourselves end up losing money on a particular deal. And in fact, you the listener, you probably heard me talk about how I personally participate for a high yield return with them myself, with Danny Lynn's company backing me. You've heard that ad near the middle of GRE episodes, and you yourself can do this too. Individual investors can get a high yielding return, and it's paid to you as cash. So Danny Lynn, tell us about how it works. Generally.   Dani-Lynn Robison  27:40   I love that you started off with that particular statement, because I will tell you that every time I've been on a podcast of yours, the number one thing I hear when people get on the phone was you said on that podcast that even if you lose money, that I still get my return. And I have never heard of that before, so tell me more. So that was a perfect lead in because I think that what we're trying to do is just do a very good job of serving the people who help us build so as you said, we're on company number seven. We're building company number eight. And the reason that we've gotten to the stage that we are today is because we've had private lenders and people who invest in our syndication, our Master notes and our funds program, that investment has allowed us to buy properties, flip properties, buy apartments, flip apartments, and allowed them to get a return at the same time. And I've talked about the fact that we do volume as we've grown, we'll do 10 deals in any given month, and maybe one or two of them are like we find something, you know, in the wall that we didn't expect. Maybe we walk in and the past tenant left it in shambles and caused more damage to the property than we anticipated when we first went in. That's the nature of real estate, and that's the risk you take when you're an active real estate investor. So we knew when we were building our businesses that if we just did volume, that was going to happen, and we weren't going to run away from that fact, or take risk upon us or our investors by not mitigating it, by not doing volume. So you'll see situations where somebody does one flip a month, and that happens to them, and it's catastrophic when you're doing 10, and it happens which it will then you know that the other eight are going to bring the profit in. And so that it is easy for us to say, Thank you, Keith, for investing in us. This particular deal. We didn't lose any money on, but these eight we made a lot of money on, and that ensures that we can always pay you back in full on time, even if we lost money on a deal. And I think when that is explained to people on the phone, they start understanding why we can pay back everything as promised, even if we lose money, because we are still profitable as a company. And so that process of doing volume and having people. People trust us with their funds. As we've grown, has allowed us to get to Company Number eight, because, as we talked about right before we press record, one of the best things for us, Flip says, I love being Santa Claus. And Santa Claus is when you get that email or that check in the bank account that says, I just made money and I didn't have to do anything. I just partnered with Flip, Danny and the freedom team to do what they do already. I provided the money. They did the work. We all won together.   Keith Weinhold  30:29   Why does no real estate rehabber ever find gold bars behind a wallwhen they go in in order to turn over a property? Right? It's usually, you know, evidence of a leak or something bad, usually not something good going on back there. But yes, you do this volume across all these companies. So therefore, when you do find a leak behind a wall, and that particular deal didn't work out for a 100k rehab home, it sure can't bring down the entire operation. Danny Lynn, I've invested with you in your private money lending program for years now, and just been very open with my audience. I've let them know that I've been receiving an 8% return from you paid in cash. But one reason I'm having you back now to help our audience is because you now offer yields up to 10% so even better than when I got in. So tell us about that.   Dani-Lynn Robison  31:24   So we are always having conversations with our investors about what's going on in their investing journey, what are they looking for, and we want to create those win wins. And right now, with everything that's going on in the market, what we learned is liquidity is one of the most important pieces, because there's here, there's some uncertainty, and people want to invest. They don't want their money sitting idle and losing, having an eroding to inflation. They want to put it to work, but they want to have access to it. And so we have been changing and tweaking our programs to meet the needs of our investors, and making sure that we are buying properties that can then have that arbitrage to get us the profit we need to pay back our investors, but while we're still making a profit many times right now in this market, that does mean we're buying multi family properties, because there's so many different advantages to multi family properties, it does take a lot of underwriting to get there, but that's where, for the last, I would say, six to 12 months, we've been really focused in on that in order to increase the returns and have everybody just creating that win win.   Keith Weinhold  32:32   I'm really glad that you talked about multifamily properties, because I've talked with the audience about how the sector is beaten down. In a lot of places, you can get 30% discounts on multifamily apartment buildings, and we know that the long term demand is going to be there for occupancy in apartment buildings. Demographics is destiny, and we talk about this timing of having you on and now you're offering up to 8% discussing this, say, two and a half years ago, I don't think the timing was as good. That's when CPI inflation peaked at 9.1% so you really weren't getting a real yield. You need to subtract inflation from your yield in order to get a real return. And now you're getting a substantial real return. Since inflation is near 2% top online savings accounts, those top interest rates, they are falling with each successive federal funds rate cut, and most expect that those yields are going to continue to fall. People invest in bonds all the time, but the yield on the 10 year T note has been around 4% or quite a while. You don't have to settle for yields like that. And Danny Lynn, I love that you brought up the word arbitrage. This should be an arbitrage play for you the listener. But of course, for Danny Lynn, it needs to be an arbitrage play as well, because if she and her family of companies over there are paying you a yield of up to 10% they need to make arbitrage ontop of that themselves. And if you're a new listener, you might be skeptical of how you could reliably do that in real estate, but when you understand that real estate pays up to five ways at the same time and 30 to 40% total rate of returns without inordinate risk, are not dream land, the reality you can begin to understand the arbitrage. But Danny Lynn, can you tell us a bit more about how you do create that arbitrage to reliably pay a return of up to 10% How do you yourselves beat that in there?   Dani-Lynn Robison  34:26   That's where it comes down to multifamily. For us, the single family market has slowed down a little bit, and so multifamily is enabling us to do bigger things. But on a long term basis, we've built our companies up enough to a point where we are businesses are producing the cash flow that we need so we can pay our investors a higher return using the cash flow of the properties, and our long term wealth as a company is coming from down the line of the appreciation, especially in multifamily, the forced appreciation, and that refinance and that when. Fall. So everything that we structure is preferred returns, meaning we always pay our investors first and we come last when it comes to multifamily, those five ways start to compound over time, and that's what we really win, is because we know we're waiting, but we're waiting for a big return in 3,5,7, years. Sometimes we're waiting 1020, years, and our investors in the meantime are getting a really nice return better than they can in most other places, because we're willing to forfeit our current returns in this scenario, because our other businesses are producing the cash flow that we need.   Keith Weinhold  35:38   That's terrific. Tell us a bit about the program details. Then how is this note? Right? Because the investor, as soon as they make an investment with you, they do hold on to a note. Just tell us about how that's secured before we get into the details.   Dani-Lynn Robison  35:53    So it depends on the investment opportunity. Some investments are going to be secured by a note by the property. Some investments are going to be secured by a note by the business. Some investments are going to be secured by the fund itself. You're an actual owner, like or the syndication, an actual owner of what that fund is participating in. So every piece of security is a little bit different. So when you jump on the phone with us. We're asking a lot of questions, and the number one question that we ask is, what are your goals? Because if you do want liquidity, we know exactly where you're going to go. And some people are wanting liquidity for peace of mind, so that they can earn a higher return, but have access to the cash if they want it. Some investors are saying, Hey, I know there's about to be a lot of opportunities. So I want my money earning for me, but I want to be able to grab it, to be able to invest in these future opportunities that are going to come my way when I want access to the capital for that reason. Then there's other investors that are set it and forget it. Look. I like you guys. I trust you guys. I've vetted you guys. I've done my due diligence on you guys. I want to sit my money in there for three, five years. Some want tax benefits. And so what we do is we have, like, this table of investments with like, little check boxes. And as people tell us their goals, we're like, okay, they're there. They're by the end of the conversation, we're saying, here's the two investment opportunities we think fits what you like and what is going to meet your needs? What do you think? And then we start going with question and answers back and forth so they can fully understand it.   Keith Weinhold  37:27   We're talking about how to get a high yield paid to you regularly in cash with Danny Lynn Robi son, co founder of freedom family investments. Yeah. Danny Lynn, why don't you tell us then about this up to 10% return. But you do have some option based on people's needs for the duration of the investment, which gets into the liquidity and the minimum investment amount and being accredited versus not accredited. So tell us about some of those distinctions, differences and trade offs.   Dani-Lynn Robison  37:55   There's the accredited and non accredited piece, which is really the first piece that you should be talking about when you jump on the phone, because the answer to that question depends on where, like we first check the box of which investment opportunity is going to be right for you. Accredited investors can invest in both. Non accredited investors can only invest in non accredited options. So accredited, I'm sure you've explained many times on the podcast, is a million dollars net worth, minus your primary residence, or earning $200,000 for the last two years, and you expect to earn it again. Or if you're a married couple, earning $300,000 a year for the last two years and you expect to do it again, that would be an accredited investor. So if you qualify there, we've got multiple opportunities. Then if you're wanting liquidity, then, again, that's a checkbox for us that says liquidity fund. That's where you want to be learning more about you want to learn about those interest rates the liquidity fund is seven, eight and 10% based on how long you want to put your money to work. So some people say, hey, one year is good. That gives me exactly the liquidity I need, and that's going to give me a higher rate of return, which is 8% some people think three years is liquid. It's interesting to me, what people perceive as liquid, because anybody who's invested in a syndication knows sometimes that's five, seven and 10 years. So they view a three year investment at 10% Hey, that's liquid to me. I didn't have to lock it up for five, seven and 10 years. And then some people, 90 days is liquid. And so we have the liquidity fund seven, eight and 10% depending on which class you want to go in, 7% is 90 days, 8% is one year. 10% is three years. That's for accredited investors. We have our masternote program, which is for non accredited investors, that is 8% for two years, and 10% I think, for three years, and then we have Lincoln village, and that one is closing soon. I think we're at the final $1 million to raise. That is 12, 13, and 14% but that also includes tax benefits. The end, it is a five or probably seven year timeline, because it's a 48 unit apartment in Columbus, Ohio, if we refinance in three years, yay. Everybody wins. But I always set expectations it could be a longer timeline. And so those are the main opportunities that are available based on accredited, non accredited and your returns.   Keith Weinhold  40:20   Well, the yield on the 10 year T note is 4% but here, the yield on the one year private note is substantially higher. Well, Danny Lynn, do you have any last things to tell us before you let us know how we can learn more?   Dani-Lynn Robison  40:34   I think what's important is a trust. When I'm on the phone, I get three questions. Where do I start? Which path is right for me and who do I trust? And one of my biggest investors says Danny, I think number three question of Who do I trust is the most important one. So I think it's really important to get on the phone to ask questions, to ask, Hey, what didn't I ask that I should have asked? What should I know that I don't know? Because sometimes you don't know the right questions to ask, and so we have this graph of all the things you could be looking for in an investment that people don't even realize might be very important to them. So I think what is most important is just taking the first step of starting the conversation. Once you start the conversation, you start to learn, you start to get educated, you start to understand what your true goals really are, and then you can make an A confident decision, as opposed to what many of us do is, you know, sit on our hands for a little bit because we're just nervous. We're so nervous about losing money or we don't know who to trust, and we're so busy that a year passes by and we just didn't take action. So I just encourage people a 15 minute phone call might change the game for you and allow you to get started   Keith Weinhold  41:45    right indecision really is a decision in itself, a decision to not do anything and have some of your cash be atrophied to inflation. Tell the audience how they can learn more   Dani-Lynn Robison  41:58   They can text the word FAMILY to 66866 and that is going to connect you with our team, and we're going to reach out, hopefully, set up a call and get that conversation started.   Keith Weinhold  42:09   Oh. Danny Lynn, this is going to help a lot of people. Thanks so much for coming back onto the show.   Dani-Lynn Robison  42:13   Thank you, Keith,   Keith Weinhold  42:14   yeah, well, I think you know that I'm more of a borrower than I am  lender, but I'm a lender in this case. So for liquid funds, this has been a reliable source for an 8% liquid return without any hassle. I mean, it's about as passive as it gets. Of course, when you store money in a bank. You're giving the bank a loan as well, even though you might not have thought about it that way. Well, if you're looking for something a little less liquid, like a three year investment duration, you are going to get a higher return than 8% here. There are good options here if you're accredited or not accredited, and you don't have to invest in one specific apartment project either, like Lincoln village that Danny Lynn mentioned, and over there at her company, like she said, yeah, those are the three questions you can ask. Where do I start? Which path is right for me, and who do I trust? And on the phone really part of that second question, which path is right for me can be to ask Danny Lynn's team about how to get this highly passive return in the most tax efficient way for you.    There's so much vital content coming up here on the show in the future. Next week, it's the first time we'll have a former NFL player on the show is we'll discuss success principles that you can use in business and life, highly motivational stuff coming there in future weeks. So much more economics and real estate investing. Content is coming, including I've got an analysis of online search results, and you'll see what amenities tenants are really searching for today when they look for rental housing. And of course, as the year gets closer to the end, next month, I am going to reveal GRE 's home price growth forecast for 2025 and just as importantly, I will follow up with last year's prediction too. We'll look back at it and then see how it really turned out for high yield returns on your savings. You don't have to settle for disappointing interest rates where you spin your wheels because you're barely beating inflation. Learn more. Set up a call. Just text FAMILY to 66866 I'm your host. Keith Weinhold, don't quit your Daydream   Speaker 2  44:45   nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential. For profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  45:13   The preceding program was brought to you by your home for wealth building. Get rich education.com you

