Podcasts about quit your daydream

We welcomed Dan Taylor from Bistrack Epicor and CTO Jodi Garvey to talk all things ERP and Project MEGA (Make ERP Great Again). Topics discussed:-Jodi's Street credit -History of Drexel SKUs -ERP Success and Struggles in the Building Supply Industry - no dominant force like Amazon or Ford and how Drexel stands out.-Having FUN in the implementation process -Pearl Jam and Project BREATHE -How is everyday easier with Epicor? -And the famous Billboard question! Jodi - Always a Rainbow after the Storm and Dan- Don't Quit Your Daydream

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. 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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 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    

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. 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 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.

President of the Mises Institute and author of “How Capitalism Saved America”, Dr. Thomas DiLorenzo joins us to uncover the current state of capitalism and if it still exists in America. Earlier in the episode, Keith discusses the inaccuracy of economic predictions, citing examples like the 2023 recession that never happened, the negative impact of misinformed predictions on investment decisions and business growth.  Persistent housing price crash predictions have been consistently wrong despite global pandemics and higher mortgage rates. Dr. DiLorenzo advocates for #EndTheFed to reduce inflation and restore free market principles. Learn how voluntary exchange between buyer and seller through market prices communicates information and influences production. Resources: Learn more about Austrian economics and Ludwig von Mises through visiting mises.org  Show Notes: GetRichEducation.com/521 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  00:00 Keith, welcome to GRE. I'm your host. Keith Weinhold, reviewing some terrible economic predictions and why it matters to you. Then the President of the Mises Institute joins us. Does capitalism still exist in the US and what would happen if we ended the Fed, today on get rich education.   00:24 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 getricheducation.com   Corey Coates  01:09 You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold  01:25 welcome to GRE from Syracuse, Sicily to Syracuse, New York, and across 188 nations worldwide, you're listening to one of the longest running and most listened to shows on real estate investing. This is Get Rich Education. I'm your host, Keith Weinhold, now a lot of media companies and pundits and influencers like to make predictions. Listeners like learning about predictions and by engaging just a little of that each of the past few years on one of the last episodes of the year. Here, I forecast the national home price appreciation rate for the following year, many media outlets, pundits and influencers have made terrible, just absolutely terrible, predictions about interest rates and other financial forecasts. Last year, a majority of Pro prognosticators firmly forecast six or eight Fed rate cuts this year, for example, well, we're going to have far fewer, and that's because high inflation kept hanging around. Then there's the 2023 recession that never happened, yet both Bloomberg and the economist actually published some rather ignominious headlines, as it turned out, they published these in the fall of 2022 Bloomberg, big headline was forecast for us, recession within year hits 100% in blow to Biden, well, That was false. That didn't come true. I mean, 100% that doesn't leave you any room for an out. And then also published in the fall of 2022 The Economist ran this headline why a global recession is inevitable in 2023 All right, well, they both believed in a recession, and they believed in it so deeply that it got fossilized. Well, an economic archeologist like me dug it up.   Dr Thomas DiLorenzo  03:31 We are going to die   Keith Weinhold  03:35 well, but I didn't risk my life like Indiana Jones did there. This archeology, it only involves some Google searches. Well, here's the thing. What's remarkable about America staving off a mammoth recession and leaving all the other g7 nations in the economic dust is the fact that merely predicting a recession often makes it come true. Just predicting one often turns a recession into a self fulfilling prophecy. Yeah, recession forecast headlines alone, they can spook employers from making new hires and slow down manufacturing, and it can also disillusion real estate investors from expanding their portfolios. Well, the US economy grew anyway, besides the farcical prognostications about myriad interest rate cuts in a quote, unquote definite 2023 recession that never happened. You know, there's also a third forecast that so many got wrong. And you probably know what I'm gonna say. I've brought it up before, because this hits our world, those erstwhile and well still ever present housing price crash predictions. I mean this facet of the gloom boom really ramped up from 2020 One until today, even a global pandemic, new wars and a triplicate mortgage rates couldn't stop the housing price surge and the rent surge. A lot of doomsdayers just couldn't see, or they didn't even want to see that a housing shortage would keep prices afloat. They didn't want to see it because they get more clicks when they talk about the gloom government stimulus programs also buoyed prices, and deep homeowner equity cushions will still keep prices afloat. Ever since 2021 here on the show, I've used that rationale and more to explain that home prices would keep appreciating, but that the rate of appreciation would slow down, and it has slowed down since 2021 see YouTubers tick tockers. They notoriously use woe begone housing crash headlines, because that gets more clicks and then some of the rationale behind this. The reasoning is just dreadful, like, what goes up must come down, all right? Well, this is like, why does it matter? Who cares about wrong predictions anyway? What's the point? Well, people become misinformed. People waste their time on these things and see no one loses money on dismal economic predictions. But the damage is done, because when investors don't act well, then they didn't get the gain that they should have had. Businesses didn't get the gain that they should have had when they could have made new investment and hired new employees sooner. And of course, a recession is going to happen sometime. They occur, on average, every five to six years. It is just a normal part of the business cycle will collectively these three faulty economic predictions, rate cuts, a recession and a housing price crash. I think if you bundle them all up combined, it could be as bad as one doomsday prediction about worldwide starvation or the Mayan apocalypse. Remember that the wide to K bug, the acid rain, even that the internet is just a fad that ran a buck 30 years ago. World War Three is eminent, robots overtaking humans, or how about running out of crude oil. I mean, we're definitely all supposed to have jet packs in flying cars by now, right? But yet, did anyone have the clairvoyance to predict the stock market crash of 1929 or September 11 terrorist attacks, or Trump's surprise, 2016 presidency or Bitcoin hitting 70k A while back, or the coronavirus. So really, overall, the bottom line here with predictions is that no one knows the future. Control what you can maintain equanimity, add good properties, gradually raise rent, reduce expenses, create leverage and expect inflation truly the best way to predict the future is to create it in just that way. Well is the USA capitalistic nation today. That's what we'll discuss later with this week's guest. When Chuck Todd hosted the show Meet the Press, he interviewed AOC about this. Yes, I'm talking about us. House Rep from New York, Alexandria Ocasio Cortez, what she say? You   08:34 have said you are democratic socialist. Can you be a Democratic socialist and a capitalist? Well, I think it depends on your interpretation. So there are some Democratic socialists that would say, Absolutely not. There are other people that are democratic socialists that would say, I think it's possible. What are you? I think it's possible. I think you say to yourself, I'm a capitalist, but I don't say that. You know, if anything, I would say, I'm I believe in a democratic economy, but.   Keith Weinhold  09:03 okay, well, I'm not sure if that clears it up at all. And I've listened to more of that clip, and it just makes things more confusing. But I think that most people have trouble drawing a line between capitalism and neighboring economic systems. Where exactly do you draw that line? I don't know exactly where to draw it. When I think of capitalism, I think of things though, like removal of interventionist central planning and allowing the free market to run with few guardrails. And then there's an issue like labor unionization. I don't really know about something like that. This is a real estate show. I'm still forming an opinion on a topic like that. In you know, some of this gets political, and that's beyond the scope of get rich education. The Fed was created in 1913 that central planning, its central banking from 1987 to. 2006 Alan Greenspan reigned as Fed chair. Those were his years, and he became even more interventionist. And then his successor, Ben Bernanke, maybe even more so with quantitative easing and such. Let's talk about, should they end the Fed and capitalism with this week's expert guest. You very well may have heard of the late, famed Austrian American economist Ludwig von Mises today, the Mises Institute carries on his legacy, and this week's guest is none other than the President of the Mises Institute. He's also the number one best selling author of how capitalism saved America and his newer book with a title that I love, The Politically Incorrect Guide to Economics. Hey, it's great to have you here. It is. Dr Thomas DiLorenzo.   Dr Thomas DiLorenzo  11:00 pleased to be with you. Thanks for having me.Th   Keith Weinhold  11:02 Well, Dr DiLorenzo, for those that don't know, just tell us a bit in an overview about Austrian economics and what Ludwig von Mises stood for.   Dr Thomas DiLorenzo  11:02 Well, Ludwig von Mises was the preeminent critic of socialism and fascism in Europe, and in his day, he fled the Nazis literally hours before the Gestapo broke into his apartment in Geneva, because he was the preeminent critic of fascism and socialism, and he was also Jewish, and so he had to get out of town. And he miraculously ended up after wandering through Europe with his wife in New York City, and he taught at New York University for many years, until he died in 1973 and but the Austrian School of Economics is a school of thought. It has nothing to do with, necessarily, with the Government of Austria, the country of Austria, just this the founder of a man named Carl Menger happened to be from Austria, but probably the most famous or well known among Americans would be Friedrich Hayek, who won the Nobel Prize in 1970s he was a student of Ludwig von Mises and critics of interventionism, critics of socialism. We teach about free markets, of how markets actually work and how governments don't work. And that's in a nutshell, that's what it's about. And you could check out our website, mises.org, M, I, S, E, S.org, you can get a great economic education. We have a lot of free books to download. Some of them are downloaded 30 or 40,000 times a month. Still, it's even Mises old books like human action, first published in the 1960s and so you can get a great education just by reading our website.   Keith Weinhold  12:42 Well, congratulations, that's proof that you're doing an excellent job of carrying on the Mises legacy into the present day, a lot of which is championing capitalism. Do we have capitalism in the United States today?   Dr Thomas DiLorenzo  12:59 I was an economics professor from 40 years before I got this job as President of the Mises Institute. And I used to say we had islands of socialism in a sea of capitalism at the beginning of my career. But now I'd say it's the opposite, that we have islands of capitalism in a sea of socialism. And socialism, this data is not defined anymore as government ownership. That was, you know, about 100 years ago, the socialism. It's basically government control of industry and in addition to government ownership. So the instruments of the welfare state, the income tax and the regulatory state, is our version of socialism, or central planning, if you will. And it's the Federal Reserve the Fed, which is a government agency that orchestrates the whole thing, really, it's a big, massive central planning industry that controls, regulates basically every aspect of any kind of financial transaction imaginable. They list in their publications over 100 different functions of the Federal Reserve. It's not just monetary policy. It's a big regulatory behemoth, and so that's that's what the Fed is. That's what I think we have today. A friend of mine, Robert Higgs, a well known economic historian, says our system is what he calls participatory fascism. And fascism was a system where private enterprise was permitted, but it was so heavily regulated and regimented by the government that industry had to do what government wanted to do, not what its customers wanted it to do, so much, and a large part of our economic system is just like that, and we get to vote still, so that's where the participatory and comes in, and the pin of Robert Hinz.   Keith Weinhold  14:41 yeah, maybe at best, I can think of today's system as capitalism with guardrails on but the guardrails keep getting taller. And I think of guardrails as being, for example, regulatory agencies like the Fed in FINRA. In the FDA.   Dr Thomas DiLorenzo  15:01 It is the beginning of my career. You know, I studied economics and a PhD in economics, and there was a big literature on what's called regulatory capture. And it was sort of a big secret among US economic academics. There was all this research going on and how the big regulatory agencies created by the federal government in the late 19th, early 20th centuries, were captured by the industries that they were supposed to be regulating. Right? The theory was they would regulate these industries in the public's best interests. But what has happened from the very beginning is they were captured by the industries, and they benefit the industry at the expense of the public. But today, that's caught on thanks to people like Robert Kennedy Jr, frankly, has been a very popular author. He sold a gazillion copies of his book on Anthony Fauci, and in it, he explains in tremendous detail how the Food and Drug Administration was long ago captured by the pharmaceutical companies. And he's not the only one. I think that that is being more and more recognized by people outside of academic economics, like me, and that's a good thing, and that's sort of the worst example of crony capitalism. It's not real capitalism, but crony capitalism making money through government connections, rather than producing better products, cheaper products and so forth.   Keith Weinhold  16:21 I watched RFK Jr speak in person recently, and I was actually disappointed when he effectively dropped out of the upcoming presidential race. And I do want to talk more with you about the Fed shortly, but with all these regulatory agencies and how I liken them to guard rails. You know, I sort of think of it as a watchdog system that's failing. You mentioned the FDA. I know RFK Jr brought them up an awful lot, the Food and Drug Administration that are supposed to help regulate what we put inside our own bodies in our diet. But these systems are failing. We have regulatory agencies in industry, industry in regulatory agencies. I mean, look at the obesity rate. Look at all the ultra processed food that's allowed. Look at all the seed oils that are allowed in food that people actually think are healthy for them. So this system of capitalism with guardrails is failing almost everywhere you look.   Dr Thomas DiLorenzo  16:22 I wouldn't call it capitalism. I wouldn't use the word capitalism at all, other than crony capitalism, people can relate to that. You know, a lot of these regulatory agencies were lobbied for in the first place by industry. That while the very first one was the Interstate Commerce Commission, it was in the 1880s it was meant to regulate the railroad companies. The first president was the president of a Railroad Corporation, the head of the Interstate Commerce Commission. So talk about the fox guarding the hen house. That was from the very beginning. And so in a sense, this word capture theory of regulation, which Kennedy has used, they weren't really captured. They always were created by the government. The same is true of all the so called Public Utilities. It was the corporations, the electric power companies, the water supply companies, that lobbied for governments to give them a monopoly, a legal monopoly, in electricity, water supply and all these things that were called natural monopolies, but there was nothing natural about them. There was vigorous competition in the early 20th century in telephone, electricity, water supply, and that was all set aside by government regulation, creating monopolies. For example, in electric power, there's an economist named Walter primo who wrote a book some years ago showing that always have been several dozen cities in America that never went this way, that always allowed direct competition between electric power companies. And what do you know, better service and lower prices. As a result, they did dozens of statistical studies to demonstrate this in his book.   Keith Weinhold  18:58 Okay, well, that's a great case study. Why don't we talk about what things would look like if we took down one of these agencies? We're a real estate investing in finance show. Sometimes it's a popular meme or hashtag to say, end the Fed. What would it look like if we ended the Fed?   Dr Thomas DiLorenzo  19:18 Well, the Fed was created in 1913 in the same era, with all these other regulatory captured agencies were created, right? And it was created basically to cartelize and create a cartel for the banking industry to make it almost impossible to go bankrupt. They've been bailing out foolish bankers for 111 years. And of course, the biggest example was that as the crash of 08 after they they handed Goldman Sachs and other big investment banks billions of dollars. That was a direct assault on capitalism itself, because capitalism, as you know, is a profit and loss system. It's not a I keep the profits. You pay for my losses system. You're the taxpayer. But that's what happened with that. So the Fed would. Fall into that the Fed is actually the fourth central bank in America. We had three other ones. First one was called Bank of North America. Its currency was so unreliable, nobody trusted it went out of business in a year and a half. And then we created something called the Bank of the United States in 1791 same thing. It created boom and bust cycles, high unemployment, price inflation, corrupted politics. It was defunded after 20 years, and then it was brought back to fund the debt from the war of 1812 and so we had a Second Bank of the United States. It did the same thing, boom and bust cycles, price inflation, corrupted politics. Benefited special interest, but not the general interest, and President Andrew Jackson defunded it, and so we went without a central bank from roughly 1840 until 1913 so we've had experience of that. And what we had been was competing currencies, and that would be sort of a stepping stone. If we got rid of the fed, we wouldn't have to abolish the Fed altogether. We could amend the charter to the Fed to say you're no longer permitted to buy bonds. Can't buy government bonds anymore. That's how they inflate the money supply, right? By buying bonds. That's totally unnecessary. And we could just just that would be a great step forward, and we would sort of whittle away our $80 trillion debt, if you count again upon count the unfunded liabilities of the federal government,   Keith Weinhold  21:26 if we did end the Fed, what would the price of money? Which are interest rates really look like? Would a new market rate be sent by individuals and companies on the free market like Bank of America, with a customer or borrower settling on an interest rate that they both agree to.   Dr Thomas DiLorenzo  21:44 You know, the Fed uses sort of Soviet style economics, price control. The economists and are all getting all over Kamala Harris for recommendations for price controls on rent and other things. Well, the Fed price control. They control the price of money. That's what they do. And so there's a big, kind of a comical thing that here you have all these economists, if they were to teach economics in the week one, they would teach about the bad effects of price controls, and then they get a job at the Fed, and they spend their whole career enforcing price controls on money, and the interest rate would be determined by supply and demand for credit and inflationary expectations. That's what the market does. And you wouldn't have these bureaucrats at the Fed tinkering around with interest rates, creating tremendous arbitrage opportunities for Wall Street investors. With all the movements and interest rates, you'd have much more stable interest rates, and and you wouldn't have this ridiculous system where the Fed says we need to always have forever at least 2% inflation. And of course, they never meet that, and they lie about it. I don't believe for one minute that the price inflation right now is 3% or under 3% that's ridiculous, right? And so things should be getting cheaper. Everything should be getting cheaper because of all the technology we have. My first PC I bought in the early 80s for $4,000 and it was a piece of prehistoric junk compared to my cell phone today, that almost for free. Almost everything should be like that agriculture, but the reason it isn't is the Fed keeps pumping so much money in circulation, that it pumps up the demand for goods and services, and that's what creates price inflation. And by its own admission, that's what it does, even though it's charter, it's original charter said they're supposed to fight inflation. All of a sudden, about 10 years ago or so, they announced, south of blue, we always have to have at least 2% inflation. Congress had nothing to do with that. President had nothing to do with that, and the people of America had nothing to do with that. It was dictators like Alan Greenspan and Ben Bernanke that just make these announcements. And where does that come from when we live under the dictatorship of the Fed? And of course, the people who are hurt the most by the Fed are elderly people are living on relatively fixed incomes and are forced to become Wall Street speculators they want to make any more money other than their fixed income, where, you know, during the days of Greenspan, when they're pursuing zero interest rates, maybe the mortgage industry like that, but the people on retirement income were starving as a result of that. So it's been sort of an economic war on the retired population.   Keith Weinhold  24:24 Things should get faster and cheaper to produce, like you said. However, there's definitely one thing that's not getting faster to produce, that's housing build times. Housing build times have actually gone up, which is sort of another discussion unto itself. But we talk about the Fed and then setting prices. People wouldn't stand for setting the price or having price controls on oil or lumber or bananas, but yet we set the price of money itself. People have just become accustomed to that. Yet it's that money itself that we use to buy oil and lumber and bananas the fed with that dual mandate of stable prices and maximum employment. If we did abolish the Fed, what would happen to the rate of inflation?   Dr Thomas DiLorenzo  25:12 Well, we would have less inflation. It's supposed to what we replace it with. There's some system would be a replacement, but we wouldn't have the boom and bust cycles that we have now. There's been research in the past 100 years or so of the Fed, and what the academic researchers have concluded is that the Fed has made the economy in general more unstable than it was before we had the Fed and price inflation. That's a joke. The dollar is worth maybe three cents of what it was in the year 1913 right when the Fed was created. So it has failed on all accounts. And so if we got rid of it, we would reverse that. The idea would be to start out with a competing money system. And I'll tell you a quick story is, you know the word Dixie from the south, you know land of Dixie that was named after a currency by a New Orleans bank called the Dix D, I x 10 in French, and it was 100% gold reserve. It was backed by something real and valuable, and it was so popular as even used in Minnesota. But that's why the whole south, the states in the South, were using this currency, because it was so reliable. But during the Civil War, the national currency acts imposed taxes on the competing currencies and taxed them out of business and established the greenback dollar, as it was called, as the Monopoly money of the country. We didn't get a central bank during the Civil War, but we got that. And so that's the kind of system that we would have. Friedrich Hayek wrote a whole book about this, about competing currencies, called the denationalization of money. He poses that as a good stepping stone to a freer market in money. And like you said, Money is the most important thing. Is most more important than bananas or shoes or any of these other things that we might have price controls on.   Keith Weinhold  27:01 All right, so we're talking about the case for ending the Fed. What is the counter argument? I mean, other than the government wanting control, is there a valid, or any academic counter argument for keeping the Fed in place?   Dr Thomas DiLorenzo  27:16 The Fed has an army. I call it the Fed's Praetorian Guard of academics. There was a research article published by an economist named Larry White at George Mason University several years ago, and he found that 75% of all the articles in the academic journals regarding money, monetary policy and so forth, are by people who are basically paid by the Fed, one way or the other. Either they're fed economists, or they've been invited to a conference by the Fed, or they're an intern some relationship with the Fed. The late Milton Friedman once said, If you want a career as a monetary economist, it's not a good idea to criticize the biggest employer in your field. So there's a lot of nonsense about that. And so yes, you'll have all sorts of rationales, but it basically comes down to this, that we think we can do central planning better than the Russians did under communism, because the Fed is basically an economic central planning agency, and there's no reason to believe Americans are better at it than the Russians or anybody else. And it basically comes down to that, you know, studying the past 111 years that's showing Well, yeah, they've been trying that for 111 years. They've made the economy more unstable, and they have failed miserably to control inflation. And why should we give them another chance? Why should we continue along this road? We shouldn't So, yeah, there'll be all kind of excuses the late Murray Rothbard, who was one of the founders of the Mises, who once answered this question by saying, It's as though people said, Well, say the government always made shoes. 100 years ago they took over the shoe industry. People would be saying, who will make shoes if the government doesn't make shoes? The government has always made shoes, right? But the government has not always monopolized the money supply. It's only like I said, we abolished three Feds in our history. In American history, they weren't called the Fed, but they were central banks. And the Fed is called a central bank, and we've done that three times. We've abolished more central banks than we have kept in American history.   Keith Weinhold  29:17  We're talking with Dr Thomas D Lorenzo. He is the president of the Mises Institute. About, is there really any capitalism left more when we come back, 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 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 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.   Kristen Tate  31:11 This is author Kristen Tate. Listen to Get Rich Education with Keith Weinhold, and Don't quit Your Daydream.   Keith Weinhold  31:27 welcome back to get rich education. We're talking with Dr Thomas DiLorenzo. He is the president of the Mises Institute. You can learn more about them @mises.org and Dr DiLorenzo. Frederick Hayek, an economist that you mentioned very well known and a student of Ludwig von Mises, he believed that prices are a communication mechanism between a buyer and a seller. Say, for example, there's a new style of single family rental home that everyone wants to rent. So therefore the rent price goes up when other builders see that the rent price goes up, that brings in more builder competition, and with more competition, that brings rent prices down, and then the world is filled with abundant housing, rather than a scarcity of housing. So that's how I think of a free market system within capitalism as working, as defined through Hayek.   Dr Thomas DiLorenzo  32:22 You know, the consumer is king. Von Mises once wrote about the same point where he said that people mistakenly believe that it's the bankers and the CEOs and the businesses that control what gets produced and so forth, but it's really the consumer. You build a housing development then people don't want those houses. You'll find out real fast who's in charge. It's not the mortgage brokers. It's not the bankers. It's not you, it's the consumer. That's the free market system, and if you do without it, and not using the free market system, whether it's for money or anything else, is kind of like trying to find your way around a strange city with no street signs, and the prices are the street signs that tell us what to do, exactly like you said, if there's strong demand for a certain type of housing, that'll drive the price up, and that'll tell the home builders, we can make money building more of these. And they will do that. Nobody tells them. The Chairman of the Fed doesn't have to tell them that the President doesn't have to tell them that Congress doesn't have to issue a declaration telling them to do that. That was the Soviet Union where they tried that. And that's the great thing about the market, is that the consumer can tell the richest man in the world like Elon Musk, go play in the traffic. Elon Musk, if they don't like his cars or whatever he's producing, even though he's the richest man in the world. And he understands that he's a pretty successful businessman, I would say, and so so he understands that the consumer is his boss.   Keith Weinhold  33:53 Well, what else do we need to know? You have published a lot of celebrated books, from how capitalism saved America to the politically incorrect guide to economics. What else might a real estate investor or an economic enthusiast need to know today? Oh,   Dr Thomas DiLorenzo  34:10 well, I think everybody needs to be their own economist. You can listen to the talking heads on TV and on podcasts and all that, but educate yourself and become your own economist. Because a lot of the people on TV, as you might see on the news, they have an ax to grind, or they have a sort of a hidden financial interest beyond what they're saying, Be your own economist. And that's why I'm selling my website, which is everything on it, it's for free, mises.org, and there are quite a few others too. You don't have to go to school, you don't have to get a degree. You can get a good economic education, for example, on money. We're in the middle of giving away 100,000 copies of a book called What has government done to our money. I'm Murray rothbar. You go to our website, scroll down to the bottom, and you can fill out a form online, and we'll send you free books and. You can educate yourself that way. And so just in general, I think that's what people need to do. I taught MBA students for many years who are people in their 30s or maybe even early 40s, who didn't have economics degrees, but they were really into it, and for the first time in their careers, they decided maybe I should understand how the economic world that I live in and work in every day operates rather than going through your life and your career without you. Might know all about real estate sales, but it's also useful to know about the economy in general and how things work.   Keith Weinhold  35:35 And when one becomes their own economic student and they take that on, I think it's important for them, like you touched on to not just consume the economic news that's on CNBC or other major media, because that doesn't really tell you how to create wealth. It might inform you, but it doesn't necessarily tell you how to take action. For example, on this show an educational channel, you might learn about a story about rising inflation like we had starting three or four years ago. And here we talk about how, okay, if inflation is going to be a long term economic force, you may or may not like what the Fed is doing, but rather than save money, borrow money, outsource that debt service to the tenant on a cash flowing asset like a single family home or an apartment building. And that inflation that you're learning about on CNBC will actually benefit you and debase your debt with prudent leverage on a property, for example, so not just consuming the news, but learning and educating yourself and acting.   Dr Thomas DiLorenzo  36:34 Oh, sure, well It just so happens that last night, I was talking to a friend of mine who's a real estate professional. They're all talking about, Oh, are we going to have a slight drop in interest rates? And I reminded them that there will be a part of the market if they see it, if we do have a slight drop in interest rates, we'll look at that and say, well, maybe this is a new trend. And so I'll sit back and I'll wait. I'm not going to buy now, because I think the interest rates are going to go down even further in the next six months there were, there would be some segment of the market that thinks that way. And so that's just one little thing. Another thing I would mention is that one of the basic tenets of free market economics is that voluntary trade is mutually beneficial. People buy and sell from each other, because both sides benefit. And that's very important for any business person to keep in mind as you structure business deals, because you know about business deal that is successful is basically, I will give you what you want, and you give me what I want, and we're both happy. And that's that's one of the main tenets of how the market works. Voluntary exchange is mutually beneficial. So think about how to make it mutually beneficial, and you'll succeed in making a deal.   Keith Weinhold  37:45 Well, it's been an excellent discussion on Is there any capitalism left, and how would it look like if we turned the course and created more capitalism here in the United States? It's been great having you on the show.   Dr Thomas DiLorenzo  37:58 Thank you.   Keith Weinhold  38:05 Yeah , again, Learn more @mises.org or look up books by Dr Thomas DiLorenzo. His viewpoint is that there are now merely islands of capitalism in a sea of socialism where those conditions were inverted last century. We've got to end the complex between the government and corporations that these watchdogs are basically powerless when the fox is guarding the henhouse. Dr dilorezzo says we could change the Fed charter so that they couldn't buy bonds, which should reduce inflation. So he does offer a way forward there, a solution.  In capitalism, he consumer is king. This is a good thing. You yourself are empowered because you get to vote with your dollars. So therefore what you buy more of society will see and make more of but a prosperous, progressive economy that should be able to produce goods and services that are constantly cheaper because they get more and more efficient to make with innovation, but centrally planned inflation makes them more expensive, at least in dollar denominated terms. So progress should make things cheaper? Well, then everything should take fewer dollars to buy, homes, oil, bananas, grapes, but it doesn't, and it won't anytime soon, like I mentioned in the interview, there single family build times are taking even longer. That's not more efficient, and they're sure not getting cheaper. In fact, the National Association of Home Builders tells us that from permit to completion in 2015 it took 7.2 months to build a single family home. By 2019 it was up to 8.1 months and then. Last year, the time required to build a single family home from permit to completion was 10.1 months. That's not the side of an efficient economy. So basically, therefore, in the last eight, nine years, the time to build a home has gone from 7.2 months up to 10.1 months. That is a drastic increase in a short period of time. Just amazing. And we now have data after covid as well, broken down by region. The longest build time, by the way, is in New England, where it is 13.9 months to build a home from permit to completion. Gosh, such inefficiency. But despite all that stuff that you might find discouraging like that, I want to go out on a good news note here some encouraging sentiment for you, if you champion free markets, then invest in us rental property down the road, there is no centrally controlled ceiling on what you can sell your property for. Most places don't have rent control. In fact, there's been no federal rent control on private property since World War Two. And somewhat ironically, you benefit. You actually benefit from government backed loans at these low fixed rates, and now they're moderate fixed rates. You often get these through Fannie Freddie or the FHA. See you benefit from that particular government backing as a savvy borrower for rental property. And on top of this, you use the GRE inflation triple crown to flip over that not so capitalistic inflationary force. You flip it upside down and use it to your benefit, profiting fantastically from inflation. So you know how to take the situation you're given and use it to your advantage rather than your detriment. Big thanks to Dr Thomas DiLorenzo today, longtime econ professor and current Mises Institute president, more ways to build Real Estate Wealth coming up here for you on the show in future weeks, as always, with the dash of economics and wealth mindset. Until then, I'm your host. Keith Weinhold, Don't Quit Your Daydream.   42:28 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  42:56 The preceding program was brought to you by your home for wealth, building, getricheducation.com.  