Keith discusses the current state of the US economy, noting that while it is considered strong by conventional measures, there are four major threats on the horizon that the country is not doing enough to address. He's joined by our guest, macroeconomic expert, Richard Duncan to discuss these topics. Richard proposes a solution that could strengthen the US's competitive position against China. Shifting from Capitalism to Creditism. Also, hear about the risks facing the real estate and stock markets in the near-term, such as the historically high wealth-to-income ratio and the ongoing quantitative tightening by the Federal Reserve. Learn more about Richard's work through his video newsletter, Macro Watch. Use discount code GRE for 50% off at: RichardDuncanEconomics.com Show Notes: GetRichEducation.com/527 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com GRE Free Investment Coaching:GREmarketplace.com/Coach Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 For advertising inquiries, visit: GetRichEducation.com/ad Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai  Keith Weinhold  0:01   Keith, welcome to GRE. I'm your host. Keith Weinhold, per conventional measures, today's us. Economy is strong, but there are four vicious threats on the horizon, and we're not doing enough about them. Our macroeconomist guests will discuss that with us today. How alarming is it, and what's the solution to our crises, this week on get rich education,   Speaker 1  0:27   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, who delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit get rich education.com   Corey Coates  1:12   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:28   Welcome to GRE from Fort Wayne, Indiana to Fort Lee New Jersey and across 188 nations worldwide. I'm Keith Weinhold, and you are back inside get rich education. We've been here for you, every single week since 2014 coming off of an election last week, this spurs more macroeconomic thought, monetary and fiscal policy, and more than that. And you know, one thing that I'm always looking for are signs of inflation versus deflation, because we live in a long term inflationary world. Well, you wouldn't keep a million bucks under a mattress because it would only be worth 300k in a few decades. But in deflation, you would flip your strategy and actually be a saver. You might keep millions out of the mattress, because deflation would actually increase the purchasing power of every single one of your dollars. Now, I've got a pretty unpopular take for you here at some point, probably now you've got to give the Fed credit for a soft landing. And what does a soft landing mean? Exactly. It means bringing down inflation without putting the economy into a recession. Well, inflation is down to about 2% now, unemployment is still low, near 4% and GDP growth for last quarter came in at 2.8% okay, yes, I sure understand that those benefits are distributed unevenly, but at this point, how much more of a soft landing Do you really want? And by the way, this sure doesn't mean that I love the Federal Reserve. I mean, they get no credit from me for not jumping on inflation sooner, when it peaked two and a half years ago, or even before that point, well, those high consumer prices as a result of that are still with us, and that's a problem, and they got that part wrong. We're about to talk with our global macroeconomic expert, really. He is one of the foremost authorities in the entire world today. We're going to talk about four major catastrophes the US economic future faces. One of those four is our ballooning national debt and deficit. And to review that for you, first, the debt is our overall accumulation of debt over the years now at 36 trillion. And when it comes to these awful, dreadful debt and deficit issues, I will ask our guests the question, when is it game over? Where is that tipping point? What would need to happen and the deficit? Okay, that refers to the annual shortfall, the annual thing, that shortfall that our bloated government keeps coming up with at the end of every year, all right, so therefore revenue minus spending equals deficit. Another way to say that is income minus expenses equals a deficit when the expenses are greater than the income. Well, that figure is near $2 trillion we're spending 2 trillion more than we raise in revenue each year. And here's an example. I'll use real world numbers rounded off to the nearest trillion. So if the government's annual revenue is only 5 trillion and you have to subtract out spending, which is 7 trillion, that could. Gives us an annual deficit of 2 trillion, pretty simple stuff, and that more or less gets added onto our overall debt of 36 trillion. Another major problem is this growing competition from China. Yes, I know that people like to discuss their demographic problems, but still, their population is more than four times the US population, and you learn about what other advantages they have over us and what we direly need to do to catch up. In our guests opinion, these issues incur some rather detailed explanations. So I'm really going to let our guest expert takeover for a while today, this weekend, I will be in San Antonio, Texas. San Antonio is an uptrending real estate market because they are really a beneficiary in distribution with their proximity to Mexico in the near shoring movement that's taking place. And then I will be in Austin, Texas, for a few days, Austin is one of the few major US metros that have seen rents substantially decline recently. I'll bring you next week's show from Austin, where I might talk more about that. Then, from the 20th to the 24th of this month, I'll be in New Orleans at the famed New Orleans investment conference, where they're pulling out all the stops at the 50th anniversary of the event, and that is the longest running investment event in America and perhaps the world. I hope to meet some of you there in New Orleans, just like I do each time I'm at the event. Let's talk about the bigger picture economy that your real estate and investments float within next.   This week's guest is the author of four books analyzing the crises that brought the global economy to the brink of collapse in recent decades. One of the books forecast the 2008 global financial crisis with great accuracy. We're going to discuss future crises here today, before we're done, he has worked as an equities and Investment Analyst, and then he went on to hold some rather esteemed roles at the World Bank in DC and as a consultant to the IMF in Asia. He joins us from Thailand today. He now publishes a video newsletter called macro watch, and long time listeners know that today's guest was also this show's very first guest that was back on GRE podcast episode seven, only 10 years ago now, in November 2014, and he's really become quite the friend of the show, and we've looked out for each other ever since. It's terrific to have back global macro economist Richard Duncan   Richard Duncan  7:46   Keith, hey, thank you for having me back. It's great to speak with you again.   Keith Weinhold  7:50   Oh, it's so good to have you here an entire decade of our lives. And as times change, economies are surely dynamic, and you're so good at spotlighting crises and explaining them in a way to people that they can understand. So Richard, why don't you talk to us now about risks facing the nation? Yes, I'm talking about the United States.   Richard Duncan  8:15   A lot of podcasts focus on all the problems the United States is facing, and it is certainly true that the United States is facing very serious risk. So I'd like to start off this conversation telling you what I think the greatest risk facing our country are. There are four main things I'd like to hit on. The first is something you mentioned to me before in our exchange of emails, is that the US government does have a very high level of government debt relative to GDP, and the budget deficits are large. So that's problem number one. Problem number two, in my opinion, looking at this from where I live in Asia, is that the United States is at risk of being conquered by China in the not too distant future. Risk Number Two. Risk Number three, we have very serious domestic political divisions within the United States. Risk Number four is that our post capitalist economic system, which I call creditism, must have credit growth to survive. If credit contracts, then our economy will spiral into a Great Depression that will be probably worse than the one of the 1930s so those are the big four problems that we have, and it doesn't do anyone any good just to talk about our country's problems if you don't offer a solution to them. So in my opinion, all of these problems can be overcome by accelerating economic growth in the United States, while all of these problems would be made very much worse by anything that causes us economic growth to slow down. The way to make the US economy grow much faster is to have the US Government finance a very, very large investment in the industries and technologies of the future over the next 10 years, starting immediately. The alternative austerity would cause the economy to spiral down into deflation. We'd like your listeners to think of austerity when they hear the word austerity. I'd like them to think of the word death. It's austerity is equal to death. Yeah, the US doesn't have to be a declining power. The first American Century doesn't have to be the last. It can be the first of many. The solution for driving the US economy to grow much more rapidly and solving all four of the problems that I mentioned above is a US sovereign wealth fund. Thank heavens. Both parties now support the establishment of a US sovereign wealth fund. On September 5, former President Trump came out in support of establishing a US sovereign wealth fund, and on the following day, the Biden administration said, then working on this for months and had a plan that they were developing. So this is fantastic news for the United States. It offers great hope for solving all of our greatest problems. And I'd like to spend, you know, a few minutes explaining to your listeners what a US sovereign wealth fund is, yes, urgently necessary, and why both parties have now come to understand why this is important to establish.   Keith Weinhold  11:27   Yeah, please tell us why you think the US sovereign wealth fund is so urgently needed, and what it is because for even longer than the 10 years since you were first here, for about 15 years now, you have championed and promoted this US sovereign wealth fund. You discussed it on CNBC Squawk Box and all over the place. Last year, you presented about it in a speech in DC to 15 members of the House, Ways and Means Committee. So tell us about the US sovereign wealth fund and why you think it's urgently needed.   Richard Duncan  11:56    Let's begin with, what is a sovereign wealth fund? Well, effectively, a sovereign wealth fund is where a country invest in individual companies or even in startups. There are sovereign wealth funds all around the world. Norway has the largest, Singapore has two very effective ones called gdic and Temasek, which had been enormously profitable and successful, and it made the people in Singapore much richer. So a sovereign wealth fund in the United States would be an investment bond financed by the United States government with the US. This investment fund would take stakes in existing companies and also in startup companies, hopefully on a very large scale. Now, some people have asked, Why is this framework necessary? Why do we need a sovereign wealth fund to do that when the government is already making investments in the military, for instance, and funding some R and D research? Well, the difference between what the government is doing now and a sovereign wealth fund is with a sovereign wealth fund, the government would actually keep equity stakes in these companies that they invest in, meaning that when these companies they invest in become enormously profitable, the profits would be owned by every American. The Americans would have the equity stakes in all of the investments that this sovereign wealth fund makes. And it would be a situation where the government provides the financing, but the private sector manages the companies. The government just finances these companies in new industries and new technologies, and the government has the ability to invest on a very much larger scale than the private sector does. For example, The United States has a lot of great companies in the private sector that have accomplished really, truly great things in recent years and long past as well. But these private sector companies cannot invest on the same scale that the Chinese government can. The Chinese government is investing on a much larger scale than any of the American companies could ever dream to invest on. And that's explains why China is overtaking us now technologically, and if they continue to invest at a rapid rate that they're doing currently, then before long, there are going to be far ahead of us technologically and therefore economically, and more worryingly, militarily, the US government has the ability to invest truly on a multi trillion dollar scale over the next decade in new industries and technologies, things like artificial intelligence, quantum computing, nanotech, biotech, genetic engineering and developing energy sources like fusion, and it has the ability to do this on such a large scale that it would be certain to succeed. And once these companies start creating cancer vaccines or fusion, for instance, they would be enormously profitable, and they could be listed on. NASDAQ at multi trillion dollar valuations, and the American public would own equity stakes in these companies, and would then would directly reap the rewards of these profits that these companies would generate. That is what a sovereign wealth fund is, why it's desperately needed, is, well, first of all, we should do it, because we can easily afford to do it. And the results, the breakthroughs, the technological breakthroughs and medical miracles that these sorts of companies would produce, would we really have the shot of curing all the diseases and radically extending life expectancy, developing sources of limitless energy that would bring down the cost of energy radically. Just across the board, it would induce a technological revolution that would turbo charge us economic growth, create UNDRIP wealth, and at the same time, shore up US national security in the face of this growing threat from China. So for all of those reasons, it is urgently necessary. In my opinion.   Keith Weinhold  16:04   both Norway and Singapore have had similar models to this. US sovereign wealth fund, and we certainly think of those two nations as prosperous places, tell me more about why it's a success so the government finances it does that incentivize companies to therefore take more risk?   Richard Duncan  16:25   It allows them to invest more. It allows them to invest on a much larger scale than that. Could if they have to rely on their own funding sources. Rather than investing millions of dollars, they could invest billions of dollars or 10s of billions of dollars. For instance, at the moment, the National Cancer Institute in the United States, this annual budget is $6 billion a year. $6 billion a year is not curing cancer. If we look back a few years ago, the Fed was creating $120 billion a month through quantitative easing per month. So with just 5% of one month of QE, you could double the National Cancer Institute's budget. Now that's not what this sovereign wealth fund would do. That just illustrates the scale. How much greater the scale would be that the government could invest on relative to what is currently being invested at the moment by the government and by the private sector combined.   Keith Weinhold  17:28   Do any critics ever ask about Wait? Is this too much government intervention into the free market? Is this a move away from capitalism? What do you say to those sort of critics?   Richard Duncan  17:38    I say to them that capitalism died in World War One. It certainly didn't survive the 20th century. Now the government. In the 19th century, we had capitalism. The government had very little involvement in the economy then and gold was money. But now gold is no longer money. The Fed creates some money. Government spending is something like nearly $7 trillion out of a GDP. That is around just not quite $30 trillion yet. So the government has been directing the economy going back at least since World War Two. This hasn't been capitalism for a very long time. Under capitalism, the private sector made investments, and some businessmen would make profits from their investments, and they would save that profit as capital and reinvest that capital. That's how capitalism grew. That's why they called it capitalism. It was based on capital accumulation and investment. But that's not how our economic system has worked for decades. Our system now is not driven by investment and saving by the private sector. It's driven by credit creation and consumption and more credit creation and more consumption and our economies has now been transformed from capitalism. It has evolved into creditism, with the government playing the directing role. So total credit in the United States, just last quarter blew through $100 trillion for the first time. By what I mean by total credit is the same thing as total debt. Total credit is equal to total debt. So this is all the debt of all sectors of the economy, the government sector, the household sector, the corporate sector, the financial sector, Fannie Mae and Freddie Mac all the sectors of the economy, it just went through $100 trillion and Breda ism has created very rapid growth, especially all around the world, not only in the United States, because it has allowed the US economy to grow so rapidly and to import so much from other countries that this is why The Asian miracle occurred. I've lived through the Asian miracle because the US has been running massively large trade deficits since the early 1980s and all these countries in Asia have been running massively large trade surpluses, and all this spending that the Americans have been doing has been fueled by this rapidly. Radically expansion of credit. Total credit first went through $1 trillion in 1964 now it's $100,000,000,000,000. 60 years later. Now our system is not capitalism. The government is very involved. Anytime there's any problem with the economy, the government steps in. In 2008 the government prevented a new Great Depression when the private sector the households defaulted on their debts and caused all the banks to fail, and Freddie Mac did fail and had to be taken over by the government. So at that time, we narrowly avoided a Great Depression, because the government increased its budget deficits by more than a trillion dollars a year for four years in a row, and the Fed expanded. The Fed created three and a half trillion dollars between the end of 2007 and 2014, expanding its balance sheet by about five times. So that's not capitalism. We don't have capitalism. So people who are worried about us abandoning capitalism. They're behind the times that happened a long time ago. That shouldn't be a concern. They should be aware now that we are competing against players who don't play by the capitalist rules of little government intervention in the markets we're now competing against China, and China is one giant sovereign wealth fund intent on dominating the world by investing very aggressively in new industries and technologies. In the year 2000 the United States invested, I think, 10 times as much in research and development as China did. But now China is actually investing more in research and development and the US is and that explains why China is ahead in so many areas of technology. They had 5g years before we did. They are the leaders in electric vehicles and batteries. We have to put up 100% tariffs to keep out electric vehicles from China because they're so much better than our electric vehicles. They dominate solar panels. And are worse, they have hypersonic missiles and we don't, and I'm sure they have other military advantages that we don't, because they invest much more aggressively in new industries and technologies than our government does. And if we don't rectify this quickly, then we are soon going to be overtaken by China militarily, and our national security is at risk, much more than most Americans understand. But this realization has slowly grown on policymakers in Washington, and now both parties are worried about this, and this is why we have this growing fear of China, and why we have proposals to limit technology transfers to China, and this is why we've done things like the chips and science act, where the government has agreed to finance a $280 billion investment in new industries and technologies a couple of years ago, with 50 billion of that going into setting up manufacturing facilities within the in the US to create semiconductors, rather than relying solely on Taiwan to obtain all of our semiconductors, because China could take Taiwan at any moment, and then then he would end up with all the semiconductor chips that go into powering artificial intelligence. And whoever develops Artificial General Intelligence first is going to rule the world, and therefore it had better be the United States rather than China, because we don't want to live in a world dominated by China, believe me.    Keith Weinhold  23:26   Well, a lot of macro voices agree with you. About two months ago, we had the president of the Mises Institute here, and the way he characterized things are in the United States. 100 years ago, we had islands of socialism in a sea of capitalism, and today we merely have islands of capitalism in a sea of socialism. Do you see the US sovereign wealth fund being able to solve all four of the United States big problems that you outlined, debt and deficit conquering by China, political division and creditism. Can it solve all four of those?   Richard Duncan  24:04   Yes, it can. So as you know, Keith, a couple of years ago, I published my fourth book. It was called the money revolution. Yeah? How to find the book? Sure, yeah. How to finance the next American century. It was a subtitle. Now I argue that it would be very easy for the US to invest on a multi trillion dollar scale, new industries and new technologies over the next decade, and if we do that through a sovereign wealth fund, then would generate so much growth and be so profitable that instead of causing the government debt to increase, it would actually make the economy so much larger and generate so many more tax revenues, and the government would make so many profits from these companies that it has equity stakes in that it would reduce the government debt in absolute terms, and radically reduce the government debt relative to GDP, which would grow far faster than it has been growing in recent decades. This problem, number one, solved the high level of government debt. A high level of debt to GDP just make the GDP grow a lot faster, and the ratio of debt to GDP will go down. Problem number two is the US is at risk of being conquered by China. We can out invest China. We can invest more than China can afford to invest. We still have the best universities and the best entrepreneurs and scientists. So if we invest on a large enough scale, we will win, and China will not conquer us. Third, if the economy is growing at 7% a year instead of 1% a year, that is going to alleviate a lot of the domestic tensions that exist currently, much of the reason there's the origins of this domestic political divide that we're now suffering from in the US is because such a large part of the population has been left behind when all the factories moved overseas, countries like China and Vietnam, we de industrialized, and the people who Used to have good factory jobs, good, unionized, high paying factory jobs. All those people were left out in the cold, and they're not happy about it. And so if our economy were growing much more rapidly, these people would have much better jobs and much higher salaries, and they would be much happier than they are at the moment. And the final one was our post capitalist system of creditism requires credit growth to survive. So if the government is financing these investments on a multi trillion dollar scale, it's going to make credit expand, and that's going to keep the economy expanding. So yes, it would solve all four of those problems.   Keith Weinhold  26:35   One of those four problems is the debt and the deficit. I want to dive into that more with Richard as it becomes more and more problematic in the United States, and just how far we can kick this can down the road. You're listening to get rich education. We're talking with macro economist Richard Duncan. More, we come back. I'm your host. Keith Weinhold.    Oh, geez. The national average bank account pays less than 1% on your savings. 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Text family to 66866    Hey, you can get your mortgage loans at the same place where I get mine at Ridge lending group, NMLS, 420056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridgelendinggroup.com that's Ridgelendinggroup.com   Jim Rickards  28:40   this is Author Jim Rickards. Listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  28:55   Welcome back to get rich education. We are going big this week, talking about the global economy, although mostly centered on the United States, with macroeconomist Richard Duncan. You can learn more about him at RichardDuncaneconomics.com and Richard I want to talk about the debt in the deficit. The debt is the United States overall debt as it accumulates year after year, and the deficit is just the annual thing, and it's so interesting and concerning. When I look at this, when you look at the line items in the United States government's annual spending, we now see that interest payments are taking the second largest chunk, only to Social Security. Social Security's number one interest is the second biggest expense, even more than defense spending and on Medicare. So I just wonder, as I see the interest payments going up and up and up and projected to be our greatest expense every year. You know, one thing I think about Richard is when our interest payments alone exceed our. Revenue somewhere down the road, is that when it's game over, or is that when we're on the way to game over? So can you talk to us about really, where the concern crops up with the deficit, like I talked about, and with the debt that's now at about $36 trillion   Richard Duncan  30:17   deficit and debt is a real problem. It was the first problem that I mentioned when we kicked off the conversation. There are two components of that. One is the fact that government debt has been increasing very rapidly. At the end of 2007 total government debt was around $9 trillion by 2014 it had doubled to $18 trillion because the government had to respond to the collapse of the private sector in 2008 and prevent us from having a great depression at that time, and then after 2014 it has doubled again, from 18 trillion to $36 trillion now, much of that was due to the need for the government to keep us from having another Great Depression during COVID When government stimulus amounted to about $5 trillion and the Fed created a similar amount over just a two year period. So now we have a much higher level of government debt. But the second component of that is that interest rates are very much higher than they used to be. The federal funds rate went up from 0% a few years back to a high of five and a quarter, actually a range between five and a quarter and five and a half. And recently, the Fed cut the federal funds rate by 50 basis points. But you can still say it is 4.9% let's call it 4.9% so interest rates are far higher than they used to be, but they don't have to remain high. The reason interest rates went up is because the Fed increased the federal funds rate. And the reason the Fed increased the federal funds rate is because we had high rates of inflation. Inflation peaked at 9% or so in 2022 but most recently, the CPI has come back down to 2.4% and the Fed's favorite measure of inflation, that PCE Price Index, has come down to 2.2% and that means that the federal funds rate, which is 4.9% is more than twice as high as the inflation rate is. That shows us that we have very tight monetary policy, and the Fed should be able to reduce interest rates very rapidly going forward. They've told us in their dot plot projections that they expect that interest rates will end this year the federal funds rate at 4.4% and then in next year, at 3.4% and 2026 at 2.9% so that reduction in interest rates will bring down the cost of the total interest expense that you mentioned as being so high currently, the risk, however, is that we get a rebound in inflation. We're inflation to surge again, then interest rates won't come down. In fact, they could go higher. So all of my career, more or less, has been spent in Asia. And the main theme that is run through the global economy, the development of the global economy over the last three and a half decades has been globalization, globalization in the form of us running very large trade deficits with other countries. Literally, the US current account deficit since the early 1980s has been $15 trillion meaning countries with the trade surpluses have had a $15 trillion trade surplus, and that's why they've all been transformed economically as a result of their trade surplus with the US, but what the US got out of this was the ability to buy things made with very low cost labor, and that was extremely disinflationary, that drove down the inflation rate in the US, and that allowed interest rates in the US to come down to very low levels that we've seen during most of this century, Up until the time COVID started. The real danger is now, if we do impose very high trade tariffs on China and our other trading partners, then that will cause a very serious spike in inflation. And it won't just be one off, because, of course, when the tariffs are put in place, that will immediately cause everything to be that much more expensive. The US companies importing goods from abroad would have to pay that tariff, then those US companies would pass those higher expenses on to the consumers, so we'd get an immediate spike in inflation. But that would also mean that the companies abroad it wouldn't be so profitable for them to have their manufacturing facilities abroad, they would try to bring those back home. And given that the unemployment rate in the US is so low already, only 4.1% there's not enough labor to allow these manufacturing facilities to come back to the US and start producing goods in the US. So that would cause an upward spiral. In wages and the wage push inflation spiral of the type that we had in the late 1960s and early 1970s so that is a In other words, tariffs would put an end to globalization, and that would cause a such a severe spike in inflation and interest rates, it would essentially be the death nail for creditism, which requires credit growth to survive. The end of globalization would mean this end of this 30 year global economic boom that the world has enjoyed, and therefore it is a very severe threat, and it would push up the interest expense of the US government, which you let off with, instead of lower interest rates, bringing down the interest expense the government has to pay every year, we would have instead higher interest rates, which would make the amount that the government has to pay on its interest even higher than it is at the moment, and make the budget deficit even larger than it is at the moment, and Make the government debt grow even faster than it's growing at the moment. So let's hope that doesn't happen. Instead, the better approach is to invest, to have the government finance large scale investments in new industries and technologies make the economy grow much more rapidly and we can grow our way out of this debt problem that we're currently in,   Keith Weinhold  36:21   yes more inflation, whether that comes from higher tarrifs or any other sources, will lead to higher interest rates to counteract that higher inflation, which will Yes, pump up the deficit in the debt that much more. And you know, one thing that I like about Richard is, you know, a lot of people complain about things, or say, what are we going to do? Or Things look bad, and Richard is saying some of that, but he offers a way forward with the US sovereign wealth fund, like he talked about before, investing our way out of it. So Richard, if we don't invest in this debt and deficit situation gets worse. It could be a hard question to answer, but I'd like your best guess at how far can we kick the can down the road? When is it game over? How big do our interest payments on the debt and deficit have to get?    Richard Duncan  37:10   the game is never over. No matter how bad things become, humanity will survive and carry on. So even in the Great Depression, people made it through, even through World War Two that resulted, largely as a result of the Great Depression. A lot of people died. 60 million people died, but the game didn't end. So regardless of how bad the economic system system were to become, humanity will survive and there will be a solution. Now, a lot of people put forward that, the idea that they point out that we have this high level of government debt, and their solution is to reduce government spending. The government spends something like $6.8 trillion last year. That was the amount the government spent. The budget deficit last year was 1.8 trillion so in order to eliminate the budget deficit, the government would have to spend $1.8 trillion less. In other words, it would have to cut its spending by 27% but the government cut its spending by 27% they're going to happen. The economy would immediately spiral into a depression. So even that reduction in spending wouldn't balance the budget, because the government revenues would collapse, and they would have even fewer tax revenues, so the deficit would still be there, the economy would collapse, and the unemployment rate would be 20 plus percent, and would just fall further behind China and be at greater risk from a national security perspective, and much more miserable As a society overall. That's why it's always say people should consider think of the words austerity and death at the same time, because austerity would bring about the collapse of our economic system and the Great Depression unless your civilization would survive it.  trying to answer your question more directly, how high could this go? Well, governments don't default on their debt when push comes to shove. If the government's having a hard time paying interest on its debt, the Fed will just print more money. And in a case where between 2008 and 2014 when the Fed created three and a half trillion dollars, they printed a lot of money at that short space of time, and they got away with it without having high rates of inflation. The highest rate of inflation we had during that period was 3.8% in 2011 and by the early months of 2015 we had deflation again for a few months. Prices actually fell negative CPI for a few months in 2015 so if we have a global economy, as we do at the moment, full of we have nearly 8 billion people, I would guess 2 billion of them at least live on less than $5 a day. So the US could get away with having a lot of paper money printing without having higher, very high rates of inflation and the government could finance itself that way for quite a long time. Of course, if we have a closed domestic economy brought about by extremely high tariff barriers, then we would end up with hyperinflation in the United States. But even with hyperinflation, it would be very painful for people who have all their cash in the bank or under their mattress, but people with assets, those asset prices would appreciate more or less in line with the inflation, and it would erode the government debt relative to the size of the economy, because the GDP would grow in nominal terms very rapidly because of the hyperinflation, and the debt, which is not inflation adjusted, would be evaporated away by the inflation.   Keith Weinhold  40:43    right? that's why here at GRE we are all invested and aimed toward prudent use of leverage with assets like real estate and we sure have been the beneficiaries of that wave of inflation that followed COVID there. Richard, well, we're talking about the debt and the deficit somewhat, which, interestingly, has actually doubled since the first time you were here on the show. When you were here, 10 years ago, it was at 18 trillion, and today it's at 36 trillion. We talked about, how far can you kick the can down the road back then? Well, here we are, 10 years later, and it's doubled. Talk to us. You know, you talked previously about the greatest risk to the United States economy. Tell us now, as we are investors here on this show, about the greatest risk to the real estate and stock market, I would just say within the next year. What are some of those risks to those particular markets?   Richard Duncan  41:38   We've already discussed the main risk that high tariffs would potentially cause a new spike of inflation and force the Fed to hike interest rates rather than cutting interest rates. But there are some other risk as well. One is the fact that we already have a very high level of wealth relative to income. Let me back up a second. You were talking about debt doubling since we first spoke 10 years ago. Here's another statistic for you. Just in the last four and a half years, the total wealth of the Americans, all of their assets minus all of their liabilities. In other words, household sector net worth. Since the end of 2019 it has increased by $47 trillion in four and a half years. That's about a 40% increase. Now, $47 trillion is enough to pay off the entire US government tip, which we've been worrying about with $11 trillion left over. So not everything is as bleak as it sounds on the surface. We've had a huge explosion of wealth in the last four and a half years that's been driven by property and also by stocks. The problem now is, is that the level of income the asset prices, are very inflated relative to their historic norms. And one of the ratios that I always keep an eye on is called the wealth to income ratio. It takes the household sector net worth. In other words, the wealth that we were just discussing, which, by the way, is now $164 trillion of wealth owned by the Americans. The wealth divided by income, disposable personal income, this wealth to income ratio is now an extraordinarily high level. The ratio is 785% whereas the average of that ratio going back to 1950 has been 550% the previous two peaks were in the year 2000 when it hit 620 during the NASDAQ bubble, and then that bubble popped, and the stock market crashed, and we had a recession, and it went back to 550 and then it surged to a new peak of 680 during the property bubble. And then that bubble popped, and we almost went into a depression, and that a lot of wealth was destroyed. We had a severe recession. The government had to bail us out from and that ratio went back to 550 again. Now it is just off the charts relative to its previous peaks, because people 680 now it's 785 so people used to suggest that higher asset prices were justified because interest rates were near 0% but even after the Fed hiked interest rates from near 0% to about 5% The asset prices have stayed inflated. That does suggest that asset prices are very inflated and therefore very vulnerable to any sort of shock that could occur, whether geopolitical or economic or domestic political problems. So that's a concern. Another concern is quantitative tightening is still occurring. Quantitative tightening is the opposite of quantitative easing. When, with quantitative easing, the Fed creates money and pumps it into the financial markets, and that tends to make asset prices go up, and it also tends to make interest rates on government debt stay low, because if it pushes up bond prices, it pushes down. Bond yields. Well, now the opposite is occurring. Over the last two years, the Fed has destroyed roughly $2 trillion it created $5 trillion from the end of 2019 till about 2022 during the COVID pandemic, and the policy response to that, the Fed created $5 trillion but now it's destroyed 2 trillion of that five that it created, and is still destroying dollars at the rate of about $60 billion a month, or $700 billion a year. And as it does, as it destroys dollars, it takes dollars out of the financial system, which all other things being the same, tends to make financial conditions tighter, putting upward pressure on bond yields and downward pressure on asset prices. So as this continues, this is a concern, because reduce the liquidity in the system by another $700 billion if it continues for another year, having said that there is still an enormous amount of excess liquidity in the system as a result of all of the money that the Fed has created, going back to 2008 I estimate that the excess liquidity is somewhere around three and a half trillion dollars. If you look at bank reserves and the reverse repos at the Fed is about three and a half trillion dollars of excess liquidity, and the Fed actually has to pay interest to the banks on their bank reserves to hold interest rates up. That's how the Fed controls the federal funds rate now. It pays the banks roughly right now, 4.8% interest on all of the banks bank reserves, and so the banks will not lend money to anyone at less than 4.8% interest, because the Fed will pay them 4.8% interest. Why would they lend to anyone else for less if it suddenly stopped paying interest on these bank reserves, these banks would look around and where would they invest their three and a half trillion dollars in? No one's going to pay them 4.8% or even 3.8% or 2.8% interest rates would plunge because of all the excess liquidity that exists. So this excess liquidity has been a thing that's been driving the economy since COVID started, and it's why we've managed to avoid recession, which everyone is expected to arrive any moment now for the last two and a half years. So there are concerns, but there are also, as always, other reasons for optimism.   