Keith discusses his journey from an entitlement mentality to realizing the importance of wealth creation through real estate investing and shares the real estate shockwave that nobody is talking about. We are also joined by Caeli Ridge, President of Ridge Lending Group, as she explains the differences between owner-occupied and investor mortgage loans. Hear about the ease of entering real estate investing with no formal qualifications or high income required. Learn the concept of demographic shockwaves and how the aging population will influence housing demand in the future. How to ethically use other people's money to build wealth for yourself before you even own a property. Learn about the key differences between owner-occupied mortgage loans and investor mortgage loans, particularly the use of rental income in qualification. Resources: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Show Notes: GetRichEducation.com/520 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  00:01 Keith, welcome to GRE. I'm your host. Keith Weinhold, I'll discuss when I was an employee with a scarcity mindset, the real estate shock wave coming that no one's talking about, then, how you can ethically use other people's money to build wealth for yourself before you even own a property today, on get rich education.   00:24 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, 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  01:09 You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.    Keith Weinhold  01:25 welcome to GRE from Springfield Ohio to Springfield, Missouri and across 188 nations worldwide. I'm Keith Weinhold, and you are listening to get rich education. It's great to have you back for another week, and I genuinely appreciate your listenership, and I am grateful to have such a large audience. I've got to tell you, admittedly, coming out of college and in my first couple full time jobs, I wasn't always a good employee. I guess I had somewhat of an entitlement mentality. I'm not sure where that came from. I don't know that I can blame anyone else on planning it inside me. I don't know where I got this notion. It sure wasn't from my parents, but I kind of felt like somebody owed me a job just because I have a college degree and I'm good at showing up on time, yeah, like, I'm just a good representative for your company. I mean, now I can see that no one owed me a doggone thing. In fact, I owed my employer value. An employer actually takes a big risk on you when they hire you, paying you to train you until you're productive there. I mean, the hiring process itself is even expensive. Well, though I felt like someone owed me a job just out of college, somewhat Oppositely, I never expected any sort of high income at all, and I had quite a modest income in my first couple years out of college, just like a lot of recent college grads do, until it grew into something more. But my humble geography degree, it conditioned me to think lower income. I knew that going to college in Pennsylvania for geography in what interested me, I mean, that's what I went with, what interested me not what I could make money in well, then I couldn't find a job in my geography field at all. No one would really pay me to describe Asia's mountain ranges to them. So what I ended up doing is working under engineers at a construction and engineering firm, a few of them, one engineering firm really liked me and designated me as their new marketing person. Of all things, they wanted me to call prospective clients on the phone and meet them cold in person, because they just thought somehow, when they met me, that I could win new business for the engineering firm, just I guess, based on how I communicated with other people at other engineering companies, even though I couldn't even talk the language of engineering. Well, anyway, these disciplines engineering, and really it was construction inspection that I did for a while. You know, that stuff, even the marketing stuff, it just didn't fill my soul. And you must have felt this way at your job before. If you don't feel it perpetually, you aren't aligned with your purpose on this earth, and you're spending so many of your faculties and so much of your waking conscious life at that job. Well, motivation to escape that is what got me reading about wealth mindset and real estate investing. Since anyone can do it, no degree needed, no certification, zero formal qualification. And now I think I mentioned this to you before, but it's worth bringing up here again, a turning point is when I read one life changing sentence, just one little what is it? A. Five word sentence in a rich dad book, that pivotal paradigm shifting, course correcting sentence was, being wealthy is a choice. And when I first read being wealthy is a choice, I just didn't believe it. I thought that Robert Kiyosaki, the author, was wrong. Well now I know that he was right. I had thought that being rich is unobtainable. You had to be born into it, so unless you won the lottery, you can't achieve more than middle class. Well, I was wrong about that. Now I can't really say something like, oh, well, a college professor said that rich people are bad or, you know, I don't have that story. I can't blame anyone else for growing up with a limited, scarcity mindset, really, other than myself in the context that was created around me. I mean, growing up in Pennsylvania, I just knew that the carts family and the domileskeys, they had more than us. And that's just the way it would always be. It's sort of preordained, and other families had less than us, and these family trajectories were just cast in stone as to how it had to be. But the good news is that it's not, and this is still what makes America great, the fact that it takes zero formal training, zero risk parents, and not even a high salary for you to do something like get a three and a half percent down payment loan for owner occupied FHA fourplex or 20% down for a single family rental that produces income from day one in The Southeast or Midwest, you can plant that seed that get other people's money working for you seed in just that way, even if you're interested in something as unprofitable as geography. Now, a huge reason that people disparage the wealthy is rooted in jealousy and envy, and that is not good. There's no goodness in those emotions, and that is because people don't think it's obtainable for them. It's obtainable for almost anybody. Learning that it is within your reach that completely breaks down your resentment of the rich. Yes, indeed, being wealthy is a choice. Well, people are obtaining wealth in today's real estate market. Here, Redfin reported that through the latest quarter ended real estate investors bought fully one in four of the nation's most affordable homes. That's up 3% year over year. And as Redfin puts it, it's a sign that investor activity is stabilizing, and as homeownership remains out of reach for many Americans, real estate investors are coming out of hibernation to take advantage of robust demand from renters. So investors are buying a greater proportion of affordable homes, some of them through our marketplace, GRE marketplace. Now over the long term, let's think about how US housing is going to be positioned for sustainable demand. Demography is destiny. That's a quote attributed to 19th century philosopher Auguste coon Tay, it means that the size and structure of a population will influence its future. So then all we need to do is track the age of a population over time to sharpen and give clarity to a forecast. It is axiomatic that in 10 years, a 25 year old will be 35 No kidding. Well, what's important about the age of 35 is that is the average age of today's first time homebuyer. It's between 35 and 36 All right. Well, the US is peak birth year occurred in 2007 we know that just look at demographics. Well, then add 35 to it. Add 35 years to 2007 This means that, on average, they will buy their first home in the early 2040s a lot of people are going to be forming their first household, whether it's rent or buy around the year 2040, I mean, the peak in all of American history, a lot more people will need homes. In fact, more than 13,000 Americans are turning age 35 every single day for the foreseeable future for more than a decade. This year is the first year where we've ever had over 13,000 Americans turning 35 every single day. And that is projected to continue to happen every single year through 2035 and that's as late as the Census Bureau projection that I have goes on. On that stat this baked in demographic housing demand. Hey, if we don't get serious about building more housing fast, and it's likely that we won't, this will be analogous to a demographic shock wave that hits the housing market. The population aging into homeownership is projected to exceed the population aging out, as in the death rate for a long time. This will pump housing demand, and that's not all. I've only talked domestically so far. This doesn't even account for additional demand from immigration. And immigrants tend to be younger and are renters for a long duration, or just forever. On top of immigration, the average number of people per household is falling as well. In 1960 3.3, people live per household in 1990 it was down to 2.6 by 2023 it was down to 2.5 this means that more housing is required just in order to shelter the same population. But of course, the population won't stay static. So to keep piling on with the housing demand here, the overall US population is projected to grow as well, from 342 million today to 383 million in 30 years. That's per the CBO. The demographics for senior housing are even more bullish. And of course, when I use the word bullish like this, this bullish sentiment that's from the investor side. If you're looking to buy your first home or find a place to rent, this is all more discouraging than perhaps all of our perpetual struggles to live a balanced life or lose weight. This baked into the cake. Demand is almost perfectly predictable, and it's of seismic importance to the real estate market. And yet, despite that fact, you know, more investors curiously fixate for month after month on something like the Fed's interest rate decision or the next jobs report. I mean, this is both harder to predict and way less significant than the sustainable demographic demand for rental housing that you got right there. So really, to sum up, this segment demographics reveal that housing demand should stay high for decades, long term, then you should expect higher home prices, higher occupancy rates and higher rents. And you can benefit by owning many rental properties. And our guest and I are about to discuss how you can do exactly that own many rental properties, and how to do it efficiently with less cash out of your pocket, including how you can start using other people's money before you even own a property when you're trying to qualify for a loan on a rental property, in some cases, you can Use a portion of the tenant's rent income toward your qualification income. Let's talk with this week's guest. There's one place that's created more financial freedom through real estate than any other lender in the entire nation that's time for a big welcome back to their president, Caeli Ridge.   Caeli Ridge  13:23 Keith Weinhold, my friend, thank you for having me happy to be here, sir.   Keith Weinhold  13:26 Oh, it's so good to have you here. You're a longtime friend of the show and so many of our listeners that you've helped originate investor mortgage loans. Caeli leads Ridge lending group. They're an investor centric lender. She does such a good concise job of explaining specifically what real estate investors need to know in optimizing your loan positions. In fact, on a previous episode, she once broke down every single line of a closing disclosure form for us one by one, detailing each individual closing cost and prepaid item and in there, besides being specific income property loan experts, they're really thorough and helpful that way. Well, Caeli, tell us about the key differences between owner occupied mortgage loans for buying a primary residence and investor mortgage loans for a rental property.   Caeli Ridge  14:17 The key things are that on a rental property, probably the biggest difference is going to be that for a rental property, there's additional incomes that potentially we get to use to help offset that new monthly liability, aka the mortgage payment, p, i, t i, principal, interest, tax and insurance, we have access to income potentially to help offset that. So in the debt to income ratio category, it can be a huge boon or a huge benefit, depending on what the individual's qualifications are. Additionally, in that same theme, we're not just confined to a conventional Fannie Freddie loan for investors. We have things like the DSCR debt service coverage ratio that you would not be able to apply to a primary residence, but also allows for income to help identify whether the property qualifies for financing.   Keith Weinhold  15:04 So for prospective investor borrower is wondering whether we'll have enough income to qualify for that property or not. Is it a certain percentage of the tenants rent income that is used in the investor borrowers qualification income?   Caeli Ridge  15:19 absolutely, so conventional full doc mortgages they are going to receive in the acquisition year formula, because there's two formulas that will be used in underwriting. One is called the acquisition year. The other one is called the Schedule E I'll focus on the acquisition year. This is applicable from the date that they acquire the property and until that tax year's Federal tax return is filed. I needed to find up to in a minute they get up to 75% of the gross rents minus the proposed p, i, t, I, principal, interest, tax and insurance. Now I say up to because it depends on two primary criteria that the borrower must possess in order to get the full 75% so think about it this way. There's three buckets. Okay, the first bucket gets the full 75% of whatever the gross rents are. The easy math example that I give, let's say that the gross rents are $1,000 a month. The PI ti proposed payment is 500 a month. If they're in bucket number one, and they get the full 75% of 1000 they have 750 bucks, right? And from that they're going to subtract out the $500 of mortgage payment. In that example, it would leave them with a gain positive 250 so that individual came to us with a debt to income ratio of x as a result of purchasing this investment property, their DTI is going to go down because they're $250 richer monthly. So 75% is the maximum you can use in the acquisition year. That individual in that bucket has to demonstrate two things. One, they have a primary housing expense, whether that's a mortgage or they rent, either is fine. And then second, they need to be able to demonstrate that they can they've had 12 months of history in owning investment property. So if they have both of those two things, they get the full 75 if they have one or the other, they're in bucket number two, which gives us an offset. They cannot have the full 75% they don't get the full gain, but I can offset. So going back to my example, using $1,000 of income and $500 of mortgage payment, they can't have the 250 gain, but I can give them up to 500 making that a zero, right? It's covered completely the mortgage payment. It's not increased any debt or anything in the example. So DTI would stay exactly the same as where they began, when we started. And then finally, bucket number three would mean that individuals that have neither of those two things, no primary they live rent free, no primary house expense, and they do not have 12 months demonstrated history currently, of being an investor. They get zero of the rental income, so they've got to support the full new payment within their DTI and keep it within that 50% threshold. So that was a long explanation to the question, but I think that that pretty much covers it.   Keith Weinhold  17:56 Now, That's really helpful. Okay, that can help the borrower's debt to income ratio. I guess a lot of cases is going to be helping it out by a small amount. What if, say that investors buying a new build rental property and there is no tenant, hence no rent income there yet.   Caeli Ridge  18:11 I'm so glad you asked. So on a subject property basis, that is the property in which they're purchasing at the moment in time. It's called the subject property. Those properties do not need to be tenant occupied. We can use assumptive rental income from the appraisal on a rental property that will come with some additional forms. It's called a 1007, it's just the number on the page. Those are rental income comps. The appraiser has given us an average of what those rents are going to be, and that's what we're going to use the 75% calculation on.   Keith Weinhold  18:41 Okay, that's really good to know new build or resale rental property, that's going to work the same with either one there. Now I know oftentimes that one wants to qualify. When we look at non order occupied properties, rental properties with conventional conforming loans from Fannie or Freddie, typically, one puts 20% down on those properties we've talked before. I think one can put as little as 15% down, although they would have PMI in that case, or alternatively, rather than putting 20% down, last time I checked, they could put 25% down and get a lower interest rate. So can you talk to us about the interplay of the percent down payment for rental property.   Caeli Ridge  19:21 I'll start by saying, more often than not, when you do the math the capital expenditure, or in this case, the difference between 5% down 80 versus 75% divided by the monthly payment difference, you're going to find that the leverage is going to outperform the higher 80% will outperform the lower 75% but absolutely, to your point, the payment is going to be less for two reasons. At the 75% level, the interest rate will be lower because you've got more skin in the game. The interest rate, loan level, price adjustment for 75% is going to be more attractive than it will be at 20% down. So the rate will be lower. And of course. The loan amount is lower, so both of those combined characteristics are going to create better cash flow, it's true, and a lower monthly payment. However, the math that I always want to promote, that people are doing is looking at it side by side, all you have to do, and it's actually much easier than people, I think, assume. So you figure out the capital expenditure difference. Let's just use 100 grand, okay, because his math is simple. So you've got $5,000 in additional capital that you'd be bringing to the table for the 75% option, right? Versus retaining the five grand, the payment difference is 50 bucks a month. Okay? Whatever the number is, all you're going to do is take the five grand and divide that by the payment difference, and that will give the individual the number of months it takes them to recapture that capital for the savings. Generally, my opinion, per an investment property is that if that number is in excess of 36 months, it's going to take you over 30 or three years to recapture that capital versus the savings. I'd keep my money because I can do one of a few things with it. If I chose to, I could cash flow the 50 bucks myself every month for 100 months, if that was the math. Or I could apply that five grand and use it with some other monies, perhaps, and buy another investment property, or put it in different investment asset class that would provide a return so more often than not, when they do that math, my belief is, when I do it, I'd say even 95% of the time, the higher the leverage is going to be, the better return numbers.   Keith Weinhold  21:27 We're philosophically aligned that way. We're leveraged proponents here, typically the smaller down payment, 20% is going to be better for you long term than 25% even though you'll get a somewhat lower interest rate on a rental property, putting 25% down rather than 20% when we pull back, we look at the interest rate difference between an owner occupied property and a rental property. What is the spread between the interest rate? Of course, you're going to pay higher interest rate on a rental property because it's a lot less likely that the borrower is going to walk away from their own home than they would a rental property.   Caeli Ridge  22:02 exactly and this is a great segue into those LLPAs that I always like that we spend some time talking about. So llpa, loan level, price adjustment. So for the GRE listeners, this is a more complicated concept, so I'm going to try and quickly break it down. Keith loves it when I get so wordy. So llpa is a positive or a negative number that associates with the individual characteristics of the loan transaction. So one of those characteristics, obviously, is occupancy. The loan level price adjustment for a primary residence versus an investment property is quite different, and for the reasons exactly that you described, there's a lot less risk in a primary then there will be in a rental. Because if an individual needs to choose between defaulting on where they live and an investment property, if it came down to that, obviously they're going to maintain, yeah, so they got to choose. So skin in the game, risk, etc, generally speaking. And there's all those other variables too, credit score, loan size, loan to value, property type, purchase versus refi, those are all unique llpas That will have their own unique number. But in general terms, an owner occupied where you live is typically going to price out an interest rate about one percentage point lower than you would find on an investment property, generally, if we're comparing apples to apples.   Keith Weinhold  23:15 talking about that risk difference for the lender, just like in the 20% versus 25% down. Example, there's less risk for the lender when you put 25% skin in the game. Hence the lower interest rate there too. Caeli, tell us about fitting the right mortgage type to the borrower. And of course, there are so many types. There's 30 year versus 15 year, fixed rate mortgages versus Adjustable Rate Mortgages, interest only, DSCR loans like you touched on. So tell us about getting that right fit for that individual borrower.   Caeli Ridge  23:49 This is a bit of a rabbit hole. So what I would start by saying is we do at Ridge take a lot of time on the front end and identifying not only what their needs are, their goals are, but obviously what their qualifications are, and marrying all of those things together and coming up with a roadmap that I like to call it, depending on where the individual is in their journey of real estate investing, as the tax returns may continue to be filed, and how aggressive they want to be with their deductions, maybe some cost segregation. I know I'm getting a little bit technical here, but because we maintain and have all of those products, it's very, very uncommon, or very rare, that we find an investor, potential client, that we do not have some sort of loan product to satisfy what their end game or end goal is. And you know, maybe we continue to graduate them. Let's say that they start in a DSCR because they can't qualify for Fannie Freddie today, but that is their ultimate goal. We're going to provide them with the insight and the background or the feedback that plants the seeds and gets them to that place in six months or a year, or whatever. So I hope I answered the question, depending on their individual needs and goals and qualifications, of course, really will dictate which one of those is going to be applicable.   Keith Weinhold  25:00 We've got a lot more to discuss, including, is it easier to approve w2 incomes from a day job versus 1099 from contract or gig work? And more, we're talking with the nation's foremost expert on income property. She is the president of ridge lending group, Caeli ridge. More, we come back. 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 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 Chaley Ridge personally. Start now while it's on your mind at Ridge lendinggroup.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 two, earn 8% hundreds of others are text family, 266, 866, learn more about freedom. Family investments, liquidity fund on your journey to financial freedom through passive income. Text family, 266, 866   Robert Kiyosaki  27:00 This is Rich Dad, Poor Dad Author Robert Kiyosaki, listen to get rich education with Keith Weinhold, Don't Quit Your Daydream.   Keith Weinhold  27:18 Welcome back to get rich education. We're talking with Ridge lending Group President Chaley ridge. These discussions are great, because debt, through leverage, builds wealth even faster than compound interest, as I've discussed, and Caeli is really the linchpin in her company, and help makes that happen with reliable income property loans and Caeli today, there are a lot more people with sharing economy income, gig economy income, or doing contract work, and they're paid with a 1099 form that shows their income for that year, versus a w2 employee wage job. So can you tell us about whether it's easier to approve those that have a w2 income and that versus the 1099   Caeli Ridge  28:03 I don't know that I would classify it as easier as harder. It's just different. So on the 1099 first and foremost, if you don't have a 24 month history of having that kind of income, you're not going to get a conventional loan. And assuming that we're going to kind of keep on that path of Fannie Freddie's. Because remember, guys, if you can't fit into those boxes. We've got 10 others that we can look to to get the financing for. But if we're in the Fannie Freddie, that's really where this is applicable, the 1099 and the w2 I mean, they're really equal in terms of the overall process. The difference would be that with 1099 you must have that 24 month history. The calculation is that we're going to take an average, it gets a little bit convoluted, like anything else that is leverage or financing related, but a 24 month average of 1099 unless we can show that that individual, let's say that they're self employed and maybe a Schedule C, and they've got their 1099 coming in through that way. If they can show five year history of having license or being self employed that way, that instead of having to use a 24 month average, we'll use a 12 month average, and that may be to their advantage. Let's say that the most recent year filed is in a bit of a decline from the prior year. Let's just use 2022 and 23 let's say 23 is a little bit lower than 22 a 24 month average is not going to be as big a number than if I were to just to be able to take the 12 month average of the most recent year. So if that individual can demonstrate they have five years of being or receiving that kind of income, then instead of being a 24 month average, I get to choose and just do the 12 month average. So that would be one thing about the 1099 that I would say otherwise, yeah, they're just different. I don't know that one is harder than the other. As long as the qualifications are there, they're there.   Keith Weinhold  29:43 When I think about this, I guess it does make sense from the lender perspective. If you're paid and shown income there on your 1099 from sharing economy work, gig economy work, or being self employed, that's more volatile work than having a day job. Um, as an employee.   Caeli Ridge  30:01 Sure, absolutely. And if you can demonstrate that you have that history and you've been able to consistently earn and have those numbers, it's okay, yeah, but without the 24 months, you're not going to get a conventional loan. You're gonna have to look at DSCR or something else.   Keith Weinhold  30:15 We're talking about what it takes to qualify for income property loans today with Ridge lending Group President Caeli Ridge, when we talk about that qualification bar that needs to be met. Caeli, you see so many loan applications in there. You have a team. You look at and deal with so many situations when you're free, you even pick up the phone, sometimes yourself, and you will talk to individual borrowers. So what do you see in there as the top reasons for not qualifying for an income property loan.   Caeli Ridge  30:42 The top reasons for not qualifying for a conventional loan probably is debt to income ratio, yeah, more often than not of the three basic criteria, which are assets, enough cash to close or reserves, credit and then DTI, I would say it's the DTI category that more often than not, is the culprit for qualifying or not. And it may be as simple as how they filed their last year's tax return and saying, Okay, before you file 2024 don't do that until you send Ridge a draft, so that we can get ahead of what you may not have known to look for last time. They could be very simple, little easy fixes. And you know, sometimes maybe it's they don't want to pay the extra taxes, which sometimes that might be required. In which case we say, okay, let's pivot over to the DSCR options. In which case, by the way, just as a quick sidebar, I'm finding that gap is starting to narrow a little bit to the point that it's a lot more affordable in terms of the investment property and what cash flow is expected than it used to be. The differences between a Fannie Freddie rate and a DSCR rate is starting to narrow a little bit. So if you have to be DSCR, I would not shy away from that just because you assume I think it's going to be more reasonable for cash flow properties.   Keith Weinhold  31:52 Yeah, I'll tell you, when I was an employee as a day job worker grinding in my eight by 10 cubicle, as it was back in the day, and I was buying income properties. Yeah, the main thing I would get held up on is that my debt to income ratio, my DTI, was too high, and my salary was pretty strong, although not fantastic, not astronomically high, but I felt like I was a guy that was pretty good, pretty prudent with my finances. And yeah, it didn't feel good to be told hey, Keith, to lower your DTI. You need to pay off your 3% automobile loan that's at a nice fixed interest rate. I didn't want to have to do that, but I was willing to do that to retire the small loan in order to qualify for the big loan.   Caeli Ridge  32:36 That makes sense. I might just offer a comment in that regard. What you may have experienced at that time could have been what we call an overlay in the industry. So, yes, like anything, right? Lenders aren't created equal. Because we're so investor friendly and focused, we are going to go by the purest form of those Fannie Freddie guidelines. It's called a seller's guide. And as an example, let's just say that Fannie Freddie gives you 75% of the subject properties, gross rents, whereas B of A or I'm just picking on B of I don't know why, but some other lender may impose an overlay. It's like layers of risk and saying, No, we're not going to give you any rental income credit whatsoever, even though the guideline says that we can do it, our overlay says, No, we can't. So depending on who you're working with, credit unions are a little notorious for that being a little bit more restrictive in their box of guideline. So it may not always be what you think. So if you've had a lender, tell you DTI wise, you don't qualify, but you feel like this is not quite right. You should double check that, because it may be an overlay.   Keith Weinhold  33:34 Everyone is interested in interest rates. It's been so interesting with what's happened the past few years, ever really, since the covid Emergency cut took place in 2020 and the volatility that we've seen in interest rates, then we saw interest rates max out in this cycle at about 8% almost a year ago. What does this declining interest rate environment mean at a mortgage loan company? And what do you see for the future of rates there?   Caeli Ridge  34:02 Well, rates have been coming down. If you guys are watching the headlines, you're seeing those sound bites. We have started to see some more refinance activity than we were seeing before, certainly additional purchases as we start to see interest rates come down, I am of the opinion that we're going to continue to see some improvement in the rate department, dependent on some of the jobs reports that we'll be getting soon, so we'll see. But My money is on that, we'll continue to see some nice tailwind in the rate department throughout the rest of the year, and who knows what's going to happen? I mean, this is our election year, etc. We'll see how the rest of it plays out.   Keith Weinhold  34:33 How does a prospective borrower get their financial house in order themselves before getting a hold of you and your team there, what are some of those checklist items that they should do themselves at home first?   Caeli Ridge  34:47 like I said a bit ago, so you've got those three primary criteria. If you're wanting to qualify for those conventional full doc loans, think about your credit Do you know what that credit score is? Now, depending on some other variables, it doesn't have to be 800 Credit scores to qualify. I mean, we've got clients as low as 650 that are able to get financing conventionally, because they've got compensating factors, similarly for assets on the investment property side, the down payment and the closing costs and the reserves, none of those things can be borrowed or gifted. And that's very different than if it was an owner occupied, gifted and borrowed funds are okay for an owner occupied, for an investment property, they have to be sourced and seasoned, meaning your own funds over the last 60 days. So think about that. What your down payment is going to be an estimate of closing costs and make sure that you have the appropriate amount of capital. And then finally, that debt to income ratio. That's a slippery or one to try and calculate that for yourselves. But if you think about your minimum payments on your credit report. That's really all that goes into it. Minimum payments, not the debt load. The minimum payments on the credit report divided by the monthly income, gross income, you should be able to come up with a number, and 50% is that threshold. So if you can kind of just take that kind of mental back of the napkin of your own, you should have a pretty good gage on whether or not you think you're going to be in this box, or if getting into the game, or continuing to be in the game, is going to require some alternative loan types.   Keith Weinhold  36:05 Inflation has been such a story for the past three or four years, but some people aren't aware that there's actually been credit score inflation. Last time I checked, the average credit score had been slowly rising in the United States. What's the highest credit score that gets one the lowest rate.   Caeli Ridge  36:22 We're staying in the Fannie Freddie department, 760 and above is all the same bucket, if the individual qualifications are identical, if this one has an 850 credit and this one has a 760 credit, exactly the same in the interest rate department.   Keith Weinhold  36:35 And then, once they've engaged with you, what about locking in their interest rate. What duration did they have prior to closing? Tell us about that timeline.   Caeli Ridge  36:45 So an interest rate can be locked on a 15 day lock, a 30 day lock, a 45 day lock, even a 60 or 90 day lock, typically it's a 30 day lock that's the average. The shorter the period of lock, the better the rate and or points that you would pay. And the longer is the adverse right? The higher the rate of the higher the points. I like to look at locking an interest rate, usually when we get the appraisal back, because an appraisal can be the piece that might delay or there may be some issues. So I generally like to see the appraisal first. We've been in such a volatile area with interest rates and what might be happening in the ups and downs, etc. I've broken that rule quite a few times over the last couple of years, I would say today, floating may be to our advantage, just because we feel like rates are on the run and that they may continue to improve. Keeping in mind, once you lock in your interest rate, it is locked. Ridge does have a policy that if interest rates were to fall five, eight of a percentage point or point 625, you would have a one time automatic float down option. It's highly unlikely, and that's why we can kind of put that in there. But if it happened, we would honor that. Otherwise, when you're locked, you're stuck with that rate. You can't expect that if an eight through a quarter point comes off of or rates come down that much, that you're going to get a different rate. The only way to do that would be to let the existing one expire for 30 days and then relock market, which is not advisable.   Keith Weinhold  37:59 Yeah, you the investor, has to think about how important a lock really is to you in this declining interest rate environment, almost everyone expects mortgage rates to fall more slowly than they rose. They spiked up so fast in 2022 Caeli, how does our audience engage with you? Get Started and go on their path to getting investment property loans.   Caeli Ridge  38:24 Three ways to reach us. Obviously, we've got our website. Please check us out there. There's a lot of good information, ridgelendinggroup.com you can email us at info@ridgelendinggroup.com, and then finally, toll free is 855-747-4343 855-74RIDGE is that easy way to remember, and we'll be here on standby. Thanks, Keith.   Keith Weinhold  38:43 Ridge is the same place where I get my income property loans. It's been great having you back on the show. Thank you. Yeah, strong. Well laid out material from cheyley here, as always, let me give us a perspective on creating value by having a good loan rather than not having the debt. Remember that just four weeks ago, here on Episode 516 it was the episode about is every debt worth paying off? And the short answer is no. I got a couple questions from listeners of that episode basically asking the same thing. Well, just say that interest rates are 6% and basically they're asking, well, if I pay all cash for a property or for a car, it doesn't matter what it is, then I avoid paying 6% interest. So right there is my six points of arbitrage. Well, to that, I say, okay, but look what if you think you can achieve a 12% investment return? Borrowing at six to invested 12 is a 6% spread. That's 6% arbitrage as well. But here's the thing, you've got a big advantage of doing this with the loan rather than the paid off condition. This is because. With the loan, you still have the use of your money. You haven't given it away. You still have your money, plus the six points of arbitrage in the paid off condition. You've got six points of arbitrage and you don't have the use of the money any longer. That's the big difference, and that's the value of having a loan, as long as you can service the payments. Getting back to mortgage loans, in today's episode, there are so many loan types for property, conventional, Fannie, Freddie's, dscrs, Portfolio loans, bridge loans, rehab loans, recourse and non recourse loan types, balloon loans, arms and a lot more. Caeli and I didn't discuss their all in one loan, which is like a big, flexible HELOC that you can put on your property. It's such a good product that can help you. You can ask about their all in one loan. When it comes down to what are the factors you need to be most attentive to? They are your assets, reserves, credit, income and debt to income ratio, unless dependent on the loan type that you want. So much attention is paid to interest rates, and some attention is warranted. They surely matter. Be mindful, though, that a quarter of a percent interest rate change on a 30 year loan per 100k borrowed that is just a difference of about $15 in monthly payment, $15 if you go from, say, 6% down to five and three quarters percent, so it takes a rate drop of a full 1% for a savings of about $60 then once you have some of Your finances in order, you can go ahead and do just what I've done for my own properties. For your next income property loan, you can give them a call or start at Ridgelendinggroup.com Until next week, I'm your host. Keith Weinhold, Don't Quit Your Daydream.   41:58 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  42:18 The preceding program was brought to you by your home for wealth building, getricheducation.com.

Tom Wheelwright is back by popular demand, our most recurring guest in GRE show history. He's a CPA, an International Authority on Tax, and Best Selling Author of “Tax-Free Wealth” amongst many other titles. We focus on the potential unrealized capital gains tax, which would tax the increase in property value even before sale. Tom explains the implications of this proposal and the broader impact on tax policy.  We cover the Democrats' proposal for capital gains tax at ordinary income rates, capital gains on gifts, and capital gains when you die. The proposal for a billionaires tax, which would tax unrealized gains at $100 million, could potentially extend to lower net worth individuals over time. Real estate income can result in a negative tax rate, increasing cash flow after taxes. Learn about the benefits of working with a knowledgeable tax advisor. Resources: GetRichEducation.com/tax Show Notes: GetRichEducation.com/519 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  00:01 Welcome to GRE. I'm your host. Keith Weinhold, this week we're talking about the value of the raw land that comes along with your property, the importance of an as built survey in real estate. Then it's tax topics with pro Tom wheelwright, the specter of an unrealized capital gains tax, higher capital gains tax rates, how gambling is taxed, and how to permanently reduce your overall tax burden. Today on get rich education,     00:33 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  01:18 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  01:34 Welcome to GRE from Essex County England to Essex, Massachusetts and across 188 nations worldwide. I'm Keith Weinhold. You're listening to get rich education before we talk taxes, let's talk about the land, the raw land, the lot that comes along with your property. Investors don't spend much time thinking about it. Yet the land is sometimes worth more than the home or structure that's on it, per the FHFA, land constitutes 32.2% of the value of the average US single family property in a metro area. Now the inexpensive land prices nationally, they are predominantly in what I'm classifying it as three US areas, the Midwest, the southeast and Appalachia well, where you have inexpensive land. Oh, that also happens to be where the cash flow for long term rentals resides. Land costs more by the water because people want water activities, water proximity and water view. So the lower costs are inland, and land also costs more by the water, because coasts and shorelines constrain development, sprawl that limits supply and a limited supply of buoys up prices. Consequently, the highest land values are mostly in the Northeast Corridor, from Boston to DC, Miami, coastal California and Honolulu. Yes, Manhattan values are flat out extortionate for raw land now, Seattle, Madison, Wisconsin and Boulder, Colorado. They are three places with really high land values as well. Seattle and Madison are on geographic isthmus. And isthmus is a narrow strip of land with water on both sides. It's interesting how Nashville's nascent population influx made its land values surge inside a cheap sea of southeastern US land values now costly land areas like these ones that I've been talking about on the coasts, they could work well for short term vacation rentals like Airbnb and VRBO, your classic waterfront and beachfront weekly rentals, but they do not work for long term rental cash flow. Texas Land values are sort of low to medium. Land near the Mississippi River and its major tributaries have low costs because rivers are efficient transportation networks, prohibitively high land costs. That's one reason, actually, why alternative building methods just really aren't as cost effective as some people think. I'm talking about things like 3d printed homes, prefabbed homes, tiny homes and shipping container homes, well, all of them have got to sit on land, just like conventionally build homes do. And there is a land cost. Talk to a tear down specialist, and they'll tell you that in some older homes, 100% of the total value is in the l and. And in practicality, it's actually even more lopsided than that. The structure can have negative value because demolition is not free. So for you to get an idea yourself, your property tax bill, it's going to show you your split. That's where you'll see the assessed values broken out for both your structure and the land. So the bottom line here is that cash flowing properties have low land values, typically 25% or less of the total property value. That's generally what you want to look for. And I swear the only thing that's more barren than raw land is the creative naming process for new developments. There is such a lack of creativity in these development names. I'm talking about names like Willow Creek Estates, stone bridge crossing, or what else do they name a new housing development? How about VISTA, view heights? They all have these idyllic sounding names that somehow just all sound like each other. Well, we're talking about raw land when you get in contract to buy a property, the seller side is expected to provide you with an as built, it often still comes in the form of an old fashioned piece of paper and as built survey, what it is is a plan view, a bird's eye or aerial view of your property. It's not a photograph, but a drawing, and it shows you the dimensions and the placement of structures on your property, and it includes things like fences and other features like easements. Now, lenders don't always require an as built before granting a loan, but it's a good idea to ask to see one before you wrap up your next deal. If you want to in your offer, you can even require that a recent as built be done by a surveying company. All right. Well, what exactly do you look for on an as built once you have one in hand, first see that the house or apartment building that you're buying is properly set back from the property lines to meet zoning requirements. If the six foot side setback is only five feet 10 inches, then you'll have to address that before you buy even if it's five feet 11 inches. Now it's possible that the jurisdiction that you're buying in will grant a letter of non conforming status, but if not, the structure is going to have to be adjusted. Another item to look for on an as built are encroachments. This is where part of a neighbor structure protrudes over the lot line and onto your property. And encroachment is really only acceptable if you're willing to grant the neighbor an easement in perpetuity for their encroachment onto your land. But why would you want to do that? The third thing that I want to mention that you should look for an as built is the existence of easements. An easement that just means that another party has a legal right to come over onto your land and use it. Yeah, and easements are actually quite common. It's not as threatening as it might sound. A common one is that as your as built would show, say, a five foot wide by 60 foot long easement. Is there that a utility company has access to. Well, that's something that makes sense. It's for the common good, but just be mindful that an easement cannot have a structure with a permanent foundation built on top of it, alright, because an electric company or a water company might have to excavate there. Most people think of easements on the raw land, but there are also aerial easements, for example, an overhead power line where the roof eaves are not allowed to intrude on that airspace. So to review what you learned so far today, the best cash flow properties typically have low land values, often about 25% or less of the tolerable property value. And an as built survey is an aerial view drawing of your property and its dimensions on an as built look to see that it meets zoning requirements like setbacks and look for encroachments and easements. It is resale properties where it's more important to look at as builts than it is for new construction properties.  As we're about to bring in tax pro Tom Wheelwright shortly, business owners and real estate investors really get so many of the best tax breaks in the US Code. But you've got to know. How to find them, or else work then with a CPA that does know how to find them, that really knows how to navigate their way around the tax code, people that make high salaries pay high taxes, as much as 50% you remember I did that episode a few months ago, high salaries don't create wealth. Taxes are one big reason why, say, for example, a chiropractor makes $1.2 million a year in salary. But if that chiropractor becomes an investor by buying and selling other Chiropractic Clinics or investing in real estate, their tax rate will drop by half or more, and that's because capital gains tax rates are about half of ordinary income tax rates. So see, you don't want to be a super earner. You want to earn enough money to invest and become a super owner, but tax policy could change Tom and I will discuss that first. Then we'll talk about reducing the amount of tax that you pay. Today is a new punishing unrealized capital gains tax coming that you will have to pay. What this means is that if you have a $500,000 home, and it rises in value to $550,000 well, you would have to pay tax on your $50,000 of profit, but you haven't sold your home. So this feels so wrong, because you haven't realized any profit at all. This is what unrealized capital gains tax is. And also, where are you going to get the cash to pay the tax on your 50k of profit just because your home rose in value yet you didn't realize it? I mean, might you have to sell your home in order to get the cash to pay the tax. And then what if you though could pay the tax on your unrealized capital gain so you do pay it, but then the following year, the home goes down in value. Well, would you get a refund then? So the unrealized capital gains tax proposal is a mess. Let's learn about it and more. This week's guest is a best selling author, CPA and an international authority on tax. He's brilliant because he actually makes taxes fun, easy and understandable. He's familiar to you because he's the most recurrent guest in show history. Welcome back to GRE Tom Wheelwright.   Tom Wheelwright  12:48 thanks always good to be on your show.   Keith Weinhold  12:50 Tom probably with more than 30 show appearances here now you are 6% of GRE episodes.   Tom Wheelwright  13:00 That's a little scary. But you know, taxes are your single biggest expense, so why not?   Keith Weinhold  13:05 It's appropriate. And yeah, I guess all these appearances are certainly an endorsement of how much you help our audience. It's also a reflection of how tax and legal are not my strong suit. So it really helps to have you here absolutely the all time, assists leader in GRE history then and Tyler. An awful lot of timely tax topics going on that are probably first and foremost in more people's news feeds than they usually are. As we're here during presidential campaign season, the one that it really seems to revolve around the most is this potential tax proposal on unrealized gains. I've been around long enough where I seem to see this proposal come up more often, but it never seems to go anywhere. So first, why don't you tell us what unrealized gains are?   Tom Wheelwright  13:51 it actually goes beyond that. Interestingly enough, what the Democrats are proposing is, first of all, they're proposing capital gains rates at ordinary income rates. So they're proposing doubling the capital gains rate. That's actually as important as anything else. The second thing is, they're proposing capital gains on gifts. So if you give it, if you give your business to your child, you have a capital gains ordinary income rates. They're proposing capital gains when you die. So not only an estate tax, but also a capital gains tax. So then you get taxed twice when you die. So about 80 to 90% of your estate goes to the government when you die. If you're a business owner, as an example, then they're proposing eliminating the 1031 exchange, which would mean that on a trade of real estate, you'd have a capital gains tax at ordinary income rates. Then they're talking about this unrealized capital gains so if you do nothing but build your business or your real estate, the increase in value is subject to capital gains taxes at ordinary income rates. Now you know their proposal is, we have this tax. Tax when you're over $100 million that is not seem to be in the news feeds right now, but that's what it is. They call it the billionaires tax, and they're calling it an alternative minimum tax on billionaires. But clearly, 100 million is not a billion. That's only a 10th of a billion. And the biggest issue, of course, is if you tax unrealized gains at 100 million, soon you're going to tax them at 10 million, then it's going to be 1 million. Because history. That's the history of our tax law. The history of our tax law. Remember, in 1913 when we passed the 16th Amendment, it was passed because it was only a tax on the rich, right? It would never have passed if it was going to be a tax on the average person. And yet it passed. Because great, we're okay taxing somebody else, as long as it's not our tax. We're okay taxing somebody else. That's pretty much what's going on with this unrealized gains tax is, oh, well, it's on somebody else and they have enough money. It's no big deal. Therefore, I'm okay with that, because why shouldn't they pay more tax? That is what this is about. The challenge is, is, as we saw with the income tax, eventually it will reach the average person, or at least the average entrepreneur, real estate investor. Because think also, let's say that you build your wealth in real estate, and then when you retire, you say, Well, look, I don't want to be doing active real estate anymore. I'm going to trade my single family homes or my apartment building. I'm going to trade for a Walgreens a triple net lease, well under their proposal, that would be taxed because, again, no 1031 exchanges over $500,000 so that means that if you accumulate your wealth through business or real estate, you pay a much higher tax rate than if you accumulate your wealth by investing in Wall Street through a 401k because if you invest in Wall Street through a 401K, you only have to pay tax as you pull that out, you're not going to be paying tax on the value. Now that's assuming that they don't tax the increase in value of your 401K, which is also obviously a possibility. Interesting enough people talk a lot about the constitutionality of this. The challenge with that is that we already have taxes unrealized gains. If you're a dealer in stocks, in securities you do mark to market, that is meaning that you're going to pay tax on unrealized gains. And so there is actually precedent for this, and that's the scary thing, is that they could point to that precedent and say, Well, wait a minute, it's just an income tax, it's not a wealth tax, that's what they're going to say. They're going to say it's an income tax, not a wealth tax, because it's on appreciation, and appreciation is income. That's how they're going to go down this road. Will it start at $100 million Absolutely, that's where it will start. Will it then drift down? Who knows? But likely that's the history of our tax system. Yeah. I mean, we've talked before about the phenomenon of the camel getting its nose under the tent. However, in this case, I didn't realize there's already precedent for unrealized gains, in a sense, as potentially, if this is approved for those with $100 million net worth, and in next it's 10 million net worth, $1 million net worth and so on, like you described there, when you talk about capital gains tax rates being stepped up so that they're at ordinary income tax rates. It's actually somewhat of an interesting philosophical discussion, in a way. It sort of makes sense that a person's gains from investment could or should be taxed at the same rate as one's income when they go to their day job. However, why don't we do that by lowering income taxes rather than doubling capital gains? Wait a minute, no, because it's a double tax. Let's say that you're a business owner. Why does your business increase in value? Well, because you're making income, but you're already being taxed on that income. It's called income tax. What we do in this country, which a lot of countries don't do, by the way, is we tax it a second time. We call that a capital gains tax or a dividends tax. We tax it twice now. Now we're going to have that second tax at the same rate of the original tax. So if you think about it, you're being taxed on the same income twice because it's your income that determines your value, so you're being taxed twice. It's really not the same. It's fine if you're invested in the stock market, and that's where your capital gains are. That's a hard one to argue too much, although it does take liquidity out of the market, because the problem with capital gains tax is being taxed over 28% it's about 28% is that you actually lower the contribution to the Treasury because there will be fewer capital gains. There will be so many fewer capital gains that you actually lose money. The Tax Foundation, taxfoundation.org, I'd refer people to, has done lots of studies on this, and it's very clear. Here that high capital gains rates actually reduce the amount of money that comes to the government. So this is purely political. This has nothing to do with let's generate more revenue, one of the challenges so you have to score this, right? So that means that you're scoring what's the revenue that's going to be produced? You have two types of scoring. One is called static scoring. The other is called dynamic scoring. Static scoring means that we're going to look at the capital gains we already have, and we're just going to, if we double the rate, we're going to double the revenue. So that's assuming that we're going to have the same number and amounts of capital gains as we add at the lower rates, right? Dynamic scoring means that we're going to take into account how people behave motivationally when you double the tax rate. Yeah. Well, let me give you an example. So I'm a business owner. My wealth is in my business primarily. Do you think, really, I'm going to sell that business and take the capital gains immediately and be done with it? But if I have a high capital gains rate, I'm going to sell this over 20 years. So I'm actually going to defer my capital gains as long as I can, because I don't want to pay those high capital gains rates. So that means less money to the government. That's what it means. So it actually reduces on a dynamic scoring if you look at truly how people behave and have behaved in the past. So this isn't a new thing, right? We've had high capital gains rates before. It's not like we don't know. It's not like we haven't seen this before. It's that, for whatever reason, politically, they've decided that, wait a minute, the rich are out of favor. We need to tax the rich more. That's a very popular line, and therefore this is a way to do that, even though it by all calculations that are dynamic, it would actually reduce the amount of funds that come to the Treasury.   Keith Weinhold  22:00 That does make sense about the double taxation. Case in point, with an apartment building, if you increase its noi, you have more income than pay tax that if you increase the noi, therefore you've increased the value of the building. Consequently, the capital gains tax that you might have to pay down the road Tom, maybe current capital gains tax are higher than I thought, is the 28% capital gains tax. Number You mentioned, current or proposed. What is that?   Tom Wheelwright  22:24 Well, right now we have a 24% capital gains tax, okay, we have 20% pure capital gains tax, plus we have a 3.8% net investment income tax. Doesn't apply right now if you're a real estate professional, but applies to everybody else under the Harris proposal formally adopted Biden's plan under the Harris proposal, then you would get a actually 39.6% rate, plus 5% net investment income tax, regardless of whether you're your real estate Professional. So that is 44.6% that's the 45% the 28% number I threw out is that's the number the Tax Foundation says is the maximum you can raise it to without losing revenue.   Keith Weinhold  23:11 That puts things into perspective, as real estate investors, for a long time, we've appreciated substantial tax shelters. What are they being the 1031, tax deferred exchange, like you mentioned, that's been around for more than 100 years. Does that have any realistic shot of being shot down? Of course, Trump shot down substantial parts of the 1031 outside of strict real estate investing.   Tom Wheelwright  23:32 He did, and he actually set the precedent for eliminating it. So by doing that, because he eliminated it on everything except real property, right? I mean, actually, and even before that, there was a time, and there's still ways you can do it with paper assets. But it's not a 1031 exchange. So 1031 exchange has it evolved. It's gotten it's shrunk. It keeps shrinking. Even three or four years ago, no realistic possibility of eliminating 1031 exchange. The challenge, of course, is it would have an impact on the liquidity of the market. However, big deals never do 1031 exchange. Ever you don't see big multifamily developments sold in 1031s. The only time you see that happen is when they've used the Delaware statutory trust. And then you've got some of the investors who use it. And some of them who don't, you can do that in the Delaware statutory trust, but the regular developers, I haven't seen a 1031 done by a syndicator in years. So could they eliminate? Yeah, they could.   Keith Weinhold  24:33 yeah, that would be concerning. Are there any other presidential hopeful proposals that have to do with taxes that are germane, and our audience should know about?   Tom Wheelwright  24:41 my heavens. So the Democrats want to raise taxes by $5 trillion they want those taxes to all be on investors. And the reason I say that is because typically, people who make less than $400,000 which is their threshold, are not major investors. Most of their money goes to spending. Money. If you're making under $400,000 you can easily spend $400,000 a year. Oh, yeah, okay, that's not that hard, especially in today's world. It's a transfer from high net worth individuals who invest their money in long term projects like real estate, like energy, like business, and it's going to be a transfer to people who spend the money and they're going to spend it, my prediction is that if the Democrats get their way, we enter into a long term period of stagflation, high unemployment and high inflation. Because if you transfer $5 trillion from people who aren't spending it in the first place to be able who do spend it. You've got $5 trillion of new money going into the marketplace. Now it could depress asset values. So that could be good for investors, okay? Because you don't have as much cash available to the I'll call it the investor class, to go into real estate. If that's the case, then you have $5 trillion less, right? I mean, it's not a huge portion of the market, but it's big enough. If you take $5 trillion out of investment capital, then that would put a downward pressure on asset prices, which would include real estate.   Keith Weinhold  25:29 we're talking about potential changes to the tax code. It's always a germane discussion, because taxes are the biggest expense in your life. We're talking with Tom wheelwright. We come back, we're going to talk about the real estate tax laws as they are now, for example, how your rent income is taxed differently than your job income, and also, what are taxes like on sports, gambling. You're listening to get rich Education. I'm your host. Keith Weinhold.   Keith Weinhold  26:45 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   Keith Weinhold  27:16 you 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.     Blair Singer  28:29 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  28:48 welcome back to get rich education. We're talking with tax pro Tom wheelwright. He's been talking to us about some of the proposals that presidential candidates have here in a campaign season, and whether these things become true or not. Sometimes it seems like just the fact that they're proposing. They're proposed, or if they get instituted at a small level years down the road, it can blow up into something bigger. So Tom tell us more about some of the proposals that are on the table.   Tom Wheelwright  29:12 So we talked about the democratic proposals, which also include things like a $6,000 tax credit for babies. It also includes an enhanced Child Tax Credit. Also includes some other there's lots of provisions in there, right? So it's a transfer. It's just a transfer of money from one group of people to another group of people. On the Republican side, we haven't talked about that now they want to extend the 2017 act. They've been very clear, that's what they want to do, which is an estimate $4 trillion so the other direction. So basically, you're talking about a $9 trillion swing between the two parties. We've never seen this before, ever in a presidential election. Now, that big of a difference, one major tax increase, one party proposing major. Tax increases, the other proposing major tax decreases in the same election. It's something that I'm glad people are paying attention to, because it's a little overdue in this election cycle. Because really, when you talk about policy, that's probably the biggest policy difference between the two parties.   Keith Weinhold  30:18 Now one thing we've learned over time from talking with you is these presidential wish lists, if you want to call them that. Well, these tax changes are things that require congressional approval, and we have a divided Congress currently. So what do you think the prospects are of really any of these things becoming new law?   Tom Wheelwright  30:36 First of all, remember, most of the 2017 act expires at the end of 2025 so something will have to be done next year. They don't have a choice, either that or is just expires, and then we're back to what we had. We have smaller standard deductions, we have alternative minimum tax again. We get a deduction for state income taxes, right? That comes back the one. We lose our 20% Small Business deduction, the only thing that stays permanent is the corporate income tax rate that was permanent in the original bill. So there is going to be something, you're right, if there is a divided Congress, and I say that if, because if one party sweeps, then, especially on the Democratic side, the Republicans don't seem to be as cohesive as the Democrats are on these things. And if the Democrats sweep, I would say, remember, we don't have Kyrsten Sinema, we don't have Joe Manchin from happening. And so would the Democrats sweep all these through, not all of them, but you're going to see a major tax increase for sure, on the Republican side, would you see the 2017 act extended? You'll probably see it, but you're right that otherwise, if it's a divided Congress, we're going to have something in between. We thought we would get a divided Congress in 2020 though, remember and we didn't. So I would not count on a divided Congress   Keith Weinhold  31:59 erstwhile 2017 Trump tax cuts in JOBS Act brought the highest marginal income tax bracket from 39.6% under Obama down to 37% as I remember it. Some thought Biden would take it back up to 39.6 but he hasn't and it's just stated 37 All right, so if Republicans stayed in power, presumably that 37% would go ahead and carry on. That's what we think about as our w2 income. Tom, why don't we talk about the taxes that actually exist today? I think a lot of real estate investors just don't understand the difference between how your w2 job income is taxed versus your taxes on real estate rent. Can you talk to us about that?   Tom Wheelwright  32:42 The reason it's confusing is because they're both considered ordinary income, right? The difference is, is that one is business income and one is non business income. Your wages are non business income. You don't get deductions against non business income, but you do get deductions against business income. So your rental income is considered business income for purposes of the Internal Revenue Code. What that means is you get deductions for taxes. You get deductions for interest, you get deductions for maintenance, you get deductions for depreciation. That's why, when you have your income from your rentals. Typically taxed much lower than your income from your salary, because you get no deductions against your salary like you do against the rentals.   Keith Weinhold  33:30 Maybe it would help to introduce an example here. I don't know if this will complicate things too much or not. If a real estate investor has, say, a single family rental property with $2,000 of rent, income, $1,000 mortgage, $800 in operating expenses. How is that tax that leaves them with $200 of cash flow?   Tom Wheelwright  33:50 You have $200 of cash flow, but then you probably have depreciation on top of that, which is a non cash deduction. And so let's say your depreciation is $500 that means you actually have a $300 loss that, in many cases, you can use to offset income from your w2 so you actually have a negative tax rate. In other words, you're making money from taxes. So actually, is that an increase to your cash flow? So it's a way to think of it is, I have $200 of cash flow from my tenant, if I have a $300 loss for tax purposes, let's say I'm in a 33% tax bracket. I have $100 of income from the government. So that means my cash flow is really after tax. Cash flow is $300 not $200 whereas if you have the same $200 of income from your wages. Let's say you have just the net, right? Let's start with the net. You have $200 well, you're going to be taxed. And let's say that again, your 33% tax rate, that means you're after tax, right, is going to be roughly $125,000 okay, under $30 so $130 we're. $300 so it's like twice as much. In fact, all of that difference is because of the tax law.   Keith Weinhold  35:06 Gosh, that was a great breakdown. I'm really glad that I introduced that example, $2,000 in rent, minus $1,000 for the mortgage, at $800 in operating expenses, again, leaving you with $200 in cash flow with that example. There's probably more going on here with taxes. Because, of course, with that $1,000 mortgage amount, some is going to be principal, some is going to be interest. In part of that interest can be tax deductible.   Tom Wheelwright  35:31 I'm assuming it's all interest, because if it were not, we'd have a higher taxable income. Remember, your principal payment is not deductible. So in your example, I was assuming that the $1,000 mortgage payment was all interest. If it was only $800 then you'd have $400 of income before depreciation. You don't have $100 loss, because, remember, your principal's not deductible, so therefore you have to add that back into your taxable income.   Keith Weinhold  35:58 Will you talk to us about how to apply depreciation to this income versus expenses. Example, is there anything else you can speak to when it comes to that $800 of operating expenses in this example, and those expenses include things like property insurance, property tax itself, maintenance repairs and utilities.   Tom Wheelwright  36:19 Right but also, for example, you might run your rental real estate business out of a home office in your home so you could have a home office deduction. You might have your use your car for the rental purposes, and then you get a deduction for your car. So there are additional expenses that aren't even in that $800 that you could pick up that would not otherwise you'd never get a deduction, and you're really not spending any more money. You're just using it for business, and therefore getting a business deduction. So it's really all about what do I get to deduct? Remember that if you own a home for yourself, you don't get to really deduct the taxes. You have a limit on how much you can deduct. So taxes are limited in deduction. Mortgage Interest may or may not be limited. Remember also that if you have a mortgage, you're limited to how much a $750,000 mortgage being deductible, whereas if you it's a rental property, it could be a seven and a half million dollar and mortgage, and you still get the deduction, so you're not limited like you are. On top of that, again, it's a business, so let's say that you put solar panels on your personal home, you'd get a 30% tax credit, but you'd get no depreciation deduction. If you put solar panels on your rental house, you get the same 30% tax credit, but now you also get a depreciation deduction of probably another 30 $40,000 in the first year. So there's always more deductions in a business setting than a personal setting.   Keith Weinhold  37:56 Well, real estate has been around a really long time. Often laugh when people talk about non conventional investments and put real estate investing in their real estate's about the most conventional investment that we can possibly think of. It's been around a long time. We think about a newer thing that people do with their money, but I sure don't call it investing. That's sports gambling, and it's something that you and I haven't talked about before. Here Tom in 2018 the Supreme Court opened the way for states to legalize sports gambling, and at last check, 38 states, plus DC and Puerto Rico have legalized at least some form of sports gambling. So now it's a more germane conversation for you and I to have than it was a few years ago. Can you tell us about sports gambling, taxes and how it's treated.   Tom Wheelwright  38:41 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'd get a 1099 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 got gambling losses. But your gambling losses can never be more than your gambling winnings. You never get to generate a tax loss on gambling. What 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 going to be taxed on $2,000 but if you can't prove the 8000 you're going to be taxed on 10,000   Keith Weinhold  39:33 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  39:42 I would keep detail ledger. Personally, I probably have a separate bank account just for gambling. Gosh, I'm not a gambler either, so that's what I would do. I would have a bank account just for gambling, 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. Don't 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  40:15 Hey, that separate account's a great way to hide it from your spouse, not that I'm suggesting. Not bad.   Tom Wheelwright  40:22 Interesting. You went there.   Keith Weinhold  40:23 I'm not a gambler at all. Can't even believe I was thinking that far ahead. What are the gambling tax rates like?   Tom Wheelwright  40:31 They're ordinary income tax rate. So gambling winnings are just ordinary income. 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. And this all applies to whether it's sports gambling or general gambling, like lotteries and sweepstakes?  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 rates. By the way, gold also has special rate for when you sell gold, it has its own tax rate. Gambling has no special tax rate, so it's just your ordinary income rates.   Keith Weinhold  41:11 To me, it seems like 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. 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  41:30 No, but they will send you your 10909g I guarantee that, that's for sure.   Keith Weinhold  41:34 Well, Tom has helped business owners and real estate investors permanently reduce their taxes. He does it like virtually no one else in the world does by keeping it simple, by helping you find deductions that other CPAs can't do. You can learn more about how Tom and his team can actually help you. You can get a free consultation. You can do that at getricheducation.com/tax. And Tom tell us more about the importance of a business owner or a real estate investor or anybody else really being connected with the right kind of tax professional that can permanently reduce your taxes.   Tom Wheelwright  42:12 So remember that if you want to change your tax, you have to change your facts. It's that simple. What you have to do is you need to know what facts you need to change. That's where a good tax advisor comes in. Is what facts do you need to change in order to change your tax now good news is, wrote tax through wealth. So you got an idea of what that is, but the tax law is very detailed. You must dot your i's cross your t's, so to speak, so that you make sure that you meet all of the rules, such as documentation, for example, for your business expenses. When you do that, you're going to get a better tax result, especially if your tax advisor is also preparing your tax return. Because really, your tax return is just part just how you implement your tax strategy, right? That's how you do it. So we launched, just recently, a franchise of tax advisors, and now we actually have much, really good control, quality control with our tax advisors, and they use our software system. It's very important that you have somebody, if not us, find somebody who you know you can actually give tax free wealth too, and say what cares make sure that we're doing it this way. But if the easy button is really the getricheducation.com/tax.   Keith Weinhold  43:27 Tom Wheelwright,  It's been valuable as always. Thanks so much for coming back onto the show.   Tom Wheelwright  43:33 Thanks, Keith.   Keith Weinhold  43:40 Yeah, key insights from Tom as always, taxes are complicated. Tom's Network helps sort it out for you. We've already covered a lot of ground on this week's episode with raw land values as built, proposed tax plans and how to reduce your tax burden within the existing tax system. Tom and I talked, and he will be back yet again with us later this year for more tax wizardry. Now, just recently here, Kamala Harris proposed a smaller capital gains tax hike than Biden. She's starting to put sort of her own policy spin on things, breaking with the President on the size of a proposed increase on the capital gains tax rate that is a 28% top tax rate when investments are sold for those that make a million dollars plus. So that's more than the current 23.8% top rate, but less than the 39.6% rate that Biden had supported all income is taxable. Therefore it is axiomatic that the fastest way to increase your ROI is to work with a tax advisor that can find you all of the biggest deductions right away. You can read Tom's book Tax Free Wealth, get a good system of documentation going and get connected with Tom's team. At the end of an episode at times, I like to leave you with the most actionable resource on the topic that we covered. You can schedule a free call to see how Tom's team can help you out. At getricheducation.com/tax. That's getricheducation.com/tax. Until next week. I'm your host. Keith Weinhold, Don't Quit Your Daydream. 45:33 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  46:01 The preceding program was brought to you by your home for wealth, building, getricheducation.com.  