Keith Weinhold  47:24   Well, that wealth to income ratio that Richard talked about, that's a calculation that you yourself can do. One's net worth is almost eight times their income now, which is at a historic high, which is one concerning point that Richard brought up. Well, Richard, I want you to tell us about your terrific video newsletter, macro watch unless you have any other last thoughts first.   Richard Duncan  47:51   well, just one last word on the US sovereign wealth fund. Thank you very much for giving me a chance to discuss that and to explain why both Democrats and Republicans are now in favor of establishing a US sovereign wealth fund, one of the few issues that has bipartisan support. And this must come as a surprise to many of your listeners and most Americans, in fact, why have both parties agreed on really setting up a US sovereign wealth fund? So I'm glad I've had a chance to explain it and why it's so urgently necessary. I'd just like to emphasize the extraordinary benefits that this delivers to the American people, both individually and at a national level, individually, in terms of medical breakthroughs and better health and much more rapid economic growth for the economy, so much more wealth and much more national security as well. So I hope the Americans will get on board with this idea and give it their full support, because it's exactly what our country needs to solve all the four issues, the major issues that I laid out at the beginning of this conversation. But with that said, if your listeners would like to learn more about my work, Macrowatch. Microwatch is a video newsletter. Every couple of weeks, I upload a new video discussing something important happening in the global economy and how that's likely to affect the stock market, property, currencies and commodities. They can find macro watch on my website, which is RichardDuncanEconomics.com that's RichardDuncanEconomics.com Macro Watch has been going on now for 11 years, they'll find more than 100 hours of videos in the microwatch archives. They can begin watching immediately, and they'll receive a new video every couple of weeks. And I'd like to offer your listeners a subscription discount. If they go to Richard Duncan economics.com and hit the subscribe button, they'll be prompted to put in a discount coupon code, if they put it in G, R, E, they can subscribe to macro watch at a 50% discount. That's great. That's GRE so I hope they'll check that out, and at the very least, they can sign up there for my free blog and follow my work that way.   Keith Weinhold  49:56   And I have benefited from consuming macro watch content myself over the years, allowing me to sort of stretch my thought process and go macro, which we don't always do as real estate investors. Oh, Richard, it's been valuable as always, and you really offered a solution, a way forward here, something that's really refreshing. It's been great as always, having you back on the show.   Richard Duncan  50:18   Yeah. Thank you very much. I look forward to the next time   Keith Weinhold  50:21   me too. when it comes to the term capitalism, if that's truly a system that we're no longer in, you know, it seems to get replaced with the word meritocracy, and that is a word that I like, meritocracy, where producers get rewards for being productive, but even that is under attack, and the government just always seems to be stepping in with a safety net. Seemingly everywhere you look, it won't let banks fail. We saw them jump in early last year with Silicon Valley Bank and other bank failures, the government won't let homeowners fail either. I mean, you don't have to think back very far with mortgage loan forbearance in the COVID era, on issues of the debt and deficit. Even Fed Chair Jerome Powell himself has called it unsustainable. That's the word that he used. Like Richard said today, we won't default. We'll just print more. So when it comes to the inflation versus deflation tug of war, the future keeps looking inflationary, but at what rate of inflation? That's what I don't know, and no one really knows. If you like Richard Duncan's content, and you sort of wished he and I's conversation would go on. Well, he is a regular guest here, so I expect him back. But if you're telling yourself, I want more of his content and I want to make it visual at the same time to help really bring this to life, well, visit RichardDuncanEconomics.com hit the subscribe button and get 50% off. That's five zero, 50% off with the discount code. GRE. Happy Veterans Day. Until next week, I'm your host, Keith Weinhold, don't quit your Daydream.   Speaker 2  52:17   Nothing on this show should be considered specific, personal or professional advice, please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively you   Keith Weinhold  52:46   The preceding program was brought to you by your home for wealth, building, getricheducation.com

Keith discusses the inefficiency of compound interest in wealth building, advocating for compound leverage through real estate investments. He illustrates how a $100,000 investment in a $500,000 property at a 6% annual return can yield much higher returns due to leverage (see the math below). He also explains how mortgage rates are influenced by long-term bond yields and discusses the benefits of real estate over stocks. A coaching call with GRE Investment Coach Naresh highlights the process of investing in real estate, including financing considerations and the role of a coach in guiding investors.  Here's the math on a 5:1 leveraged RE return at a 6% appreciation rate:  Year One: $500,000 x 1.06 = $530,000. Subtract $400K debt = $130,000 equity Year Two: $530,000 x 1.06 = $561,800. Subtract $400K debt = $161,800 equity Year Three: $561,800 x 1.06 = $595,508. Subtract $400K debt = $195,508 equity. GRE Free Investment Coaching: GREmarketplace.com/Coach Show Notes: GetRichEducation.com/526 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 For advertising inquiries, visit: GetRichEducation.com/ad Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai   Keith Weinhold  0:00   Keith, welcome to GRE I'm your host. Keith Weinhold, make America rich again in play numbers. You'll get a fresh take today on how compound interest does not build wealth and compound leverage does. Then you'll learn about how bond market moves affect mortgage rates. Finally, you get to listening to a call between one of our investment coaches and a GRE follower today on Get Rich Education.   Speaker 1  0:33   Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com   Corey Coates  1:19   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:35   Welcome to GRE from Altoona, Pennsylvania to Saskatoon, Saskatchewan, and across 188 nations worldwide. I'm Keith Weinhold, and this is get rich education, the voice of real estate investing Since 2014 you're going to hear some things that you've never heard before today, and some listeners tell us that GRE is unlike any real estate information they've ever heard. And with what I want to tell you today, well, again, it's information that I've never heard anywhere else, either. So what I endeavor to regularly do for you here on this show is to tell you what I wish I had known sooner make America rich again, nope, that is not my presidential campaign platform for my run in the year 2032, or anything like that. It is this, don't get your money to work for you. In fact, if you want real wealth, don't work for money or get your money to work for you. Don't make either of those things the focus anyway, avoid growing your money through compound interest, because that's not the formula either. Now you and I have covered that ground before, if you're new here, and that material makes you say what you might have thought things like that were the holy grail of wealth building, nope, and today, for the first time on the show, in over 500 episodes, I'm gonna put some real numbers to that to show you exactly what I mean. Let me explain to you how to invest to truly win in a way that you've never seen in your life. You're not gonna improve only your life, but generationally, your entire family's life. At your job, you are like a dock worker. You're trying to pull your boat up to the dock so that you can then make a short, easy hop onto the boat and get away. And you'll learn how I did that and how I would begin investing today if I could start all over again. Now, after I had graduated college and had a job, I used to think, Well, yeah, I'll invest through a 401K in mutual funds, because it's easy and it's just deducted right from my paycheck. Well, when you do the easy thing in life, there's usually not much reward. And back then, I thought, Well, why would I invest in real estate anyway? I mean, a stock and mutual fund return on investment is about 10% over time. Real Estate is more like five or 6% plus real estate has all these maintenance hassles, and in the stock market, your 10% return enjoys compound interest. I don't really know how that works over on the real estate side, all right. Well, let's look at some numbers with how this would all work anyway. Here we go with $100,000 invested in stocks at 10% after year one, it's grown to $110,000 in year two, you don't just have 120k you've got more, because the 10% compounds on the 110 10k so now in year two, you've got $121,000 and I bet that you don't see any problem in this yet, right? Hey, things are going great. And after year three, you're up to $133,100 All right, so there we are. You begin with 100k and after three years, you've got then $33,100 in profit, your gain, on top of your 100k All right, that's what compound interest does. Well, let's take a closer look at that. $33,100 first, okay, I could attack it a slew of reasonable ways, if I wanted to, we could subtract out the constant drags on that of inflation, emotion, taxes, fees and volatility. But let's just take one volatility. We smoothed out our 10% return saying that you achieved it every year in that example there, we know that does not happen in the real world. Stocks are volatile, and the more volatile the return, the lower the return. Because instead, if you were up 20% one year and then down 20% the next year, which stocks are known to do you're not even you're down your 100k would instead go up to 120k in year one and down to 96k in year two, a loss, like I've told you before, that right there is the difference between what's called the compounded annual growth rate and the average annual return. But we'll just leave stocks number right there. We'll say that despite all five drags, volatility, of which is just one, the compound interest still somehow gave you this $33,100 gain. That number is about to look really disappointing, and this is about to get really interesting.    Let's compare that to real estate, and we'll say that despite that, it only returns, say, 6% per year here. Well, how do most people buy real estate? They do it with other people's money. OPM, remember earlier that I talked to you about how you don't create wealth from getting only your money to work for you, like you did in the stock example. Yeah, here's how you ethically use other people's money to buy real estate. When you invest 100k in a rental property. That's your 20% down. You get to borrow 80% from the bank, 400k so now you control a $500,000 property. And here's the thing, its entire value appreciates a 6% all 500k not only your 100k invested, yes, so you're now about to get the return on both your 100k and all of the bank's money. 400k that you get to leverage returns from both are about to go to you. Oh, yes, let's run these numbers, instead of compound interest, you're about to get compound leverage, using those borrowed funds to amplify your own return. So with your 100k invested on a 500k property at 6% after year one, you've got 130k after year two, $161,800 and after year three, $195,508 why? Because, again, your 6% return was accumulating on the 500k property. All right, so after year three, with this $195,508 you're gonna subtract out your 100k down payment, and your gain is $95,508 All right, that is compared to your compound interest based stock and mutual fund return of just $33,100 if you'd like to see the math for that leverage. Return that is in the show notes. Look for it there. See, by employing other people's money, it's like when you were a kid and in the evening, your body cast a shadow five times taller than you actually were. That's how leverage allows you to magnify returns and appear to be a bigger, taller investor than you actually are. Yes, your 20% down payment on real estate gave you five to one leverage amplifying your returns. If you listen to the show for a while, you understand that, but you never saw that numeric dollar per dollar comparison like we just did. So after three years, how about 33k profit on stocks and 95k on real estate? Real estate returns almost three times as much. But in reality, it's probably more than a 3x win for real estate because you're 95 Gain over three years in real estate, equity is actually going to be higher, because your tenant is also paying down your principal balance on your 400k loan every single month for 36 months in this three year example, if your property is vacant, 10% of the time they paid it down for you 33 out of 36 months, and as we know, at the same time, inflation pays down your loan even faster than the tenant does. Real Estate is also more tax advantaged than your stock gain, because you never have to pay capital gains tax on your 95k profit with a 1031 tax deferred exchange. And on the downside for real estate, upon owning the property, you will need to pay closing costs of maybe four to 5% of the purchase price. All right now, in this 95k gain for real estate versus 33k gain for stocks, I did some rounding there. Yes, even if your stock return was in a 401 K type fund, well, you would still have to either pay the tax now with a Roth or later with a traditional retirement plan. So you're still paying the tax. The higher real estate return is also more likely because real estate is less volatile than stocks, and I've got more vitally important things to tell you about how you just grew wealth about three times faster with leverage than with compound interest. And yes, this is exactly the kind of stuff I wish I knew when I had just started out. Now if you think you don't have the money for a down payment. I'll get into that. But first, a big review here, and I've woven threads of this review through previous episodes. First, don't focus on getting only your money to work for you. And second, stress compound leverage, not compound interest. Optimize using other people's money. And when you take out a loan for rental property, you get to use other people's money three ways at the same time, three different entities, you're using their money. Number one, it's for the bank's loan, like we discussed. Number two, you're using the government's money for generous tax incentives. I only touched on one of the tax incentives. And then, thirdly, you are using the tenants money to pay down your mortgage loan and pay all of your properties operating expenses, like maintenance repairs, insurance, property taxes and pay your property manager to make this all mostly passive for you. I don't manage any of my own properties. I think you already know that. And on top of that, hopefully you'll have a little residual income after expenses every month, your monthly profit of rent income minus expenses, that is called cash flow. And when I talk about doing this ethically, use an experienced property manager. Never get called a slumlord. Provide housing that's clean, safe, affordable and functional, okay, some really core, enduring, GRE mantras in there. But what if real estate goes down in value? It's not common, but I did have it happen to me around 2008 we won't even talk about what happens when stocks go down in value, but when real estate values went down in 2008 it just didn't matter that my rental property's values were temporarily suppressed because my rents were higher than my expenses, I was still making income each month off the property. That's a good way to own property, if you can. I'm not motivated to sell an asset. I mean, are you motivated to sell an asset that's paying you income every month during a time when it's capital value dip, so probably not. And by the way, there is nothing new or esoteric here. You just haven't had it explained to you in this way before. This 33k from stocks and mutual funds versus 95k from real estate you haven't seen that before. This is simply buying houses with plain vanilla 30 year fixed rate loans, and it's just simply long term buy and hold. This is not flipping, as I like to say. This is not day trading. This is decade trading, as you continue along in your real estate journey, keep stacking more properties, and it's gonna go faster than you think, because you've got this power of compound leverage, and your tenant also pays you income that you can use toward buying the next property, and then as a backup, you have that trapped equity that keeps accumulating in your property. And the reason this goes faster than you think is that you can also release that equity by removing it with a completely tax free event, a cash out refinance, all while you still hold onto the asset and you. Use the untrapped equity to put down payments on more property. Now, what if you think you don't have the money to start or get as big as you want, as fast as you want? Well, I've met a lot of people that when they understand this compound leverage concept, they withdraw their 401 K funds, pay a penalty and pay the taxes, and they put those funds toward real estate. I mean, you would owe taxes on it anyway. Now that part may or may not be ready for you, but you know, once I understood this, what I did is I stopped contributing to my 401K and I instead got into compound leverage. Yeah, this is how to make America rich again. Now, what if you think you don't have 100k to invest in property like we did in our example? Well, there are perfectly good $200,000 properties at GREmarketplace.com where you could make a $40,000 down payment. But you still might be thinking, I'll just say that the real estate market is just really competitive now, and that your small down payment maybe it can't compete with a deep pockets all cash offer, because all cash buyers can close really fast, but no your small down payment can still compete with all cash offers, because Some sellers don't want a quick sale for either tax reasons or myriad lifestyle reasons that they might have, I like to say that using debt is like using fire if it's misallocated, like with 23% credit card debt, that's what the average credit card interest rate is right now, 23% well that can burn down your financial house. But if you know how to use the debt in a controlled manner, like from income property that others paid down for you, oh, that fire is contained in a stove, and that fire or fireplace will heat your home. If I could start all over again with what I know now, it would be to embrace good debt, because tenants pay down this debt for me, so use it as leverage to build a real estate empire. Think of it this way, besides the employer match, every dollar that you lock inside a 401K is $1 that you cannot use to leverage other people's money. Back when I started investing, I should not have contributed to a conventional retirement plan beyond the employer match myself. So I used leverage to pull my boat up to the dock more than three times faster and escape the day job when I was still young enough to enjoy it. And once you know the difference, why would you want to do life any other way? You might have heard that real estate has made more people wealthy than any other investment today.    