A prominent Florida Builder and #1 Wall Street Journal Best-Selling Author joins us to discuss the benefits of build-to-rent properties, including affordable housing and attractive mortgage rates. He has already done all the work for investors, offering new build income properties that are sometimes rented. We discuss the importance of median value and affordability index in choosing profitable areas for long-term real estate investments. Learn about new build income properties with rate buydowns as low as 3.75%. Important market dynamics and investor strategies, including the trade-offs between cash flow and equity growth. Show Notes: GetRichEducation.com/518 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  00:01 Welcome to GRE. I'm your host. Keith Weinhold, a great way to forecast the future of the real estate market is to look at the level of new building. I've got a surprise to reveal there then a focus on one of the hottest in migration states. That's popular because it promises cash flow for real estate investors today on Get Rich Education.   00:24 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 guest 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  01:09 You're listening to the show that has created more financial freedom than nearly any show in the world. This is Get Rich Education.   Keith Weinhold  01:25 Welcome to GRE from Plains Georgia to White Plains New York and across 188 nations worldwide, you are listening to Get Rich Education. I'm your host. Keith Weinhold, we are an educational platform. And if you haven't yet, I really suggest that you spend 100 hours learning how to invest in real estate. The average person works 2000 hours a year for 40 years. That's 80,000 hours of working for money. I implore you to spend 100 hours learning how to keep it and grow it and leverage it and create income and tax advantages from it. 80,000 hours of lifetime work, 100 hours learning real estate investing. Now, when someone like a presidential candidate produces, still vague talk about building 3 million starter homes in four years. That actually appears just about impossible. Within the existing structure. We would need 2 million housing starts per year from 2025 to 2028, in order to overcome our existing shortfall. And we haven't exceeded 1.8 million in any year in the moderate era, and that's even when demand was extraordinary and interest rates were low. Just you know, look at the reality of what home builders need to actually do, and this is even if they don't have any excessive not in my backyard. Pushback, builders have to procure land, meaning they need to lay out cash far before building, and then they need to jump through zoning and building hoops in counties and cities, in towns, in communities, and sometimes those hoops can reach preposterous levels with substantial delays. Builders need to secure financing, and for most, interest rates are still in the 9% plus range. And then builders need to acquire a whole local network of contractors and subcontractors, and then they need to keep those contractors and subcontractors busy, or else they're gonna lose those workers. So builders have to work to maintain their teams once they found them. And if that's not enough, this is all amidst a historically bad skilled labor shortage, meaning those workers can be enticed to go work for somebody else. As you know, skilled worker demand far exceeds skilled worker supply. So for builders, it takes years of planning and development. In a lot of cases, they sit on land for many years before the market conditions are right for the actual build. Well, look, at least there is finally acknowledgement among our highest elected officials that we do need to address the core problem, but our elected officials proposals aren't really so good, and our country's housing problem is largely a regulatory issue. Later today, we'll talk to a builder that's already done all of this for you, so it's not preconstruction that has new build income properties complete, available sometimes even rented already, and they help you buy down your mortgage rate to a level that's really low. You'll soon learn about it. But first, let's talk more about adding new housing supply in the larger apartment segment. It's something that can help you see the future here, but it isn't getting enough tension outside of multifamily industry circles, and that is the fact that apartment starts are plummeting to 11 year lows. And this is a real surprise to some people, multifamily completions are outpacing starts by the widest margin since 1975 and I mention this because, you know, you probably keep hearing and reading about how apartment construction is at all time highs, but really, that is a story from two years ago. It takes about two years to go from an apartment construction start to a completion. Well, today we're seeing that huge surge of apartment starts two years ago morph into completions. That's the piece to be aware of here. And to give you some idea about the new apartment building, slow down through July, we have completed 314,000 multifamily units, and we started just 193,000 units. That's all according to census stats that year to date. Start total is the nation's lowest since 2013 when we were just building our way out of the global financial crisis. Also a larger share of apartment supply. In this next cycle, it's likely to be affordable housing, because that's where the tax incentives are in the last wave of apartment construction a few years ago, it was more higher end stuff, and the result is today, apartments are oversupplied in a lot of markets, leading to falling apartment rents, or just somewhat stable and frozen apartment rents in heavily overbuilt places like Austin, Texas and a lot of others. But this slowdown in New Starts of larger apartments is why some have bullishness on the multifamily outlook for 2026 and beyond supply is the biggest headwind for apartment investors today. While it is an enormous tailwind for renters, it's good for them, but those dynamics appear likely to shift again. It took an almost perfect storm of variables to push apartment construction to 50 year highs, and it's difficult to see a scenario where construction could re-accelerate back to those peaks. Today's apartment completion levels could mark a high. It's generational. You may never see it again. So to summarize, in the world of large apartments, supply is still up, even outpacing demand in a lot of markets. It all came from a big building wave that began when interest rates were low two years ago. They're mostly upper end places. Apartment syndicators also got hit with higher rates that reset on them, and you've seen the value of some apartment buildings fall 30%. It is bad. But long term, I expect that apartments are going to be fine. New lease ups are absorbing what's out there. The demographics show that renters will continue occupying apartments. Interest rates have already fallen and they're expected to keep falling, and you don't have very many new apartment starts, it's that last piece that a lot of people aren't aware of. So that's the forecast over the next few years for five plus unit apartments. When it comes to the market dynamics for one to four unit properties. I'm going to discuss this with one of the voices of GRE marketplace today. They are a build to rent provider building new construction, single family homes, duplexes and fourplexes for tenants that they sell to investors. Hey, I'd like to welcome in a home builder and property provider serving Florida, basically statewide, known as North America's leading build to rent property developer, and he believes in what he builds and offers others, because he's been a real estate investor himself for more than two decades. Hey, Jim, welcome back onto the show.   Jim Sheils  09:45 Keith, good to be here. Thanks for having me.   Keith Weinhold  09:47 Jim, we have a lot of exciting things to talk about. What you're doing in Florida. You've really helped out a lot of our investors and followers so far. You have some really interesting things to tell us about. Rate buydowns and just how low those rate buydowns are on some new build properties. And I sure want to get to that. But first, why don't we just pull back big picture, and from the 30,000 foot national view, before we talk about Florida, what are some of the important dynamics you see in the real estate market here in late 2024   Jim Sheils  10:16 Yeah, it's been interesting. The media is always late to the party, as you know, Keith, I've seen some interesting stats. You know, affordability nationwide has gone from 480,000 about eight months ago, and now it's down to about 405, so we've already seen the affordability index come down nationwide, and it's hit really well here in Florida. One of the reasons why is there's definitely been some price adjustments on higher priced property in Maine markets, Miami, Orlando, Tampa, areas that we don't build because the numbers didn't work. So that's been really good to see that affordability also, rates are just starting to drop. But here's an interesting thing. A year ago, Keith, the average mortgage payment for the average person buying a home, was 57% of their total income. Now that has dropped to about 44% of their total income. So I'm always looking at affordability and overall median pricing, and that's been a really, really good thing for us. As I had said, second tier markets where you can get affordability, but also great amenities, great lifestyle is where we've always focused on building, and it seems like that is really continuing to have a solid pulse. I love visiting some of those bigger markets, you know, taking my kids to Disney, but I'm glad we stayed out of there, because it seemed a little more temperamental, and we're glad we're in the more second tier markets.   Keith Weinhold  11:39 You cited an affordability index there earlier. Now, affordability still, historically, is not that good, but it's not as bad as it used to be. Tell us more about that index.   Jim Sheils  11:49 Yeah, I always have looked at, you know, the affordability index. Let's just use an example, Orange County, California. I think the median value of a home there is $1.1 million. In Jacksonville it's 305, and so you get a score for based on what is the average family income per price of the home. And it's kind of like your report card. And there's certain areas that have an A, and there's certain areas that have an F. You know, we have lots of investors come to us with you guys too, from New York or Seattle or Orange County. And this is something I look at, what is the affordability index, and just know how they figure out the score on your affordability index. What's the average price of the home in that area, and what is the average family income for that area? And the correlation of those two numbers shows whether you have a good score or bad score.   Keith Weinhold  12:39 And now that we've looked at the national picture somewhat, you mentioned some of the major metro markets in Florida, some of which you specifically stay out of, and that's simply because the numbers don't work for long term rentals. They don't provide cash flow. Tell us more, just in general, about some of the areas that you've chosen and why is there profitable for long term real estate investors?   Jim Sheils  13:03 Yeah, this median value, this affordability index, is so key when we're able to get into home still, you know, Jacksonville is barely over 300,000 as the media now, we're able to cash flow right off the bat. So like Jacksonville is still as the population growth, the economic growth is occurring. It's desirable coastal community, and supply and demand is in our favor. We don't have enough housing, so that's where we focus all of those factors, not only here, but on a smaller scale, in Palm Coast, in Ocala, where we've done a ton with the GRE community. And then southwest Florida. We don't go to Southeast Florida, too expensive, too overbuilt, too high on insurance, but that Greater Fort Myers area, which did experience the highest growth anywhere in the country during the pandemic, which was interesting to watch, we're still seeing a lot of good fundamentals down there. And again, at that affordable range, it makes a big difference when you're buying at a medium priced home is, let's say 320,000 opposed to 580,000 makes a huge difference to whether it will cash flow off the bat or have a negative cash flow. And as you know, Keith, even though we're doing new construction high growth areas, we want to see app cash flow right away.   Keith Weinhold  14:13 Now, you are a builder, you are adding much needed inventory to the national housing supply, where we've had a shortage of millions of units per years, depending on what source you cite in quote there, a lot of the estimates as to the housing shortage really are all over the place. But many sources state that Florida inventory levels just statewide. Here they are back about to pre pandemic levels. So they have recovered. They are back to about 2019 levels. And I think one important thing for people to remember is, well, 2019 was a pretty good, balanced housing market.   Jim Sheils  14:50 It was a normal market. We liked 2019 you know, that was a good market. There was growth, but it was sustainable, more predictable, steady. So I'm happy to be back in 2019. You know, 2020 21 levels there were, there was less than a month's worth of inventory on the MLS that it was dire. Yeah, it was just such a skewed thing. And you've studied this for a long time. So everyone if you say, Oh well, it went from this to this. I love how you talk about 2019 because by all statistics that was a very normal market here in Florida. So we're happy to get back to that, because you have to have a certain amount of inventory level to balance the playing field. We want to see growth, but I'm more of a long term player, as you know, we don't need to see huge spikes, because that can get a little volatile.   Keith Weinhold  15:36 Now, as a builder, talk to us about builder sentiment since, like we talked about before, we are in a falling interest rate environment, mortgage rates are already down about one and a half percent from the recent highs, and the Fed hasn't even begun lowering rates yet. So talk to us more about what those lower rates do to build their sentiment. And we're not just talking about rates for buyers here, which matter, but it's the rate that builders like you that have to pay the typically factory in here too.   Jim Sheils  16:06 Yeah, it's an interesting market right now, Keith, and here's something I want to give great encouragement from as you know, we do build some for the institutions and the larger groups. The little guy, the small investor, has the guerrilla warfare advantage over them right now, because, as you know, we right now have announced financing. We're able to have this builder forward commitment where we're buying large tranches of money for residential mortgages. That means, you know, individuals like we work with all the time, Keith, that buy a few properties, we can get them this incredible financing right now, at 3.75 we're beating the market. You know, you go into a B of A and try to get a duplex finance, you're probably looking at six and three quarters. And we're able to do that because it's residential real estate. Some of our bigger guys, they would buy all of our inventory. But we can't get a institution qualified for these individual investor loans for residential real estate. They have to go to the commercial world. And as you know right now, Keith, the commercial world is screwy. People aren't lending. The rates are really high, and even these big guys have to sharpen their pencils and do their numbers and they go, Gosh, it's not panning out until rates drop. So that means these bigger groups are on the sidelines. And we all hear the complaints, all the big guys are buying all the properties they own 40% well, they're on the sidelines, and our little troopers and investors are building their portfolios in ways they cannot so it's exciting to see now for us too. What's lucky and unlucky is a lot of good builders out there that we're friends with. They can't get financing. The banks have gotten so stringent. So they might even have a good balance sheet and a good track record, but the banks are getting really stringent where Chris and I are. As you know, we were partially acquired by Sumitomo forestry about a year and a half ago. They're a 331 year old company, and when we decided to team up with them, they said, We love Florida and we love build to rent, go, and so now we have zero bank debt, and they've given us a green light to build out all of our inventory. We have five, over 5000 lots in Florida, and we don't have the bank slowdowns. So to find a good builder, you have to make sure they have financing in place, because they're going to be a great builder out there that just can't get the funding to do the job for you. So that's another thing you want to look for.   Keith Weinhold  18:16 Right. And last time I checked, you've got more than 925 current independent income property investors, many of those whom are GRE listeners. Well, we're going to talk more about just how low those rates are. Who participates in the buy down? I already know that most of it's the builder, and just part of it is you, the investor. You're listening to get residuation. We're talking about Florida, build to rent property more when we come back, 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 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.     Garrett Sutton  20:28 This is Rich Dad advisor, Garret Sutton, to grow your wealth. Listen to the always valuable. Get Rich Education.   Keith Weinhold  20:45 Welcome back to Get Rich Education we're talking about half of progress real estate investing in high growth Florida, with a renowned build to rent provider there. And I think a lot of this really comes down to trust with the fluctuating interest rate environment that we've had, some people don't trust certain builders or that investor to go ahead and put down a deposit on a vacant lot and wait 12 months or more for it to be built. But we're not talking about pre construction here.   Jim Sheils  21:16 No, no. Since we steamed up with Sumitomo, you know a lot of good builders again, they can't even start the project until they have a a buyer with a deposit down. That's the requirement for the bank to give them the money to start building. We don't have bank requirements, so we're building on our own dime, and so we are having properties completed before you even have to make an offer on them. So these are finished properties, sometimes a tenant already in place. I know just this month, there's been a few GRE people very happily stepping into pre rented homes. So you don't have to wait that period. If you're ready to move your money or have a 1031 exchange, we can fulfill those no problem, and close within 30 days Our in house financing, Keith, which I know we're about to go over, I want to make sure people know this is for not only our single families, but our duplexes and our quads as well.   Keith Weinhold  22:02 Tell us more about that in house financing that's something of great interest to people, and especially with these mortgage rate buyouts.   Jim Sheils  22:09 Yeah, everyone says, Oh, I wish I had locked into a mortgage before June of 2022 right? I mean, for every time we heard that, Keith, well, now you can and what we're able to do since we have the balance sheet we have now, with teaming up with this bigger company, banks will allow us to do what's called a builder forward commitment and buy large tranches of money. We're in the money buying business, I guess, now, and we have to commit to large amounts of money, but by doing that, we're able to pay fees upfront to buy down the mortgages. So right now, our most popular rate is 3.75. You as the buyer, and these are called discount points, which I've heard Keith talk about. You're bringing in a little under two discount points to get the 3.75 rate. And you say, Okay, well, Jim, we're bringing in a little less than two points. What are you bringing in? We're not really supposed to talk about that, but here's what I can tell you, do this test, go to one of your mortgage friends, or your B of A or Wells Fargo, and ask it what it will take for you to pay to buy down a rate for 3.75. Now, first of all, they will not allow you to do that much. We are on a more high volume schedule that will allow us to do that, but let's say, if they would, here's what the feedback we've got. If you were to try to do this on your own, Keith, you or I just walking into our bank, you would have to pay anywhere from 12 to 15 points to make this happen. Gosh, and that was the advantage of working as a collective group like we do together, you and I in our investor community, because now that we're able to do volume, it benefits us   Keith Weinhold  23:39 all. No one really knows where interest rates are going to go. I think it's pretty foolish to try to predict them, but very few people think they're ever going to drop to the levels that we saw during the depths of the pandemic, 3.75% if you get locked in there, it's pretty unlikely that the future market is going to meet that down the road at all and tell us more about that product type, the single family homes, duplexes and fourplexes that this is available on. And of course, they're all new build.   Jim Sheils  24:09 Yeah, we do a combination of new build on all of these. We found, Keith, a lot of build to rent. Companies really only focused on the single family home, but we found, you know, to increase rental yield and overall returns. There was really a lack in the market for duplexes in residential areas and quads, again, and those are close to commercial deals, without the commercial financing, they allow more affordable rent in more residential areas that people can afford and want to be in. And we found through the pandemic, these had a greater calling to them than, let's say, a large apartment complex. You know, people want to be a little more spread out, have their own yard, like in a duplex, and they get that there, but they get it at a fraction of the price that a complete single family home would be at. So we found, as you know, most of our investors, our average client, buys three to eight properties with us, and no surprise, they. Buy a mixture of single family duplex and quads. I know we agree on this. Keith, the single family home has had the best history of all of great equity appreciation, and the duplex might lag behind that a little bit, but it's got a better cash flow. So I will always do little trade offs and combo my own portfolio to make up for two of those. And that's what our counselors usually coach our people. I know yours do as well.   Keith Weinhold  25:23 Yeah, the economies of scale for the real estate investor really can be there long term with duplexes and fourplexes, and you're really helping fill a need. Some months ago, I talked about the mmm multi families, missing middle, about how so few duplexes, triplexes and fourplexes are being built today, as compared to when you had about three times as much construction in those property types that you did in the 1980s a lot of that's really gone away. You're really bringing it back. We talk about some of the areas where these are built. You know, Jim years ago? Well, really about 10 years ago, when I began this show, I was often talking about how I want to be invested in Metro statistical areas that have a population of at least 500,000 to 1 million people, in order to get a diversity of economic situations there, because you do need rent paying tenants. But so much has changed since then, starting four to five years ago, with the work from home movement, I'm more open to more outlying areas than I had been previously. So tell us about some of these areas that you choose to build in. In Florida.   Jim Sheils  26:29 yeah, you know our hub market where we started doing rehabs many, many, many years ago was Jacksonville, Florida. Yeah, and we still are headquartered here, but Jacksonville, again, is the most affordable coastal city, I believe, still on the East Coast, which brings great fundamentals. It hits both of your things, Keith, where it is larger, but it has more of a sprawl and that larger population and the fundamentals look really well again, that overall median price is still very low. And we branch down to Palm Coast, which is a little more of a higher end area, but a bedroom community, to Jacksonville, the silent soldier, the one that really surprised us the most. I think you remember, this was Ocala. In fact, when Christopher said, Do you want to go start building Ocala, and this is about a decade ago, I said, Wow, Ocala, isn't there only, like, some horses out there? Yeah, now he's a horse guy. So he laughed, and he said, Oh, sure enough, I put my foot in my mouth. But Ocala, the amount of growth that we've seen out there has been incredible. And Ocala is really well placed because it's just below Gainesville, where the, you know, there's the medical centers, the university, and it's just north of the villages, which is the second largest retirement community and growing. Not only that, it has its own economic infrastructure, but it's really well placed in the difference of a price of a home for a starter family in Ocala compared to like Northern Tampa. There is no comparison. You're talking half. So we like that. And also with rents, it's got a great lifestyle. And then southwest Florida again, Southwest Florida, Keith, we're very lucky that we took some risk there. A lot of builders would like to be building down there, but as you remember, we took some big risks in 2020 we talked to some of our friends and said, this can be really good or really bad for real estate. We went with the really good and we loaded up on, well, a lot, over $20 million worth of land at the pre jump prices. Now we're into land right down there so we can get them built right for you guys still make a margin for ourselves that other people that they're trying to get land today, they just can't do and Southwest Florida has been a really good market for us. Had that hurricane there a few years ago, and all of our new construction properties did well. In fact, of almost 300 properties that were under construction, we had four that needed insurance claims, and those four, Keith, well, we had just put up the freestanding walls. We hadn't been able to tie the roof on before the winds and the winds knocked the walls over, and that's it. But there was no flooding, and that's why you get an insurance break. And all the markets that we're in, we always hear, Oh, you can't get insurance in Florida. And I kind of giggle and say, on which properties? Because there is a very different treatment for a new construction property built 2004 or newer, compared to a property built 1957 on lower ground.   Keith Weinhold  29:02 Yeah this is such an important thing to bring up. Property insurance premiums have been hiked substantially on Florida, existing, older build properties, not the post 2004 ones like Jim is talking about here and yeah, for those that don't know, Ocala, there in Central Florida is known as an equestrian area for horses and your business partner, Chris, that's his big hobby. So yeah, when you first went there, you were with Chris. You were like, are you just trying to get there because you want to be around horses more and what? But now there's actually a good fundamental reason for this, where it makes sense to build there. Well, Jim, why don't you talk about how you've specifically helped one of our listeners, or the typical buyer there in how that process looks, including an approximate timeline to get them from the time where they submit an offer all the way through to closing.   Jim Sheils  29:52 Yeah. Well, you know, our team and your team work together. We want to make sure we set people's goals and expectations. Up front. What are you looking for? What are you trying to get into? If someone says to me, Look, I'm looking to get into a great starter home with the lowest basis and highest cash flow, I'm gonna say, Okay, let's look at Ocala. They say, Look, we're looking more long term. I'm more of an equity growth player. Yeah, I want cash flow. I'm gonna say, Okay, let's look at Palm Coast, or southwest Florida. Together with our teams and our property counselors, we try to assess what are your needs and where are you wanting to go. Now, all of our vehicles will get through there, but some a little better than others, depending on the plan you want to put together. And so once we do do that, what we like to do is go through properties that seem to match what they're most wanting. We'll go through the performance. We'll look up the site maps, we'll go through the different fundamentals of that direct area, and then, if it seems to make sense, first thing we got to do is get you pre qualified with our in house lender. All is that a go? Well, then we can make an offer, get it in. We have a whole onboarding process. You know that we've done hundreds and hundreds and hundreds of time, and now we're over. I know I laugh because we talked recently and you said, I think you're at a 925. Investors, we're over 1000 now, so we're continuing to grow. But again, we've tried to make it fluid, where our people are part of the process, but never alone. We answer the questions on the financing help get you the directionals on the insurance now, you can use whatever insurance company you want. 99% of them use the company that we recommend. We have no financial affiliation with them. But everyone asked years ago when Chris and I started this, well, who do you use for insurance? Who do you use? So we just gave them who we used, and this person usually undercuts and better coverage than most. So all those pieces Keith with going through that and again, this is about a 30 day process of getting qualified, once you pick the property, submitting the contract with your 10% deposit, doing your onboarding for Property Management and Insurance pieces. And then, obviously you don't have to come here to see us for closing. We do all of our traveling closings for you. And most important thing I like to set up with PM is, where do you want the money wired?   Keith Weinhold  31:59 That's a great question. Well, yeah, I mean, this is a great answer for so many of our listeners, those super attractive rate buy downs. And then the big thing is, is, in many cases, you're not waiting and waiting and waiting months for the build to take place. Well, Jim, before I tell our listeners how they can connect with you over there, do you have any last thoughts overall with anything that we did touch on or did not.   Jim Sheils  32:22 I want to encourage people, if they're not looking to get in the next to real estate in the next two to three years, not a big deal. But if you're looking to get in sometime over the next year, then I would really look at what's happening, things you talk about with the rates and the interest, because I do believe that institutional money within the next six months, it'll be interesting when we reconnect, Keith, that are going to start coming in and buying up more residential real estate. However, their hands are tied right now. They cannot get the financing that the smaller guy can. So whether it's with us or someone else, take advantage. Take advantage. David and Goliath, this is a great opportunity where the big guys cannot keep up with you, because they can't get the financing and insurance rates that you can so take advantage.   Keith Weinhold  33:03 Well, I specifically wanted to have you on today because it is an opportunistic time. They serve Florida with new builds. Learn more about their properties and even get some under contract. If you so wish, you can do so by contacting your GRE investment coach. If you don't have one yet, you can do so at GREmarketplace.com it is free or at GREmarketplace.com/florida. Jim, it's been great having you back on the show.   Jim Sheils  33:32 Thanks having me. Keith, good seeing you.   Keith Weinhold  33:39 Yeah, an excellent update on Florida build to rent properties. A lot of our listeners are asking about these new build properties with 3.75% mortgage interest rates, and you are not the majority participant in the rate buy down either. Next week, who I consider the foremost tax authority in the entire world will be back here with us. Tom Wheelwright is going to discuss presidential candidates, tax plans, whether you should be scared about a tax on unrealized gains and a lot more. Also on a future episode, I'm going to talk about the land that is the vacant land that comes along with your rental property, what to look out for and what to avoid. It's really a little discussed subject that we haven't talked about here before. To learn more about Florida, build to rent property with those attractive rate buydowns, start at GRE marketplace.com Until next week, every host, Keith Weinhold, Don't Quit Your Daydream.   34:45 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. Potential for profit or loss. The host is operating on behalf of Get Rich Education LLC, exclusively.   Keith Weinhold  35:13 The preceding program was brought to you by your home for wealth building. Getricheducation.com

Futurist, Technologist and Author of many titles including the classic “Wealth and Poverty”, George Gilder joins us to discuss supply side economics and the transformative potential of using graphene material in various industries including real estate. We discuss economic growth measured by time prices, showing that private sector progress is faster than GDP estimates. Learn about graphene's properties, including its strength and conductivity, and its potential to transform various industries. Graphene is a single layer of carbon atoms that is 200 times stronger than steel, 1000 times more conductive than copper and the world's thinnest material. Resources: getgilder.com Show Notes: GetRichEducation.com/517 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  00:01 Welcome to GRE. I'm your host. Keith Weinhold. I'm talking about the various economic scare tactics out there, like the BRICS, the FDIC and the housing crash. What lower interest rates mean? How our nation's $35 trillion debt has gone galactic. Then today's guest is a legend. He's a technologist and futurist. It tells us about today's promise of graphene in real estate all today on get rich education.  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've got pop ups and push notifications and cookies disclaimers. Oh, 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. See, 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 to get the letter. It couldn't be more simple text, GRE to 66866, and when you start the free newsletter, you'll also get my one hour fast real estate course, completely free. It's called the Don't quit your Daydream letter, and it wires your mind for wealth. Make sure you read it. Text GRE to 66866, text GRE to 66866.   Corey Coates  01:40 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  01:56 Welcome to GRE from Dunedin, Florida to Dunedin, New Zealand and across 188 nations worldwide. I'm Keith Weinhold, and you are listening to get rich education, where real estate investing is our major. That's what we're here for, with minors in real estate economics and wealth mindset. You know, as a consumer of this media type as you are, it's remarkable how often you've probably encountered these de facto scare tactics, like the BRICS are uniting and it will take out the dollar and it's just going to be chaos in the United States. You might know that BRICS, B, R, I, C, S is the acronym for Brazil, Russia, India, China and South Africa. Do you know how hard it is to get off the petro dollar and how hard it is for the BRICS, which is basically more than just those five countries, it's dozens of countries. How hard it is for them to agree on anything with things as various as their different economies, and they'll have different customs and currencies. I mean, sheesh, just for you to get yourself and three friends all to agree to meet at the same coffee shop at the same time, takes, like a Herculean effort, plus a stroke of luck, and all full of you are like minded, so I wouldn't hold your breath on the dollar hyper inflating to worthlessness, although it should slowly debase. What about the scare tactic of the FDIC is going to implode, and this could lead to bank closures and widespread societal panic. Well, the FDIC, which stands for Federal Deposit Insurance Corporation, they're the body that backs all of the US bank deposits, including yours, and it's steered by their systemic resolution Advisory Committee. Well, there are $9 trillion in bank deposits, and is backed by only a few 100 billion in FDIC cash, so there aren't nearly enough dollars to back the deposits. So can you trust your money in the bank? That's a prevalence scare tactic, but my gosh, if nothing else, history has shown that the government will step in to backstop almost any crisis, especially a banking related one, where one failure can have a cascading effect and make other institutions fall. I'm not saying that this is right, but time has proven that the government does and will step in, or the common scare tactic in our core of the world that is the eminent housing price crash. And I define a crash as a loss in value of 20% or more. Do you know how difficult this would be to do anytime soon? Housing demand still outstrips supply. Today's homeowners have loads of protective equity, an all time high of about 300k so they're not walking away from their homes. Inflation has baked higher replacement costs into the real estate cake, and now mortgage rates have fallen one and a half percent from this cycle's highs, and they are poised to fall further, so a housing price crash is super unlikely, and a new scare tactic for media attention seems to be this proposal by a future presidential hopeful about a tax on unrealized gains. Now Tom wheelwright is the tax expert. He's returning to the show with us again soon here, so maybe I'll ask him about it. But a tax on unrealized gains is politically pretty unpopular. It would be a mess to impose, and a lot of others have proposed it in the past as well, and it has not gone anywhere. Plus tax changes need congressional approval, and we have a divided Congress, there's a small chance that attacks on unrealized gains could come to fruition, but it would be tough. It's probably in the category of just another media scare tactic, much like the BRICS and the shaky FDIC banking structure had a housing price crash. I like to keep you informed about these things, and at times we do have guests with a disparate opinion from mine on these things. Good to get a diversity of opinions, but it's best not to go too deep into these scare tactics that are really unlikely to happen any time soon. Well, there was a party going on 10 days ago at what all affectionately dub club fed in Jacksonhole Wyoming, I don't know what the club fed cover charge was, but fortunately, we did not have to watch Janet "Grandma" Yellen dance at Club fed and and share. Jerome Powell, yes, he finally caught a rate cut buzz. He announced that the time has come for interest rate cuts, and as usual, he didn't offer specifics. Total rager. what a party. later this month, he's going to render the long awaited decision, which now seems to be, how much will cut rates by a quarter point or a half point? Did you know that it's been four and a half years since the Fed lowered rates? Yeah, that was March of 2020, at the start of the pandemic. And then we know what happened back in 2022 and 2023 they hiked rates so much that they needed trail mix, a sleeping bag and some Mountain House freeze dried meals to go along with their steady hiking cycle. Interest rates now, though have been untouched for over a year, it's been an interesting year for the Fed and rates many erroneously thought there would be six or more rate cuts this year. And what about Maganomics? Trump recently said that if he becomes president, he should be able to weigh in on fed decisions that would depart from a long time tradition of Fed independence from executive influence. Historically, they've been separated.   Donald Trump  08:26 The Federal Reserve's a very interesting thing, and it's sort of gotten it wrong a lot. And he's tending to be a little bit later on things. He gets a little bit too early and a little bit too late. And, you know, that's very largely a it's a gut feeling. I believe it's really a gut feeling. And I used to have it out with him. I had it out with him a couple of times, very strongly. I fought him very hard. And, you know, we get along fine. We get along fine. But I feel that, I feel the president should have at least say in there. Yeah, I feel that strongly. I think that, in my case, I made a lot of money. Iwas very successful, and I think I have a better instinct than in many cases, people that would be on the Federal Reserve or the chairman.   Keith Weinhold  09:10 Those Trump remarks were just a few weeks ago, and then shortly afterward, he seemed to walk those comments back, but he did say that he would not reappoint. DJ J-pal, to the economic turntables. It's a long standing economic argument as well about whether an outside force like the Fed should set interest rates at all, which is the price of money, rather than allowing the rate to float with the free market as lenders and borrowers negotiate with each other. I mean, no one's out there setting the price of oil or refrigerators or grapes, but it is pretty remarkable that the Fed has signaled that rate cuts are eminent when inflation is still 2.9% well above their 2% target. But let's be mindful about the Fed's twofold mission, what they call their dual mandate. It is stable prices and maximum employment. Well, the Fed's concern is that second one, it's that the labor market has slowed and see the way it works is pretty simple. Lower interest rates boost employment because it's cheaper for businesses to borrow money that encourages them to expand and hire, which is exactly how lower interest rates help the labor market. That's how more people get hired, and this matters because you need a tenant that can pay the rent. So the bottom line here is to expect lower interest rates on savings accounts, HELOCs, credit cards and automobile loans. What this means to real estate investors is that lower mortgage rates are eminent, although the change should be slow. Two years ago, mortgage rates rose faster than they're going to fall. Now, one thing that lower interest rates can do is lower America's own debt. Servicing costs and America's public debt is drastic. Now, between 35 and $36 trillion in fact, to put our debt into perspective, it has gone galactic. And I mean that in an almost literal sense, because look, if you line up dollars, dollar bills, which are about six inches long, if you line those up end to end from Earth, how far do you think that they would reach? How about to the moon? Oh, no, if you line up dollars end to end, they would stretch beyond the moon. Okay, let's see how far we can follow them out through the solar system. They would breeze past Mars, which is 140 million miles away, the next planet out Jupiter. Oh, our trail of dollar bills would extend beyond that. Next up is Saturn and its ring. The dollar bills would reach beyond that. We're getting to the outer planets now, Uranus still going. Neptune, okay, Neptune is about $30 trillion bills away, and we would have to go beyond that then. So our 35 to $36 trillion of national debt would almost reach Pluto that's galactic. That's amazing. That's bad, and it probably means we have to print more dollars in order to pay back the debt, which is, of course, long term inflationary. And I don't know what's stopping us from going from $36 trillion up to say, 100 trillion, gosh. next week here on the show, we're talking about real estate investing in one of the long time best and still hottest real estate investor states, and then later on, we've got brilliant tax wizard Tom wheelwright returning, as we know here at GRE real estate pays five ways, and if you have any Spanish speaking family or friends, I've got a great way for them to consume all five video modules. It's an AI converting my voice to Spanish in these videos, we have a Spanish speaker here on staff at Get Rich Education, and she said the dub is pretty good. Well, the entire package, real estate pays five ways in Espanol is condensed into a powerful one hour total, all five videos a course, all in one wealth building hour. It's free to watch. There's no email address to enter or anything you can tell your Spanish speaking family and friends, or maybe your multilingual and your primary language is Spanish. That is it getricheducation.com/espanolricheducation.com/espanol or a shorter way to get to the same pageis getricheducation.com/espricheducation.com/esp, that's getricheducation.com/esp.richeducation.com/esp.  This week's guest is one of the first people I ever heard discussing the blockchain and cryptocurrency 15 years ago, and then he was early on AI. What got my attention is his education about a promising construction material for building new real estate, though, I expect that our discussion will delve outside of real estate today as well. Let's meet the incomparable George Gilder. This week's guest is the co founder at the Discovery Institute, discovery.org original pillar of supply side economics, former speechwriter to both Presidents Reagan and Nixon. And he's the author of the classic book on economics called Wealth and Poverty. Today he's at the forefront of technological breakthroughs. He's a Harvard grad. He wears a lot of stripes. I've only mentioned a few. Hey, welcome to GRE George Gilder.   George Gilder  15:09 right there better here.   Keith Weinhold  15:11 It's so good to host you, George, in both your writings and your influences on people like President Reagan, you champion supply side economics. And I think of supply side economics as things like lower taxes, less regulation and free trade. We had someone in the Reagan administration here with us a few months ago, David Stockman. He championed a lot of those same things. But go ahead and tell us more about supply side economics and what that means and how that's put into practice.   George Gilder  15:43 Well, it really begins with human creativity in the image of your Creator, essence of supply side economics now super abundant. I mean supply side economics triumphs. We had the whole information technology revolution ignited during the Reagan years and now dominates the world economy and gives the United States seven out of the top 10 companies in market cap. 70% of global corporate market cap is American companies because of supply side economics amazing, and that's why it's distressing to see supply side economics, with its promise of super abundance and prosperity and opportunity, Give way to narrow nationalistic calculations and four tenths of war. I mean, all these Jews are at the forefront. Today, in time, we're going to see human creativity once again prevail in my books, Life After Capitalism is my latest book, my new paradigm is graphene. Graphene is a single layer of carbon atoms, two dimensional layer of carbon atoms that is 200 times stronger than steel, 1000 times more conductive than copper. It switches and the terahertz trillions of times a second, rather than the billions of times a second that our current silicon chips which and you mix it with concrete, the concrete comes 35% stronger, just parts per million of graphene mixed with concrete yields some material that's 35% stronger than ordinary concrete. You mix a parts per million of graphene with asphalt, the roads don't get potholes in the winter. It's radically Abate, but it conducts signals so accurately. If you go on YouTube, you can find a mouse and said it's spinal cord severed completely, injected with graphene, the spinal signals transmitted so accurately that the you see the mouse doing cartwheels by the end of the YouTube measure. I mean, it's material that's going to transform all industries, from real estate to medicine to surgery to electronics. Electronics been kind of the spearhead of our economy, of the transformation and electronics may be more significant than any other domain.   Keith Weinhold  18:49 Well, this is a terrific overview of all the contributions you're making to both the economic world and the technology world with what you told us about right there. And I do want to ask you some more about the graphene and the technology later. But you know, if we bring it back to the economics, it was in your classic book, Wealth and Poverty, which sold over a million copies, where you espouse a lot of the same things that you still espouse today in your more recent books, that is, capitalism begins with giving, we can often think of it that way. As a real estate investor is where we need to give tenants a clean, safe, affordable, functional property before we profit. Capitalism begins with giving.   George Gilder  19:32 Absolutely. That's a crucial debate I had with Ayn Rand The Fountainhead and Atlas Shrugged and I say, capitalism is subsist on altruism. I'm concerned for the interests of others, imaginative anticipation of the needs of others. It's an altruistic, generous system, and from that generosity. Stems the amazing manifestations of super abundance that which I've been writing about recently. And super abundance shows, measured by time prices, how many hours a typical worker has to spend to earn the goods and services that sustain its life. Yeah, that's where the real cost has time. Yeah, time is money. Money is time, tokenized time, and measured by time, economic growth has been 50 to just enormously faster than is estimated by any of the GDP numbers. However, measured by time government services or ordinary GDP assumes that every dollar of government spending is worth what it costs. Prices both show that progress in the private sector has been four or five times faster than is estimated by GDP well government time, price of government dominated goods, including, increasingly, healthcare and education, is way less valuable than the cost. It's value subtracted, and certainly trillions of dollars for windmills and solar panels, trillions of dollars of subsidies is a net subtraction of value in the world economy. So I am with Gale Pooley and Tupy, both who wrote a book called Superabundance that I wrote the introduction to, and William Nordhaus, the Nobel laureate from Yale, who really conceived and developed time prices and showed that economic growth is 1000s of times greater than has been estimated by ordinary economic data. This is a time of abundance. It's not a time of scarcity. It's not a time of the dismal science. It's the time of super abundance.   Keith Weinhold  22:17 Yes, 100% a lot of that is just the government getting out of the way and really let people be givers, be that go giver and lead with giving, because I have never heard of a society that's taxed its way to prosperity.   George Gilder  22:34 Yeah. Well, that's absolutely the case. And I've been talking previously about graphene, which is the great new material that has been discovered of the last a couple decades. It originated, a lot of the science originated in Jim Tour's laboratory. James Tour of Rice University, and he's had scores of companies have emerged from his laboratory, and 18 of them got started in Israel. Israel is really become a leading force in the world economy. And when Israel is in jeopardy, our economy is in jeopardy. We have 100,000 Israeli citizens working in companies in Silicon Valley, 100,000 all the leading American tech companies have outposts in Israel, and now we face what I call the Israel test, which is how you respond to people who are really superior in creativity and accomplishment and intellect, and the appropriate thing to do is emulate them and learn from them. But too many people in the world see success and they want to tear it down, or they think it was stolen from someone else, or it was part of a zero sum game where the riches of one person necessarily come at the expense of someone else, which is the opposite of the truth, the riches proliferate opportunities for others. That's how the economy grows through the creativity and the image of your Creator.   Keith Weinhold  24:25 And when you bring up Israel, they're one of many nations that's made strong contributions to society and the economy, and we think about other nations that's been an increasingly relevant conversation these past few years, a lot of that centers on immigration. I'm not an expert on how many people we should let into this country or any of those sort of policy sorts of things, but here is a real estate investing show. I often think about where and how we're going to house all these immigrants, whether they come from Central America or South America or Israel or. Anywhere else. And I know oftentimes you've touted immigrations economic benefits, so I think it's pretty easy for one to see how in the short term, immigrants could be of economic detriment, but tell us more about those long term economic benefits of immigrants coming to the United States.   George Gilder  25:17 Immigrants come to the United States and become Americans and contribute American opportunity and wealth. We won the second world war because of immigration of Jewish scientists from Europe to the United States, who led by people like John von Neumann and Oppenheimer who forged the Manhattan Project, and that's really how we won the Second World War, was by accepting brilliant immigrants who wanted to serve America. Now there is a threat today where immigrants come to the United States not to contribute to the United States, but to exploit the United States, or even destroy it, not to go givers. They are givers, and so we want immigrants who are inclined to commit to America and create opportunities for the world, but immigrants who want to tear down America and who believe that America owes them something tend to be less productive and less valuable immigrants and immigrants who really want to destroy western civilization, and the jihadists that we know about are actually a threat to America. So the immigration problem isn't simple, but when we had a system where legal immigrants could apply and enter our country and revitalize it, that was a wonderful system, but having boards of illegal immigrants just pour over the border is not an intelligent way to deal with the desire of people around the world to share an American prosperity.   Keith Weinhold  27:13 We've seen several cases in the past year or two where immigrants are given free housing. There are really great case studies about this in Massachusetts and some other places, how they're giving housing before oftentimes, our own Americans, including sometimes retired veterans, are provided with housing. This all comes down to the housing crunch and already having a low housing supply. So what are some more your thoughts about just how much of a layup or a handout should we give new immigrants?   George Gilder  27:42 Housing technology is going to be transformed by the material science revolution that is epitomized by graphene, this miracle material I was describing. I think part of the problem is real estate enterprise is over regulated, and there are too many obstacles to the building of innovative new forms of housing. In 20 years, it'll be hard to recognize many of the structures that emerge as a result of real revolution in material science that is epitomized by this graphene age that I've been describing, and that also will transform electronics as well, and part housing can become a kind of computer platform as Elon Musk is transforming the auto business by seeing Tesla is really a new form of computer platform. I believe there's going to be an Elon Musk of real estate who is going to re envisage housing as a new form of building a computer platform that makes intelligent houses of the future that will be both cheaper and more commodious for human life.   Keith Weinhold  29:12 Real estate is rather old and slow moving when we think about technology in real estate, maybe what comes to mind are smart thermostats, smart doorbells, or 3d printed homes. When we come back, we're going to learn more about graphene and what it can do in real estate in the nanocosm revolution. Our guest is George Gilder. We talked about economics. We're coming back to talk about technology. I'm your host. Keith Weinhold. 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 less. Ridge 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.   Dolf Deroos  31:19 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  31:32 Welcome back to Get Rich Education. We're joined by an illustrious, legendary guest, George Gilder, among being other things, including a prolific writer. He's also the former speechwriter to presidents Reagan and Nixon. He's got a really illustrious and influential career. George, you've been talking about graphene, something that I don't think our audience is very familiar with, and I'm not either. Tell us about graphene promise in real estate.   George Gilder  31:59 Well, back in Manchester, England, in 2004 graphene was first discovered and formulated. It actually was submerged before then, but the Nobel Prizes were awarded to Geim and Novoselov in2010.  So this is a new material that all of us know when we use a lead pencil, a lead is graphite, and graphene is a single layer of graphite. And it turns out, many people imagined if you had a single layer of graphite, it would just break up. It would not be useful.   Keith Weinhold  32:42 We're talking super thin, like an atom.   George Gilder  32:45 Yeah, it's an atom thick, but still, it turns out that it has miraculous properties, that it's 200 times stronger than steel. If you put it in a trampoline, you couldn't see the trampoline, but you could bounce on it without go following through it. It can stop bullets. It means you can have invisible and almost impalpable bulletproof vests, and you mix it with concrete, and the concrete is becomes 35% stronger, even parts per million of graphene can transform the tensile strength of concrete, greatly reduce the amount you need, and enable all sorts of new architectural shapes and capabilities. We really are in the beginning of a new technological age, and all depressionary talk you hear is really going to be eclipsed over coming decades by the emergence of whole an array of new technologies, graphene, for instance, as a perfect film on wafer of silicon carbide and enable what's called terahertz electronics, which is trillions of cycles a second like light rather than billions of cycles a second like or Nvidia or L silicon chips, and it really obviates chips, because you what it allows is what's called wafer scale integration of electronics, and today, it the semiconductor industry, and I've written 10 books on semiconductors over the years, but the semiconductor industry functions by 12 inch wafers that get inscribed with all sorts of complex patterns that are a billionth of a meter in diameter. These big wafers and then the way. First get cut up into 1000s of little pieces that each one gets encapsulated in plastic packages and by some remote Asian islands, and then get implanted on printed circuit boards that arrayed in giant data centers that now can on track to consume half the world's energy over the next 20 years, and these new and all this technology is ultimately going to be displaced by wafer scale integration on The wafer itself. You can have a whole data center on a 12 inch wafer with no chips. It's on the wafer itself. And this has been recently announced in a paper from Georgia Tech by a great scientist named Walter de Heere. And it's thrilling revolution that that render as much as Silicon Valley obsolescent and opens up just huge opportunities in in construction and real estate and architecture and medicine and virtually across the range of contemporary industry.   Keith Weinhold  36:20 You wrote a book about blockchain and how we're moving into the post Google world is what you've called it. So is this graphene technology that you're discussing with us here? Is that part of the next thing, which you're calling the nanocosm revolution?   George Gilder  36:36 The microcosm was an earlier book the quantum revolution and economics and technology. I thought I wrote years ago called microcosm.   Keith Weinhold  36:46 Okay, we're getting smaller than microcosm now in nanocosm.   36:49 that was microns, that was millionths of a meter dimensions of the transistors and devices and silicon chips, the nanocosm is a billionth of the meter. It's 1000 times smaller the features and electronics of the future, and we're moving from the microcosm into the nanocosm. New materials like graphene epitomize this transformation. You know, people think that these giant data centers all around the world, which are amazing structures, but half the energy in these data centers are devoted to removing the heat rather than fueling the computation. And I believe these data centers are represent a kind of IBM mainframe of the current era. When I was coming up, people imagined that a few 100 IBM mainframe computers, each weighing about a ton, would satisfy all the world's needs for computation, and that new artificial minds could be created with these new IBM mainframes. And it's the same thing today, only we're talking about data centers, and I believe that the coming era will allow data centers in your pocket and based on graphene electronics, and wait for scale integration, a whole new paradigm that will make the current data centers look like obsolete, old structures that need to be revitalized.   Keith Weinhold  38:37 Around 2007 Americans and much of the world, they got used to how it feels to have the power of a computer in their pocket with devices like the iPhone. How would it change one's everyday life to have effectively a data center in their pocket?   38:54 This means that we no longer would be governments of a few giant companies hearing a singular model of intelligence. That's what's currently envisaged, that Google Brain or Facebook or these giant data setters would sum up all human intelligence and in a particular definition, but there are now 8 billion human beings on earth, and each of our minds is as densely connected as the entire global internet. And while the global Internet consumes error watts, trillions of watts of power, or brains. Each of these 8 billion human minds functions on 12 to 14 watts, or it's billions of times less than these data center systems. On the internet. I believe that technology works to the extent that it expands human capabilities, not to the extent that it displaces human capabilities. The emergence of distributed databases in all our pockets, distributed knowledge and distributed creativity can revitalize the whole world economy and open new horizons that are hard to imagine today, as long as we don't, all of a sudden decide that we live in a material universe where everything is scarce and successes by one person come at the expense of somebody else, as long as that zero sum model doesn't prevail, right? Human opportunities are really unlimited. Most of economics has been based on a false model of scarcity, the only thing that's really scarce is time. Imagination and creativity are really infinite.   Keith Weinhold  41:10 Yes, well, if someone wants to learn more about graphene in the nanocosm revolution, how can you help them? What should they do?   41:18 They can read my newsletters. I have a company with four newsletters. I write the Gilder Technology Report. Much of the time I write, John Schroeder writes moonshots, which is and I have a Gilder Private Reserve that reaches out with our crowd and Israel, and a lot of those graph gene companies in Israel are part of our Private Reserve. And I do Gilders Guide posts, and those are all available getgilder.com.   Keith Weinhold  41:56 if you'd like to learn more about George and his popular newsletter called the Gilder Technology Report. You can learn more about that at get gilder.com George, it's been an enlightening conversation about economics and where society is moving next. Thanks so much for coming on to the show.   George Gilder  42:16 Thank you, Keith. I really appreciate it.   Keith Weinhold  42:24 yeah, a forward looking discussion with the great George Gilder. Forbes said graphene may be the next multi trillion dollar material. George will tell you that you want to get into graphene now, while the biggest gains are still ahead. If it interests you in at least learning more, check out his video resource. It's free. There's also an opportunity for you to be an investor. You can do all of that and more at getgilder.com again getguilder.com until next week. I'm your host. Keith Weinhold. Don't Quit Your Daydream.   43:04 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  43:32 The preceding program was brought to you by your home for wealth building. GetRichEducation.com

In this episode Keith shares the survey results on what the highest rising cost for landords is and what to do about it. He challenges the conventional wisdom that all debts should be paid off.  He talks about how the rising costs of homeowners insurance and property taxes are the most significant expenses for single family landlords 76% of single family landlords plan to raise rents over the next 12 months, with 35% expecting increases over 4%. Learn about the concept of debt as leverage and its role in wealth building. The importance of liquidity, interest rate arbitrage, and the ability to outsource debt payments. How inflation impacts debt. Understand the benefits of debt in real estate investment, including the ability to own more properties and create arbitrage opportunities. Show Notes: GetRichEducation.com/516 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  00:00 Welcome to GRE. I'm your host. Keith Weinhold, the economy is affecting real estate in some interesting ways. Now, vital trends revealed from a survey of single family landlords. Then the heart of today's show is every debt that you have worth paying off. The answer is no, with some surprising reasons all today on Get Rich Education. 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've got pop ups and push notifications and cookies, disclaimers. Oh, had no other time in history has it been more vital to place nice, clean, free content into your hands that actually adds no hype value to your life? See, 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 to get the letter. It couldn't be more simple. Text, GRE 66866 and when you start the free newsletter, you'll also get my one hour fast real estate course, completely free. It's called The Don't quit your Daydream letter and it wires your mind for wealth. Make sure you read it. Text GRE to 66866, text GRE to 66866.   Corey Coates  01:34 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  01:51 Welcome to GRE you are listening to the voice of real estate investing since 2014 I'm your host, Keith Weinhold back to help you build your wealth for another week. This is Get Rich Education. That's just one of many things that makes this show different from other shows, or just consuming news stories. Here, you stay updated on important real estate investing trends, but you learn specific strategies to actionably build your wealth. That's the difference, and it's with the most generationally proven medium of real estate, all without you having to be a flipper and often not a landlord either. Now, presidential candidates make lots of promises during their campaigns, that includes with real estate here recently, even if you're listening 10 years from now, I'll tell you how to put something like this into perspective. Kamala Harris unveiled her plan to spur the construction of 3 million more housing units. That's a good thing. America needs more housing. She also wants to give federal assistance, and by the way, that means your money. She wants to give federal assistance in the form of a $25,000 down payment help for first time home buyers. I see that as a bad thing, and see there's no partisan bias here at GRE a lot of media outlets, they will filter something like this is all good or all bad, because they get better ratings when they rile people up, and that results in a divided America. But the problem is that the 25k of down payment help that can be delivered faster than new homes can be built, and that risks pushing up home prices faster, sooner, which arose the very affordability that's trying to be helped here now a presidential candidate, be it Kamala Harris or anyone when they have this enthusiasm to also limit price gouging at grocery stores here, like this candidate does. I mean, that's the beginning of price controls, and when there are price controls, no farmer is going to want to produce cherry tomatoes or Fisher is going to want to produce wild caught salmon if they have a significant price ceiling limiting the supply of those things. Therefore, I mean, when we had price controls in the high inflation 70s, that created shortages. And it's important to keep in mind that presidential campaign promises, they often don't become policies that are enacted even if that person is elected president, and even if they are, much of this still requires congressional approval, and we still have a divided Congress, and any tax changes require the approval of Congress. So really, this stuff is just a presidential wish list, giving you some perspective here. Now on the topic of shortages, there still is not enough available supply of US homes, active listings, those seeking a starter home often get more worn out than your grandpa after two games of checkers. But inventory levels are not as bad as they used to be, we still got a ways to go to claw back close to a more normal, balanced pre pandemic housing supply level nationally, we are still 29% lower. There are now still 29% fewer active listings than there were in pre pandemic times and most individual states still have inventory levels lower than that, too, compared to five years ago, when we break it down by state, some have a more paltry supply than others, though, places with the scarcest inventory, they seem To be those states where maple syrup gets produced, as it turns out, and I sure hope that this doesn't mean people need to sleep in the sugar shack. Connecticut is down 75% that means they have 75% less inventory than five years ago, pre pandemic, Illinois down 66%,  New Jersey down 57%, Virginia down 53%, Pennsylvania, Massachusetts and Michigan all with 51% less inventory than they had pre pandemic. Ohio down 43%, California and Missouri each down 31%. The main problem here is that the Northeast and Midwest have not had enough home building in order to keep up with housing demand. I guess what? There were too many snow days in the Northeast and Midwest, or were builders constantly distracted by potholes and cicadas? Conversely, there are three popular investor states where for sale inventory is just a tad higher now than it was five years ago. Texas is up 6%, Florida up 5%, Tennessee up 2% and this doesn't mean that these states are oversupplied with housing, it just means that they have a touch more than they did in 2019 so they're closer to balance. The important overall thing to remember here is, of course, that nationally, buyers still outnumber sellers. So between the lower mortgage rates that we've had in the past year and the low supply, this keeps the environment ripe. There will be more offers and more potential for home prices to increase faster than its current rate of 4.1%. That 4.1% year over year, as per the NAR, it's important for you to understand that there's virtually no way that prices can revert to their pre pandemic levels. Home prices are not going back to where they used to be five years ago. In fact, there is more pressure on them to rise from here not fall, and there are a few reasons why prices cannot go back to where they were. The rate of inflation has slowed. You've seen the price of lumber come down, but wider inflation has been indelibly baked into the pricing cake. Homes now have higher, permanently embedded costs of labor, materials and land that all have more stick-to-itiveness to them than Simone Biles on the balance beam. Prices are not coming down anytime in the near future. You might remember that right here on this show in in our newsletter, back in late December, eight months ago, I forecast that national home prices would rise 4% this year, and I still really like how that looks.  I'll get back to the investment side here shortly, but real quick, in light of the new rules about how real estate agents are compensated if you're about to buy a primary residence, you may not have any experience negotiating with a broker. In last week's newsletter, I sent you a template you can use and that can help you simplify the process as a buyer and help you avoid being taken advantage of. I sent you that template last Thursday. Back here on the real estate investor side, after a high tide of inflation, you know, you and I, we have all surely enjoyed the splash of both higher property prices and rents. That looks to continue. But what about your higher property expenses, too? Let's talk about what you've got to do to avoid getting crunched by expenses. A survey of single family landlords was recently conducted by lending one in resi club, and they asked this question, what is your expense that increased the most the past 12 months? The number one answer is fast rising insurance premiums, with half of respondents citing that as their biggest expense increase item. And that's hardly a new development, not surprising. The next biggest expense was property tax,  27% of respondents cited that. That's mostly a reflection of higher property values and their consequent tax assessments. 235 single family landlords completed this survey, by the way. So they were the proportion of landlords that answered about what was their fastest increasing expense. Half of them said insurance, easily the most well, the rate of increase in homeowners insurance costs was roughly 10 to 12% nationally last year. That's according to the Insurance Information Institute, and the top two reasons for this are more severe storms and higher replacement costs. The good news is that further rate increases are cooling off, though, all right, but still, what are you to do as a rental property owner that's stuck with a higher property insurance bill? I've got a great answer for you, and it's so incredibly simple. You pass the expense along to your tenant with a rent increase, and then others can deal with what happens downstream from there. And I'll tell you how to go about doing this shortly, which is also so incredibly simple. But if you're reluctant to pass along the increased insurance expense to your tenant, understand that you and your tenant are just like two ports along a river. As this wave of inflation flows along, it flows from the reinsurer to the insurer, to you, the property owner, to the increased rent, to the hike in the tenant wage, to the employer, and then the employer hikes prices on the consumer. That's how the river flows. No watered down returns for you. Now, of course, this River's headwaters are sourced with the government, because that's where inflation comes from. Inflation means an expansion of the money supply. You and your tenant are really two ports along the river. Don't let the expense water dam up and flood you, and the written reason that you give your tenant for the rent increase is drum roll here, higher insurance costs. Yeah, that's it. It's super simple. There's no need to be inventive here. Honesty is therefore the best river raft. Hey, come on now this remorseless geography degree holder has got to let loose with something like river references from time to time. So that's the greatest expense increase item, what to do about it and how you should go about doing it. Now this same survey of single family landlords, they showed that 76% expect to reach high watermarks and raise the rent over the next 12 months, including 35% of landlords who say the rent increase will be over 4% and planned rent increases of one to 7% are most common. That's the planned rent increase range one to 7%. Look, you didn't get into real estate to subsidize others living expenses. There is nothing unethical about adjusting to market level rent. Rent hikes are like a lock lifting your ship through the Panama Canal. All right, so what do we make of this. I mean, gaging, overall investor sentiment is we head later into the 2020s, decade. What is the landlord temperature? As I see it, expenses are up. Higher. Rents follow. And last quarter, home values increased in almost 90% of us, Metro markets, yes, property values are up in 89% of Metro markets. But how do single family landlords in this same survey feel? Well, 60% of them say they will buy at least one investment property over the next 12 months. So most single family landlords they want to buy more. And when that's broken down by region, the most single family real estate investor optimism is in the Midwest, Northeast and South. And really single family landlords are optimistic in every region except the West. And this makes sense. Cash Flows are less lucrative in the West because prices have long outpaced rents there, the survey really shows that most aren't wildly bullish or excessively bearish on the real estate market. They expect it to stay balanced. Many plan to buy properties raise rents, and the survey shows that they, too, expect a 4% home price appreciation rate. That's what it showed, and they anticipate falling interest rates.  Now, personally, I often disagree with what the masses think. I mean, contrarians to the mainstream, they are often the profiteers. But in this case, I guess I'm more agreeable with the survey respondents than a perfectly brewed cup of coffee in the morning. And well, maybe that's because single family landlords, the very people that were surveyed are not mainstream. The housing market is actually pretty normal in most every significant way, except, of course, the ongoing lack of housing inventory and affordability challenges for first time homebuyers. And if you're a newer GRE listener, even normal times can be thrilling for a real estate investor when you achieve a 40% plus total rate of return from how real estate pays you five ways. Yes, if you're new here, I know that sounds like an unachievable return, but 40% plus is actually realistic without high risk when you understand your five simultaneous profit sources with income producing property. In fact, when someone asks why you invest in real estate, you can just hold up five fingers. The broader economy shows a lot of signs of normalcy as well, GDP, growth, consumer spending, unemployment, the inflation rate, but the sad exception here is this widening gap between the wealthy and the poor, so I guess that more people charter yachts and yet others increasingly pour mountain dew on their fruit loops in the morning for breakfast. Now, complete uncertainty never disappears, but after disruptions from covid, high inflation and new wars, a lot of people see calmer times ahead. Elections matter, but some people seem more concerned about who the next President will be than the parent of a Sephora obsessed teen. Presidential elections aren't known to rock the real estate market, and actually, history shows that the more sensitive stock market is only temporarily affected by an election. Sometimes I just ponder and quietly think to myself, hmm, when the liquid death drink brand thrives from Hawking wildly overpriced water in a can, I posit just how bad can the economy really be? The bottom line is that most single family investors are meeting higher insurance expenses with rent increases and they want to buy more income property over the next 12 months.  Hey, if you like this show here, and you get value from it every week, I love it when you just simply tell a friend about the show, it's as easy as having them download our dedicated Get Rich Education mobile app for both iOS and Android. If you think you have any friends that would benefit from the vital episode here, I'd be grateful if you shared the show with them, use the Share button on your podcaster, or even take a screenshot and post it to your social. Straight ahead is any debt worth paying off? 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.   Keith Weinhold  19:47 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.   Dani-Lynn Robison  20:49 This is Freedom Family Investments Co-founder, Dani-Lynn Robison, listen to Get Rich Education with Keith Weinhold, and Don't Quit Your Daydream.   Keith Weinhold  20:57 Welcome back to Get Rich Education. I'm your host, Keith Weinhold, you're listening to Episode 516 is every debt that you have worth paying off? The short answer is no. I have held millions of dollars in debt from a young age, and I just keep holding on to more and more. Look what happens to your net worth when you pay down one of your debts, absolutely nothing happens to your net worth. It stays the same. All right. Say that the total value of all of your assets gives you a sum of one and a half million dollars. That's the combined value of any of your real estate, cars, retirement accounts, gold, Bitcoin, all of it, anything of value one and a half million and totaling up all of your debts equals just a half million. That's your mortgages, automobile debt, credit card debt, everything. All right, so you've got one and a half million in assets and 500k in debt. So you've got a million dollar net worth, okay, well, next, say that you decide to pay down 100k of your debt. All right. Well, what's the result? You've got only $1.4 million in assets and just 400k in debt. Well, the result is that your net worth is still a million bucks. You've now got fewer assets and less debt, so you just broke even. But it could be worse than just a break even, because what if, one month after you made this debt pay down. You now need that 100k back for living expenses, but you can no longer get it returned to you because you lost your job, so no one will qualify you for a loan again, or you still have your job. But lending standards have tightened and changed now your 100k is on the other side of a wall that you can't access. So debt pay down isn't just a question of net worth, it's liquidity. And there are some more layers here that we're going to get into paying down mortgage debt. It also builds home equity. Well, that is usually a bad thing, because, as I'm known for saying, home equity is unsafe, illiquid, and its rate of return is always zero. Do you know the crowd that sometimes forgets this and really gets penalized? It is seniors, retirees. All right, what happens when a person is older and they've had a paid off home for a while. People get a reverse mortgage. They need funds for living expenses. Well, reverse mortgages, they have high fees, and also you can't get nearly all of your equity out. You'll often only get up to 60 to 65% loan to value, meaning that 35 to 40% of that hard earned equity that you worked decades for. First it became trapped with no return, and now it's essentially gone. Poof. For all those years, your home is paid off, even if it began as early as your 30s, like it does for some people all that time your equity wasn't earning any rate of return. And the earlier in life you learned that the ROI from home equity is always zero, the better. You didn't see any bill for this loss. You just never saw the gain that you should have had. And that's part of the reason why this myth that home equity is such a great thing perpetuates and carries on for generations. All right, well, we are just getting warmed up here at a key financial question in your life. That question is, is every debt that you have worth paying off?   24:58 Did you know millions of Americans live with debt they cannot control. That's why I developed this unique new program for managing your debt. It's called Don't buy stuff you cannot afford. Let me see that. If you don't have any money, you should not buy anything. hmm sounds interesting, sounds confusing.   Keith Weinhold  25:24 Well, there's a little something to be said for that. But what about interest rate? If that 100k that you paid down was for credit card debt? All right? Well, that was probably a good thing. 44% of American credit card holders carry debt month to month. Now I'm going to guess for you the GRE listener, it's even less likely than that that you carry debt month per month, where you would be subject to credit card finance charges. The average credit card interest rate in America is about 25% today, and it is unsecured debt, meaning that it's a debt type that's not backed by collateral. Now, yes, you can beat a 25% return if you're leveraged in real estate, but your liquid cash flow drain is drastic on credit cards. The other problem with credit cards is that you have to pay your own debt. Later, I'll talk about when others pay your debt for you. And if you have decided that you have some debts worth paying down because its interest rate is too high for goodness sake, pay the one with the highest interest rate first. I know there's a school of thought that says, pay the debt with the lowest balance. First, that is nonsense. Now, sometimes, if you know specifically what you're doing with credit cards, you can play some little games with them. I mean, personally, after I finished college, I kept transferring credit card balances with 0% APR, Intro offers, introductory offers that were for a limited time at 0% and then I kept track of that so that intro rate didn't expire. But this isn't any sort of long term wealth building strategy. Higher balance transfer fees have made that strategy less lucrative. Now too, banks have tightened that up. When it comes to interest rates, it's about that arbitrage. Ask yourself really two questions when it comes to arbitrage, which is just a fancy sounding way of making a profit or a spread. First, you need to ask yourself, how good of an investor Are you? What percent return can you reliably earn from your investments? Say you think it's 15% then if you're plus 15 but the interest rate on your debt is 8, well, then you've got 7 points of arbitrage or profit. So keep the 8% debt. And then secondly on arbitrage plays. Ask yourself, can I afford the cash flow if I keep this debt around? Because if you're 15% return, just say that it's all tied up in the appreciation of a property. Well, that's not very liquid, so you're going to need to have the free cash to make the payments on your 8% interest rate loan. Let's talk about other times not to pay down the debt. Say you're trying to build up an emergency fund of at least three months, or you want to contribute to your employer match in your company's retirement plan, you may very well want to fund those things before you pay down debt too. Now some say, hey, you know something. Just forget about all these numbers like rates of return and interest rates. You know, debt just makes me feel anxiety and feel stress and sleeplessness. There is emotion here, so let me just get it paid off. Or I'm afraid that if I've got some money and I don't pay off my debt, that I'll just lose all of the money to sports gambling, and to that, I say, come on, be an adult. Set some boundaries. Dog ears, some cash for entertainment, and have a firm line. Learn how to use that to your advantage. Debt is like fire. It can burn you if you don't know how to use it, and it can heat your home if you do know how to use it. And if debt gives you sleeplessness. Here, this will help you sleep your debts, principal balance is being debased for you as you sleep, every single one of your debts is being eroded by inflation. Right now, as you listen to me, your principal balance is quietly, debasing and passively, eroding with your say 500k of total debt. We have 10% inflation over a couple years. Well, that erodes its weight down to 450k all without you having to get involved and make any pay downs at all. As wages go higher, and so do prices and rents and salaries, as they all spiral higher, it gets easier to pay back those principal balances. And debt is the most powerful wealth building force that I know of, because debt is leverage. Compound interest is weak. Leverage is powerful. Debt allows you to own and control five times as many properties as you could if they were all paid off. And if you don't understand this, or if your jaw hit the floor, what I just said a minute ago, that compound interest is weak. I just discussed this for you in clear detail nine weeks ago, on Get Rich Education podcast episode 507. So go and check that out. One attribute of real estate debt is that as you get properties where the rent income meets or exceeds the expenses, congratulations, you have reliably outsourced all of your debt payments to tenants. See, most of my debt, personally, virtually all of it, it isn't really going to be paid back by me. It's my tenants, and that is another reason to keep debt in place and only make the minimum payment. Let's talk about another reason to pay down your debt when a payoff or pay down actually does make sense, even if it's at a low interest rate, it's when an outside force kind of makes you pay down your debt. And here's what I'm talking about. Say you're trying to buy a property, whether that's a primary residence or rental, and that you've got say, Oh, just $11,000 left to pay on your car loan at a 5% interest rate, even though you can't outsource the payments. That's a pretty nice low 5% interest rate, you're confident that you can beat that and earn more elsewhere, so you'd rather enjoy the positive arbitrage instead of paying that off. And I'd feel the same way. But here's the twist, your mortgage loan officer says you've got to pay the $11,000 down to zero because your debt to income ratio is too high. So if you want the mortgage, the big loan amount, you've got to pay off the car loan, the little loan amount. Well, that's a case when it makes sense to pay off that automobile loan debt then, and also, when it comes to your credit score, you might need to improve it to qualify for another loan so you can get a low interest rate and 30% of your FICO score is made up of your amounts owed. I'm answering a vital question for you today, and that is, is every one of your debts worth paying off? I'm sharing information, perspective and experience with you here, and this experience was built, just like all experiences, and I didn't always have the experience, of course. Now my parents and I split my college loan costs, 5050, I still had student loan debts for a few years after graduating, and you know, I can't remember what my student loan interest rates were maybe 6% blended because I had a few different student loans, some of which I did transfer onto those 0% intro, APR credit cards, by the way. But after my student loans were paid off, and I started investing in real estate and understanding terms like leverage and arbitrage, you know, I started to wonder if it would be desirable to have those student loans back rather than paying them off so fast I could have owned another property or two sooner, and I'll never know the opportunity cost of not benefiting from the returns on owning more Property sooner. And of course, student loan debt is one of the few debt types that cannot be written off in bankruptcy that tilts back a little toward paying them off sooner than later.  What you just heard me talk about here for the last 15 or so minutes is a message that hundreds of millions of people need to hear it's that not every debt is worth paying off or even paying down. So to help give you a summary answer to our question, is every debt worth paying off? The answer is no, and the key considerations are liquidity, interest rate arbitrage inyour ability to outsource the debt. Debt is good when it helps you buy a cash flowing asset or create arbitrage. Debt is probably even good when it helps you buy a home for your family and have a sense of permanency and a mantle to place baseballs and hang Christmas stockings from and build memories. And now this is all because every single one of us either uses debt or we forego the opportunity to use debt. Well, when we forego using debt, we are now subject to a resultant opportunity cost, and this is why a central and enduring mantra here at GRE is that financially free beats debt free. Financially free means that you have enough residual income streams to meet all of your expenses and live just how you want to live. Debt Free means that you don't owe anyone anything, but if you put debt free before financially free, you are going to grind and live below your means and eat dirt and miss opportunities for decades.   And speaking of leveraging your way to financial freedom with assets, the way that we actionably help you here is by recommending income producing providers and properties for you. And you probably noticed over time that GRE marketplace properties here are less expensive than elsewhere. And you might wonder why exactly is this? Well, there's a few reasons. Investor advantage markets have low prices. Also, there is no agent you get to buy directly. Thirdly, providers provide homes in bulk, keeping your costs down. And then finally, there are no owner occupied emotions involved here with buying and owning rental properties, so you don't have sellers that are making unreasonable requests. So this helps answer why GRE marketplace properties are often good deals. Now it seems like states with the best cash flow in real estate are the same ones where people are more likely to wear bib overalls. That's just how it is. In fact. Hey, case in point, I just learned about some brand new, new build single family rentals in southwest Missouri at GRE marketplace. They're available for you to own regardless of where you live. They make ideal rentals, and they come with free property management for the first year. And because they're freshly built. Expect the likelihood of a quality tenant, light maintenance and low repair costs for years. Let me just quickly mention two of them to give you a feel. The first one is in Carthage, Missouri. The single family rental is three bed, two bath. Rent 1550 the price is 206k it's 1200 square feet, built this year. You get a $1,200 rent credit with it. So it's going to take a 51k down payment, and it produces cash flow. The second one is in Carl Junction, Missouri, four bed two bath in this single family rental. The rents $1,875 the price $250,500 1683 square feet built this year. 62k down and produces cash flow. And like I said, both come with free property management for the first year, and we can help set up an entire real estate investment plan for you, whether it's with these properties or others in multiple states, where we help you make it easy on yourself and contact a GRE investment coach. It is truly free always. There aren't going to be any hidden coaching bills that pop up in the mail. We don't have some paid coaching program. We're trying to upsell you. We don't have anything to sell, and our coaches are like advisors, consultants, super connectors and like silent partners on your deals, and they get zero equity in the deal. And our coaches don't wear Bib Overalls either. So they keep it really relatable for you, make it actionable and make a real difference in your life, start at gremarketplace.com. That's where you can contact a GRE investment coach, and we'll see how we can help you out from gremarketplace.com just click on the free investment coaching button.  Until next week, I'm your host, Keith Weinhold, and I'll be back to help you build your wealth, Don't Quit Your Daydream.   39:46 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 or investment strategies have the potential for profit or loss. The host is operating on behalf of get rich Education LLC, exclusively.   Keith Weinhold  40:06 The preceding program was brought to you by your home for wealth building. GetRichEducation.com.