You've learned how now, sometimes it is hard to stop and turn off a mindset if the same thing has been believed for a long time. I think we've all experienced that. If you believe something for a long time, well then it's hard to change your mind on that, and you might even fight and defend that core belief. That could be the case here with me, denigrating the wealth building capability of compound interest. And if you're still wrestling with that yourself, a great compliment where I discuss this more in depth and in a different way, can be found on an episode that I did earlier this year that is on GRE Podcast, episode 507 episode 507 is called compound interest is weak. I'm here to talk to you about things that are really gonna move the meter in your financial life, like what I've covered with you so far, and what I'm gonna help you learn next. You know, there's just some information out there, even real estate information, it's just not that useful. Say, for example, mortgage purchase applications were down from last week, but yet they were up month over month. Well, that might matter to certain sub industries, but it doesn't move the meter in your life with how you're going to actionably build wealth.    Hey, before we move on, I want to give a major shout out to this show's long time, steady, capable sound engineer, Vedran. He just hit the 10 year mark of filling that important role for us here. Yet 10 years almost since the inception of this show. He's been with us since November of 2014 so since about episode five, and he's edited every single episode since then, and he recently told me that he looks forward to the next 10. Congratulations, Vedran. Also, thanks to you, the listener, the follower. Here, we held three GRE live virtual events this year, webinars. You. You are really taking action. Back in June, we broke a record with 307 registrants for that event. And then our latest event that was held about 10 days ago saw another record broken, 528 of you registering, and I say thanks, because you make me feel good. You're showing that I'm helping make a difference in your life. And now maybe you're thinking these events or this platform, it's getting too well known, and if you show up to a future event that you might not get to ask a question, no, that's not the case. Not everyone that registers shows up for the event live, and then you can ask a lot of your own questions with a personal free coaching call as well. I'll let you listen into a coaching call later on, today's show. In fact, now I've shared with you a few times before that changes to mortgage rates don't follow changes in the federal funds rate that Jerome Powell and the FOMC said. I've also told you that mortgage rates closely track long term bond yields, but let me tell you about what all that really means, and this is going to help you understand and perhaps even predict the future direction of mortgage rates. In fact, it's unusual. You know, the largest market in the world is not the real estate market, it's not the stock market, it's the bond market. And What's unusual is here we are on episode 526, and we've really never discussed the bond market. Well, you're probably aware that a month and a half ago, the Fed dropped interest rates by a half point. Their next decision is in just three days. Now I don't think they should drop rates again, though they could. That's because since the rate cut, GDP and job growth have been strong. That's why I don't think they should do it. I mean, rates usually get cut to help a wounded economy, so why lower them now? I mean, recessions usually see rate cuts. But here's what even fewer people understand when the Fed cut rates a month and a half ago by a half point, why have mortgage rates soared since then? They were about 6.1% and then the Fed made their cut, and mortgage rates recently spiked up to 6.9% well, many still feel that the long term trend for all types of interest rates is lower. But you know for one thing, rates are really hard to predict. The Fed only controls short term rates. Long term rates, like the 30 year and 15 year mortgage are tied most closely to the yield on the 10 year treasury note, and here after I'll just call that the 10 year All right, so what is this and what controls it? Well, don't let that name intimidate you. This is get rich education. So let's break down each word yield on the 10 year treasury note. Yield just means interest rate. 10 years is the period of time that this loan is made for the duration the US Treasury issues them so they receive the loan and a note is an IOU. It was also known as a bond. That is what's held by the person or the entity that loaned the money, the person that loaned this money to the Treasury. It could be you yourself, or it could be a foreign nation. So you hold on to this note because you made the loan to the Treasury. That's the breakdown of every word of the phrase the yield on the 10 year treasury note. Okay, so to say it a different way, if you hold a 10 year treasury note, that is basically your receipt, your proof that you made a 10 year long IOU to our federal government and it is going to pay you an interest rate known as a yield. All right, that is the simplest explanation I can give. Well, a month and a half ago when Jerome Powell cut short term rates, the 10 year was 3.7% at that time, and at the beginning of last week, it was up to 4.2% that's the highest since July. And again, 30 year mortgage rates most closely track the 10 year all right, as you and I sort of hold hands through this together next, let's ask what made them rise. And you know, some think this is harder to understand than trying to understand why YouTube viewers constantly fall for ludicrous housing price crash videos. Okay, but relax. This is easy. When the economy gets hot, all these things tend to rise in value, real estate, stocks and also productivity rises. Employment rises. Is an inflation that tends to rise as well. Because a 10 year investor needs a real return above the rate of inflation, this yield must rise as well. That's it. You got it. You got it. So therefore, when a rosy jobs report comes out, the 10 year tends to go up. When a strong retail sales report comes out, the 10 year yield tends to go up or a high flying CPI is released, the 10 year tends to go up. And therefore, because it rose in the past month, investors have expectations for a strong economy and more persistent inflation. So conversely, expect both the yield on the 10 year treasury note and the 30 year mortgage rate to fall when the economic outlook gets more dim. It's important to understand that, like a lot of things in the stock market, yields on the 10 year they tend to be more of a reflection of future economic expectations than the current economy. And this should be pretty easy for you to remember, because when you think about it, that makes sense. Since you've lent out your money to the federal government for 10 years. I mean, you're really interested in what that 10 year future is going to look like. So yes, though this is somewhat less exciting than watching a motorcycle jump over the Grand Canyon now that you listen closely for the last few minutes. Congratulations. Now you know that the 10 year can tell you both what investors expect to happen in the future, and can tell you the direction of 30 year mortgage rates. And, yeah, I mean, this is just more the type of material that I wish someone had explained to me sooner, in a way, just like that. And you know, are you interested in doing things that at the end, they make you say, You know what, I just got 1% better this week. I mean, think about the kind of person you'll be if you make yourself just 1% better each week. Now you better understand how leverage beats compound interest and what makes mortgage rates move. Go out and vote tomorrow as far as next, listen into one of our GRE investment coaching calls. I'm Keith Weinhold. You're listening to get rich education.   Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage. You can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridgelendinggroup.com that's Ridgelendinggroup.com.   your bank is getting rich off of you. The national average bank account pays less than 1% on your savings. If your money isn't making 4% you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work with minimum risk, your cash generates up to an 8% return with compound interest, year in and year out. Instead of earning less than 1% sitting in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And I would know, because I'm an investor too, earn 8% hundreds of others are. Text FAMILY to 66866, learn more about freedom. Family investments, liquidity fund on your journey to financial freedom through passive income. Text Family to66866.   Zack Lemaster  29:08   this is rent to retirement. Zach Lemaster, listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  29:22   Welcome. Back to get rich Education. I'm your host. Keith Weinhold, there will only ever be one GRE podcast episode five under 26 and you're listening to it. Let's let you listen into a coaching call between GRE investment coach Naresh and GRE follower, Brenda, and then I'll be back to wrap it up at the end.   Naresh Vissa  29:41   hey, Brenda, good to Good to see you after emailing back and forth. Thanks for setting up this call.   Brenda  29:47   Yeah, thanks, Naresh, thanks for setting up time to talk to me.    Naresh Vissa  29:49   Yeah. Well, tell me what made you schedule this call, like, Why did you hit that button saying I want to talk to the real estate investment coach?   Brenda  29:59   Yeah, well, I've seen some of the newsletters that come from GRE I'm familiar with some of the podcasts, but then I had gotten into the newsletters, and then I saw that there was an option for a free consultation to talk to you. And I thought, Well, I'm not sure what this really means, or what we talk about, or how you can help me, as far as, like, the vision, or how do I set my goals? Or what is it exactly that I would do with you with GRE, like, what kind of consultation Do you provide?   Naresh Vissa  30:29   Yeah, well, so that's you came to the right place. So let me tell you a little bit about GRE, a little bit about me, who we are, how we operate. So get rich. Education is an education company. As you know, you listen to the podcast, you read the newsletter. It's free. The podcast is free. The newsletter is free. You can go to our website, read our blog, go through past podcasts. You can subscribe to our YouTube channel, subscribe to our social media, Tiktok, Instagram, Facebook, X, you name it. That's all free content available for you, and this service, the real estate investment coaching, is completely free of charge. I know that sounds kind of crazy, but you'll never pay as a dime. I'm here to help you throughout and along your real estate investment journey. Think of me as a super connector, someone who can introduce you to all the right people, whether it's specific markets you want to invest in. Providers. There, wholesalers, flippers, lenders, appraisers, although your lender will take care of the appraiser part, if you need a second lender, financing, CPAs, attorneys, anything at all, just come to me and I can introduce you to the right people, or at least point you in the right direction. I'll try my best to do it 100% of the time. I don't, or I should say, I don't, have answers 100% of the time, but I do have answers most of the time, and I can forward you and refer you, point you in the right direction. So think of me as a super connector. Think of me as your silent partner in deals, because I get any equity in the deals who you don't have to pay anything to think of me as an advisor, a consultant. Again, this is a completely free service. There's you're not going to get like, a bill in the mail saying, Hey, you talked to Naresh five times, so you owe us $1,000 for that. Now, there's none of that. So the most common question I get after telling people this or, like, well, then, I mean, you can't be doing this for free. Like, why are you doing great? Like, like, yeah, what's the catch here? And they also have, I mean, I'm sure you're wondering, how do you make money? Well, if you listen to the podcast, if you go to our website, you'll see advertisements, sponsorships. We are paid marketing fees, advertising fees from partners. So you listen to the podcast, I'm sure you hear many of those commercials. We make our money on the back end, so we can keep services like this and our newsletter and our podcast free on the front note, like I said, GRE is not is an education company. We are not a broker or a wholesaler or a flipper or a builder or an agency or a realtor service or any of that a brokerage, where we're not of that, we're purely education, education based through our educational content or free educational coaching, which I offer too. So that's what you are. Got it .we work with all those other companies. So we can refer you to all those other types of companies that can help you on your real estate investment journey. But we are not any of those. Now me, personally, I am an investor myself. I own eight properties in southeastern United States. I got started in 2017 I bought my first property in a single family home. That was rehab. Back then, rehabs are very hot. That was what you should get in, that what made sense to get into. And I scaled pretty quickly. I went from one to eight in a matter of it's been seven years since I bought that first property, but I actually went from one to eight in a matter of more, like two and a half years, I just kind of went so I bought, like I said, southeastern United States, bought my last property in 2020 I'm saving up for my next property because I personally now only, like new construction, I rehabs have their place, certainly For certain investors. And at the time, I got six rehabs, rehab properties from 2017 to 2019 so I personally, though, am now saving up because new construction is more expensive than than rehab. So I'm saving up for my next real estate property, which is most likely going to be a new construction. So that's a little bit about my investing background. I've been a real estate coach Since 2019 came in 2021 to GRE and have run the coaching side ever since. So that's a little bit about me on the real estate side, on the coaching side. Now, my background is not in real. Real Estate. I like, I said, I got in 2017 before that, and I still do work in tech. So I worked in tech from 2000 really, from 2005 and still do work in tech. So it was through my tech work that I got involved in real estate, because I would do back end tech work for real estate companies. And doing that work, I was like, Oh, I started learning about real estate, and then I said, huh, if this doesn't seem hard or difficult. And I also got an investment coach who helped me, like I said, with that competitor, they also had investment coaches or investment counselors. So I had a coach who helped me a little bit, but that's what the coaches are for there to help investors like me, especially newbie investors, or even veteran investors. They're there to help investors with the networking part, with the who are offering the best deals, special deals, special interest rates, who's honest, who's dishonest? That's what I'm here to do. So that's a little bit about GRE About me, about my background, how our coaching program works. So now, Brenda, it's all about you. I want to hear I'm sure you have tons of questions based on what I just said, but before you ask those questions, I'm just going to start out with, how much cash do you have ready to invest? Because really, I could be of most service if you're looking to invest, otherwise, I can't really be of much service. So how much cash do you have ready to go to invest? And then I'll answer, I'll say something about that, and then I'll let you ask whatever questions you want.    Brenda 36:35   Sounds good. Just a cash ready for deployment is 100,000 but I'm assuming that doesn't all have to go to one property, right? Or depending on the property?   