The King of Commercial Real Estate joins us to discuss office, hotels, apartments, retail, industrial and warehouse real estate. Many office building values are down 80%+. Is it headed straight to purgatory? According to Moody's, the national office vacancy rate is 20%.  Offices have the double-whammy of higher interest rates and lower demand. Learn how feasible office to residential conversions are. For two years now, momentum has swung from Airbnbs to hotels. More apartment syndications will blow up from forthcoming interest rate resets. Commercial real estate often has higher prices than residential. Learn from our guest, Dolf de Roos, on creative ways to make low down payments.  Learn how to vet commercial tenants. We discuss adding carports to residential RE. Rich people are often vilified. They're called “filthy rich” or “stinking rich”. Resources mentioned: Attend Dolf's free live training: www.DolfLive.com 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 Podsqueeze   Keith Weinhold 00:00:01  Welcome to GRE! I'm your host, Keith Weinhold. There are many commercial real estate sectors. Large apartments, office, hotel, hospitality, retail, warehouse, industrial. Well, what's thriving? What's been beaten up so bad and is never coming back? And what's in a dip that's ripe for opportunity? Also creative deal structuring if you don't have a lot of money. It's the debut of the King of Commercial real estate here today and get rich education. 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've got pop ups and push notifications and cookies. Disclaimers are at no other time in history has it been more vital to place nice, clean, free content into your hands that actually adds no hype value to your life? See, 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 to get the letter. It couldn't be more simple.   Keith Weinhold 00:01:13  Text gray to 66866. And when you start the free newsletter, you'll also get my one hour fast real estate course completely free. It's called the Don't Quit Your Daydream letter and it wires your mind for wealth. Make sure you read it. Text gray to 66866. Text gray 266866.   Corey Coates 00:01:41  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 00:01:58  What does your read? From Tuscarora, Pennsylvania, to Tuscaloosa, Alabama, and across 188 nations worldwide. I'm Keith Whitehill, and you're listening to get Rich education. Today's guest, the king of commercial real estate, is talented, dynamic, global, articulate, has both a wide range of knowledge and an expansive palette of creative strategies in both commercial and residential, where you can buy with little out of pocket. And he's going to share that with us today. That's coming up here shortly. Now, when we think about residential real estate, of course, that is a really wide world in itself.   Keith Weinhold 00:02:38  From condos to single family homes to tiny studio apartments. You could also divide it into short term and mid-term and long term rentals. And then you could also parse it by all of the geographic markets. Well, of course, the commercial real estate world has a ton of segments too, one of which is office, which I want to talk about because it's probably been the most downtrodden and beleaguered since 2020. But there are still some things that are misunderstood within office and even dividing things up that much. Let's take care not to broad brush stroke office real estate itself some smaller segments of office might be in decent shape today. Other office segments are in real trouble. Like we're talking about tall concrete and glass, office towers and a lot of business parks, too. Yeah, business park, sort of a campus like areas, like maybe what the comedy The Office had. He had Dunder Mifflin was in a business park.   Steve Carell 00:03:43  I'm just helping you invest in your future, my friend.   Oscar Nunez 00:03:46  It sounds like a get rich quick scheme.   Steve Carell 00:03:48  Yes. Thank you. You will get rich quick. We all will.   Keith Weinhold 00:03:52  yeah. I guess that's what Steve Carell's character. What Michael Scott from The Office says about prudent investing. Let's talk about office real estate and how that intersects with the housing market. And really a lot of this comes down to the office vacancy rate. Moody's tells us that 1 in 5 office spaces in this economy are empty. And that is the highest ever. And a lot of people think that it's going to go higher right now. Dayton, Ohio is the highest in the nation at 28%. These are office vacancy rates. Charleston, West Virginia's 27. Tulsa, Oklahoma 26. And Houston, Dallas and Austin are all in the top ten for the worst office vacancy rates. Now, a lot of city officials, they want to turn that into housing, and they want government funding in order to make that transition happen from office to residential. This is most attractive to cities if you can partially convert a building to have housing on upper floors, and then you just maintain some offices on lower floors and see that mix right there, that makes for a vibrant, lively downtown community, because that way you don't have downtowns that go quiet at 5:00.   Keith Weinhold 00:05:10  But a lot of these renovations, they just aren't that feasible. They call them ritzy conversions. That's kind of what this is known as. So office to residential. I mean that means you often got to deal with huge floor plates, overhaul mechanical systems, and you've even got to consider things like the fact that windows don't open in office buildings. And they've often got to for resin conversions. Well, with this prolonged high vacancy in offices. Well, where do these people that would have been in offices spend their time instead? Well, of course at home in their residential real estate. And oftentimes it is a one for one. You have one less person occupying an office for lots of that waking day, and that means one more person occupying their home. Well, that's one reason that people are increasingly willing to spend and pay more for homes because they're spending more time than ever there. And ever since the work from home movement and zoom from home movement, if you will, since that became commonplace for urban workers coming off the pandemic, you soon saw the hashtag auto.   Keith Weinhold 00:06:27  The return to office movement that began is where you've got to come into the office 2 to 3 days a week, and then a lot of companies try to ramp it up to 4 to 5 days per week. Some companies even said, yeah, come on in here. You've got to in order to be eligible for promotions. Well, a lot of people don't want to come into the office. We found that out now, especially younger workers. In fact. Did you ever hear of the term coffee bagging? Yes. Some workers are trying to game the system. Coffee bagging. That is the art of returning to the office to a quick hit. Just have a quick hit. You only badge in, get coffee, chat and peace out of there. Well, more people are doing this or they're staying at home than what you're often led to believe. So despite the RTL movement that you hear about the share of employed persons that work their average day from home, last year it rose to 35%, up from 34%, and that's per the BLS.   Keith Weinhold 00:07:31  Well, that's a little interesting to know, but it all comes down to that office vacancy rate, which is, like I said, a stubbornly high all time record 20% nationally, and it could go higher. If you're going to invest in office real estate today, I mean, you've really got to have some insider knowledge and invest smart.   Donald Trump 00:07:55  Did you use the word smart? so you said you went to Delaware State, but you forgot the name of your college. You didn't go to Delaware State. You graduated either the lowest or almost the lowest in your class. Don't ever use the word smart with me. Don't ever use that word. Oh, give me a break. Because you know what? There's nothing smart about you, Joe.   Keith Weinhold 00:08:16  oh, dear. Oh, one of those two men is our current president, and the other could be our next president. Oh, well, love him or hate him, I guess the Trump. Hey, he is the Art of the deal author. And when you think about the Trump name, you should think about seeing those letters on tall office buildings in hotels coming up on the show here in future weeks.   Keith Weinhold 00:08:39  We are stacked with great guests an NFL All-Pro, the president of the Mississippi Institute, the return of the tax free wealth author Tom Wheelwright, and also the incomparable financial firepower of Garrett Gunderson. That's all coming up here in future shows. Let's talk to the king of commercial real estate. This week's guest is a former high tech engineer turned real estate mogul and New York Times best selling author of the book Real Estate Riches. He is globally renowned for his ginormous real estate ventures and his mentorship. But his approach to real estate isn't just transactional, it's about strategic creativity and leveraging property investment for financial independence. Known as the King of commercial real estate. Hey, welcome here for your great debut. Joining us from Malta today. It stopped the roost.   Dolf de Roos 00:09:38  Thank you very much. It's my absolute pleasure to be here.   Keith Weinhold 00:09:41  Oh it's great to finally speak here on the show. And I know that a good segment of our international audience has been anticipating this episode. And often we think about commercial real estate today. Problems come to mind immediately, like the large apartment space with interest rates blowing things up over there, and then the office sector, which just seems to be dying and never coming back.   Keith Weinhold 00:10:03  So first of all, why don't you give us an overview on how various commercial sectors are doing today?   Dolf de Roos 00:10:09  There's always the things that you see on the surface, what you read in the newspapers and what you lead yourself to believe just on the sheer balance of probability. And then there's the reality of what is truly going on. And I'm always amused at the chasm between them. There's a big difference. And in fact, your ability to do well in real estate is largely dependent on the arbitrage between the markets perception of where things are at and the reality. Now, if we all follow the trends, you know, real estate doesn't go up linearly as mathematicians would say. It goes up in fits and starts with each peak a bit higher than the previous peak and each trough a bit higher than the previous trough. But in addition to that, real estate markets always overshoot so that when things are going well, when the public perception is that things are going well, Interest rates are low. There's good capital growth.   Dolf de Roos 00:10:59  People think it's going to go on forever. It will never end and they pay way too much for properties. We have the greater fool theory where no matter how big a fool you are to pay too much for a property, it doesn't matter, because next year they'll be an even bigger fool to pay even more for it. So everyone jumps into the market, overshoots, and then there's a strong correction. A bit like the 2008 GFC. It was on the cards. It was. The writing was on the wall, as they say, and then it corrects. But instead of correcting back to where it should be, it overshoots on the downside as well. And in Phoenix, where I'm based, at one stage we had 90,000 homes into foreclosure simultaneously, and they were selling them on the courthouse steps at the rate of one every 56 seconds for initially 20,020 5000, and people thought, why are these fools buying these properties? The market's crashed. It will never recover. And yet when you live long enough, which unfortunately I have to say, I've done now like I've been around a while, I've seen a few cycles.   Dolf de Roos 00:11:59  No, I'm serious though, Keith, because when you experience your first downturn, you think it's the end of the world. But when you've been through three and you've seen that despite all the bad press and saying it's doomsday to never recover, it not only recovers, but it actually far exceeds where it was before it crashed last time, then you know that the time to take action is when everyone else is panicking. You have to be countercyclical when everyone else is jumping on the bandwagon and paying too much for properties. That's when you should get on a plane and read some good books on a beach somewhere, preferably in a foreign location. Why a foreign location and being disloyal to the home country? Note just explore something. Expand your mind. And you know, I know I'm waving around a bit from topic to topic, but one of the great things about reading books on foreign beaches is that you get to see different ideas of real estate that you can bring back home. So when you bring back these ideas that can help correct the market, then you almost you don't wish for a crash, but you think when it happens, well, there's got to be some good aspect to this and you can actually find some stunning deals from people who are too scared to think it might recover well.   Keith Weinhold 00:13:05  So those places where you might find stunning deals are in some of those commercial real estate sectors that are suffering today. Tell us a bit more about some of those sectors in their health. We're talking about five plus in the department's office, hotel, hospitality, retail, warehouse, industrial. Let us know what's going on with some of those sectors.   Dolf de Roos 00:13:27  In a state of flux. And it's a very good question. Let's talk about hotels for a moment. When the pandemic set in, we were all told to do this thing called to be socially distant. We've almost blissfully forgotten that expression. But social distancing was the thing. So hotels fell out of favor because you're in a foyer with a concierge and a reception area and hundreds of other hotel guests checking in and checking out. So Airbnbs became very popular and the value of hotels plummeted. Many couldn't meet their mortgage obligations because their revenue from room sales did not cover their own loan commitments, so they were being sold off at ridiculously cheap prices. I know of one hotel in the Atlanta area, admittedly a very old hotel.   Dolf de Roos 00:14:09  It was converted into a storage facility. When you think about it, hotels are all compartmentalized and have good little cubicles for story. Yeah, and Airbnbs took off. And we all know people, and people wrote books about it and had courses on it. I know in Phoenix, one statistic in a 12 month period from July 22nd to July 23rd, the availability of Airbnb's went up by 23% and all would have been good and well if demand had kept on escalating. But as the pandemic sort of wound down and people realized they did need to be socially distant anymore. And what's more, when you went to an Airbnb, what you found is that there was a long laundry list of items you had to do, but the sheets through the washing machine no more than one bed at a time. Well, four beds worth of sheets is going to take you three hours and do this and do that. People thought hotels are much easier, so there was a massive swing by tenants of rooms back to hotels, and the value of hotels went back up.   Dolf de Roos 00:15:04  And in the meantime, the value of houses used as Airbnb's, it sort of peaked a bit and it's going down rapidly. How far it will go down? I'm not so sure. So my point is, with hotels in a very short period of time, like three years, the values plummeted and then they came back up again. Office space is suffering a bit of a longer cycle downturn. It's fair to say, I think, that offices are in a very dire straits. Something like $785 billion of mortgages secured against commercial office space that is coming up for renewal, and there's not enough revenue to cover them. There is a pair of hotels on Union Square in San Francisco, for instance, the park Renaissance and the Renaissance itself. They had $745 million of mortgage funding, and the operators of those hotels handed the keys back to the bank and said, we can't make this cash flow. There's a lot of commercial space that is being sold off a ridiculously cheap prices. So there are two ways of looking at this, Keith.   Dolf de Roos 00:16:02  One is if you happen to own office space right now, unless it's boutique space, I've got quite a bit of office space, but it's a very much a boutique classification, and they'll always be demand for boutique office space from unique operators like interior decorators and people like that. But for the general concrete and glass office towers, demand for that has plummeted. The values have gone down and I know of one building in Chicago. It's sold for 315 million. It's on the market at 60 and dropping, and there's not a buyer in sight. And you might say, well, it's got to be a bargain. But no. Here's the challenge. With commercial real estate. Unlike residential, residential is valued on the basis of comps. We all know that if you have a four bedroom, three bathroom home, certain age, certain size, certain condition in a certain suburb, then and if it's sold for, say, $480,000, then a similar sized and aged house up the road, down the street around the corner is going to sell for about the same amount.   Dolf de Roos 00:17:02  Whether it's tenanted or not, that doesn't even matter. But when it comes to commercial real estate, the value of a commercial property is literally a multiple of its rental income. Technically, is the rental income divided by the cap rate? Which cap rate is short for capitalization rate? It literally means the rate at which you capitalize the rental to arrive at the value. So if we can figure out a way of doubling the rental, then we've doubled the value. And by the same token, of course, if you lose the tenant and you have your rental, then you have the value. And that's why the value of so many of these commercial office buildings has plummeted, because there are no tenants for them.   Keith Weinhold 00:17:40  Yeah, well, there's a lot there. And back to the Airbnb thing. Yeah. About two years ago, there seemed to be this well well-documented Airbnb bust. And my gosh, I personally had awful Airbnb experiences recently, including checking into an Airbnb where it hadn't been turned over, it hadn't been cleaned yet, and that I can never unsee what I saw.   Keith Weinhold 00:18:00  Then I had to stay there. That was really rough. I think what you're getting at here is once you hit a bottom, that's where the opportunity is. So there are going to be some of those opportunities somewhere in the commercial real estate sector, commercial real estate syndicators, many of them imploded from high rates. So when we talk about finding the bottom link with these large apartment buildings, how many more apartment syndicator implosions do we expect from the higher mortgage rates?   Dolf de Roos 00:18:27  Many. I'm indifferent to it. I'm not saying I don't have sympathy for the people who own them, and I'm not gleeful for those who buy a bargain. But here's why I'm indifferent. I think it's fair to say that I've made most of my money in real estate by finding either vacant or semi vacant buildings, and that goes against the grain. Most people think they need to look for a building with a good tenant, because it's the tenant that pays the rent, and that's not incorrect. That's accurate. And then if you've got a building that you buy and say 8% return and your mortgage interest is 7%, hopefully that 1% margin covers your property taxes and your insurance and your maintenance.   Dolf de Roos 00:19:05  And then you just wait for time to do this thing where slowly, over time, the rents creep up and the property value creeps up. I don't have the luxury of waiting that long, and I never had the cash to buy properties like that, so I literally sought out semi vacant or even vacant buildings. Now, I didn't buy them because if I bought a vacant building, I still have to pay property tax and insurance. But what I would do before buying it is see if I can find a tenant, and I can give you a specific example. I came across a vacant building that was a funeral parlor, and most people don't like to think of what goes on in a funeral parlor. But they have these stainless steel trays where they put the product of their business on, and they insert these hollow stainless steel tubes and suck up the blood and replace it with formaldehyde and all kinds of things we don't want to think about.   Keith Weinhold 00:19:52  That's even worse than my Airbnb experience.   Dolf de Roos 00:19:55  No one knew what to do with it.   Dolf de Roos 00:19:57  So I found it. And it was being sold for a song because it was vacant. And what I did is I employed someone at the then going hourly rate of $8 an hour to phone every funeral director, going further and further from this place until she found someone who said, oh my gosh, I've always wanted to operate there. And I was just open and honest. And I said, well, there's a funeral parlour premise for sale. Go and check it out if you want to buy it, buy it. Why would I offer it to him, Keith, when I really wanted to buy it? Because the last thing I want is a tenant to be gracious. The fact that the only reason he's paying me rent is that I'd beat him to it. But I knew that in all probability, he didn't want to buy real estate. That's not his gig. And he said, no, I don't have the money or the inclination he had to look at. He said, listen, I love it.   Dolf de Roos 00:20:40  I want to operate there. What would it take? And I said, well, if you're willing to sign up a heads of agreement, an alloy, we're subject to me buying it. You will become the tenant, then I'll have a crack at buying it. And his response was, were not so fast, I need you. I'll only do it if you give me a long term lease. Well, that's exactly what I want. So I'd found a tenant by adding the tenant to this otherwise vacant building. The value of it doubled. And when I went to the bank to apply for a mortgage, they said, well, we're only going to give you 50%. Well, guess what? 50% of double the value was the purchase price. They lent me all but the last $10,000 to buy that property. So the magic sauce here is finding the tenant. Could anyone else have gone through at the time? This is before the internet, the Yellow pages and phoned every funeral director going for. Of course they could, but no one thought of doing it.   Dolf de Roos 00:21:33  And that comes to part of what you had in your title, that this is all about creative real estate. The thing I love about real estate is it's about the only investment vehicle where you can actually use your creativity. I mean, if you're a really creative person and you buy a portfolio of stock, IBM stock and Microsoft and biotech, what.   Keith Weinhold 00:21:53  Can you do to improve it?   Dolf de Roos 00:21:54  Can you deploy your creativity? How can you deploy what you've seen in your travels to make your stock portfolio worth more? Zero. Absolutely nothing. Not with stocks, not with bonds, not with futures. Options, certificates of deposit, Treasury bills, nothing. But with real estate, the sky's the limit, I love that.   Keith Weinhold 00:22:13  Well, you talked about getting into commercial real estate sectors with little or none of your own money. That's part of the creativity. A lot of our audience is interested in investing in residential property, a single family home. You might still be able to get one for 150 K now, 20 to 25% down payment on that 30 K plus.   Keith Weinhold 00:22:34  I mean, that's still pretty manageable for a lot of people, but many are somewhat intimidated by commercial real estate. I think one of the first things they think about is how do I come up with the money? So we talk about creativity in funding that down payment. Tell us more about some good strategies for doing that, and kind of overcoming that daunting feeling of higher commercial real estate prices.   Dolf de Roos 00:22:52  You're absolutely right. Most people think commercial real estate is more expensive, where you might be able to buy a home in a cheaper market, a cheaper price point at one 20,000, say the commercial property is going to be half a million, or if homes are $1 million and a fancy suburb and the commercial properties at 3 million. That's true, but not all properties are like that. My smallest commercial building was a little corner shop. It was a wet fish supply shop, so they sold fish but not cooked fish. And it was a horrible looking thing. But I paid all of $79,000 for it and it's been rented on a full commercial lease from the day I bought it, so it needn't be liked.   Dolf de Roos 00:23:31  In fact, we tend to only notice the big ones for the For Sale sign. You're in the downtown of some city and you see a big one of the big firms, CB Richard Ellis or Jones Lang LaSalle or something for lease or for sale sign, that's for sure. And you don't tend to notice the small ones. The trick in finding good value real estate. Be it commercial or residential, again, has to do with the fact that it's not an automated market like the stock market. You buy stocks through computers on a share market. Everyone pays the same price. But when it comes to real estate, the seller may choose to go through a real estate agency. It might be a national one, and then it's vetted by many agents. But we have a thing known as fizzbuzz or for sale by owner. And why would a seller choose to circumvent a real estate agent? Well, probably because he's hoping to save on the 6% commission. By the way, that's the highest in the world.   Dolf de Roos 00:24:21  And the rest of the orders? 2 or 1 and a half or 3%, it soon to be lowered in the States. But even so, they want to save on that commission and more sinisterly. Perhaps some of them think, why should I entrust my property, the sale of my property to some snooty, nosed 22 year old kid just out of school who doesn't even live in the suburb. I have lived here for 59 years or whatever, he says. And I know what it's worth. And in pricing it, he's either way too high or way too low. Now, if he's way too high, you and I aren't going to buy it because it's just way too high. We know that. But what if it's 100,000 below market value? It happens every day of the week, and if we stumble across one of those, then we might just make 100,000 that day. Not in terms of cash, not in terms of folding hard cash, but in terms of equity. And we could sell it the next day for a hundred thousand more.   Dolf de Roos 00:25:08  But we don't because we want to invest in it. And these things are real key. These happen. That's why I encourage people don't take the same route home from work every day. If you've finished work, get in your car, take a different route, keep your eyes peeled, look for visible signs of a sale by owner, or look for abandoned properties, ones where the grass is a bit high in this litter blown up against the fence and the windows are a bit grimy, and then do some research to find out who owns it.   Keith Weinhold 00:25:34  Sometimes the greater the crisis, the greater the opportunity. But often we talk about, say, if one has overcome the money in the down payment thing, you know, in effect, when we go ahead and get a loan, whatever sector we're investing in, the bank underwrites either us or the bank underwrites the property. But in a sense, us as the investor is we're sort of underwriting the tenant that's in there. Now, when we buy a residential building, you know, we can look at the tennis credit scores and their work history.   Keith Weinhold 00:26:00  You know, we know that the residential tenant is going to pay us to live there. We have a good sense of faith about that. But when it comes to commercial real estate investing, say, I want to buy a plaza with eight businesses in it. I think a lot of investors feel overwhelmed because they're like, oh my gosh, like, how do I study the validity of these eight businesses? And how do I know that they're going to be solvent and sustainable going forward? And do I need to understand all this, or can you speak to that and help break that down for us a bit? Basically the investor underwriting the tenant.   Dolf de Roos 00:26:31  That's all true. And yet there isn't that much to learn. Because if we take your imaginary shopping plaza with eight tenants. Yeah, I think we'd all agree that if one of those tenants was a Gloria Bean coffee and tea or whatever it's called, or Seattle's Best or Peet's Coffee, not to mention Starbucks, that's a global change, but one of those lesser brands.   Dolf de Roos 00:26:51  I think we would be pretty comfortable that they can pay the rent every month. And similarly, the bank underwriting that loan was like, well, a Peet's Coffee or Gloria, that they're a good tenant And, you know, just to name others at random rosters for less, that's a nationwide chain store. I think if we had them as a tenant, that would all go well. And you might get a couple of independents, but they would have a track record. They've leased those same premises for the previous eight years, and they moved there from other premises, which ended up being too small for them. That means they're expanding where they were for 12 years, things like that. Give a picture to any novice in this game to say, wow, they're probably going to be here for the long haul. And beyond that, what happens when you develop the skills to attract new tenants? You don't worry about that even because you know that when you lose a tenant, it's easy to get one lesson.   Dolf de Roos 00:27:42  I've got 101 ways of getting tenants for buildings, and I'm blown away that people don't deploy even one of them. And I'll give you an example from last week. I was with a client in the UK in Bournemouth, which is way in the south of the country, and we were looking at a commercial office building there and it had been vacant for 18 months. And I said to the agent what seems to be the trouble with getting a tenant? And he shrugged his shoulders and said, well, I don't know. It's been on the market for 18 months. And I said, has it ever occurred to you to put a sign outside the property? A big canvas sign hanging on the side of the building signs, and the grass verge saying, this building is for lease. Enquire within or go to this website. And he was stupefied by that thought. He said, what an amazingly good idea. You have to let people know. They think that they're going to go to their office because they're looking for office space.   Dolf de Roos 00:28:34  So now, would they be guaranteed to get a tenant within a week by putting a canvas sign on the building? Of course not. But I know we won't reduce the chances. And that's why if I can find a tenant before committing to buy the building, I'm pretty confident we'll get there. And I've got all these other techniques, Keith, of doing it like one that I really love is, let's say you've got a vacant warehouse and it's an ugly, horrible warehouse in a sea of similarly ugly and vacant warehouses. If you and I bought that, I would hesitate to suggest that we would have a tenant within a month. And here's how we'd do it. We would spend no more than $10,000, and we would go to the manager's office, because ultimately, the person who decides whether to lease our warehouse as opposed to another one, is not the CEO and the head office in New York or LA or wherever. It's not the cleaning lady or man who's going to sweep the floor. It's going to be the manager is going to manage it.   Dolf de Roos 00:29:28  So I get rid of the linoleum and I put in commercial grade carpet. I put in triple glazed or dual glazed windows. Keeps the noise out and the warmth in. I replace the fluorescent tubes with LED lights and replace the locks with electronic locks so he can never forget his keys. I put on an 80 inch LCD screen and tell him it's good for corporate training videos. We know he's never going to watch corporate training videos on it, but those TVs you can buy for $500 now, I put on a little coffee machine and make sure it's brewing when it looks, and have a fridge for end of week drinks, celebrations, and our unsuspecting manager, who's looked at seven ugly warehouses so far that day when he comes to our ugly warehouse and he opens that door to the manager's office subconsciously, or maybe consciously, he thinks, oh my gosh, if I lease this one, this is where I'm going to be packed for 40 hours a week for Lord knows how many years. He says I'll take it.   Dolf de Roos 00:30:17  And he hasn't even asked the rental. You might say that's bribery and corruption, but I think it's just offering a better product than the competition. No one else does this.   Keith Weinhold 00:30:27  Oh well. This is another brilliant example of using creativity in real estate investing. We're talking with the king of commercial real estate, Dolph Thomas More. We come back including some of his psychology and insights from the rich. This is general education. I'm your host, Keith Whitehall. 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 prequalification and chat with President Ridge personally. Start now while it's on your mind at Ridge Lending group.com. That's Ridge Lending group.com. And your bank is getting rich off of you. The national average bank account pays less than 1% on your savings.   Keith Weinhold 00:31:31  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 $25. You keep getting paid until you decide you want your money back there. 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, to earn 8%. Hundreds of others are. Text. Family 266866. Learn more about Freedom Family Investments Liquidity Fund. On your journey to financial freedom through passive income. Text family to 66866. What's up everyone? This is HGTV Star Kombucha. Listen to get Rich education with Keith Wine hold and don't quit your day dream. Welcome back to Get Syndication. You're listening to episode 513 of the show that's created more passive income for busy people just like you than nearly any show in the world.   Keith Weinhold 00:32:55  I'm your host, Keith Whitehall. We're at the king of commercial real estate, Dolph Durst. Just like he has a lot of creative, proven types of things that you can do to improve commercial real estate. He also has a lot of those ideas for residential because he's been around the game for so long. So tell us about some more of those creative ways to add value to residential real estate.   Dolf de Roos 00:33:17  Well, probably. Like most people who end up focusing on commercial real estate, I got started in residential and that's where I first deployed some of my creativity. And I noticed, for instance, that I'd have a rental property that had no garage and no carport. And when you think about it, a tenant's biggest asset because it's not their home, it tends to be their car. One could argue that because they waste money on expensive cars every two years, that's why they can't afford to buy a home. But we won't go there. So if it's their car, if there's no carport and no garage, that means their biggest asset is in the rain.   Dolf de Roos 00:33:49  The sleet, the sun, the shine, the hail, you name it. So by building a carport, we can protect their biggest asset and it's worth a lot more to them by any means. If you have a carport on a house, that house will rent for about $80 a month extra. An 80 a month times 12 is 960. Call it $1,000 extra, a rent in a year. And Keith, I can build a carport for $1,000 easily. It's simply for one in each corner and then a roof with a bit of a slope. Why the slope? Well, if it rains, the rain falls off. If you're really cheap, you can get away with three posts. It still stands, you know. But no. And I'm being silly, but we sometimes make them with two posts and cantilever them. They're a bit more expensive, but then there are no posts out front so I can build a carport for $1,000, and then I get $1,000 extra a year coming in. And when you think about it again, which other investment can you think of that once you've consummated the deal, once you own it, you can spend an extra thousand dollars and then get 100% return on that money.   Dolf de Roos 00:34:49  And as they say in the infomercials. But wait, it gets even better. Because think about it. Let's say we have that carport built, but we haven't paid for it yet. And so we've got our thousand dollars a year extra of rental coming in. We go back to the appraiser and say, we want a new appraisal With an extra $1,000 coming in, he's likely to appraise it at $10,000 more. With that increased appraisal of 10,000, we go back to the bank and say, Mr. Bank manager, remember I got a 70 or 80% more. I've got now got an appraisal for 10,000 more. Will you give me a modest 70% loan on that? Well, banks are in the game of lending money and making a profit. So they say yes. So you get 7000 from the bank. Let's use 1000 of that 7000 to pay for the carport. It's now paid for. That leaves us with $6,000 cash. And the question is, is it earned income? And the answer is no, it's not earned income.   Dolf de Roos 00:35:42  There's no income tax on it. Is that the sale of something? Nope. Didn't sell it. No sales tax, no capital gains. It's tax free money. And you might say but hang on, you've now borrowed $7,000 that you have to be interested. Even at a ridiculously high 10%, that would only cost 700 a year. But we're collecting an extra thousand a year. So when you build this carport, you have two choices. One is pay cash for it and get 100% return on your money. Or the second one is don't pay any money for it, but $6,000 of tax free money in your pocket and get $300 a year surplus cash flow index for inflation for the rest of your life. Like, why would you not do that?   Keith Weinhold 00:36:25  Well, and it's a terrific example of how to accidentally improve the property. And it's so interesting that you bring this up, Dolph, because just a few weeks ago here on the show, I talked about garage real estate. I mentioned how adding a carport can often be more cost effective for a landlord from an ROI standpoint, than constructing a garage.   Keith Weinhold 00:36:43  I also talked about the future with autonomous cars. If people are going to need garages as much as they will, but that's into the future, and that's another subject in itself. All for one really important thing. I know that probably even more important than the actual investing is getting people in the right mindset to do this in the first place. You've studied this in really unexpected psychology behind wealth creation. I think a lot of it is counterintuitive, but it kind of makes sense because if you come from a scarcity and conventional mindset and you just do mediocre stuff, you're only going to get a mediocre outcome. So why don't you talk to us more about breaking down that psychology that most Americans and most residents of everywhere in the world really struggle with?   Dolf de Roos 00:37:28  Well, my pleasure. I had been teaching real estate for about 15 years and I decided why? I don't know, but I decided to run a survey to find out how many of my students became a millionaire within 18 months. That was my expected time frame of reasonableness.   Keith Weinhold 00:37:43  Is that I was actually wealthy.   Dolf de Roos 00:37:45  Right? And I was pretty confident. But when the results came in, I was devastated because it was fewer than 4%. And in my mind, 4% wasn't even statistically significant. Meaning if you take a thousand people, a random 4% are going to become millionaires. One's going to marry into money, one's going to win the lottery, one's going to win at a casino, and the fourth one's going to fall over a paper bag and looks inside. And we just believe that there's a million bucks there. So I vowed to stop teaching until I'd cracked the nut, because my dilemma was, how is it that when you give people all the tools you think they need to become fabulously wealthy, they still don't do it right? And what I found is that it had nothing to do with my rate of speech or my accent. Not that I have one, of course, or the content of my information or the sequencing of it. It had everything to do with the subconscious mind of the student, the fear.   Dolf de Roos 00:38:38  And he has that stance. You're a young kid and you say, hey, mom or dad, I want a bicycle. And they say, well, what do you think, kiddo? That money grows on trees and I know where the parents coming from. Hey, money's not that easy to come by. Temper your expectations of what you'll get for your bet. But this kid is. Our money doesn't grow on trees. Meaning money's hard to come by. And how often have we been told money can't buy you happiness. And money is the root of all evil. And when I say that, someone always points out no, the full saying in the Bible is for the love of money is the root of all evil. There's a big difference. And I'll say, yes, there is a big difference. But to the subconscious mind, it's still here's money and evil in the same sentence, and it's unconsciously makes that association. And the religious even say that it is easier to get a camel through the eye of a needle than for a rich man to get to heaven.   Dolf de Roos 00:39:24  In other words, if you're rich, you're condemned to hell. And that's a nice, strong belief system to take on board, even subconsciously. And by the way, most people don't know what the eye of the needle is. The eye of the needle was the entrance to East Jerusalem and even camels. And I've been there. I've said the camel said to get down on their knees as a sign of respect before they could enter. So there's a reason behind all these things, but the subconscious mind takes aboard. Money can buy you happiness. Money's hard to come by if you work hard for it. You don't deserve that money's root of lever. You won't get to heaven. You condemned to hell. And how do we describe the rich kids? We say they are so rich. That filthy rich. They're so rich. That stinking rich we associate being rich with filth and stench. So that is why in the United States and every Western nation, when someone wins the lottery and we no longer win 10 or $20,000, it's 300 million or 800 million or 1.2 billion when people win the lottery within five years of winning, 80% of the winners are back to where they were before they won.   Dolf de Roos 00:40:25  Right? And why is that? I discovered that it's because subconsciously, even though they're happy they won it and they going to tell their boss they're going to quit and they're going to buy their parents a nice home and they're going to get a new car. But subconsciously they feel they don't deserve it because they haven't worked hard for it. They're not going to be happy. They're now evil people. They're not going to go to heaven, and they're filthy and they stink. And the only way to overcome that is to get rid of the source of the problem, which is the money. And you'll see it happen again and again and again. So what we do is we dissolve what's in the subconscious mind, all these things that we've been saying without realizing it over and over and over again and replace them with more empowering beliefs. And the great thing about the subconscious mind is, initially, you don't even have to believe the thing that you're going to say over and over again to replace those old ones, but it could be something as simple as money is good or a bit more sophisticated.   Dolf de Roos 00:41:18  My poverty helps no one, but my wealth can help a lot of people.   Keith Weinhold 00:41:22  The more you have, the more you can give.   Dolf de Roos 00:41:24  Exactly as the reverend says, I'm a magnet for money. And so when we get into this mode of thinking differently, then all of a sudden people find that the money starts flowing and we give people specific exercises to do. And it's you think by how is that going to make difference? But it does. And so what I found when I introduced these concepts into my real estate teaching, the success went from under 4% to over 80%. And if that's not evidence enough that this works, I don't know what is.   Keith Weinhold 00:41:56  Yes, it really takes changing that mindset to break down these old stereotypes and have the confidence to say and act upon things like financially free beats debt free. But if you raise to think that money is a scarce resource, you think that retiring debt is a good thing, or don't focus on getting your money to work for you. Focus on getting other people's money to work for you.   Keith Weinhold 00:42:17  A lot of people don't even know what that means. But yeah, it takes breaking down some of these simple things that we all began to learn when we were age five or something like that. Golf is we're winding down here. You operate globally. You play globally. That intimidates a lot of people. They don't really know how to do that. But it's giving you this wherewithal to say that real estate is the only profession that can truly be played globally. Tell us about that.   Dolf de Roos 00:42:44  Well, when you think about it, if you study to become, say, an attorney, you can't just up and leave the US and go to Germany or Peru or Kuala Lumpur, Malaysia to practice, you've got to study their local laws and set the bar exam. If you're a physician, you can't just go to another country and conduct frontal lobotomies on patients. You've got to study and hit the bar exam. I had a friend who was a dermatologist, a skin doctor from Austria. He moved to Australia after eight years of study to get his qualifications.   Dolf de Roos 00:43:13  They wouldn't accept them here to start all over again. And he said that's ridiculous. And he became a farmer and was very happy doing that. But when you think about it, not only our real estate investors welcomed all over the world, but they think that you're going to bring money with you. You don't have to, of course. In fact, if you're going to invest as a US citizen in another country, I would not recommend bringing U.S. dollars with you. I'd recommend borrowing locally, because if you bring U.S. dollars with you, then you're subject to exchange rate fluctuations. So just borrow locally and then you've got no risk from that at all. But despite the fact that the other countries, the host countries think that you're an investor, you're going to bring money. So they welcome you with open arms. I think it's the only profession where you are never discriminated against. Your welcomed. You're made to feel welcome. They want more of you. They encourage you to come with delegations of other investors.   Dolf de Roos 00:44:05  It's kind of good gig to be on.   Keith Weinhold 00:44:08  Make the World Yours. The UN recognizes 193 world nations. Get out and see them and invest outside your own home country if you have the ability to. Well, Duff, you've got this interesting combination of commercial real estate focus, a great grasp of the mindset and how to help people with the wealth mindset. And then thirdly, you also operate globally. So it's been really interesting to speak with you. You help people in so many ways with a lot of your teaching resources. So why don't you let our audience know how they can engage with that?   Dolf de Roos 00:44:41  We have a lot of programs that we run from time to time. I mentioned I saw a client in the UK. He was an example of someone we did a fly out for. I'd spend three days just with that one client to help him with his portfolio. But the thing I've got coming up is a live training and people can get a free seat to attend and learn more at my website called Dolf Live.   Dolf de Roos 00:45:03  So Dorfman and Dolf and then live Live.com golf Dolph Live.com. You can see what we've got coming up there. It's entirely free to attend. And then, you know, once that event's gone, I'm sure we'll post other things there, but that's the best way of staying informed with what I've got going. Part of my passion, Keith, is sharing it. You know, it's pretty boring doing it on your own. And one of the biggest thrills I get is when you get feedback by email or however, from someone who said, well, when I heard this or saw that or read this, I wasn't even sure if it would work and I certainly wasn't sure if it would work for me. But look at what I've done since then, and that gives you a feeling that you can't describe in words. That's pretty cool. You change someone's life and you don't even really know who they are, then that's kind of that's fun stuff.   Keith Weinhold 00:45:48  The ruse has been helpful to me in our audience today. The King of Commercial Real Estate, thanks so much for coming on to the show.   Dolf de Roos 00:45:55  Hey, thank you so much for the opportunity. I really enjoyed it.   Keith Weinhold 00:46:04  Check out Dolph Live.com. It looks like he's got a live event coming up this Thursday night, and if you missed that more afterward, like I was saying earlier, a ton of great episodes coming up here on the get Rich education podcast, just stacked. As always, you'll get lessons from me when I'm going to break down. Is any debt worth paying off? Which debts are which are not and why? That's going to help you know what to do with every debt for the rest of your life. And that's besides what I mentioned earlier, both new guests and very popular returning guests. I hope that you learned something today. I'll run it back next week when we meet again. Until then, I'm your host, Keith Weintraub. Don't quit your daydream.   Speaker 8 00:46:54  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.   Speaker 8 00:47:05  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 00:47:22  The preceding program was brought to you by your home for wealth building. Get Rich education.com.

As a working mom, it's easy to get caught up in a whirlwind of commitments and obligations. From professional responsibilities to personal goals, we often find ourselves juggling an endless list of tasks. In the midst of the chaos, it's important to recognize the importance of pausing, reflecting, and reprioritizing. Sometimes in our careers we take a step back, while other times we take a huge leap forward. Similarly, as our children grow, we find ourselves in phases where we can lean into our career because of their independence and other times when they simply need more time and energy from us. Through it all, though, remember why you started. What was your dream? The one that gets you energized and out of bed thinking about? Don't lose sight of your dream...even if you need to hit pause for a moment. I am living proof that pause does not coincide with failure. A pause in life doesn't have to be goodbye or a pivot, it can simply be a holding place.  Thank you, truly, for letting me be part of your working mom journey this past year. It's time for me to hit pause on an area of life, to focus on others. You have been the best community and I look forward to coming back on air to connect with you in the future. Don't Quit Your Daydream. ******** For the direct links shared on this episode and previous shows, click below! Pre-order my new book: The Working Mom Blend Rent the Runway Discount Code Join my community: Working Mom Moments Facebook Group Get the latest - Email Newsletter: www.lacyjungman.com/insider  Connect with me: info@lacyjungman.com  Follow me on LinkedIn: https://www.linkedin.com/in/lacyjungman/  If you're ready to create the work life blend you've always dreamed of, I'm here for you! Grab time on my calendar for coaching here.  _

We've already had more inflation in this young 2020s decade than the entire 2010s. If the next forty years have as much inflation as the last forty, gas will cost $13.38 per gallon, the average home $1.88 million, and the average rent $59,000 annually.  Inflation impoverishes most people. You can profit from it 3 ways at the same time. Watch the free 3-part video series: GetRichEducation.com/TripleCrown.  The 30-year fixed rate mortgage is a uniquely American construct. It virtually exists nowhere else in the world. I compare this to mortgage terms in Europe, Canada and Australia.  In much of the world, homeowners have had their mortgage payments double overnight! Trends that won't soon be disrupted: more inflation, people need to live somewhere, there aren't enough places to live. That's so simple! Invest in it. Rents are increasing the most where little new supply has been added. There's a myth that gigantic institutional investors are gobbling up all the single-family rental homes. But they only own 3% of the market. Mom & pops own 80%. Single-family rents are up 3.4% per CoreLogic. Detached SFHs are up more than attached types. Property prices and rents are positively correlated. Some people falsely think that they move inversely. Resources mentioned: Profit from inflation 3 ways: GetRichEducation.com/TripleCrown 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Welcome to GRE! I'm your host, Keith Weinhold. Learn how the misery of INFLATION is altering BOTH your quality of life and the return on ALL of your investments… … also, many people are now having their mortgage payments DOUBLE overnight and IT'S creating pain, then, what are the factors affecting the future direction of RENTS - all that, and more, today on Get Rich Education!  ______________   Welcome to GRE! You're listening to one of the longest-running and most listened-to shows on real estate investing. This is Get Rich Education. I'm your host, Keith Weinhold - the voice of RE since 2014.   I don't know if you fully realize how much inflation is steering all of your investments - and it's emphatic at a time like this when the dollar is down 25% cumulatively just in the last four years. Gosh!   And I've got some jaw-dropping inflation fact to share with you soon.    We'll get to inflation's RE affects shortly. But here's what I mean.    In stocks, they keep riding up on a wave of optimism, anticipating a Fed interest rate cut - largely due to future INFLATION expectations. Yes, there's jobs & GDP and some other factors.   But the stock market - which is a FORWARD-looking market - it moves based on what's expected to happen 6 to 12 months from now.    STOCK investors know that rate cuts open the floodgates to get us closer to the “easy money” days again.    That's why - as backwards as it is, the worse the economy looks, the lower that inflation tends to be, and then, in turn, the lower that interest rates can go, which the stock market likes.   So a worsening economy often pumps up the stock market. Soooo backwards.    Just look at what happens historically. Recessions sound bad. Yet what happens is that rates get cut in a recession - because the economy needs the help.    But nearer-term, it's this ongoing expectation of the rate cut - that's been looming out there for months but hasn't happened - which CAN keep propelling the stock market to higher highs. It's already hit all-time highs here recently. You can make the CASE that stocks should keep floating higher from here… based on that premise.   Before we look at real estate & inflation. Understand this.    Inflation has already widened the divide between the affluent and the deprived. That divide has gone from a gully to a canyon.   But... my gosh! Here's the stat that I want to share with you. And you're really going to get a sense for the gravity of what you're living through this decade.   We've already seen more inflation in the first 51 months of the 2020s decade than in the ENTIRE decade of the 2010s. Already.   This gets really interesting. Let's look at about the last four decades here.    Alright, in the 1990s decade, America had 34% cumulative inflation. Let's go ahead and… we'll associate this decade with President Bill Clinton.    We won't tie any President to the inflation number because there are lag effects and other factors. A President really can't take the credit or blame, in most cases. Just marking the era here.   So, 34% inflation in the 1990s.    The 2000s decade saw the GFC and… 29% inflation. Most of those were George W. Bush years.   The 2010s decade saw lower inflation → Just 19%. So that's under 2% a year. These were mostly the Obama years here in the 2010s.    Little flex there from the former Commander in Chief.   Then the 2020s decade → have seen, like I alluded to, and under Joseph Robinette Biden, Jr. - yes, as the oldest sitting president ever, it's easy to forget that he's a “junior. In this young 2020s decade, we have, 21% cumulative inflation. Already.   So this figure is after just the first 51 months of this decade, if we're counting from 2020… and this is largely due to supply shortages from the COVID pandemic.    So 21% ALREADY this decade… and just 19% ALLLL of last decade which was a full decade. That's the impact.    That's reflective of what you see in home prices and rent prices and utilities, transportation, labor, and almost every facet of your life.… and what you see in your weekly Costco bill and Trader Joe's bill.    Who have we left out here? A one-term president, so far? Does somebody feel left out.    Yes, that is the actual person of one Donald John Trump.   Psssshhh!   All of those figures I cited are from the BLS, and I've been rounding to nearest whole percent.   But get this! Inflation over the next forty years could make the LAST 40 years seem like a picnic.    That's partly because we're $35T in debt and that figure now grows by $1T every single quarter… every 90 to 100 days. So we MUST keep dollar-printing to help pay it back.   But just, if the last forty years repeats itself, by the year 2064, which is the next forty years, we'll see these prices. Prepare for a future that looks like this: Gas at $13.38 per gallon The home price at $1.88 million Average rent at $59,000 per year And the average salary at $104,000 That is if inflation over the next 40 years, looks like that last 40 years. Also, note how salaries don't keep pace with prices. That $104K average salary in the year 2064 doesn't sound as high-flying as those other figures.   Well, this is all really frustrating for consumers… and even debilitating to one's standard of living. Remember, this latest wave of inflation brought us the biggest YOY increase in homelessness - based on HUD figures.   and why you need to invest in something that reliably BENEFITS from inflation and pays you an income at the same time.    Look, here's really, the deal. Dollars are abundant. So then isn't it a paradox that a major spike in the supply of dollars would create more homelessness?   Well, you know that dollars are there for your taking - because so many more have been brought into existence. Dollars are abundant. So as they cycle through the economy, rather than going through the consumer motions, you can build your diverter. That's where the world of abundance exists, so get into that flow.   Ultimately, REAL capital is scarce. Your time and energy are scarce. Natural resources are scarce. Labor is scarce.   What's frustrating is that money ought to reflect that scarcity if it is going to accurately convey the value that enables people to make capital accumulation decisions.    And alas, we're doing our measuring in dollars and the dollar is not remotely scarce.   The middle class and poor often have wages that don't track inflation, yet they disproportionately suffer the higher consumer prices.   The investor class owns assets that float up with inflation. And GRE listeners will do even better than that.   As income property owners with mortgages, we're winning three ways at the same time with the Inflation Triple Crown. That's your dollar diverter.   Alright, so that's longer-term inflation. I've been talking in terms of decades - both the past and with an extrapolation into the future to 2064 there - and it's really rather sobering.   Well, what's the more CURRENT inflation situation? The situationship? Ha! What's the situationship now?   In trying to quiet it down to their 2% target, the Fed has run into so many hurdles that you'd think they were training for this summer's Olympics in Paris.   After it peaked over 9% two full years ago now, inflation's been bouncing near 3-and-a-half-percent for a year and they just keep having trouble getting it lower than that.   Hmmm... would we say that this could turn into Jerome Powell's three-quarters life crisis? We'll see.   Rising inflation is one of the key factors that brought down the Roman Empire. They famously experienced hyperinflation after a series of emperors lowered the silver content of their currency, called the denarius.    Today, some lament that the dollar isn't backed by gold, silver, or anything else.   But it is.   It's backed by the world's most powerful military, strongest economy, reserve currency status, international trade agreements, and you also… must pay your taxes in dollars.    Dollars are still liquid and useful… but perpetually debased, so get them and then transition out of them.    Yet, at the same time, we're also the greatest debtor nation in world history. The easiest way to pay it all back is to simply print more and inflate more.   So that's why it's almost inevitable that dollars will keep being worth less... and BTW, the two words “worth less” sound awfully close to the word “worthless”. Ha!    That's where we keep heading.   Until you can send a Venmo request to the Fed to compensate you for your loss in purchasing power, we need to actually do something about this.    And the dollar that you had when you started listening to me today could very well now only be worth 99 cents. Ha!   We can either have our standard of living degraded by inflation or we will decide to profit from it.   So, if you haven't yet, check out GetRichEducation.com/TripleCrown.   Rather than impoverish you, learn how you can make inflation CREATE wealth for you three ways at the same time with that free, 3-part Inflation Triple Crown video series. Good learning there.   It's free & easy to watch, again, at GetRichEducation.com/TripleCrown   Inflation seemingly seeps into everything.   Inflation took down the commercial sector - Apt buildings & offices. Apts are down 30-40% in the last two years. It's all because inflation made the Fed panic and jack up those rates.   If that's not jaw-dropping enough. Office values are down 80%+ in the last two years. 80%+, 90%+ in some cases.    Of course, office RE got the double-whammy of the inflation-induced interest rate hikes AND the Work-From-Anywhere movement.   That leaves residential 1-4 unit properties in good standing - and still impacted by inflation, but LESS impacted by inflation.    Yeah, your 1-4 unit RENTS are up - and I'll talk more about rent later in the show today.    inflation also jacked up your expenses like insurance, utilities, maintenance & repair cost and more.   But as we move away from the inflation conversation now, of course, one big reason that 1-4s have stayed resilient is the American privilege of LTFIRD - and the fact that it's 30 years for most US properties.   In fact, in 2022, 89% of homebuyers applied for the 30-year.   I think that you're about to get more appreciation for this… perhaps than you've ever had.   The 30-year FRM is a UNIQUELY American construct.    And, BTW, some people don't seem to know what the word “unique” means. You've probably heard people misusing this word all the time.   Unique does not mean something that's sort of different.    Unique means “ONE of a kind”. Unique means something that does not exist ANYWHERE else.    What do I do here on this show? Besides giving you the occasional geography lesson as a side dish to your real estate, I do this with vocabulary, grammar, and syntax as well, don't I?    Even though my own is surely imperfect.   Anyway, the reason that the 30-year mortgage can exist is due to our deep financial markets - especially our secondary market for mortgage-backed securities, where your loan gets packaged up and purchased by a bond investor - a bit like Ridge Lending Group President Caeli Ridge & I touched on last week.   The reason that mortgage-backed securities are attractive to investors in the U.S. and across the globe is because their government sponsorship makes them safe investments over long periods of time. They also provide a fixed payout to the MBS holder.   And see, the rate on the 30-year fixed-rate mortgage tracks closely to 10-year Treasurys because “U.S. real estate is almost as good an investment as a U.S. Treasury bond.”   They've got Fannie & Freddie insurance.   And that entire MBS process now has more guardrails in it than we had before the Global Financial Crisis.   We're talking about the foundation here - really - of where you get your big lumps of money from - the 30-year FRM and its uniqueness.   Compared to the world, the US has very little variable rate debt.    Less than 4% of American mortgage borrowers have debt that's on rate terms of a year or less. Over 96% of US debt is LTFRD, defined as 10 years or more.   That is virtually unparalleled worldwide. To compare us to some other developed nations, mortgage borrowers in Germany - just 47% of them have long-term fixed debt - and none of them can get 30-year debt.   Long-term debt, again, defined as ten years or more,  Is little to ZILCH for mortgage borrowers in Canada, the UK, Ireland, Italy, Sweden, Finland, Australia, and other developed nations like them.   In Canada, the most common mortgage terms reset to the prevailing market interest rate every five years.    In Finland, their mortgages reset annually or faster. Gosh, can you imagine if your mortgage rate reset every year like it does for the Finns?   Sheesh, that's more often than some people lose the remote control or rearrange their furniture.   OK. So what's this really mean?   Ya gotta… pour one out for most mortgage borrowers in the rest of the world.   They can't lock in their mortgage interest rate for the long-term. So with rates doubling or tripling, starting from 3 years ago, it's totally ruined a lot of foreign homeowners.   Look, what if you're middle class and your monthly mortgage payment soars from $1,893 on Tuesday up to $3,415 on Wednesday?   That's what's happening elsewhere. It can go up 50% overnight and nearly double overnight in Australia, Europe and elsewhere.   But in the mortgage-advantaged US, we're safe.   If we buy at an 8% mortgage rate on a 30-year fixed amortizing loan today—just the plain, vanilla loan: If rates rise to 10% later, you're happy to be locked-in at 8% If rates fall to 6% later, you'll refinance Note that I refrain from saying "just refinance". I don't like the word "just". You'll still need hours to provide documentation and your credit score will be checked. But it's worth it.   You won't “just refinance”. Ha! You'll refinance.   So think of it this way then, you can alter your deal with the bank whenever you want—and usually with no prepayment penalty. Yet the bank can't alter it on you.   What did Darth Vader say to Lando Calrissian in the “Empire Strikes Back?”. I am altering the deal, pray that I don't alter it any further.    Ha! We better not play that clip here. I don't know the copyright laws with LucasFilm or Disney there. Ha!   But you're not a dark lord of the Sith for doing it… for altering the deal on the bank. You're playing within the rules.    This is almost an unfair advantage for Americans.   The bottom line here - with this unique American advantage, is that, as rates change, you get to play both sides of the game. And that's why we add smart properties with loans.    We turn that into wealth, with compound LEVERAGE.    Now, mere compound interest, that's a vehicle for you to rely on more for your shorter-term funds, your cash or what you're keeping more liquid.   Long-term wealth is build through compound LEVERAGE.   Short-term funds - that's for compound INTEREST.   And… 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 about 4-5% today, you're losing your hard-earned cash to inflation.  What I do, is keep my dollars in a private LIQUIDITY FUND. You can do this too. 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 - or even 4-5% elsewhere. The minimum investment is just $25K. You keep getting paid until you decide you want your money back. This private LIQUIDITY FUND has a decade-plus track record - and they've always paid their investors 100% in full and on time. I would know… because, I'm an investor with them myself. See what it feels like to earn 8%. A lot of other GRE listeners are. To learn more, just text the word FAMILY to 66866 to learn more about Freedom Family Investments' LIQUIDITY FUND. Get 8% interest! Just do it right now, while you're thinking about it. Text FAMILY to 66866.   More straight ahead, including what's happening with rents. I'm Keith Weinhold. You're listening to Get Rich Education. _____________   Welcome back… you're listening to Episode 503 of Get Rich Education. I'm your host, Keith Weinhold.   We've got a poll result, from our Get Rich Education Instagram Page.    The poll question was simple. “When buying property, what's more important?”    The purchase price or the mortgage rate.   71% of you said the purchase price. 29% of you said the mortgage rate.    Of course, both are important, but I think that the PURCHASE PRICE is the best answer - because your purchase price stays fixed for the life of your ownership period, and you can CHANGE your fixed mortgage rate and make it malleable… whenever it suits your needs.   As we talk about where the OPPORTUNITY is today, though multifamily apartments are going to bottom out sometime and therefore, at some point, they'll make a wise investment - who REALLY knows - maybe the time for larger apartments is now…   … one opportunity is… giving good people OPTIONS during a housing affordability crisis.   And what's going on right now is that… let me put it this way… when people have a hard time affording their own home today, basically (ha!) people are having a hard time transitioning from resenting their landlord to bickering with an HOA.    Ha! That's kind of how the world works.   Seemingly everyone would rather be bickering with an HOA rather than resenting their landlord.    A lot of renters want to be buyers… they can't… and that isn't expected to change anytime soon… as prices will likely stay elevated… and mortgage rates are staying higher, longer too.   These things are ALMOST “knowns”. It's often wise… to invest in trends that are known. Nothing's completely predictable, but when you're looking for a place to park your investment dollars, a few other things… are known… right now.   And AI is not expected to change what I'm about to tell you… anytime soon.   VR - virtual reality is not about to change what I'm about to tell you anytime soon.   AR - augmented reality isn't either. Machine learning won't imminently disrupt this.   And that is, that… everyone expects more long-term inflation. At what rate, no one knows.   People will need to live somewhere… and there are not enough places to live.   Those three facts, right there, are so simple. I love simple. Ha! One reason I love simple things is that I can remember it.    So many investors - investors in all types of things, say, from tech EFTs to junior mining stocks to crypto - you can make money there.   But, at times, investors will unnecessarily go out on the risk curve and GUESS and speculate… at a future trend.    Some are right. They're often wrong, and adopting too much of that approach… that's exactly when your risk-adjusted return goes down throughout your investor life.   Instead, you can get great returns - real estate pays 5 ways-type of returns - in these trends that I just described that are near certainties.   Why guess? When instead, you can almost be certain.   Often times, the certain thing is right… there.    It's often easier, like I think I brought up on the show once before, inspired by Jeff Bezos - don't ask what will change in 10 years.    The more insightful question and profitable question that fewer people think to ask is actually - “What will be the SAME in ten years?”   Well, when we talk about rents and the fact that tenants WILL keep paying you to live somewhere ten years from now, the trend that's taking place here in the mid-20s decade - here in the mid 2020s, is that… Rents are increasing the most where there hasn't been enough new supply added - up 5-6% in parts of the Northeast including New York and Boston - Seattle too… and parts of the Midwest. Detroit and Honolulu rents are each up about 5%.   Rents are decreasing the least, and even declined - where they've added lots of new supply recently, like Austin, Texas and Miami, where they're down 3% or more in each. New Orleans is another major city that's down - at minus 1%.    But among the larger cities, Austin, Texas is the WORST performer in the nation right now.   If you're listening to this either this week or you're listening to this ten years from today, if you want to know future rent trends, look at where they're adding supply.   Especially in apartments. But all these new apartments will fill up and nationally, they're building fewer apartments this year than last year's apartment-building boom.   When we talk about rents and who owns SINGLE-FAMILY HOMES, there are a few myths that I want to help bust for you here.   There seems to be this misconception or misinformation that GIANT Wall Street firms are buying up all the SFRs. That's just not true.    Now, there is more participation from the big firms than there has been historically, but those that own 1 to 9 SFRs… which is our definition of mom & pop investors here… constitute 80% of the SFR market.   80% own one to nine units. Now, you might own more than 9.    In fact, 14% are in that next tier up, owning 10 to 99 SFRs. Then 3% - known as small national investors own between a hundred and a thousand.   And, what's left, the big institutional investors - those that own 1,000+ SFRs - and you've heard of some of these companies - Invitation Homes, and another is American Homes 4 Rent.    Progress Residential, Blackstone, First Key Homes  - all those big players own just 3% of the market.   So again, 80% are the small ones - the mom & pops… a highly fractured market.   There are a total of 82 million SFHs in the United States. Out of all of them, do you have any idea what percent are OOed and how many are rentals?   It's 83% OOed and 17% of the single-families are rentals. So about one-sixth of SFHs are rented out.   Now, here's the thing. Some people tend to think of mom and pop single-family rental operators as unsophisticated charity case workers who never raise rents.    That's part of the perception out there.    But that narrative has never really been true, and, in fact, the COO of American Homes 4 Rent - his name's Bryan Smith - recently brought up this key point on their recent earnings call.   He said that while historically mom and pops hadn't always priced directly to market because of a lack of market data, "they've migrated into a strategy that's closer to ours."   How is this and why is this? Anymore, why ARE mom & pops raising rents just about as aggressively as the big institutional players.    It's really increased transparency on the rents that landlords are asking… through internet listing sites like Zillow.    It's not that mom and pops didn't increase rents before. (I mean… just look at what happened with rising rents in the 1970s and 80s before institutions were in the sector.)    But when there's a lack of rent amount transparency, it takes longer for operators to discover and adjust to market pricing-- especially for smaller players in a deeply fragmented market.    That's the part that's changing.   But see, increased transparency works both ways. It's good for you and bad for you as a property investor.   This information helps tenants too. In upswing markets, operators may push rents faster than they would otherwise.    But in a downswing market, operators may cut or keep rents flat faster in order to lease the unit.    Because tenants can easily see what other LLs are charging and compare features. When you price too high, units sit vacant and generate no income.   Since renters benefit from increased transparency too, if they see two similar homes, they're usually picking the better deal.   And increased transparency is why NEW lease rent growth is cooling off.    In fact, CoreLogic just released their latest SF Rent Index report last week. It showed that, nationally rents are up 3.4%, which coincidentally, happens to be the same as the latest CPI inflation number.   Detached properties are seeing more rent growth than ATTACHED ones - like townhomes. If you think about it, that makes sense. Townhomes are in less demand now.   Because the homeownership dream, is when one moves out of the apartment & buys a detached house.    And since that's so unaffordable to buy here in the 2020s decade, that's why more people are willing to pay more for to rent the detached type.   Note that SFR rent growth has moderated since mortgage rates spiked-- further dispelling the sticky myth that rents boom when home sales fall.   Remember - when homes price growth is really hot - like it was in 2021 and 2022 - near 15% - rent growth tends to be hot too. It was ALSO near 15%.   And when home price growth is moderate, like it is now, well, rent price growth is moderate too.   Prices and rents move together. They're POSITIVELY correlated. Some people think they move inversely… and we're looking at history over hunches again - what REALLY happens here.   So though you're almost certainly going to get nominal rent growth over time, it's not a good thing for you to count on it in the short-term - it NEVER is, in any era.   The time for you to push rents is, of course, in any market, when you go for NEW leases. A new lease with a new tenant is going to be higher than a renewal lease.   It's the ol' - this has been a good tenant for three years, so I don't want to push the rent too hard & lose them.    To review what you've learned today, inflation is affecting ALL of your investments, 30-year FRMs are a UNIQUE American advantage…   …it's wise to invest in future trends that are KNOWN, if you want to know what is going to happen with rents in the near future, look where they've added supply.    Less new supply correlates with more rent growth… and large institutional investors own just 3% of SFRs.    If you enjoy the show, please, tell a friend about it.   Isaiah on LI had the most flattering comment. Over there, he wrote and called GRE “The best podcast on the planet.”    I… really don't think that I can take credit for that, though… I'd like to think we're a good resource for building your wealth through REI and regularly informing you, giving you ideas that you've never thought about before that add real value to your life.   You've heard of Bidenomics. The first portmanteau type that I ever heard about a President's economic policies is REAGANomics, though it was a little before my time.    Here on the show next week, with us, will be none other than “The Father of Reaganomics”.    Yes, late President RONALD REAGAN'S Budget Director will be here next week. Basically, he was Reagan's “Money Guy”.    His name is David Stockman and he often met with the President in the Oval Office, advising Reagan on economic affairs.   I have asked David Stockman, if besides talking about the condition of today's economy next week, he'll also discuss real estate - and he agreed to do so.    That's “The Father of Reaganomics”. You can look forward to he & I together next week here on the show.   You might be one of the listeners that's been here every single week since 2014 - just like I've been here for you.     A new podcast is published every Monday. If you want more our DQYD E-mail Letter is published and sent about weekly, that's typically been on Thursdays lately. Then, there are many new videos published each month over on our Get Rich Education YouTube Channel. Those are the main three places that you can find us.   Until next week, if you enjoy listening, I really appreciate if you would told a friend about the Get Rich Education Podcast.    Until then, I'm your host, KW. Don't Quit Your Daydream!