Naresh Vissa  36:46   Yeah, so, so is that lick? So what I should have clarified my question as how much liquid cash do you have on not like a 401, K, or properties that you have to cash out refinance, or it's just if you today, if you were to take a property and and you had cash ready to do so be $100,000 Yeah, correct. Okay, so, so a few things that's very good, because with 100,000 that gives you optionality. You can either go for a rehab property, and we have rehab property right now. Our hottest provider is in Memphis, Tennessee, and you can get a rehab property. Worst case scenario, let's just say the property, the average property, is about $100,000 and so you just put down a 25% down payment. So let's just give or take, let's say $30,000 I tell our investors. I say, Look, if you want to buy your first property, or Yeah, your first rehab property, you need at least $50,000 cash, liquid in the bank, ready to go. That's just because you want that cushion. You don't want to put all your eggs in one basket. So I say, if you want a rehab property, you need 50,000 if you want a new construction, single family 100,000 because the new constructions are going to cost you at least $240,000 at least. So if you take 25% of that, plus closing costs and cushion and everything, just if you want to be a good investor, you have to be disciplined. And you have to be disciplined enough to be able to save the 50,000 or the $100,000 if you want to make it as a real estate investor. So 50,000 for a rehab property, 100,000 for a new construction. If you want a duplex, you need, I say, a new construction duplex, which is probably our hottest new construction asset class right now in Florida, 150,000 for a new construction. Down payment or not. Down Payment task, ready to go for a new construction duplex, because those are selling for about 490,000 give or pay. So it's 50,000 for rehab that you should have in the bank. 100,001 in the bank for a new construction, single family. 150,000 for a duplex. Anything beyond that, then we can talk. You know, later you wanted a squad or something else, but that's generally what I say. And I tell, I tell investors. I say, Look, if you only have $30,000 in the thing, let's connect after you get up, because I don't want you putting all that 30,000 into a rehabbed property, whereas, who knows, maybe the economy might go into a recession and it stays vacant for six months. I don't want you to have to go through that. So let's stick to those numbers. So you said you have 100,000 so you have options. You can you can get either a rehab property or you can get a new construction. So it's completely up to you. It's about your new construction. Single family, it's completely up to you. I personally, I, like I said, I started out with the rehabs, and then I've kind of graduated up to new construction. God, they the lowest risk you can take with 100,000 is by starting with a. Be just a low price rehab where you put in $30,000 and full, you know, down payment burden, costs, everything else you put that, you know, 30 grand, if it first property, you put that 25 to 30 grand in, and you treat that as a learning experience. And you go through the experience, and if everything goes smoothly, then you can buy the second property, and you can decide whether, hey, do I want to continue with this rehab, or I'd still have enough capital for the new construction single payer. But I would start small. If you're new, if you're an advanced veteran investor who has six figure, well into the six figures in the bank, ready to go. I tell those people. I say, hey, let's just go for new construction. Let's go for the new construction. Single family. Let's go for the duplexes. Some of them have 700 $800,000 in some cases, a million dollars plus. I say, hey, let's let's just go for the quad to the construction four Plex. The incentives are great, etc, etc. So in your case, 100,000 you certainly have choices. And what I'll do after this call is, well, first I want to hear, based on what I said, What are your thoughts on anything, whether it's renew, construction versus rehab, and then what I brought up earlier about coaching?    Brenda  41:12   Yeah, I actually thank you, Naresh, I really like what you said about starting small. I have purchased two single family homes in the past, their rentals, but I never went through a coach. I just kind of did it on my own, and luckily, things worked out. But certainly having a coach and starting out small, just to kind of go through the process, it's really helpful. Here's the situation that I think is just a little bit different, and I know that this would probably be something that I talked to like a lender about. But in your experience, I actually just came from an 18 year career. Actually, I was in tech myself, but I'm now transitioned from a corporate w2 into more, but 1099, what's classified as like a independent company, you know, type of income, what has been your experience with other clients that transitioned from that type? Is it easier? Is it harder to obtain loans? Is there going to be different requirements? 25% does that still stand?    Naresh Vissa  42:13   Yeah. So I could give you a full, you know, lecture on this, or something called the housing expense ratio and something called the total obligation ratio. I'm not going to get into those details, because the lenders, I can refer you to lenders, and they can explain all that, and those ratios mean a lot to getting you pre qualified. But what I will say is, unfortunately, if you are 1099, you are at a disadvantage, because it's not steady, consistent income, unless you can show two years of steady, consistent income. I mean, really is the last for your last two years of tax return. So if it's a new 1099, gig, yep, you're gonna have to wait until you have two years of consistent high income. If you've been doing it for a while, then send your last two years. And if it's, you know, if it's looking good, then, then you'll get approved. The other option, and this is, this is not a personal question or anything, but it married couples can go together on one loan. So if this actually helped me out a lot, because my wife is a high income earner, and I have my own business, and my business does pretty well, but if you're 1099 as as you know, there are all sorts of things you can do with your tax return that are completely legal and to where you pay yourself as little as possible, so that you can cut your income tax. So in any case, that's like 1099 workers are a disadvantage for mortgage because all they care about is your pay stub, your you know, how much income did you have? So there were times when I put my wife on the mortgage and she's got a high income, and so you can put a spouse on there, and you can both do it together. Now you're allowed 10 loans per person, so if you want a spouse go on a mortgage that counts, even if it's for one mortgage, one property, that counts as one for each of you. So for two working husband and wife. For a couple where both spouses are working with good income, I say look, you'll want one spouse to do 10 properties and another spouse to do a completely different 10 mortgages. That way you can do 20 combined. Now, if you do it together, then you'll only be able to buy 10 combined because you're older than so 1099, workers. We get that question a lot, and it actually it is a problem, because the standards changed after 2008 so either wait the two years and have your consistent records to show high income, or if you already have it right now, then you can get approved.   Brenda  44:54   Got it. Got it. This would be for just conventional loans. What about other loan products? Like, I think I've heard of the DSCR loan where maybe just the rental property would cover, you know, part of the I'm not sure, like, I guess you're guaranteeing that the property will make enough money to cover the payment of the loan.   Naresh Vissa  45:12   Yeah, DSCR and loans are hard to get approved. Really, what I should do is introduce you to some of our lending partners. If you're interested. DSCR is meant more so for people who have utilized you want to use those 10 loans first, so because if you go you're going to have a higher interest rate if you go with the deal. So those DSCR loans, or Portfolio loans, are meant for people who have used their 10. Their spouse has used their 10. They've got capital low rolling in their ultra high net worth. So they're fine, okay, just get me another loan. I need the tax benefit. I need the tax break. I'm fine paying a 10% interest. So they'll go for a portfolio loan or a vsdr loan. In your case, first property, your first investment property, first turnkey we want to go for a loan.   Brenda  45:58   Got it makes sense. And then another question, so this was about the financing. But another question that I meant to ask earlier is, I know you mentioned, like, you know, I am not like a realtor or anything like that, but how does it work? Like, I'm think about when I'm purchasing a home, personally, I kind of say, hey, I want to three bedrooms, four bedrooms, this many baths. Like, how does that work with you? Like, do I give you criteria of what I'm looking for, or, you know, based on my goals? Do you kind of craft a plan? How does that work?   Naresh Vissa  46:29    Yeah, so I actually sent you an email just right before this call it. I think you got the email, and it includes a link to about 20% of our inventory. It's not all of our inventory. That inventory is just there. To get you started to see the types of properties that we have available. We have some constructions and the markets that we cover, again, it's only about 20% of the inventory. If you go to our GRE marketplace, you can see all of the markets that we cover. Your biggest source will be, I send out emails. So your biggest source will be, if I email you, I'll email you like a property. It'll be, Hey, I just came across this deal. It's like, it's my VIP email list. So you'll get my, you know, VIP emails, and that's going to be your, your best source. You also get Keith white holds newsletter, which promotes properties from time to time and and we only promote the best. We there are hundreds of properties we can promote. We only distill it down to the best of the best. So don't think, oh, like, there might be another property that narration knows about. Now we promote through our social media, through my email list, through Keith's newsletter, through the podcast, through the webinars, the best of the best. So that's the best way to to find out,   Brenda  47:49   got it your inventory or what you currently right,   Naresh Vissa  47:52    and with your permission, I can add you to my VIP email list. If it's okay, yeah, that would be cool. I'll go ahead and add you, and you'll start getting those emails in real time. I only send out an email maybe once every three weeks, so I really only want to send the best of the best. I want to waste people's time.   Brenda  48:07   Great. So what if you do send me an email and I'm like, Yeah, I love it. I think this is fits exactly what I'm looking for. Do I email you back? Do I contact you? Like, how do we stay in contact?    Naresh Vissa  48:18   So email is the best form of communication, because in real estate and business in general, we want documentation of everything. We don't want any miscommunications. So if you see something you like, email me. I'm available. You have my phone number. You can text me, you can call me, you can email me. I'm very accessible, but email is preferred, because that way it's in writing, and I'll know exactly what you want, the address, everything. So let's say you see a property that you like from an email that you get from Keith or from me, and you email me to say, hey, I'm interested. What are next steps? I will get you in touch with the actual like I said, we're just an education company. I'll get you in touch with the actual builder or the broker or the agent on the property, and they'll be able to answer way more questions than I can answer way more and that that's for anything. If your question is about financing, I can get you in touch with several good, low rate lenders, and they can answer all your questions about financing. Your question is CPA Tax stuff. I can get we have, uh, several good contacts who can help you out there as well.    Brenda  49:20   Got it, got it. So then what, what does our communication look like from there? Like, do if I say yes, I want it, then you get me in contact with them, and then I kind of work with whoever it is that has this property. And then hopefully we just close on the property. And that's it, right? Am I understanding that correctly?   Naresh Vissa  49:40   Sure? So, so all correctly? Yeah, I'll refer you over to them, and they will, they will take care of you. Should copy me on all emails that way. Okay, what's going on? Copy, you remember, I'm your coach. I'm here to help you, like it's free, so copy to an email so I know what's going on. If there's a problem, I can jump in. In many cases, I hold a leverage over a lot of these. People, if a problem happens, I can step in and say, Hey, treat her better. Or, you know, you should waive this cost, or whatnot. So copy, because the people who get into trouble are the people who didn't copy me on the emails. And many, many time, time just goes by, and then they come with their problem as they Hey, if you came to me a year ago, I could have actually helped you with this. Now, the statutes expired, and it's, it's a complete mess. So always, even after you're done posing on the property and you have a tenant in there and just copy me on me.    Brenda  50:30   Got it. Okay,  So kind of bring you along the journey. Okay, so let's say I'm at the end, like, do these providers help me? I'm assuming in some of these cases, you've mentioned places that are far from where I live. So do they help provide additional resources, like, who's going to manage my property, or who's going to find me a tenant? Like, could they help me with that?   Naresh Vissa  50:51   Absolutely. So the entire point of GRE of this investment coaching program, the entire point is so that you can become what's called a laptop landlord. You can literally live free and have just take a step back and have your properties run on their own. So the idea is not for you to invest down the street and become a property manager and a landlord down the street. It's you can be anywhere in the world. Buy properties anywhere. Like I said, I live in Florida, but by Prop, I've never visited any of my properties. I've never met a tenant. So that's what you want to do, and that's what we help people do. If you want to buy a property across the street and become you can do that yourself. Go through all the loops yourself. We are here to help you invest in Ohio, in Tennessee, in Florida and Texas and all these places that you may not have even visited every other life, but you can still have a very fruitful investment journey. So we set all that up for you, the property management, every all that it's going to be taken care of, so that your hands off. That's why it's called turnkey real estateReal real estate investing.   Brenda  51:56   Got it. Okay, sounds good. And typically, how long does this process take? I mean, I'm sure it's different for everybody, but what can I expect, like from beginning, from when I talk to you, to when hopefully I have a property that I'm signing off on?   Naresh Vissa  52:12    In some cases, it's literally taken two days. In other cases, it's taken there's not even an answer, because people did end up buying Okay, yeah, so, so, yeah, in in the case of, like, our Memphis burr properties, which are rehab properties in Memphis, I recommend that you watch our burr webinar. I can send that to you after this call, if you'd like. But I had people who watched the webinar talk to me. I introduced them that same day to the provider in Memphis. They talk to their provider in Memphis, and then the next day, they pick the property, and the day after that, they sign a contract. Oh, okay, so it's all about the investor. If you're a serious investor, it can be very quick, like me, I was very serious. That's why I scaled. I bought eight and two and a half years, eight properties in two and a half years. Other people, if you want to take your time, it could, you could literally take your time and never buy any and a lot of people are doing that, because in 2019 they said, Oh, you know what, I'm gonna wait. There's gonna be a crash and this and that. And so they waited, they waited, and prices skyrocketed, and now they said, You know what, I'm I'm priced out of the market, so I'm just not gonna invest in real estate anymore.   Brenda  53:16   Yeah, it's that analysis paralysis. I've experienced that. Yeah, yeah, got it. Okay, cool.   Naresh Vissa  53:23   All right. So any other questions?    Brenda  53:25   No, this is really helpful. It's kind of good to know, like, kind of where you step in and kind of where you hand off, and again, the timeline is different for everybody, but it's kind of good to know that I could literally be standing here two days later and have a property if I want. So good.   Naresh Vissa  53:42   Yeah. So as we end this call, next step, so I told you about new construction versus rehab. Are you? Are you interested in both, or leaning towards one or the other? Right now? Just    Brenda  53:54   probably the rehabs, because I think, like what you said, I like the idea of the E step into like, let me see how this process goes first before kind of committing a bigger chunk of capital to something larger. Yeah, I agree.   Naresh Vissa  54:06   Okay, so here's what I'm going to do as next steps. I'm going to send you a link to the webinar we did for our hottest rehab asset class right now, hottest rehab provider out of Memphis. It's the Memphis Burkey webinar. I went ahead and just emailed that to you. So watch that webinar. It will answer like every question imaginable regarding the provider, how they do their process, the properties, everything. So watch that webinar and then shoot me an email after you're done with the webinar on what you're thinking just you can watch webinar today and you want to shoot me an email right after, just let me know what you're thinking, and we can go from there. I think that's would be the next step. Just watch that webinar, and then we'll, we'll reconnect.   Brenda  54:54   Sounds good? Okay, I like that.   Naresh Vissa  54:57   Okay, very good. Well, I sent that link to you, and. And that's about it. If you have no more questions like I said, you can add my phone number to your phone book and feel free to reach out whatever you want.    Brenda  55:07   will do. Thank you so much.    Naresh Vissa  55:09   All right, thank you. It was great.   Keith Weinhold  55:11   Yeah,  I hope that you found that helpful in making America rich again. Namely, you. Of course, no two coaching calls are the same. Some GRE followers will perhaps have more questions than Brenda did. There. We are here to learn your situation. We know the mistakes you've got to avoid, and we can connect you with the best income property for you across the nation. We really filter it down to the best of the best, and besides being a truly free coaching call, we don't try to upsell you to a paid course or anything like that, because we don't even have any product to sell really. So even if you wanted to buy something from GRE, I don't know if you could, maybe unless you buy a GRE logo t shirt from our website or something like that. So keep all of your funds for the property down payment. As far as now, you can book a coaching call at GREmarketplace.com and select the free investment coaching area. Until next week, I'm your host. Keith Weinhold, don't quit your Daydream.    Speaker 3  56:21   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively,   Keith Weinhold  56:41   The preceding program was brought to you by your home for wealth, building, get rich, education.com  