Become a time billionaire. In this episode of the Get Rich Education podcast, host Keith Weinhold explores the significance of living an extraordinary life, emphasizing the importance of time management and the value of time.  You are here today, gone tomorrow. Gain new perspective on life and death. The show promotes strategies for achieving financial freedom through real estate investing.  A hypothetical scenario examines the potential impact of eternal life on Earth's resources, prompting listeners to consider the implications of unlimited population growth.  The episode offers a blend of motivational content and practical wealth-building advice, with a side of philosophical musing on the nature of time and life's finitude. We listen in to Neil deGrasse Tyson's “Life and Death: A Cosmic Perspective”. Resources mentioned: 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Welcome to GRE! I'm your host, Keith Weinhold. You need to become financially-free so that you have… time to be present and live in the “now”.    You are here today and gone tomorrow. There's not much time to leave your dent in the universe. All that you ever have is now - and that's how it will always be. Today, on Episode 500 of Get Rich Education.   Welcome in… to Get Rich Education. I'm your host, Keith Weinhold.   At times, people tell me something like: “Look at what you're doing. You live an extraordinary life.”    Now, I might reply to that person with something like - “Thanks. I appreciate it. I like to get out and see the world.”   But do you know what's really going on inside my head when someone tells me that I live an extraordinary life?    I'm really thinking, “Well, of course, I do. Don't you? You design your life: So why would you choose anything… else or anything… less… than an extraordinary life?”    Esp. in this world of abundance that we all live in. That's why you have zero reason to live any life that's LESS than extraordinary - if that's what you want.”   Investing for income now is a tool for freedom.   When you're no longer trading your time chiefly for dollars, that's when you can stop living a disembodied existence - when you're living such that your mind and your body are in two different places.    Begin to own your time and truly be yourself.   You need time.   And you don't have much time. That's why, in my experience, it's better to err on the side of being too early over being too late.    Are you truly living… or are you only existing in space and time? I think that deep down… you know. Ask yourself. You already know the answer.   Remember, Episode 1 of this very show is called: “Your Abundance Mindset.”   But if you're thinking in LIMITING ways, here's the good news - the really good news for you.   You don't have to believe everything that you think.    The good news is that… you were born rich. You were born with an abundance of choices. Society stifled that.    You don't have to believe… everything that you think.    Since there's never a "perfect time" to build financial freedom, your conception that it's too early is often just your fear.    As long as you've got a few touchpoints, once you dive in, you'll figure it out.   Old people tend to regret the things they didn't do, or didn't do earlier—not the things they did.   The best reason for becoming financially-free is so that you can buy time and finally start to be yourself.   If you don't want to do it for yourself, do it for someone you love… because there's someone in this world that needs you to be... you.   Since all that you'll ever have is “now”, you need residual income to buy time so that you can spend more of your life present in the “now”.   Now, if you were to ask yourself, what made the most successful leaders in the world successful, was it the capital they had, their technology, the people they knew, or their mindset? Which one of those things was it?   It's their mindset.   See, because if you took away the capital, technology, or friendships from Jeff Bezos or Steve Jobs or Mahatma Ghandi or MLK - whoever you want to use as your leader.   If you took away those elements but they retained their mindset, they would most likely go on to regain everything they've got.   That's why you must deeply explore and consider, what mindset do you have, where did you get your mindset, and what mindset do you need for the decades ahead?   Did you get it from… your parents? If so, I'm sorry to say, that's usually a red flag… and that's where most of us get our mindset from.    But most people never learn differently.   Realize this - and this is a little hard to say. But the truth is hard.    Your parents don't want your success. Isn't that ironic? Your very own parents don't want your success; they want your safety.    They want you to have a stable, safe, say, accounting job, in a cubicle that only gives you two weeks of vacation a year - because it's KNOWN and average.   A ship in harbor is safe; but that's not why ships are built. Some safety is OK. But you weren't built to live a life CENTERED on safety either.   That's not even approaching living your dreams or doing anything ‘extraordinary'.   Most people aren't living their dreams. They're living their fears.   When your parents had you at birth - in the hospital delivery room - they'd be thrilled to know that you'd grow up to live your DREAMS. But on the day-to-day, they've got you living your fears.    Once your parents got “newborn you” home from the hospital, all the way up to adulthood, an overly fragile safety mindset often becomes pervasive… and it stifles dreams.   If you don't take a chance, you don't have a chance. Take the risk or lose the chance.   Don't live below your means; grow your means. It's in your genes… though that probably wasn't part of the mindset of your formative years.   I love my parents. They cultivated the right environment for me. But you'll often find an overabundance of safety from yours - especially from your mother.   Eckhart Tolle said: “Most humans are never fully present in the now, because unconsciously they believe that the next moment must be more important than this one. But then you miss your whole life, which is never not now. That's Tolle.   Alright. But once you've made time, what's next? It's how you arrange your priorities.    We think it's about time management - and it STARTS THERE.    True achievers in life make large blocks of uninterrupted time - notifications off, phone one room away.   But more specifically, it's about your priority management.   For me, I know that I'm going to be living in this same body 50 years from today - just like you will inside yours, so I make FITNESS a priority in life - often at the expense of investing & business opportunity.    That's my take - it doesn't have to be your take. That's an example of priority management.   First, you've got to play a game worth winning. It's been said that one question to establish focus is, ask yourself: Are you hunting antelope or field mice? This… idea is simple (but supremely powerful): A lion is capable of hunting field mice, but the prize wouldn't be sufficient reward for the energy required to do so.  Instead, the lion must focus on the antelope, which does require considerable energy to hunt, but provide a sufficient reward. In whatever you are pursuing, are you hunting antelope or field mice? Are you focusing on the big, weighty, important tasks that will provide sufficient reward for your energy?  Or are you burning calories chasing the tiny wins that won't move the needle? Ask yourself this question from time and time and use your answer to reset as necessary. Always hunt antelope! When it comes to priority management…   … you've got to make time for yourself and create better “nows” for yourself beyond the mandatory loads that you're already encumbered with.    Because you'll still have meal planning, grocery shopping, doctor's appointments, housekeeping, scheduling, meeting, driving…   There's not much leftover discretionary time left over to make you the you that you need to be - whether you're trying to be the best equestrian rider that you can be because you connect with horses…   …you're trying to be the greatest PARENT ever, cleaning up a beloved local creek, coaching your kid's sports team… or maybe you'll move heaven & earth to write that book that you just KNOW that you have inside of you. Get it out there!   But instead, people rationalize away their low quality of life.   If you're working for the weekend, examine your M-F. You're not living in the “now”. If you call Wednesday “hump day”, you're not living in the now.    The good guys are BRAVE enough to risk investment, commitment, marriage, being vulnerable to family members, and all those things that make the non-doers and bad guys envious. Be brave enough to study and then risk boldly.   This is sad. You've probably heard of stats like this before - a Pew survey from last year found that 46% of US workers who receive paid time off from their employer take less time than they're offered. Almost half!   People rationalize away their low quality of life - actually defending living a small, scared, too-safe life.   If you need a push to fire up Google Flights, consider that you will be happier because of it.  That's what the science says: researchers from the Netherlands found that the biggest boost in happiness around vacations came from the simple act of planning one. Then you get to anticipate it. How important is it to build a residual income rather than work more hours? Is working more and working late the answer?   Understand… that twenty years from now, the only people who'll remember if you worked late are your kids.   Instead, become a time billionaire. Let's lean into this and look at what some others say.   Graham Duncan proposed the concept of the Time Billionaire. If you've got a billion seconds worth of wealth, that's 31 years. He said that:   "A million seconds is 11 days. A billion seconds is 31 YEARS… I feel like in our culture, we're almost obsessed, as a culture, with money.  And we deify dollar billionaires in a way...And I was thinking of time billionaires that when I see, sometimes, 20-year-olds—the thought I had was they probably have two billion seconds left.  But they aren't relating to themselves as time billionaires."  That's what Graham Duncan said. The central point here… is that TIME is our most precious asset. No one ever posts pictures of napping on the sofa on social media. But if you're a time billionaire - you might consider that an ostentatious display of time wealth. Ha! When you're young, you are RICH with time. At age 20, you probably have about two billion seconds left (assuming you live to 80). By 50, just one billion seconds remain. But as Graham Duncan pointed out, we don't relate to ourselves as the "Time Billionaires" that we really are. Most of us fail to realize the value of this asset until it is… gone. In his passage called On the Shortness of Life, the stoic philosopher, Seneca, says, "We are not given a short life but we make it short, and we are not ill-supplied but wasteful of it." That's Seneca. To me, being a “Time Billionaire” isn't necessarily about having the actual time, but about the awareness of the precious nature of the time you do have.  It's about embracing the shortness of life and finding joy in ordinary daily moments of beauty. Let me introduce the “Surfer Mentality”. Yeah, the surfer mentality. When a surfer gets up on a wave, they enjoy the present moment, even though they know with certainty that the wave will eventually end.  They fully enjoy THIS wave, with the wisdom and awareness that there are always more waves coming. There are five ways that you can apply this “Surfer Mentality” and have this awareness in your life: (1) enjoy your next wave and embrace the present moment, (2) be strategic about your positioning in between waves, (3) PASS on more waves rather than jumping at the first one that comes your way, (4) always get in the water and stop sitting on the shore, and (5) roll with the punches that life deals you. That's the “Surfer Mentality” Do not become an ostrich. An ostrich will bury its head in the sand to avoid danger. A lot of humans behave the same way when they encounter new information that challenges their existing beliefs or views.    An ostrich cares more about being right than finding the truth. Do not become an ostrich, embrace new information that forces you to change your mind. That, right there, is growth.   A great, actionable way for you to GROW with the time you've created and the priorities that you've outlined is to Do something new that scares you. This is EXACTLY what you did as a kid but that you forgot how to do.    For example, when you were age 11, you swam in water over your head for the first time. It made you rise up, grow, and gain confidence. I can't tell you what grows inside you psychologically, but…   We're operating 200,000 year-old mental software. That's when the modern human brain came into existence.    Our primordial brains are evolutionarily wired to see problems - to detect threats like lions & tigers - and our body still responds to those threats like they are lions.   And today, we don't have to look very hard to find those problems. Just turn on the news or scroll social media and there they are.   And in this environment, it can be easy to let ourselves be yanked around by our circumstances.   When it comes to OTHERS - peers, family, and friends along your life journey…   You have to be strict with yourself but tolerant of others.    That's what the stoic Marcus Aurelius wrote about in his meditations. He has these exacting high standards.    Most people don't have the self-discipline that you do… and it's called SELF-discipline for a reason.    It's not a thing that you get to project onto other people. You don't get to go around insisting that other people follow YOUR standards and your code.    You have to be encouraging and forgiving of other people because they don't have the gift that you have. They don't own the drive that you have. There's even a saying in ancient Rome.    “We can't all be Catos.” If you remember from history, Cato was the influential leader that championed Roman virtues during THEIR empire.   We have to be tolerant, and accepting and encouraging of other people. If this realization is still frustrating to you…   Another way that you can think of this, is that others never signed up to the code and standards that you have.”    Money is a tool for freedom. The best reason to accumulate wealth is to buy yourself freedom from anything you don't want to do, and the freedom to do the things you do want to do. Money is not an end in itself. If you sit on it and never use it, you've wasted your life.    Money CAN absolutely buy happiness. But only so long as you spend it on upgrading and expanding the things that make you happy or in buying time, instead of using it to play status games or on fleeting experiences.    Increase the difficulty. If you're listening to this, then your life is (probably) already on easy mode compared to the global and historical standard. You need to strategically introduce some challenges to keep yourself motivated. Don't ruin yourself, but don't let yourself get too complacent, either.    Investing involves risk. You're going to lose sometimes. The good news is that you don't have to make money back in the same PLACE where you lost it.    If something in your business or life is losing money, you don't have to plug the hole right there at that spot. Often it's easier to make the money back elsewhere.    It's never the right time. Any time you catch yourself saying “oh it'll be a better time later,” you're probably just scared. Or unclear on what to do. There is never a right time for the big things in life: having kids, changing jobs, breaking up, getting engaged, or buying the property.    Err on the side of too early over too late. Related to that point, since there's never a “perfect time,” it's almost always better to do things “too early.” Your conception that it's too early is just your fear, and once you dive in you'll figure it out. Old people tend to regret the things they didn't do, or didn't do earlier. Not the things they did. Bad things happen fast, and good things happen slowly. This is one reason why bad news seems more newsworthy - but it's not actually more important. It's hard-wired within you that money is a scarce resource.  Don't be afraid to commit. You've got to let go of fear about tomorrow and just get on with it.    Uncertainty is a PERPETUAL condition - it's existed in your entire past, and will in your entire future. That's why you feel uncertainty in the present too. Uncertainty only disappears when you die.   We all want to know the future. But the truth is, it's easier to make decisions within your certainty of NOW rather than postpone & speculate about your perpetually uncertain future.   “Life is meant to be lived, not postponed.” Don't get so caught up trying to make a living that you forget to live a life. That's not a life well-lived.   Regretting past decisions is an utter waste of energy. Does the past exist now separate from your own thoughts? Nope… it doesn't even exist.    Coming up - you'll hear ANOTHER voice with a more COSMIC perspective about life and the power of “now” - it includes some sound effects to anticipate.  Then I'll come back in for today's conclusion. I'm Keith Weinhold. It's Episode 500 of Get Rich Education.    LISTEN: Neil Degrasse Tyson: Life and Death - A Cosmic Perspective   That's Neil DeGrasse Tyson on the significance of life, death, and the power of “now”.   Horace Mann said, "Be ashamed to die until you have won some victory for humanity."   Life feels ordinary. But in fact, it's incredible that you overcame tremendous odds to have your… one… precious life.   In order to be born, you needed: 2 parents 4 grandparents 8 great-grandparents 16 second great-grandparents You needed 32 third great-grandparents 64 fourth great-grandparents 128 fifth great-grandparents 256 sixth great-grandparents To be born, you needed 512 seventh great-grandparents 1,024 eighth great-grandparents and 2,048 ninth great-grandparents For you to be born today from 12 previous generations, you needed a total sum of 4,094 ancestors over the last 400 years. Think about what they overcame… to produce you – How many struggles did they have? How many battles? How many difficulties? How much sadness did THEY have?  How much happiness? How many love stories created you? How many expressions of hope for the future? – did your ancestors have to undergo for you to exist in this present moment… The past is history, the future is a mystery, and this moment is a gift. That's why they call this gift, “the present”.   Spend your time where time disappears. Your work should feel like play… your passions should feel like flow… with people that make hours feel like minutes.    The more present you are, the quicker the present goes. That's the paradox.    A full life goes fast. But in the end, time that flies… is time well spent. And a life that flies by… is a life well spent.    At least here on Earth, all you've got is one life and one shot.   You shouldn't fear death. You should fear a life where you could have accomplished more that fulfills your potential and aligns with your soul.   You're here today and gone tomorrow. You've got NOW to go leave your dent in the universe.   There's no time to wait. You now have less time remaining in your life than when you started listening to me today.   All that you ever have is now - always. Don't Quit Your Daydream!

Get our free real estate course and newsletter: GRE Letter Our core formula here at GRE is simple, buy-and-hold real estate. Then where does your profit come from? I explain. Where will your next tenant come from? Essentially, market intelligence analyst Rick Sharga & I answer this today. We explore job growth, wage growth, and the condition of today's consumer / tenant.  Rick Sharga doesn't believe that mortgage rates will fall substantially until the Fed Funds Rate does. This isn't likely to happen until at least June. Consumers are exhibiting some distress signals. Credit card debt has swelled. We break it down. Many economic indicators still show that they'll still be an economic slowdown.  In most recessions, home sales and home prices both rise. Resources mentioned: Show Page: GetRichEducation.com/495 Inquire about business with Rick: CJPatrick.com Rick Sharga on X: @ricksharga LinkedIn: Rick Sharga 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Keith Weinhold (00:00:00) - Welcome to gray. I'm your host, Keith Weinhold. We aren't fooling around on April Fool's Day. How can you be assured of having rent paying tenants in the future? That's dictated by the economy, job growth and real wage growth above inflation. Well, how exactly does all that relate to the housing market? We break it down today with an expert guest on Get Rich Education. 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've got pop ups and push notifications and cookies. Disclaimers are. At no other time in history has it been more vital to place nice, clean, free content into your hands that actually adds no hype value to your life? See, 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 to get the letter. It couldn't be more simple. Text GRE to 66866. And when you start the free newsletter, you'll also get my one hour fast real estate course completely free.   Keith Weinhold (00:01:16) - It's called the Don't Quit Your Daydream letter and it wires your mind for wealth. Make sure you read it. Text GRE to 66866. Text GRE to 66866.   Corey Coates (00:01:33) - 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 (00:01:49) - What category? You're listening to one of America's longest running in most listened to shows on real estate investing, the Voice of Real Estate since 2014. This is get rich education. I'm your host. My name is Keith Weinhold, and you probably know that by now. But what we never truly know is the direction of the economy and how it shapes the housing market. Well, an expert and I are putting our heads together for you today to give you the best indication that we possibly can. I'll be with us shortly. And he is coming, armed with all of his best indicators and statistics. Last week here on the show, I got somewhat philosophical with you at times when I posited the question, do you want to retire? And I helped answer the question, what is retirement today anyway? I had a lot of good feedback on that show, but today we're talking about more concrete indicators with some numbers.   Keith Weinhold (00:02:50) - For example, historically in a recession, what really happens to real estate prices? We're going to answer that and more questions like it today. Now, I like to say that wealthy people's money either starts out in real estate or ends up in real estate, but there are so many ways to do it, so many ways to do real estate right? Hence so many ways to do it wrong as well. Our formula that we use here at GRE more than any other, is something we use because it is so simple that I think some people overlook it. It is buy and hold. Yeah, mostly long term buy and hold residential rentals. Now, we sure talk about some other things too, but that's really a cheap formula, something that we focused on since day one here. Now there surely can be some other good strategies as long as you execute, right? Flipping, wholesaling, Oreos, the birth strategy, self-storage units, RV parks and a lot more. But with buy and hold, I think some people know the real estate.   Keith Weinhold (00:03:58) - They might then ask, well, well where's your margin on that? Where does your profit come from if you just buy and hold? Or they might even think that that strategy is really slow and a 40 year game plan. Well, then they learn about the five ways and that changes that. It's largely about buying strategically and then managing your manager. I think most people dream of a life where they can just spend their time remotely managing their investments here and there. Now, for me, most months, I don't have anything to do with managing a property manager in a certain market. I just get the cash flow and then I do browse the monthly property statement. Some months had only been do that because from the amount of cash flow received, I can often see that nothing really went wrong for the month because from the amount of cash flow received, I can often see that nothing really went wrong for the month. Tax benefits as one of the five ways you're paid. That takes some management to and you know this tax time of year with my bookkeeper.   Keith Weinhold (00:05:11) - At times she emails me and asks me for this and that scrap of information. The mindset that helped me manage all the generous tax benefits of real estate is not taking my bookkeepers questions as an occasional annoyance, but rather taking the mindset of tax benefits or something that you can manage throughout the year. And that way when my bookkeeper goes an entire month without asking me for something, it can feel like a short break. Sort of like something was turned off for a month. And hey, first world problems, right? Downloading a document and emailing it to your bookkeeper ten minutes a month., today is also talking about where your next tenant is coming from, which really, at the end of the day, is what a real estate economics discussion is about. Well, it's also about giving tenants the housing that they want, meeting their desired lifestyle and the set of amenities that are both going to attract your renter in the first place and then retain your renter over the long term every year. Building,, the property management software company, they ask thousands of renters which amenities and property layouts would motivate them to choose one rental property over another.   Keith Weinhold (00:06:33) - That's what they're asking tenants. And what you imagine that renters might want could be different from the reality. For years now, renters are prioritizing their neighborhood quality. In the amenities that are actually inside the rental unit. Those things are more important than they are the shared community amenities like a pool, lobby, clubhouse or gym. Renters are gravitating toward neighborhoods that are safe and quiet, but yet are still convenient to stores and restaurants. And that led to half of the renters surveyed to rental properties that are located in the suburbs. Now, when it comes to the amenities within their rental unit that they're prioritizing, renters want a space with kind of all those comforts of home air conditioning and a washer and dryer to the option to own a pet. And these are the feature types of single family rentals, although some newer apartments can meet that too. And some condos community amenities. Then like a fitness center or a pool. I mean, they still hold some appeal to residents in these surveys, but lately they're seen more merely as perks instead of necessities for today's cost conscious renters.   Keith Weinhold (00:07:55) - So the bottom line here with this survey is that it's what's actually inside the unit that's become more important. And maybe that's a little too bad as people tend to get less social. They're using community areas less, they're prioritizing them less. And hey, maybe they just want to lie on the sofa and scroll their phone in a nice, comfortable place. Hey, you've got a suit and fit the world as it is, not as the way that you wanted to be, at least when you're providing others with housing. Hey, coming up here both on the show and on our YouTube channel, why do Western US homes cost more than eastern US homes on average? This seems geographically paradoxical. It feels backwards to a lot of people, because almost two thirds of the United States lives east of the Mississippi River, and yet that area comprises just over one third of all the land. You've got almost two thirds of people living on just over one third of all the land in the East. So to some more people on less area, oh, that would have to mean that eastern home prices are more costly.   Keith Weinhold (00:09:09) - No, it is exactly the opposite. In fact, coming up on a future show, I'll share eight plus reasons why. This is why Western US homes cost more than eastern ones. And this is also why many of the best cash flow markets, they tend to be in the eastern half of the US. They have those lower purchase prices also coming up in the future. I'm about to have a talk. This talk isn't going to be on the show here, but a talk with a conventional financial advisor about my own personal retirement. I've got an appointment with this person and this ought to be interesting. We'll see what he says about my situation. I'll try not to lecture him on how financially free beats debt free or anything like that. We'll see if I can hold off doing that. And if that meeting produces some interesting takeaways or just humorous ones, I'm going to share that with you in the future. And if you want to be sure to hear those upcoming episodes on subjects like that, I invite you to follow the show here on your favorite podcast.   Keith Weinhold (00:10:17) - And that way you won't miss any upcoming episodes. I only met today's guest about two years ago. We enjoyed that conversation and now we collaborate regularly. He helps provide crucial market updates that straight ahead. I'm Keith Reinhold, you're listening to episode 495 of get Rich education. You know, I'll just tell you, for the most passive part of my real estate investing, personally, I put my own dollars with Freedom Family Investments because their funds pay me a stream of regular cash flow in returns, or better than a bank savings account up to 12%. Their minimums are as low as 25 K. You don't even need to be accredited for some of them. It's all backed by real estate. And I kind of love how the tax benefit of doing this can offset capital gains and your W-2 jobs income. And they've always given me exactly their stated return paid on time. So it's steady income, no surprises while I'm sleeping or just doing the things I love. For a little insider tip, I've invested in their power fund to get going on that text family to 66866.   Keith Weinhold (00:11:31) - Oh, and this isn't a solicitation. If you want to invest where I do, just go ahead and text family to six, 686, six. Role under the specific expert with income property you need. Ridge lending Group Nmls 42056. In gray history from beginners to veterans, they provided our listeners with more mortgages than anyone. It's where I get my own loans for single family rentals up to four Plex's. Start your pre-qualification and chat with President Charlie Ridge personally. They'll even customize a plan tailored to you for growing your portfolio. Start at Ridge Lending group.com Ridge lending group.com. This is Rich dad advisor Tom Wheelwright. Listen to get Rich education with Keith Reinhold and don't quit your daydream. You are going to get a fantastic real estate market update today, and you'll also learn lessons if you're consuming this 5 or 10 years from now. Our expert guest has been the executive VP of markets. Some of America's leading housing intelligence firms named it national lists of most influential real estate leaders. He's frequently quoted on real estate, mortgage and foreclosure markets, too.   Keith Weinhold (00:12:59) - He runs the real estate market intelligence firm, the C.J. Patrick Company. Hey, welcome back to Great Rick Saga. Always a pleasure to spend some time with you, Keith. Thank you for having me. Oh, same here, because, Rick, you've been with us here every six months for about two years now. You and I discussed the condition of the overall economy as well as the real estate market. I think of both of those as resilient today. Now, back when I was a new real estate investor, Rick, I didn't know to look at the broad economy at all. I was more concerned with if, say, on a vacant unit that I had, I had the drywall texture just right to try to attract a new tenant ASAP. Now that surely matters. But time gave me the perspective to know that what matters more is to have a local stable of tenants that are capable of paying the rent, and that's what matters more. So with that in mind, where would you like to begin? That's great counsel.   Keith Weinhold (00:14:03) - And it's really important for investors or even somebody looking to buy a house, understand what's going on economically, both across the country and in their region. So why don't we start by taking a look at what's going on in the economy? There's been a lot of conversation about potential recession. We can talk a bit about that, but if you're good to go, we'll start by just sharing some information about the US economy and some of the trends that we're seeing. Yeah, let's go ahead and do that. And yes, that dreaded our word may very well come up. That thing that we've all been waiting for but has never happened. Don't count your chickens just yet. But let's see what's going on. Because on average, recessions do happen every five years. It's just a normal part of the business cycle. Yeah, that's important to keep in context. I'm glad you brought that up. Recessions are a normal part of the business cycle and the economic cycle. We may be slightly overdue to have one at this point, although the last one that we had took very, very long to recover from, the Great Recession that started back in 2008 took a full decade to recover from, which is also very unusual.   Keith Weinhold (00:15:05) - So we'll take a look at some of these cycles and see where we are today. Keith, the basic metric that most economists look at when they're trying to figure out the strength of the US economy is is something called the gross domestic product, the GDP.   Rick Sharga (00:15:18) - We track that to see if it's growing, if it's declining. The technical definition of a recession is two consecutive quarters of negative GDP growth. And there's been a lot of talk about the GDP slowing down in the US. But really it's been mostly talk. In fact, if you look at the last quarter, we have data four, which was the fourth quarter of last year. You can see that the GDP grew by 3.2 3.3%, which was a much higher number than what most economists had forecast.   Keith Weinhold (00:15:47) - That resilient economy with a low unemployment rate, jobs being added and productive growth in the GDP.   Rick Sharga (00:15:54) - Yeah, we're going to get to all of that. And it's a great point. If you look at what makes up the GDP, about two thirds of it is comprised of consumer spending, right.   Rick Sharga (00:16:04) - So typically when you see strong GDP numbers, you're consumer is doing pretty well. And a lot of this probably has to do with consumers still having money to spend from the enormous amount of stimulus that the federal government poured into the economy to help prevent a recession or depression during Covid. About $15 trillion in all of the stimulus that was sent out to consumers and businesses alike. And that's probably helped us weather the storm of what normally might have been a slowdown in the economy. We are, however, Keith, in a globally interconnected economy, and it's important to note that not all of our peers are doing quite as well. Canada may already be in a recession. The UK is almost certainly in a recession. The eurozone barely escaped going into recessionary numbers in the last quarter, and even markets like China aren't doing as well as as expected. And I'm not saying that to gloat about how well the US is doing. I'm saying that is sort of a warning that if we do get into a situation where it looks like there's a global recession going on, it's very unlikely the US will come out of that untainted at all.   Rick Sharga (00:17:09) - So it's something to keep an eye on as we move forward.   Keith Weinhold (00:17:11) - Right. 100%.   Rick Sharga (00:17:13) - You mentioned unemployment a couple of minutes ago, Keith, and that's one of the other economic metrics we check. Unemployment went all the way up. And I say that facetiously. The 3.9% in the numbers, full employment is considered to be anywhere at 5% unemployment or lower. And we haven't been at 5% unemployment. Probably since about 2016, with the exception of the blip we had during the Covid pandemic, when the government shut things down and we had a huge increase in unemployment temporarily. But we are continuing to see very, very strong job numbers, both in terms of these low levels of unemployment and in terms of job growth. The January and February numbers again caught the economists who come up with these consensus forecasts by surprise. In January, about 350,000 jobs created. In February, about 250,000 jobs created. I should put an asterisk on some of these numbers. When you hear politicians talking about all the jobs they've created over the last few years.   Rick Sharga (00:18:15) - Keep in mind that during the Covid pandemic, we wiped out about 22 million jobs virtually overnight. A lot of the millions of jobs that have been created over the last few years were really those old jobs being refilled. We filled most of those within about two years, and we have continued to create jobs since then. We have more jobs than we have people looking for work. They're about 8.5 million jobs open, about 6 to 6.5 million people looking for work.   Keith Weinhold (00:18:43) - You can almost think that this is an over employed condition.   Rick Sharga (00:18:46) - And it almost is in most cases, not all cases, but in most cases, somebody who doesn't have a job right now just isn't looking for a job right now. And these are not all service level jobs. That's the other pushback I get when I'm out talking to groups sometimes. Oh yeah, but not everybody wants to work at Starbucks. Well, first of all, you get pretty good benefits of Starbucks free coffee healthcare. But let's not do a Starbucks commercial. These are government jobs.   Rick Sharga (00:19:10) - They're manufacturing jobs. They're construction jobs. They are some type of service level jobs. But these are jobs across the board. And because there are more jobs available than people are looking for work, we're seeing wages go up. The average hourly wage across the country last month was over $29 an hour, which is the highest it's ever been. And if you look at wage growth on a year over year basis, it's running at about 5%. And really, Keith, this is the first time in a number of years that we can say with certainty that wage growth is actually running at a higher pace than the rate of inflation, right.   Keith Weinhold (00:19:44) - And that really matters. That really helps pay the rent. One thing that detractors say with the unemployment rate, you talked about them not necessarily being consolidated in the low paid service sector area, is that a lot of people lament, well, aren't many of these part time jobs? Where are your thoughts there?   Rick Sharga (00:20:01) - There are a probably historically large number of part time jobs, but we also have an awful lot of people who have opted out of full time work for a variety of reasons, and are thrilled to be able to pick up some money working in the gig economy.   Rick Sharga (00:20:16) - So whether they're driving for Uber or Lyft, they're doing DoorDash or something else that's a part time job that they're doing just to either, in some cases, kill time or to make a little bit of extra money. This isn't an economy where the majority of part time workers are in part time jobs, because they can't find a full time job. That's simply not the case, and the data doesn't support that.   Keith Weinhold (00:20:41) - Now, if you, the listener and viewer here are wondering, well, this stuff doesn't apply directly to me. I'm good. I'm secure in my job. Maybe I don't even need a job. Keep in mind that we're talking about the financial condition of your tenant today.   Rick Sharga (00:20:57) - Yeah. When I'm talking to to real estate investors in general, I know that you were talking about drywall earlier, and sometimes you really can't see the forest for the trees. You're kind of overwhelmed or you're not sure where you should actually be looking. I tell them in many cases, to pay less attention to home prices and rental rates and more attention to some of the underlying fundamental economic conditions.   Rick Sharga (00:21:20) - Are you in a market where population is growing or declining? Are you in a market where there's job growth? Are you in a market where there's wage growth? If you're at a market where the population, jobs and wages are all growing, you're going to be in a pretty healthy market for real estate, whether it's owner occupied properties or its rental properties. On the other hand, if jobs are leaving your market, if wages are going down, if population is declining, those are warning signs. And it might be an indication that that's not a good market to start investing more in. So everything we're talking about really does get connected back to the housing market, whether it's rental housing or owner occupied housing. And it's important to see these trends for what they are.   Keith Weinhold (00:22:04) - And of course, we're talking about these factors on a national level. As we know, our real estate is local, and our audience is often interested in studying a metro market before they decide to invest there. So on that more regional level, Rick, or local level, do you have any favorite resources or websites or apps that you think are important for prospective investors to look at first within a certain region or MSA? Well, you.   Rick Sharga (00:22:33) - Can. Find a lot of local market data on some of the free housing sites that are out there. The Zillow's, the Realtor.com is the homes dot coms of the world. If you go beyond the basic home search, or if you dig deep into some of the information that they provide on local markets, within that home search, you'll find a lot of information there. There are third party companies. There's a company I'm familiar with it that works mostly with realtors, but has a lot of data that investors would probably be interested in. It's called keeping current matters. Yeah, they do an awful lot of reporting on this. But if you really want to do your own research and you don't mind doing a little bit of digging, I find that the Department of Labor and the Census Bureau and the Bureau of Labor Statistics, all government entities, have just copious amounts of local market information. You can find, you know, down to what does the local Pipefitter earn on an hourly basis in Peoria? There's all of that data out there for free on these government sites.   Rick Sharga (00:23:34) - You just have to be willing to do a little bit of research and dig through those sites.   Keith Weinhold (00:23:39) - Right. And sometimes the government websites don't exactly present their information in a beautiful, graphically rich way. But this is part of your research. Some people don't realize that, Fred, the Federal Reserve economic data has an awful lot of regional and local information, not just national information as well. Well, thanks for sharing some of those resources, Rick, and where you like to go and look, that can really help our audience. What else should a real estate investor know about today's overall economy?   Rick Sharga (00:24:08) - So we talked about consumer spending and the reliance our economy does have on consumer spending. And one of the things that I'm watching fairly carefully right now is an apparent disconnect between consumer confidence and consumer spending. So if you go back to when the pandemic hit and the lockdown occurred, consumer spending obviously fell off a cliff. There was just nothing to buy. And consumer confidence took a major hit with the announcement of the pandemic.   Rick Sharga (00:24:34) - Consumer spending as soon as the lockdown was over started to come back strongly and has never slowed down. It's hit an all time high today. Consumer confidence, on the other hand, was battered a little bit by subsequent waves of Covid, by threatened government shutdown in Washington, by the war in Ukraine, by the more recent war in the Middle East. And so the concern here is that if consumer confidence doesn't come back, we might see spending revert to the mean. And actually, as economists would say, and come back down, which would cause, at the very least an economic slowdown and at the worst, probably a recession. So it is something we're keeping an eye on. Consumer confidence has been improving a little bit lately, but historically it's gone hand in hand with consumer spending. And that simply hasn't been the case in recent months. So it is something we're keeping an eye on.   Keith Weinhold (00:25:25) - Now, one might wonder how do you measure confidence? Well, there are various surveys out there. And Rick, the way I think of it with consumers is that consumer confidence is more of a leading indicator, and then the actual consumption is more of a trailing indicator.   Rick Sharga (00:25:42) - I completely agree with you. The sentiment index that I follow most closely is one that's put out by the University of Michigan. Yeah, and it's been out there for decades. So there's an awful lot of history that goes with it. And generally speaking, on any index, you're looking for a number that's around or above 100 because that usually is your baseline. And some of the more recent months we've seen numbers down in the 50s and 60s. Now they've been trending up, as I said, in recent months. But that's something that's reported on very widely by the press. We were talking about sourcing things for investors. And I have to tell you, the just doing a basic Google search for something like, what's consumer confidence like today? You'd be surprised. The rich information that you can pull just from Google, that you can start to find some of these sources online. But that is one thing that we're watching. And, Keith, I think it's important to break out a little bit in more detail how consumers are spending or what they're spending with.   Rick Sharga (00:26:44) - And these are potential red flags for the economy, consumer credit card use. The amount of debt on credit cards surpassed $1 trillion in the third quarter of last year for the first time ever, and it got close to 1.2 trillion in the fourth quarter. That's an awful lot of credit card spending. Regardless of what you want to talk to me about, with inflation adjusted dollars, it's still $1 trillion. And that happened at a time when credit card interest rates had soared because of what the Federal Reserve was doing. So you're talking about people spending 1 to $1.2 trillion on their credit cards, when the average interest rate on a new credit card issued was between 25 and 30%. Gosh. Which, by the way, is a high enough number that it used to get you arrested for usury. And apparently now it's the new. Normal and it's okay. But this is concern. And one of the big concerns is because the cost of living has become so high and it's so difficult for so many families. The worry is that people might be starting to use their credit cards to make ends meet, to buy basic necessities, and that historically has not been a story with a happy ending.   Rick Sharga (00:27:52) - So we are watching credit card use. We're also watching personal savings rates. When the government stimulus came out, we saw a savings rates at all time highs. We then saw savings declined rapidly to all time low levels. They've recovered a little bit, but they're still on the low end of things, historically speaking. So the same worry here, Keith, which is that we're worried that families might be dipping into personal savings in order to make ends meet. And that combination, there's some research that suggests that, on average, the US household has more credit card debt than they have savings, and that's just not a healthy ratio for anybody to have.   Keith Weinhold (00:28:30) - Yeah, America has very much so they live for today mindset I think. So therefore it was a pretty predictable that after the Covid stimulus payments that savings levels probably would drop.   Rick Sharga (00:28:42) - Yeah. It's just that they drop further than what we had hoped they would. We're going to talk about inflation in the second. I have a bit of skepticism about some of the inflation numbers that we see reported from the government because of what they include or exclude, or some of the data is trailing by a long time.   Rick Sharga (00:28:56) - So I out of frustration, I created my own CPI. It's not the consumer price index, it's the Costco price index. And I look at one of my leading indicators is salmon because I buy my salmon at Costco. And a year ago that salmon cost 999 a pound. Today shopping a Costco, that salmon costs 1299 £1.30 percent. That's a 30% lift for all the talk we hear out of the administration about gas prices going down, I can tell you that where I buy my gas at Costco, it's a couple dollars more a gallon than it was just a few years ago. And I say this with a little bit of a chuckle, and I say this knowing that it's a nuisance for me. But I've been blessed. And it's not a life or death decision for me. But there are families out there who are deciding whether or not they can buy salmon this week. And I would submit that on average, your rental family's income is lower than your owner occupied houses, families, income. And so for all of your listeners who are landlords, this is something to be paying very close attention to, despite the fact that inflation is coming down.   Rick Sharga (00:30:02) - Keep in mind that these inflation rates are on top of very high prices that we have as a result of the previous cycle of inflation. So it's going to take a while, even with wages going up for those households to catch up here. And the hope is that wage growth will continue to outpace inflation growth long enough that they'll be able to do that.   Keith Weinhold (00:30:23) - Yes, that's a positive trend. Yeah. Rick, as long is in your Costco price index, Costco doesn't try to skimp, inflate and replace your wild elastic salmon with Atlantic farmed salmon. I'm sure you're going to be paying attention to that as well as you fill your own shopping basket and come up with what's really happening with inflation. Because for those that believe the CPI, it's been reported in the low threes lately and CPI peaked at 9.1% almost two years ago in June of 2022.   Rick Sharga (00:30:55) - And what the Federal Reserve has done is unprecedented. We've only ever seen rates go this high this quickly, once in the last 50 or 60 years. That was back in the 1980s, when inflation was really in runaway mode and out of control.   Rick Sharga (00:31:10) - And normally what the Federal Reserve does is very methodical, very thoughtful. They'll raise the fed funds rate a quarter of a point. They'll sit back and wait to see what happens. They'll raise another quarter point and give it some time to take effect and so forth and so on until they feel like inflation is under control. And then they'll then they'll drop that fed funds rate. In this case, they've admitted a few things that probably took a lot for them to say out loud. They admitted that they underestimated how high inflation would get. They admitted that they underestimated how quickly it would rise. And they also admitted that they underestimated how difficult it was going to be to get it under control. So what it did peak at about 9.1% a couple of years ago. They took unprecedented steps in terms of the size of of rate hikes and the rapidity with which they raised the fed funds rate. And now they're in a position where inflation is trending more or less in the right direction. It's in the low threes, as you said, it has not come down as much in the last couple reports as they would like.   Rick Sharga (00:32:10) - And that's probably going to result in them holding the fed funds rate at its current level for at least the first half of this year before they start doing rate cuts, because the last thing they want to do is cut too soon and see inflation start to come back up.   Keith Weinhold (00:32:25) - About one month ago, I did an episode titled Why the Fed should not lower rates. Rates are. Normal and the economy doesn't need the help. So if we do have this dreaded R-word, this recession, the most convenient tool for the fed to use is to cut rates. We don't want to use up that ammo while we're still in a good position like we are today.   Rick Sharga (00:32:47) - Yeah, I don't disagree with you. And there were some economists and mostly Wall Street, who had been predicting a fed rate cut as early as March and over the course of the year. And I thought they were all crazy great. And I've been saying at the earliest, May now I think it's probably not until June. The rates are a little higher than historic averages.   Rick Sharga (00:33:05) - I could see maybe three rate cuts this year, maybe four if the economy slows down significantly. We're not we're certainly not going back to the zero rates that we had for a few years. I think the fed will be very cautious and reserved in its approach to scaling back the fed funds rate. One of the the side effects of what they did is they cast a lot of uncertainty and doubt into the financial markets, which have caused mortgage rates to skyrocket, which have caused private lending rates to skyrocket. For your listeners who borrow from private lenders. And I don't think we see those rates start to come down significantly until after the fed does its first fed funds rate cut, I suspect, and so far I've been right, that until we see that rate cut, we're going to see mortgage rates on a 30 year fixed rate loan kind of bounce back and forth in a very narrow band between about 6.75 and 7.25% for the next few months. And that's really where they've been since January. And I think that will continue to be the case until we see that first rate cut, at which point the market will probably say, okay, they're serious now we can have that sigh of relief, and then we'll see a slow and gradual reduction in mortgage rates.   Rick Sharga (00:34:21) - I did want to touch on two things related to the fed actions and the current economic issues. Keith, because I often get the question about likelihood of a recession. If you go back in history all the way back to World War two, not counting this cycle, the Federal Reserve has raised the fed funds rates 11 times in order to get inflation under control. Eight of those 11 times, they've wound up over correcting as they raise the rates right. And that steered us into a recession. The three times that didn't happen, the three times they executed a soft landing, not a recession. All three of those cycles had something in common, and that was that the fed didn't have to overcorrect because they started early. They acted proactively when it looked like inflation was getting started, and they were able to keep inflation under control without a drastic increase in the fed funds rate this cycle. They've already admitted that they waited too long and inflation got higher than they expected. And because of that, they've had to raise the rates more quickly and more dramatically again than anything we've seen in the last 40 or 50 years.   Rick Sharga (00:35:25) - So historically speaking, it would seem more likely than not that we'd see at least a mild recession. The people who say, well, if we would have seen one through this cycle, we would have already seen it often overlooked the fact that it can take 24 months after the Fed's rate hikes are done, to see the full effect on the economy.   Keith Weinhold (00:35:45) - Economies are complex and cycles move slowly. They do so, historically speaking.   Rick Sharga (00:35:50) - That's one thing. I look at the other and without getting to Inside Baseball for your listeners, is something called a yield curve inversion. Yeah. And that's when when the bonds markets sense a disruption in the force and think that Darth Vader may be hitting the economy, but basically it's when the the yields on longer term investments like ten year Treasury bonds switch places with the yields on shorter term investments like two year Treasury bonds. So the yield on a two year investment is actually higher than the yield on a ten year investment. And when you have that inversion, that's what they call a yield curve inversion.   Rick Sharga (00:36:23) - And the last eight times that's happened we've had a recession follow not always a long drawn out recession, but there's always been a recession. And this particular yield curve inversion cycle is one of the deepest and longest ones we've had in a long time. And again, using history as a precedent. That doesn't seem to be really good reason for this cycle to behave differently than the last eight half. Having said all that, we may get lucky. The fed may pull a rabbit out of its hat and actually execute that rare soft landing instead of a recession. If they do, we'll still feel the economy slowdown that's almost a given. And if they don't, if we do have a recession, every economist I speak with tells me the same thing that it's likely to be a very short, very mild recession because all of the economic fundamentals underneath are still very, very strong. And, you know, employment, wages, productivity and so forth and so on. So likely to see some sort of slowdown this year, Keith, whether it turns into an actual recession or is just very, very slow growth, that's the most likely scenario for the rest of 2024.   Keith Weinhold (00:37:30) - Well, Rick, as we wind down here, the. Last thing I'd like to ask you about is in a recession, what typically happens to real estate, because you and I both study history and something that I often say here on the show is oftentimes you need to look at history over hunches, for example, I think it's easy to have a hunch that when mortgage rates rise while home prices are definitely going to fall. No, actually, if you look at history, when mortgage rates rise, home prices typically rise because rising rates typically mean the economy strong. And another one is when home prices are up. Well, a lot of people think that others want to then jump into the housing market and buy when they see that prices are up. So then when home prices are up, well, that means rents must fall since everyone's buying. But no, these two things typically move together home prices and rents. It's about history over hunches. So with that in mind, talk to us with your historical research on in recessions, what typically happens to the real estate market?   Rick Sharga (00:38:28) - Typically, home sales go up from the beginning of recession to the end of a recession.   Rick Sharga (00:38:33) - And in fact, with the notable exception of the last recession, the Great Recession, housing is very often helped the economy recuperate from a recession and recover. And that's particularly true in the new homes market. Home prices also typically go up from the beginning of recession to the end of a recession. So you could have some short term disruption. You could see home sales volume or home prices dip slightly at the beginning of a recession. But historically speaking, in every recession except the Great Recession, we've actually seen both home sales and home prices go up. And to your point, higher mortgage rates do not historically equate to lower home prices. What they do equate to is home prices going up at a slower rate. And this last cycle has been very unusual because historically, we've never seen mortgage rates double in a single calendar year until 2022. And in fact, that year rates didn't double in a calendar year. They doubled in a couple of months.   Keith Weinhold (00:39:33) - And tripled overall.   Rick Sharga (00:39:34) - And they tripled overall. So if you look at that, we did see home prices actually decline in some markets, although nationally the number never went negative.   Rick Sharga (00:39:44) - And we saw home price appreciation drop off pretty dramatically but still stay positive on a year over year basis. So it's been kind of interesting. This has been a very unusual cycle for a lot of reasons, but historically speaking, your spot on a recession does not spell doom and gloom for the housing market. Whether you're talking about owner occupied homes or rental properties.   Keith Weinhold (00:40:06) - Rick and I talked about the general economy today. Next week, Rick is going to join us again, and we're going to focus squarely on the real estate market. So no long goodbyes, Rick. We'll see you next week.   Rick Sharga (00:40:18) - See you soon, Keith.   Keith Weinhold (00:40:25) - Yeah. Strong insights from Rick, as usual. To help sum it up, recession or not, expect some sort of economic slowdown later this year. It's expected to be mild. That's what Rick shared with us. And if that happens, expect less rent growth. Then in a recession, home prices tend to go up. That's what really happens. Wage growth keeps outpacing inflation. Now the longer that trend continues, expect more rent growth in the future.   Keith Weinhold (00:40:57) - But of course the real rate of inflation is slippery to measure. I think you could still make the case that wage growth isn't really higher than inflation. So to me, that part's actually not that bullish. Rick believes mortgage rates will stay near 7% until the fed makes their first rate cut. We discussed monetary policy today. And you surely know that's what the fed does. They control the flow of money and interest rate policy. We did not discuss fiscal policy. We're not going to next week either. Fiscal policy is something that Tom Wheelwright and I often do together. And what is the difference? Well, fiscal policy is the tax and spend side. When you think of fiscal think tax and spend, and it's often congressional committees and elected officials that make those fiscal policy decisions, not the fed. They're making the monetary policy. That's the difference. This is get rich education. So after all, we do often have these learning moments. There's more of Rick Saga next week as we pivot from talking about the broader economy this week.   Keith Weinhold (00:42:05) - And then next week, we'll really drill down on the housing market, including more on property price growth prospects, which regions are growing or shrinking, rent growth prospects, and any warning signs that investors should take notice of today. Hey, what? I'd like to think that I don't ask much of you, the listener. I'd like to ask you if you can help me out with one fairly quick thing today. I'd really appreciate it if you get value from the show here. Whether that was, say, last week's episode on what is retirement anyway or from, say, a few weeks ago, why inflation is actually an immoral force, or the latest trends like the content of today's and next week's show, or my upcoming breakdown of why Western US homes cost more than eastern US homes and other content like that that you just aren't going to find anywhere else. I'm simply asking you for your feedback. This takes the show from one way communication to some two way communication. Please consider leaving me a podcast rating and review, whether that's on Apple Podcasts, Spotify, or wherever you listen to the show.   Keith Weinhold (00:43:17) - Just do a search for, for example, how to leave an Apple Podcasts review so you can see how to do it. And then I'd be grateful for that. Rating and review more next week on the future direction of the housing market I'm Keith Weinhold. Don't quit your day dream.   Speaker 4 (00:43:37) - 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 (00:44:05) - The preceding program was brought to you by your home for wealth building. Get rich education.com.