Keith highlights the unprecedented surge in immigration and its impact on housing demand. The conversation also covers state income tax policies, noting that nine states have no income tax, and the impact of international tax laws on US citizens abroad.  Immigrants now make up more than 14% of the US population, the highest proportion since 1910. The US is facing a significant housing shortage, with an estimated 4.5 million housing units needed. Housing shortages are expected to continue, with homelessness rates rising by 12% year over year. Learn about the challenges of being a US citizen living abroad and the potential for double taxation. Resources: Connect with Tom's team at WealthAbility for a free consultation on permanently reducing taxes. Show Notes: GetRichEducation.com/525 For access to properties or free help with a GRE Investment Coach, start here: GREmarketplace.com Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Invest with Freedom Family Investments.  You get paid first: Text FAMILY to 66866 For advertising inquiries, visit: GetRichEducation.com/ad Will you please leave a review for the show? I'd be grateful. Search “how to leave an Apple Podcasts review”  GRE Free Investment Coaching: GREmarketplace.com/Coach Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE' to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Complete episode transcript:   Automatically Transcribed With Otter.ai   Keith Weinhold  0:01   welcome to GRE I'm your host. Keith Weinhold, both an immigrant surge and a big wave of US born residents is tightening housing demand near unprecedented levels. Then we're joined by show regular Tom terrific again, but it's not Tom Brady on how to legally avoid paying state income tax and the fact that if you're from the US, if you move out, you must still pay tax on your worldwide income, plus more tax strategies that you can benefit from today on Get Rich Education.   Speaker 1  0:34   since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show, guess who? Top Selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast, or visit getricheducation.com   Corey Coates  1:20   You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  1:36   Welcome to GRE from Athens Georgia to Athens, Greece and across 488 nations worldwide. I'm your host. Keith Weinhold, get rich education. Founder, Forbes real estate council member, best selling. Author, long time real estate investor and holder of a humble bachelor's degree in geography from a college in Pennsylvania that nobody's ever heard of. It's that time of year where you now have Halloween decorations in your front yard competing hard for space with political campaign signs. What's your HOA gonna do now? Welcome in this slack shot operation right here is the get rich education podcast. I think you know that by now it's episode 525   Brace yourself, immigration has absolutely exploded. I've got the latest numbers on that, and there's a chart recently published in The Wall Street Journal that shows it all legal and illegal. We're a real estate platform, so the question I'm asking is, Where in the heck are we going to house all of these people? In addition to soaring immigration, we'll look at our own domestic US born surging population that are forming households now, and that part might have flown under your radar. This is an urgent issue. All of this isn't just coming. It is already here, this explosion of housing demand, it will indelibly shape both broader society and real estate's supply demand component for decades, it is really approaching the unprecedented we look at net immigration to the US since 2000 it's really these past four years where the numbers have shot up like a rocket through 2020 immigration averaged around 1.2 million people per year, but since 2021 it has more than doubled to around two and a half million net immigrants per year. But the number of illegals arriving among them has gone up as much as 10x starting in 2021 and the overall figures they keep rising. Last year, there were over 3 million immigrants, about three times the total number that we averaged in the first 20 years of this century. So a 3x total net inflow, legal and illegal. And these figures in the Wall Street Journal chart, they are sourced by the CBO. Now you might think that the immigrants that did not enter legally could eventually get deported, but some of them that are already living and working here, gained something called Temporary Protected Status that keeps them here. Well, our central question remains, Where in the heck are we going to house all of these immigrants in a nation of almost three 40 million people? Do you have any idea what our foreign born population is up to now, okay, so not the descendants of those people, just the foreign born population here now, out of the 340 million total US population, any guess? Venture a guess. Last year, the US foreign born population reached 47.8 million. And that figure 47 point 8 million, that is five times more than in 19 75x Do you even realize that's almost double the population of the entire continent of Australia, now crammed into the states. That's how many immigrants, 47.8 million is. It's also the same as the population of all of Spain. That's another way of saying it all in the US today. And by the way, that is my geography degree at work, right there. Hey, the geography muscle is one that I just don't get to flex enough. Immigrants now make up more than 14% of the population. That is one in seven Americans. And that proportion, right there is the most since 1910, per Pew Research. Well, where are the immigrants from? Alright? Before I get into that, if we go back about 60 years, immigrant growth accelerated after Congress made changes to US immigration laws in 1965 that was a key year before 1965 the law favored immigrants from Northern and Western Europe, and it mostly barred immigration from Asia, all right, Well, so here in modern times, where are immigrants from? Mexico is the top country in 2022, 10.6, million immigrants living in the US were born there. That is almost a quarter of all immigrants. And then the next largest origin groups in order are those from India, China, the Philippines, and then El Salvador. All right, so there are a lot of new immigrants here, like a demographic shock wave that's going to drive the demand for housing. But there's way more to this housing crunch story. Combine this nascent immigration influx along with America's own high birth rate years. And this is something that you might not be aware of, though, what I just talked about that might have been somewhat informative to you. You probably had some idea that immigration is higher now, because it's been in the news cycle for a few years here, but something that you probably don't know. And yes, fertility rates are down today, but there was a boom of US born residents from the years 1990 to 2010 and then you might say, well, so what 1990 to 2010 that was in the past? But no, actually, it is just the beginning, because when it comes to housing, it has less to do with the birth year. Currently, what you have to do is add perhaps 25 or 35 years to that birth year, because that's the age of when that person tends to start their own household. And the average age of today's first time homebuyer is 35 to 36 years old. Well, the US is peak birth year occurred in 2007 then adds 35 or so to it. And that means that, on average, they will buy their first home in the early 2040s and a lot of them were going to start renting in the 2020s and 2030s So suffice to say, a lot more Americans will need homes. Well, what else will those high birth years from 1990 to 2010 mean now and into the future? Realize that over 13,000 Americans are turning 35 every single day, both now and years in to the future, record highs. Yes, every single day, just another demographic figure that's on the rise, and there are deaths to account for as well. But the population aging into home ownership is projected to exceed the population aging out like with deaths for a long time, this will pump housing demand. The US has about 144 million housing units today, and we are going to need more housing of all types. Well, between all the fresh immigration I discussed and this US born surge, you've indubitably got the recipe for a ridiculous amount of demographic driven housing demand. And you know, maybe over the past few years, at times, you or some of your friends or family, they've wondered why housing prices have risen fast, why rents have risen fast, and why? Even a tripling of mortgage rates couldn't stop it. It could only slow it down. It's because of this demand that is just coming, and it's going to keep on coming from both the US born demographic surge and an immigrant surge. And here's the thing, as we know this is all amidst a still lackluster US housing supply today, so greater demand, yet still a meager supply. Zillow estimates that we're still four and a half million housing units short, and the housing deficit is growing, although other outlets have estimates that, you know, they really are all over the place. These estimates as to how great the shortage is, 3 million is probably closer to a good amalgamation of how severe the housing shortage is, all right. Well, how do we reduce the housing deficit? We need to start more construction, but it had its recent peak in 2022 and it's fallen since then, in single family homes, because builders faced higher interest rates then and new apartment building starts, they have fallen too. And two years ago we had a lot of apartment building starts, actually. And as you drive through major cities today, you might still see cranes in the air. You still see a lot of active apartment building construction, actually, but more of those projects began two years ago. They began to freeze as interest rates rose, and now they've just got to complete what they've already begun. It can be two years from an apartment construction start to a completion. So as some of these complete, there will be some absorption time there on apartments. But the starts are way down on apartments. This year, we should have at least double the number of apartment starts being started than what we have now. So this sets us up for more future shortages, regulation and zoning. We know that that slows down building for most any housing type, single family, homes, apartments, condos, whatever it is. And nimbyism is a condition that's especially pervasive in the construction of new apartment buildings. Neighbors don't perceive new single family homes as a threat in their neighborhood like they do apartments, whether that's warranted or not. That's how people feel. That's the sentiment. That's the type of neighbor that shows up at a public meeting and speaks out against new apartment buildings. So to summarize what you've learned so far, it's really the confluence of four housing factors coming together here, two of them for higher demand and two for lower supply. The two for higher demand are more immigrants and a surge of US born people from 1990 to 2010 that are just starting to get old enough to need their own place. That's the higher demand side. And then the two factors on the paltry supply side are both a lack of current supply and not enough building for the future. Either it is an increasingly dire situation, and it can even be in your face. Actually. How is it in your face? Well, it's one reason that you see more homeless people on the street in your nearest city, although you might see more US born homeless than you do immigrant homeless. HUD tells us that the homelessness rate has jumped 12% year over year. That's the fastest homelessness increase rate they've ever reported. I talked to you about that before, and I'm waiting for HUD to release their new number in December. They released that annually. You know, amidst this demand, supply imbalance, in fact, anymore, let's look at it this way. Let's flip the script. Consider what could possibly stop insatiable US housing demand from exceeding supply for decades. And when you do, when you think about what could stop that, it starts to get absurd a sudden, new construction technology that pumps out homes like a popcorn machine, climate change that roasts us into human popcorn, not the good kind, and AI or VR, so advanced that We're all going to live inside some sort of force field. How about an even worse pandemic, or even a world war that would have to kill at least 10s of millions of people, or something like that, or aliens or asteroids destroying Earth? Or how about a depression level economic contraction. But see all these scenarios that would derail the housing demand trend. They range from the pretty unlikely to the downright ludicrous. Starts to sound like a Sci-fi flick, and amidst a lot of those afflictions, your life's biggest concern wouldn't be your real estate investment portfolio. It would be primordial human survival. Now, before I summarize your big takeaway here, let me tell you immigration, it has near term downsides, like a lack of housing and a demand for public assistance. And yes, I know a huge pack of new immigrants can appear sort of like a Walmart at first glance, huge, chaotic and full of people that seem like they've given up on life.   But that is certainly not always the case. A lot of immigrants are ambitious long term new young people drive an economy. Immigrants have long been a backbone of innovation. A lot of our tech giants were started by immigrants or their children, and also a lot of immigrants find those construction jobs that can help us build our way out of the housing shortage crisis, but that is going to take a long time. The bottom line here is that if you're looking for your own home, waiting probably won't help. As an investor, own more properties now, own lots of rental housing, you're going to have something that everybody needs. Housing demand is expected to exceed supply well into the future. Both this US born surge of people and the immigrants, what they do is they tend to be renters for years before they become buyers, if they ever become buyers, from here today, it's a realistic scenario to expect then soaring real estate prices, higher rents and lofty occupancy rates for years.    Well, Tom terrific is back in the house, and we are talking taxes. Brady's in the gun bulletin to his left. He's got the hoo man on the right wing with Dobson to the right Collie and Tomkins left. Brady throws it to the end zone for kenbrell Tompkins. Leaping. Kenbrell Tompkins, Brady's back.   That's your quarterback. Show ponies, where's the beat? All right, that's enough. Scott zolak, Bob Sochi on the call there 95 the sports hub in Boston. No Tom. Brady is not the Tom terrific that we often have here. Brady simply doesn't know enough about taxes. We've got the tax expert with us, the extraordinary Tom. We're right. What about that spirited play call at the end there? Did he say unicorns show ponies? Where's the beef? I don't really get all that. So getting back to real estate and taxes here, look, here's the thing, when you see what your government spends money on, and you're disgusted by some of these spending programs, doesn't that give you a supreme motivation to want to reduce your taxes? Well, we're going to talk about state income taxes where they're high where they're low. There are currently nine income tax free states. Are more states looking to drop their income tax to zero and join them? Or is it going the other direction, where they're looking to raise them if you live in one state and invest in another. We'll get into how that looks too. Canadian listeners, sorry, we don't plan to have provincial income tax discussion today. Now, I seem to have become here no more for my real estate investing voice than anything else. Last month, I was in Pennsylvania for a while, and I ran into one of my high school teachers. He was the art teacher, but he also taught a class called journalism in publications. That was an elective class, and I took that class as a high school student. I think I was a senior then, well, our job was to lay out the yearbook, writing, positioning and centering this text here in that image over there. Well, I told my old journalism and publications teacher that he's been a substantial influence on me because, as you know, I write our Don't quit your Daydream letter to you about every week. And I just love doing that, I've always thought of myself as more of a writer than a talker, and I myself really enjoy writing and laying out the body and images of our newsletter and sending it to you about weekly on crucial information that you must know About, real estate investing, economics and wealth mindset. It's got a dash of humor, and every single letter can be read in less than five minutes, often less than three minutes. I would love to have you as one of our 1000s of weekly readers, and it is free. You can get it simply by texting GRE  to 6866. come along and join us for real estate investing information and fun. Just take a moment and do it right now while it's on your mind. Text, GRE to 6686 lots more. Straight ahead. I'm Keith Weinhold. You're listening to get Rich education.   Hey, you can get your mortgage loans at the same place where I get mine, at Ridge lending group NMLS, 42056, they provided our listeners with more loans than any provider in the entire nation because they specialize in income properties. They help you build a long term plan for growing your real estate empire with leverage, you can start your pre qualification and chat with President Caeli Ridge personally. Start Now while it's on your mind at Ridgelendinggroup.com, that's ridgelendinggroup.com.   Your bank is getting rich off of you. The national average bank account pays less than 1% on your savings. If your money isn't making 4% you're losing your hard earned cash to inflation. Let the liquidity fund help you put your money to work. With minimum risk, your cash generates up to an 8% return with compound interest, year in and year out. Instead of earning less than 1% sitting in your bank account, the minimum investment is just 25k you keep getting paid until you decide you want your money back. Their decade plus track record proves they've always paid their investors 100% in full and on time. And I would know, because I'm an investor too. Earn 8% hundreds of others are. Text FAMILY  to 66866, learn more about Freedom Family Investments, liquidity fund on your journey to financial freedom through passive income. Text FAMILY to 66866.   Chris Martenson  21:42   this is peak prosperity's Chris Martinson. Listen to get rich education with Keith Weinhold, and don't quit your Daydream.   Keith Weinhold  21:58   This week's guest is, to me, the world's foremost tax pro. He is an international authority on how you can permanently reduce your taxes, and he really makes taxes easy, fun and understandable, like no one else that I've ever met does. He runs a terrific educational platform too. It's called wealth ability. Welcome back to get rich education. Tom, we're right.    Tom Wheelwright  22:21   Thanks, Keith, always good to be here.    Keith Weinhold  22:23   Yeah, it's so good to have you back, because taxes are such a dynamic topic. And one place where I wonder if it's going to be dynamic, Tom, is we have a number of states that don't have any state income tax, which is something that people have to pay on top of their federal income tax. Federal alone can be up to 37% some of the states with the fastest population growth, like Tennessee, Florida and Texas, don't have any state income tax. So what I'm wondering, Tom is, are more states considering abolishing the income tax like those states have done.    Tom Wheelwright  22:59   We've actually seen a lot of states in the last couple of years reduced their income tax rates. So Arizona, where I live, is one of them. We went from over a potential tax rate of like eight and a half percent potential to an actual tax rate of 5% there was actually a proposal passed that would have increased it down to a tax rate of two and a half percent. Our former governor, Doug Ducey, his goal was to abolish the income tax in Arizona, and we did get down to two and a half percent. There are a number of states, typically in the middle of the country. You don't see any states on the coasts doing this, outside of Florida, that are reducing their tax rates. So you do see states doing that. You see other states that are increasing their tax rates. Recently, I was reading about Bill Belichick, and he said, Massachusetts is always hard getting the top earners, the top free agents, into New England. Because he says, This is taxachusetts, because they have a surtax on millionaires. Well, of course, all football players are millionaires. That is an issue. People are leaving states like California, Massachusetts, New York, New Jersey, and they're moving to low tax states such as Arizona, Texas, Florida and, you know, the whole southern belt.    Keith Weinhold  24:15   with Belichick having Tom Brady. It didn't matter if he couldn't bring in the best players, because Tom Brady made stars out of nobodies. It seems like he could complete a pass to any no name wide receiver or tight end for two decades there in New England. But can you tell us more about maybe interesting dynamics with state income tax? For example, I know that California has punitively high state income taxes, and then you have other states that have tax rate tables and some that have flat taxes, like, I think Pennsylvania has about a 3% flat income tax. Colorados is 4.4 so can you tell us more?   Tom Wheelwright  24:51   Yeah, there are, you know, the federal income tax has graduated rates. We go, actually, from a zero rate to currently a 37% rate, which is not really 37% rate. It's really 41% because there's a 4% add on tax that pretty much you're gonna pay. So it's really over 40% California has a graduated tax rate, but it goes up to 13% Minnesota has a high income tax. New York has a high income tax. So Massachusetts, we're seeing high income taxes. The states that provide have big governments and provide lots of services have high tax rates. That's why we see it on the coasts. Interesting enough. Minnesota. Minnesota is the liberal state in the middle of the country, and so they have liberal states tend to have very high tax rates, and conservative states tend to have very low tax rates.    Keith Weinhold  25:45   Now we have a lot of real estate investors here that have learned that the best deals are outside their home state. So that investor might be domiciled in a Minnesota, but investing in, say, Arkansas, tell us about how the state income tax affects them.   Tom Wheelwright  25:59    So it's kind of like being a US citizen, right? You live in the US. You're taxed on your worldwide income. You live in Minnesota. You're taxed on your worldwide income in Minnesota. So by virtue of where your residency is, you are taxed on all of your income. Now you'll get a credit, typically, for taxes paid to another state. Well, let's say that your tax rate in your state is 10% and then you invest in a state with a tax rate of 3% well you're going to get tax credit of 3% so you're still going to pay 7% in your state, plus 3% that state. You're still going to pay your 10% it's just going to be some of that's going to go to another state. Some of it's going to go to your state. But in total, your tax rate is likely to be wherever you live. That's youroverall state tax rate. I'll give you another example. Let's say that you invest in Texas, you live in in Minnesota, you're going to pay Minnesota tax rates on your income, you get no credit because you have no tax in Texas. What's worse is, though, you have property tax in Texas, but you don't get a credit in Minnesota for your property tax paid in Texas. So you have much higher property taxes in Texas than you do in most states. Right? Because every state has to raise revenue, right? In Texas has decided to it largely on sales tax and property tax. So that means that you don't get that offset. Property taxes are pretty serious in Texas. If you're an investor in Texas, you know that property taxes are pretty serious, but you don't get any kind of benefit in Minnesota, but you still pick up the income in Minnesota.    Keith Weinhold  27:38   In some Texas jurisdictions, property taxes can be 3% annually based on the property's value, pretty punitive. There in Texas, Texas is a good example. That's where we have often high property tax rates, but zero state income tax. So with these other states that have zero state income tax, are they subsidizing that with property taxes or sales taxes, or in what other way are they making up that?    Tom Wheelwright  28:03   Of course, for example, we were talking earlier about Tennessee. Tennessee doesn't have a personal income tax, but if you have your real estate owned through a limited liability company, you do have a 6% tax on the income of the LLC. So even though it's a pass through entity for Tennessee purposes, it's taxed. They have all sorts of mechanisms to raise revenue. All states need revenue. Now, some states raise less revenue per capita than other states. Those are the states that people tend to move to. But don't forget those other taxes. I mean, sales taxes. Sales taxes can be very high, right? And you pay sales taxes typically don't pay them on food or prescription drugs, but you typically pay them on pretty much everything else, and including leasing a car, they're going to get their money. It's just how they get their money.    Keith Weinhold  28:50   Well, we've been talking about ways that you could potentially legally escape taxation, depending on what state that you live in. So in a domestic sense, and Tom we pull back and we think about that in an international sense. A lot of Americans don't seem to realize that if they're, I guess, born and raised and get citizenship in the United States when they become an adult and get older and they go abroad, they have to continue to pay US taxes if they move to Norway or Dubai. Can you tell us about that?    Tom Wheelwright  29:21   Yeah, so US citizens are taxed on worldwide income as long as they're a US citizen. Here's what's really interesting in the US let's say you give up your US citizenship, you're still subject to taxes on your worldwide income for 10 years. Wow, after you give up your citizenship so you no one get any of the benefits of being a citizen. You've given that up, and you still have taxes for 10 years. Earlier this year, we did an episode, and we talked a little bit about this unrealized capital gains tax, right? People don't think, well, I'll just leave. Doesn't work that way. You're still going to have the capital gains tax for at least 10 years, and the only way to get rid of it is to give up your citizenship and wait 10 years. It's a pretty restrictive law, because most countries only tax if you live there, if you're a citizen of France, but you move to Belgium, you're taxed in Belgium, you're not taxed in France. Not true with us.    Keith Weinhold  30:19   Yeah, that's remarkable. I didn't know about that 10 year thing. Even if you renounce your citizenship, those taxes will follow you for 10 years regardless of where else in the world you live. Um, I'm just maybe this is a little bit of devil's advocate. I mean, this sounds preposterous when we first think about how Americans are taxed abroad for the rest of their life, but maybe thinking of it philosophically, if it does make sense in any way, which is really hard for me to say, but maybe it's because, okay, well, you were born and raised in the United States, where we have this very mature infrastructure and stable currency and good educational system, so you got to be a beneficiary of that. So when you're 30, you can't move away and never give us any tax money to support that. Again, what are your thoughts with that?    Tom Wheelwright  31:02   different countries have different tax systems? What I will say is, just like the state discussion, you do get a credit for taxes paid to another country. So if you have income taxes, let's say you're living in Portugal and you pay Portuguese income taxes, you're not going to pay taxes twice. You're going to pay the higher of the two rates, either the Portuguese tax rate or the US tax rate, but you should not be paying tax twice. Now, if you're going to do that, you need a really good team of tax professionals. You need a good US tax professional, and you need a good tax professional where you live, and those two tax professionals need to talk to each other on a regular basis, because otherwise you can end up paying double tax, and that is the worst of all worlds. You do not want to end up paying double tax. So make sure that just know that if you're going to invest in another country, or you're going to live in another country, you need double the tax advice.    Keith Weinhold  31:05   I am just going to speculate that there are an awful lot of people that don't consider taxes before they move, whether that's domestic or international, not that that should be the top consideration, but a lot of people probably aren't even thinking about it.    Tom Wheelwright  32:13   A lot of people aren't. That's true. Now, are there ways to reduce your taxes internationally, particularly if you're in business? Yes, there are ways that you can reduce your taxes. So know that there is still tax planning available. But I hear about people saying, I'm going to invest in the Dominican Republican, or I'm going to invest in Dubai, or I'm going to invest somewhere else. Just know that you've got now two sets of laws that you're working with you're working with US laws, and you're working with that country's laws. And so make sure that you've got good advisory on both sides. When we're talking about moving for tax considerations, we should cover Puerto Rico. Tell us about the advantageous tax laws for Puerto Rico, and if they're going to sunset, they're there for the foreseeable future. So Puerto Rico, depending on how you earn your income, you can potentially reduce your income tax rate from the current 37% rate in the US to 4% yeah, that's basically an agreement with Puerto Rico. Puerto Rico is still the US, but it's got special laws that it's almost like a treaty, right? Even though it's a territory of the US. And what happens is, is that if you set it up properly, you got to live there, by the way, you can't just pretend. You got to live there six months in a day out of the year, over six months a year. And if you do, then you get a 4% tax rate on the income you earn while you're in Puerto Rico. If you earn income while you're in the mainland, you're going to pay tax on the mainland, but the income you earn in Puerto Rico, you're going to pay 4% tax. And there are certain types of income that that works for certain types of income, it doesn't just make sure that this is one where you need a Puerto Rican tax advisor as well as your US tax advisor. Capital Gains also have they have a potential tax rate of zero. So there are obviously details you have to follow again, make sure, before you get into that, know that there are huge tax benefits for living in Puerto Rico. No question. You know, it's the Puerto Rican discount. What can I say? We say in Arizona that California has a beach tax and we have a desert discount. The same was true in Puerto Rico. Puerto Rico has a Puerto Rican discount. That's what it is.    Keith Weinhold  34:24   Yeah, you're going to be getting on a plane a lot in order to go anywhere. I know an awful lot of entrepreneurs that have relocated to Puerto Rico. You do too. Tom, you the listener, probably do as well. It's really important to have the right team before you make such considerations. And before we're done today, Tom and I will talk about how you can connect with him and learn more. But Tom, since we last had you here, you updated your terrific book, which I have on my bookshelf called Tax Free Wealth. Tell us about the updates and changes you made to the book.   Tom Wheelwright  34:56   We do a new edition of tax free wealth every time there's a major change in the tax law. So the second edition was the 2017 tax law, because that was a major change. Since 2017 though we've had six major changes to the tax law, we had a bunch of major tax law changes during COVID And so what we did was we actually took the 2017 and all the new ones, werolled them all into a new edition. By far. This is the best edition of tax free wealth by a long shot. I mean, I think tax free wealth, you know, got good bones to it. It's a good book. Got almost 4005 star reviews on Amazon. This is the one I like the best, by far.   Keith Weinhold  35:18   Tax Free wealth, I read the original edition, and it's not like watching motorcycles jump off ramps, but for a tax book, it's actually really a good read there. He really brings life and some good examples to how you can permanently reduce your taxes. Tom, you and your terrific firm wealth ability have been helping people do that for years. If you the listener, want to Tom's team and Tom's referral network to help you permanently reduce your taxes. We have a resource for you atget rich education.com/taxwe can actually set up a free consultation to confirm if indeed they can help you in your situation. And Tom, why don't you talk to us some more about the importance of having the right tax pro on your team, and how they're not actually an expense, but really they're an incentive to you, because the fastest way to get an ROI is actually by reducing your taxes, because it can be done almost instantly.    Tom Wheelwright  35:36   Yeah, for sure. And what's important is that you have a relationship with a tax advisor that does give you tax advice. That's why it's called a tax advisor. They actually give you tax advice, and they willing to give it to you. And they're not waffling. They're not saying, Well, I don't know, or they're not backing off. They're saying, Well, look, if you do this, this is what you get. You have to choose whether you want to make those changes to your situation, but they're going to give you, you know, what changes you can make to your facts in order to reduce your taxes. I think the most important thing, though, is that you have a partnership with your CPA, that this is a true relationship. And we've actually changed the way we work with clients. We used to charge for projects. We used to charge for tax returns. What we want is a relationship, so we basically charge a monthly fee for the relationship. So that's a recent change in our model, you're going to see more and more CPAs go to that model, because it is a much more comfortable model for both the CPA and for the client. But what we want to do is we want to emphasize the relationship. We don't want you to feel like every time you pick up the phone, you're going to get charged. We don't want you to feel like, well, all that tax return fee is just killing me. No, it's not a tax return fee, it's a monthly fee. It's an annual fee, billed monthly, is what it is. And that way you have something come up, you don't have to worry about them and get a bill for it. You have even an IRS audit come up. Once you're a client with us for a year. After the first year, we'll then allow you to pay a small monthly fee so that when you get audited, you won't pay us for handling the audit. We call that an audit defense plan. I talk about that in tax free wealth. To me, we've been operating this way. So my firm, which I worked with people like Robert Kiyosaki, we've been operating this way for several years, and it is the best way to work with a tax advisor, because you always have that relationship, and you never have to worry. I'm not going to get this big tax bill, this big fee, like you do for an attorney, right? You don't call your attorney, because you can get a big fee, right? Every minute it's going to be a big fee. This is a great way to work with a tax advisor and make sure that you can be proactive, and they can be proactive. It's really a great way to help build the relationship over time, which is something that you're going to want to have over time again. If you want to learn more and have that free consultation, you can start at get rich education.com/tax.   Keith Weinhold  38:56   Tom, it's been valuable as always. Thanks so much for coming back onto the show.    Tom Wheelwright  38:59   Thanks, Keith.   Keith Weinhold  39:06   Nine states don't have an earned income tax. Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. And the way to avoid state income tax is clearly to start by living in one of those states. I don't believe that moving to one just for tax reasons, is a good idea, though, like I was saying earlier, do you agree with how your government is spending your tax dollars? If you don't, then you owe it to yourself to reduce your tax burden, otherwise, you are just helping to fuel reckless spending. And when you lower your tax burden, not only do you stop fueling reckless spending, of course, you increase your own personal return on investment. You know in fact. This paying any more tax than you have to fuel a kleptocracy. I think it's at least worth asking the question then, because this is get rich education, little learning moments, some vocab rehab. Here, you can think of a kleptocracy as being synonymous with a fevocracy. The strict definition of a kleptocracy is a government whose corrupt leaders use political power to expropriate the wealth of the people and land they govern, typically by embezzling or expropriating government funds at the expense of the wider population. All right, well, is that a little too strong for the behavior of our elected leaders or not? I'll let you decide that. But see, most of the 1000s of pages of the US tax code does not outline the taxes that you have to pay. Did you realize that the vast majority of the IRS Code is a guidebook to help you reduce your taxes that are in those tax tables. Well, now my own tax return is hundreds of pages long, and a lot of it outlines how my taxes have been reduced for that tax year. Well, Tom's excellent book called tax free wealth is sort of a digestible way to make the reading more fun than any psycho that would read the entire IRS tax code, but to make it even easier than that, it's really a good opportunity to connect with Tom's team and see exactly how they can help you reduce your tax In your specific situation, and is especially helpful for real estate investors and business owners. You know that I often like to leave you with something actionable. You can book a free consult at getrich education.com/tax that's get richeducation.com/tax.   Until next week, I'm your host. Keith Weinhold, don't quit your Daydream.   Speaker 2  42:06   Nothing on this show should be considered specific, personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own. Information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  42:34   The preceding program was brought to you by your home for wealth building. Get rich education.com you