Get our free real estate course and newsletter: GRE Letter Time, health, and money are three key resources in your life. Learn about their trade-offs. “It's not at what age I want to retire, it's at what income.” -George Foreman I discuss at least three definitions of retirement: 1-The time of life when one permanently chooses to leave the workforce. 2-To remove from service. 3-When you become job-optional. 4-When you stop doing mandatory income-producing activities. Social security, pensions, 401(k)s, and residual income from real estate and stocks are all discussed. Compound interest is faulty. Compound leverage can help you retire young. “After the first $2M-$3M, a paid off home, and a good car, there is no difference in the quality of life between you and Jeff Bezos.” We discuss.  I briefly cover the antitrust case against the NAR, making the 5-6% commission paid by the seller largely a thing of the past. Rents are up 2% annually, the biggest gain in thirteen months, per Redfin. Learn 15 reasons why single-family rentals beat apartments.  I discuss two specific addresses—one in Memphis and one in Little Rock. Our Investment Coaches help you free with these and other income properties and your strategy at GREmarketplace.com.   Resources mentioned: Show Page: GetRichEducation.com/494 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Keith Weinhold (00:00:01) - Welcome to GRE. I'm your host, Keith Weinhold. Do you want to retire? What is the definition of retirement today, anyway? In fact, with just 2 or $3 million, would you be as happy as the world's richest man, Jeff Bezos? I'll break that down. Then I discuss key trends in the rental housing market today on get Rich education. 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've got pop ups and push notifications and cookies. Disclaimers are. At no other time in history has it been more vital to place nice, clean, free content into your hands that actually adds no hype value to your life? See, 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 to get the letter. It couldn't be more simple. Text GRE to 66866. And when you start the free newsletter, you'll also get my one hour fast real estate course completely free.   Keith Weinhold (00:01:16) - It's called the Don't Quit Your Daydream letter and it wires your mind for wealth. Make sure you read it. Text gray to 66866. Text gray 266866.   Corey Coates (00:01:33) - 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 (00:01:49) - We're going to go from Andover, England, to Andover, Massachusetts, and across 188 nations worldwide. I'm Keith Weinhold, and you're listening to Get Rich education. Around here, we say that financially free beats debt free. And for many, financially free means retirement. Now, you might be far from retirement, but those with the most foresight are those that begin with the end in mind. And it can be rather dreamy for some to think about retirement and then others don't want to retire. I'm asking you, do you want to retire? Do you ever want to retire? In fact, we posed that very question to our general education audience. I've got those results that I'll share with you here later, and it is really interesting.   Keith Weinhold (00:02:41) - But let me give you some perspective. First, I think that some young people fall into the trap of daydreaming about retirement. Oh, you might want to retire someday, but look, you can't dream about it too much. You've got to live in the moment. Because if you retire a traditional retirement age, those people tend to look back on their younger years and regret the things that they didn't try when they were younger. Don't quit your day dream, but don't dream about older age too much when you're younger. With the wealth building concepts that we discuss here on the show every week, you don't have to be that old when you retire to me. What sets the stage for you being able to retire is when you reach the point of being job optional. At what point are you job optional? That is a key turning point and for you, as soon as you're job optional. You might want to retire at that point, but you don't want to retire so soon that things will be iffy on whether or not you run out of money before you run out of life.   Keith Weinhold (00:03:49) - The best way to avoid that situation is to build your residual outside of work income alongside you during your working years, and then you won't have to merely guess on if a certain lump sum amount is going to be accumulated and sufficient. Now, one definition that I like for retirement is that you stop doing income producing activities that you don't want to do. All right. That's one definition. What you've done there is that you stopped sacrificing today for some imaginary tomorrow. If you stop doing those mandatory income producing activities. Look, you've got three key resources in your life time, health, and money. When you're younger, you'll trade away your time and even your health for money. That's because you feel like you have an abundance of time and health and not much money yet. But as you progress through life continuing to make this trade, your time and your health become more scarce, resources no longer abundant ones, there will come a point in your life where working will cost you more than retiring. You don't want to get to that point.   Keith Weinhold (00:05:09) - Now. You probably see no sheets of paper with the squares that you can hang up. There's 52 boxes in a year and is divided into 90 sections, one for each year of your life. And it shows you graphically in your face how many weeks and years you really have left. And by the way, I cannot get myself to hang up one of those sheets. That is just too much of an in my face reminder of my own mortality. Okay, I'm not doing that, but what do you like to do? Do you like canoeing or reading books or running in five K races? Well, if you read five books a year and you're going to live 50 more years, let's just 250 books for the rest of your life. Now, that sounds like quite a few, but when you're done, you're done. Do you have some best friends that you see, say, once a year? Do you live a long ways from your parents and you only see them once or twice annually, or at this rate, then you might only see your friends, say 31 more times.   Keith Weinhold (00:06:17) - And if your parents are older, what if you only see them 18 more times? That might sound like quite a few, but when that's done, that is done. Now this can get a little depressing. But what I'm helping you do here is identify what's important to you in your life. A lot of people don't have any real hobbies outside of their jobs. People feel sad and unfulfilled and can never see themselves retiring when this is the case. Now, you might enjoy drinking with your friends. All right. Sure, but that's not a real hobby. Hopefully you have the ambition to know that there are a lot of things that you really want to do, and you need to find the time in order to do those things. Well, here's the good news you are the one that's in control of how much of your time on earth you spend doing those activities are spending time with those people. Now, I was chatting with one woman about retirement. Gosh, this was interesting. And she told me that she doesn't want to retire.   Keith Weinhold (00:07:23) - Okay, well, she justified her stance by saying, who wants to stay at home? And I'm thinking, who wants to stay at home? I found that a really curious answer. Why does retirement mean staying at home? Like if you don't go to work, you'd stay at home. So maybe this person didn't have any hobbies. I mean, I would think that retirement would include the time and ability to travel. Well. So retiring and staying at home or not at all identical to me. A few years ago we had financial expert Kim Butler here on the show. You might remember that really intelligent woman. She was a retirement detractor, not a fan of retirement. The definition of retirement to Kim, if you remember, is to remove from service. That was her definition, meaning that she'll no longer serve others. I'm not saying that's right or wrong. That's her perspective. Well, I think that you can still serve others in retirement. Take a leadership position at your church, coach kids baseball, volunteer at a homeless shelter.   Keith Weinhold (00:08:28) - And even if retirement does mean to remove from service, or you probably served others at a full time job for decades, probably even for most of your life. So it's okay to have others in turn serve you in retirement. Well, today I'm here asking you, do you want to retire and what is retirement and not giving you some food for thought, let me discuss some more formal definitions of retirement first before I continue here. Now if you go and Google what is retirement, the word age appears after that as a fourth word, suggesting that you might select what is retirement age. Well, the former boxer George Foreman, he said it well. He said it's not at what age I want to retire. It said what income. Yeah. The first retirement definition that you find though, is the time of life when one permanently chooses to leave the workforce. All right. Well, that's actually a good short definition. And it'll show you that the traditional retirement age is 65 in the US and a lot of other developed countries too.   Keith Weinhold (00:09:39) - But in the US today, full retirement age when you can collect full Social Security benefits is age 67. If you were born in 1960 or later, and the earliest that you can collect benefits is 62. But do you know what the average monthly Social Security check amount is today? It is $1,767. Now, that amount can vary a lot depending on the recipient type, but it gives you some idea that that is only a supplement to your other income that you've got to figure out. And a sad and paltry $1,767. I mean that right there. That may very well be a motivator to make you want to invest well elsewhere. The old standard is that retirees need 80% of the income that they had when they were working, but were more abundantly minded. Here at GRI, I'd like to think that your income could go up in retirement as you keep adding cash flowing assets. But in a recent survey of consumer finance, the mean retirement amount saved of all working age families, the complete family here, not just the individual, is just 269 K.   Keith Weinhold (00:10:58) - That's not per year as retirement income. That's just the lump sum to live off of. Now some workers, especially government employees, they have a pension. That's where you don't have to just draw from a lump sum at the end of your life, like you would at the end of your life, like you would with a 401 K. So a pension that's a predetermined livable amount that you're paid each year in retirement, it's often based on the percent that you earn during your working years, say 75%. That's why most people like a pension within a 401 K, because pensions are about the perpetual income, not the lump sum, where you just hope that it lasts. But pensions are expensive. So the private sector really started phasing them out beginning in the ninth. 80s. Really in the US retirement. What that used to mean is turning 65 and drawing a pension and Social Security. I mean, that's what you'll hear your grandparents talk about. Now for us in younger generations, remember, your 401 K withdrawals must begin between age 59.5 and 70, and you must begin paying tax on it at that time.   Keith Weinhold (00:12:13) - Now, there's been a flurry of research about advances in longevity. Some of the more optimistic ones even say that if you're currently under age 55 and you get to the age of 65 in good health, you're likely to live to be 125 plus, if that comes true or even partially true, that tilts toward not accumulating a lump sum in retirement, but having an income stream from something like income producing real estate or stock dividends. You really need to focus on that income stream. If you're going to live a few decades longer than the current life expectancy. Look, when you make the production of ongoing income part of your ongoing investment strategy, you don't need what many retirees think of as the 4% rule. You probably heard of it what the 4% rule is. That's a popular retirement withdrawal strategy that says that you can safely withdraw the amount equal to 4% of your savings during the year that you retire, and then you're supposed to adjust for inflation each subsequent year for, say, 20 or 30 years. Well, that imposes serious limits.   Keith Weinhold (00:13:28) - I mean, that is synonymous with the life deferral plan, like a 401 K, where you voluntarily reduce your income in your working years to participate in an employee sponsored plan that isn't even designed to produce income until you're older, trading away pieces of your 30 year old self to get pieces of your 80 year old self back, you're drawing down on your big pot that you have saved for retirement. And instead, if you've been adding income producing investments for a decade or more, what you won't have to draw down at the limiting 4%, you've got to, of course, figure out inflation. Those retirees that are tapping into one lump sum amount, like from an employer sponsored plan a 401 K or a 403 B, they just try to guess at the future inflation rate. That's all any of us can do. And a lot of times they safely assume 4%. Around here we talk about how the real world inflation long term is almost certainly higher than that. So if you've got income from real estate and say you even do want to have your real estate paid off in retirement, you may or may not want to pay it off since you're ten and services your debt.   Keith Weinhold (00:14:41) - Well, you know, when it comes to inflation, rents tend to stay indexed to inflation. So your residual cash flow is pretty well protected from erosion to inflation. I've got some good news. You might be able to retire substantially sooner than you think. That's because if you're age 20 or 30 or 40 or 50, whatever, most planners, they project your wealth from a lump sum that grows with compound interest or compound interest is faulty, as we know it's degraded down after you account for inflation, emotion, taxes, fees, and volatility. Luckily for you, you have more than weak, impotent, and deluded compound interest because in addition to your residual income, you're going to have bigger lump sums than others because you had compounding leverage, not compounding interest. Even if you had zero real estate cash flow in retirement and you've got leverage, you made lots of 20% down payments on properties that appreciated, say, 5% a year. That means you were leveraged 5 to 1 and you got a 25% return in that first year of each rental property that you owned and is any Gary devotee knows that 25% is one of just five ways you're paid.   Keith Weinhold (00:16:07) - This is why you can actually retire sooner than you're thinking. With help from leverage. What you've done is collapse time frames. Understand that when you're in your retirement years, most people they have a U shaped spending pattern. Yes, u shaped spending in retirement because you tend to spend a lot of money in your early retirement years. You're traveling, you're living it up, and then you get a decade or two older. You slow down, you stay at home and spend less the trough of the U. And then your expenses go up before end of life. Care. Yes, you shaped spending patterns in retirement are common. And I know I talked about slowing down there at the trough of the year, but of course you won't be slowing down. It's just that others have tended to. Now, a really interesting topic that has circulated among many lately, and I believe that this was first proposed and debated on Reddit or X, and that is this after the first 2 million or $3 million a paid off home in a good car, there is no difference in the quality of life between you and Jeff Bezos, the richest man in the world.   Keith Weinhold (00:17:29) - That's the topic. What do you think about that? 2 or $3 million is attainable. You might already be there or beyond it. And of course, this says nothing about an income stream. So let's presume that there isn't one. All right. Well, in response to this topic, Spencer here from Orlando says I strongly disagree. Private jets complete immunity to health care costs and the ability to donate sums that change lives are all heavy hitting things that you can't do with $3 million. Tug from New York says, I agree 100%. Things like vacationing on a private island or a superyacht they may be cool to experience, but these are not necessarily things I'm thinking of when I think of happiness and anonymous respondents says Bezos's 420,000 acres probably have several views. That would be my view. Glenn, from Florida, says I have a paid off 975 square foot home, a 2018 Honda Cr-V, and not much spare cash. But I do have a wife going on 49 years who loves me, so I am richer than most millionaires like Quay.   Keith Weinhold (00:18:43) - I don't know where he's from, Mike says. I disagree with the 2 million to $3 million thing. I have some wealthy friends and they say that the sweet spot is 10 million to 100 million. In this zone, you can live very comfortably, but you're also able to blend in easily enough with most of the middle class. When you eclipse $100 million, typically you're involved with something public invisible, and then security and other considerations become much more of a problem. All right, that was his take, Mike keys. And then we had a number of others point out that $2 million is not enough to fly private, which makes a big difference to your quality of life. And yes, they do have a point there. I have flown private once and there is a substantial difference. Finally, Tanner's got a good point here. He says, I agree there is no significant difference in quality of life. Having safety, security, education, some autonomy and growth potential is key. The difference between a regular vacation and a $50,000 vacation is negligible, and it is the same with cars, food, watches and anything materialistic.   Keith Weinhold (00:19:54) - That's what Tanner says. All right, well, to summarize that for you here, and this is also parallel with my belief is that I disagree with this Bezos thing, with the 2 to $3 million net worth in your necessities taken care of. There is a difference between that life and Jeff Bezos life. But remember, the claim is that there was no difference. However, that difference is not that vast. That's my opinion. And yes, one can say that no amount of money can bring you happiness, but with money, you can buy time that you can fill with happiness and those that you love. Now that you have some perspective in different viewpoints, maybe you're better able to answer that question that I asked you at the beginning. Do you want to retire? And here it is, our poll that was run on our Instagram Stories. It asked, do you want to retire and blow those words? It showed a happy couple on vacation holding hands and the result was yes, 58% of you want to retire and the nos were 42%.   Keith Weinhold (00:21:06) - If you've given extraordinary service to humanity, I say sure. Thank you for your great service to humanity. Congratulations. Go ahead and retire more straight ahead. As I discussed the most proven retire early vehicle of all time and key shifts in the real estate market, and how you can accidentally build wealth with it. Positive leverage. This is episode 494. You're just six weeks away from an unforgettable episode 500 I'm Keith Reinhold. You're listening to get Rich education. You know, I'll just tell you, for the most passive part of my real estate investing, personally, I put my own dollars with Freedom Family Investments because their funds pay me a stream of regular cash flow in returns, or better than a bank savings account up to 12%. Their minimums are as low as 25 K. You don't even need to be accredited for some of them. It's all backed by real estate and that kind of love. How the tax benefit of doing this can offset capital gains and your W-2 jobs income. And they've always given me exactly their stated return paid on time.   Keith Weinhold (00:22:19) - So it's steady income, no surprises while I'm sleeping or just doing the things I love. For a little insider tip, I've invested in their power fund to get going on that text family to 66866. Oh, and this isn't a solicitation. If you want to invest where I do, just go ahead and text family to six, 686, six. Role under the specific expert with income property, you need Ridge Lending Group and MLS for 256 injury history from beginners to veterans. They provided our listeners with more mortgages than anyone. It's where I get my own loans for single family rentals up to four plex's. Start your prequalification and chat with President Charley Ridge. Personally. They'll even customize a plan tailored to you for growing your portfolio. Start at Ridge Lending group.com Ridge lending group.com. What's up everyone? This is HGTV. Tarek Moussa, listen to get Rich education with Keith Reinhold and don't.   Speaker 3 (00:23:31) - Quit your day dream.   Keith Weinhold (00:23:43) - Welcome back. To Get Rid of Education. I'm your host, Keith Weinhold. You might want to know what I think about the ruling that was made ten days ago.   Keith Weinhold (00:23:50) - With respect to the antitrust case against the Nar. I was asked to speak on television about it. I put more about that in last week's newsletter, so I don't have too much more to tell you here. The high point is that the standard 5 to 6% commissions are gone. Sellers used to pay that completely. That commission amount was split between their seller raisin in the buyer's agent. What really happened here is that the lawsuits argue that the Nar and brokerages kept buyers and sellers out of the commission negotiation process, and that led to higher overall costs. And really, the result of this is that it should make some agents lower their fees in order to stay competitive. We should end up seeing lower sales costs when one sells a property. Some estimates are that agent commissions will be down about 30%. Perhaps half of America's 2 million agents will lead the industry. We'll see about that. But see, sellers are still going to want to get the most money for their property that they can, and they're still going to be using comparable sales.   Keith Weinhold (00:24:54) - So that's why it remains to be seen if it really affects listing prices at all. Overall, the Nar continues its waning influence in the real estate industry. Before we discuss the rental property market, you know, I find this kind of upsetting. I mean, do we need to politicize everything? Redfin recently reported that the majority of U.S. homeowners and renters say that housing affordability affects their pick for president. I mean, this is getting ridiculous. That's according to a Redfin commissioned survey conducted by Qualtrics, 3000 US homeowners and renters were surveyed. Those surveyed were worried about the lack of housing inventory and affordability. I mean, how do you really know which presidential administration to blame that on for who to give credit to? I mean, Biden did recently roll out a plan to help with housing affordability. And then, on the other hand, Trump is famously known as a real estate investor, after all. Let's talk about the single family rental market. Do you know what the typical rent range is for a single family rental in America today? Well, the John Byrnes Single Family Rental Survey shows us that most respondents report monthly rents in the $1750 to $2250 range.   Keith Weinhold (00:26:18) - There are about eight ranges here, and 54% of single family reds are in that range. So really close to $2,000. And yeah, I myself have many or even most of my single family rentals in that same range near $2,000. Rents are lowest in the Midwest and Southeast, where a lot of operators report average rents 17 to $1800, and then it almost $2,700. California rent outpaces much of the nation. And you know what? If you just heard that right there, you'd actually think that California is the place to invest and that the Midwest and Southeast or not. But it's just the opposite of that, because it's not about the absolute rent amount. It's about that ratio of rent to purchase price. And that's what makes the Midwest and Southeast the best places. And a third region that's an investment sweet spot is what I like to call the inland Northeast Pittsburgh, Harrisburg, Philadelphia, even Baltimore. Although Baltimore is getting a little coastal, it's the Inland Northeast that has the numbers that work, not the coastal northeast like New York City in Boston and those really high priced markets where rents don't keep up proportionally.   Keith Weinhold (00:27:39) - And of course, there are pockets of opportunity elsewhere, like Texas and some other markets. And note that no part of Pennsylvania is on the East Coast at all, not even Philadelphia. None of it touches the coast. I am indeed a native Pennsylvanian. You get these little geography lessons from me interspersed here at gray., Redfin tells us that rents in the US now this is both apartments in single family. Now we're just talking about single family. Earlier rents are up 2% annually. That's actually the biggest gain in 13 months. Yes, a pretty modest increase there as rent amounts have just been really pretty steady for the last year. And so much new apartment construction took place last year that there is quite a bit of apartment supply to soak up in certain metros, and you might even see concessions. On some of these. I mean, if a new apartment complex is just finished, you know what's sitting there? 250 vacant units all at once. So you're seeing some apartment owners try to entice renters with one month's free rent for a 12 month lease, for example.   Keith Weinhold (00:28:51) - The single family rental market is in better shape from a demand supply perspective than apartments are. See, what's happened, though, is that with the Airbnb market becoming both oversaturated in some markets and then cities cracking down on short term rentals in other markets, it's there's some STR owners have turned their single family homes from Airbnbs over to long term rentals, and that brought a little more supply out of the long term rental market. More places have bans on short term rentals, and gosh, I just had an awful short term rental experience last month when I stayed at one. I usually go for hotels and that's what I'll be doing for a while again,? Now, Adam data, they have some great stats for us here. They reported that rental margins are increasing in about two thirds of the nation. That's some good news. But the increase is still pretty small. And they show us the top five counties for single family rental yield. And they used three bedrooms in their single family rental yield comps. And they did it in larger markets of a million plus.   Keith Weinhold (00:30:03) - All right. So these are counties of a large population where you're getting the best cash flow today basically on single families. Fifth, and I'm surprised that this is Riverside County California. That's the Inland Empire. You sure want to check landlord tenant law in a highly regulated place like California. Fourth is Cook County, Illinois. That's Chicago. Third is Coahoma County, Ohio. That's Cleveland. The second best single family rental yield is Allegheny County, Pennsylvania. That's Pittsburgh. And first number one for rent yield on single families is Wayne County, Michigan. That's Detroit. We've discussed Detroit on the show before. It has a stigma. It seems like the only way to make the stigma disappear is to visit. And you're going to find Investor Advantage properties in a lot of those counties through our gray investment coaches here at Gray marketplace.com about single family rental homes. Now, some asset types like apartment buildings or perhaps self-storage units, they have economies of scale and some other advantages over single family rentals. But single families are a favorite.   Keith Weinhold (00:31:18) - They might have the best risk adjusted return anywhere today, even after 2008 Great Recession, those that had bought for cash flow persevered and even thrived. In fact, single family rentals have at least 15 distinct advantages over a larger apartment building, some that you probably never thought about before. And as I discussed this, don't think that I dislike apartment buildings. Okay, it's likely not the most advantageous time in the market cycle for apartments. It's tenant quality. Single family rentals attract a better quality of tenant. They take better care of the premises. Then there's the neighborhood. Single families tend to be in a better neighborhood. Then there's appreciation. Properties tend to appreciate better over time. Fourthly, there's the school district. They're more likely to be in a better school district. Then there's the retention. Tenants stay longer, creating less vacancy expense. And the aforementioned neighborhood and school districts are why they stay. And you've got common areas. A lot of people don't think about this single families. They don't have these common areas to clean and maintain.   Keith Weinhold (00:32:29) - Apartments have hallways, stairs, larger rooms, and common outdoor grounds that a custodian needs to service. And this is another overlooked profit drag that apartment investors miss in their PNL in their profit and loss projections. And I miss this expense on my first ever apartment. By then, there's utilities in single family rentals. Tenants often pay all the utilities. They even care for the lawn. The larger the apartment building is, the more likely you'll, as the owner, be the one paying utility costs like heat, electricity, water, wastewater, and landscaping. Then there's divisibility. What if you've got property that's not performing the way you hoped it would? Well, if you had ten single family rentals, you can sell the 1 or 2 that are not performing. And with a ten unit apartment building, you must either keep or sell all of the units. It's not divisible. Fire and pestilence. You know, fire and pests. They are more easily controlled in single family rentals where there aren't common walls, even if you're at.   Keith Weinhold (00:33:34) - Ensured these diffuse conditions. They often affect multiple units and families in larger complexes. Financing is a big deal. Income. Single family rentals. They have both lower mortgage interest rates and lower down payment requirements than apartments. You can secure ten single family rental loans if you're single, 20 if you're married at the best rates and terms through the GSEs, the government sponsored enterprises Fannie Mae and Freddie Mac, with 20% down payments and apartments, rarely, if ever, have 30 year fixed rate terms like 1 to 4 unit properties do, and you can get more than 10 or 20 of them. But the financing terms are not going to be as good. And what about vacancy rate? That's true that if you're a single family's vacant, your vacancy rate is 100%. If your fourplex has one vacancy, then your vacancy rate is only 25%. But the same is true if you own four Single-Family rentals in one is vacant. Then there's management. If you hire professional management, your manager would likely rather deal with higher quality single family residence.   Keith Weinhold (00:34:44) - If you're self-managing, this is a demographic that you would probably rather handle yourself to supply and demand. There aren't enough low cost single family rentals that make the best income producing properties. Demand exceeds supply, and this is going to continue in both the short and the medium term. Then there's market risk. This is another overlooked criterion. Yes, criterion. Does anyone even know that the singular of criteria is criterion?, you've got to keep your properties filled with rent paying tennis. They have jobs. So if you think you're going to be able to buy ten rental units in the near future with your tenured apartment building, that's only going to be in one location, leaving you exposed to just one geographies economic fortunes instead with, say, ten single family rentals, you could have four in little Rock, three in Dallas and three in Birmingham. And then your exit strategy, that's an important consideration, especially for newer investors years down the road when it's time for you to sell your income property, hopefully, after years of handsome profits, there's a greater buyer pool for your single family then there's going to be for your apartment building.   Keith Weinhold (00:35:58) - More buyers can afford the lower price, and then, unlike apartments, you even have access to a pool of buyers that might want to occupy your property themselves. To live there as an owner occupant, there might even be your current tenant that buys it from you. So those are some of the attributes of single family rental homes. Again, I really like apartment buildings too. I could go on with more advantages for apartment buildings. If you've been meaning to grow your portfolio, you know when you have this information, don't let it be like two well-meaning friends that meet at the gym. And then they say, hey, we should grab lunch sometime. You know what? That is a nonstarter. You got to put something on the calendar to make something happen. You can't make any money from the property that you don't own. You can just copy me and buy the same types of properties in the same places where I buy. Get pre-qualified for a mortgage loan and we'll help you find property. We talked about retirement earlier.   Keith Weinhold (00:36:58) - I mean, the earlier you get into real estate, the better off you're going to be. From that perspective, the best time is today as you get leverage working for you and inflation profiting working for you. What's going on today is with this lower affordability, first time homebuyers, they have often now got to spend years saving for a down payment while they rent. And in the meantime, you can solve their housing problem. They become your renter in these freshly renovated homes or new build homes. And I'll even give you two addresses before we leave. Today. Though in today's tightly supplied market, you know, sound income properties can seem more rare than a pop up. And that's actually useful. Supply is short overall, but because of our long standing relationships, we have a good selection right now. This first of two properties is on Crane Road in Memphis, Tennessee. It's a single family rental. The purchase price is $169,500. The rent's 1253 bed, two bath, 1265ft². The year built is 1964.   Keith Weinhold (00:38:12) - Ask your investment coach about the fresh renovations there. And the other one is in little Rock, Arkansas. And I think I told you that when I made my little Rock real estate visit, I had some extra time and I visited the Bill Clinton Presidential Library, which though, although it's called a library, presidential library, is there really like museums a tribute. To the past president. What I don't think that I did share is that in the entire Bill Clinton presidential library, I could not find one mention of Monica Lewinsky. Not one shred of evidence that that ever took place. Nothing.   Speaker 4 (00:38:50) - Let me tell you something. There's going to be a whole bunch of things we don't tell Mrs. Clinton.   Keith Weinhold (00:38:58) - Nothing whitewashed. All the evidence at all.   Speaker 5 (00:39:01) - Nothing there.   Keith Weinhold (00:39:03) - This property is on Duncan Drive in Little Rock, Arkansas. The single family rental has a purchase price of 117 nine. Rent is 975. Three bed, two bath, 888ft². In the year it was built was 1967. So these are some of the lower cost properties that you find at Gray Marketplace.   Keith Weinhold (00:39:25) - If you prefer brand new builds, brand new construction, we can help you with those two. You typically can't find these deals on public facing platforms that are broad like the MLS or Zillow, and it's completely free. Contact your gray investment coach and learn about these properties. Rehab details and others like them. Learn about their occupancy status and more. And if you don't have a coach, pick one. They'll help you out at Gray marketplace.com. Until next week. I'm Keith, landlord. Don't quit your Daydream!   Speaker 6 (00:40:02) - 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 yet Rich education LLC exclusively.   Speaker 7 (00:40:30) - The preceding program was brought to you by your home for wealth building. Get rich education.com.

Get our free real estate course and newsletter: GRE Letter I state the reasons why I DON'T believe that the Federal Open Market Committee should lower interest rates. Rates are currently normalized. Watch the full Spartan Summit Presentation here. The first half is played on this episode. President Biden is trying to help the housing market's poor affordability and undersupply. Fed Chair Jerome Powell made recent remarks on the real estate market. He emphasized the lack of supply. High rates = strong economy Low rates = weak economy Lowering interest rates to zero is artificial and introduces distortions in an economy. If we have a recession, we need “rate cut ammo” in order to make cuts at that time. Lowering rates also sets up an inflationary environment. That's bad for society, but leveraged income property investors benefit. A “Fed pivot” means that the FOMC changes from raising rates to lowering rates, or vice versa. Resources mentioned: Show Page: GetRichEducation.com/493 Full Spartan Summit presentation video: On YouTube Freddie Mac mortgage survey: https://www.freddiemac.com/pmms Mortgage News Daily mobile app 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Keith Weinhold (00:00:01) - Welcome to Greece. I'm your host, Keith Whitfield. President Biden tries to help the housing market. Everyone wants to know when interest rates will be cut. I'm asking, why would we cut rates anytime soon? Yes. Some fed talk today and a lot more on get rich education. 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've got pop ups and push notifications and cookies. Disclaimers are. At no other time in history has it been more vital to place nice, clean, free content into your hands that actually adds no hype value to your life? See, 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 to get the letter. It couldn't be more simple. Text gray to 66866. And when you start the free newsletter, you'll also get my one hour fast real estate course completely free. It's called the Don't Quit Your Daydream letter and it wires your mind for wealth.   Keith Weinhold (00:01:15) - Make sure you read it. Text gray to 66866. Text gray 266866.   Corey Coates (00:01:27) - You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Keith Weinhold (00:01:43) - Welcome, Jerry from Bowmanville, Pennsylvania, to Louisville, Kentucky, and across 188 nations worldwide. And Keith Wayne Holden, I'm grateful to have you here with me for another week. This is get rich education. I'm about to discuss the case for not lowering interest rates, and you'll hear a clip of Jerome Powell commenting on the real estate market shortly. But first, President Biden recently made a state of the Union address, and he unveiled his plan to help the Undersupplied housing market. Part of the plan was to help the buyer side the demand side with incentives, which I'm not sure that we need the support over there on that side. And now that would juice real estate prices. More on housing supply side. Biden's plan creates a $20 billion fund to build more rental housing and kill some construction restrictions. Okay.   Keith Weinhold (00:02:35) - Yeah, that's the key part of the plan. And that's more helpful. Help that supply side. Perhaps the most interesting part of the plan is a $10,000 credit that's meant to incentivize people to sell their starter homes. That's our president on housing. Let's pivot over to Club Fed. Yeah. Welcome in to Club Fed. There's no cover charge for some reason Janet Yellen still hanging around chaperoning. And she still looks like my grandma. Earlier this month, Fed Chair Jerome Powell acknowledged that the commercial real estate loan problems could cause manageable problems for regional banks, possibly for years. I find it interesting that he uses the word manageable when acknowledging problems on the commercial side. I mean, we'll see, but that kind of reminds me of one of Powell's predecessors, former Fed Chairman Ben Bernanke, in 2007, saying that the subprime loan problem was contained is the word that he used. And we all know that. I know the mortgage meltdown contagion of 2008 was anything but contained. Today, when we talk about Powell and interest rates back around 2021, he got beaten up pretty badly for not acknowledging rising inflation sooner.   Keith Weinhold (00:03:56) - But he's brought inflation down to about 3% without a recession. So some credit is due there, but not too much credit because the game's not quite over. And it took that torrid set of interest rate increases where they climbed a cliff in order to quell inflation. And that already hurt a lot of people, including those erstwhile commercial real estate people in their loans that jumped up to a higher interest rate. Now we're talking about interest rate policy. Let me give you something that's easy to remember. High rates mean a strong economy. Low rates mean a weak economy. With that in mind, let's look at where we've come from. And then we'll look at the future. A lot of people got drunk with easy money starting 15 years ago, because it was nearly free to borrow an interest rate of zero at the federal funds level. That gives you no incentive to save and more incentive to borrow and spend. Well, the federal funds rate was zero from 2009 to 2015 to get us out of the Great Recession.   Keith Weinhold (00:05:04) - And then it was zero again from 2020 to 2022 to help lift us out of Covid. That's the past since the federal funds rate, which a lot of other interest rates are based off of two since it quickly shot up starting two years ago, it's now been a full eight months since rates have moved at all. They haven't budged since July of last year. So that's where we are now and I'm fine with them staying here for a while now. Jerome Powell recently testified to the House Financial Services Committee. Let's listen in to him discuss real estate as he's questioned.   Jerome Powell (00:05:44) - The housing market is in a very challenging situation right now. You had this longer run housing shortage, but at the same time, you've got a bunch of things that have to do with the pandemic and the inflation and our response with higher rates. So you you have a shortage of homes available for sale because many people are living in homes with a very low rate mortgage that they can't afford to refinance. So they're not moving, which means the supply of regular existing homes that are for sale is historically low and very low transaction rate.   Jerome Powell (00:06:14) - That actually pushes up prices of of of other existing homes and also of new homes, because there's just not enough supply. The builders are busy, but they're running into, you know, all kinds of supply issues still around zoning and, and workers and things like that. So, so it's quite challenging. And of course, rates are high. So people who are buying a lot of the buyers are, are cash buyers or able to actually pay without a mortgage because mortgages are expensive, I will say. The first problem. The longer run problem of supply is a longer run problem. The other problems associated with low rate mortgages and high rates and all that, those will abate as the economy normalizes and as rates normalize. But we'll still be left with with the housing market nationally where where there's a housing shortage.   Keith Weinhold (00:07:02) - That's Jerome Powell on real estate. And I'm surprised that he said rates are high. Do you know what the long run federal funds rate is? It is 4.6%. That's the average. And currently it is at 5.3% where it's been for a while.   Keith Weinhold (00:07:18) - So it's not that much higher than average. The 30 year mortgage long run average is 7.7% for Freddie Mac. And that's been hovering around 7% for months now. So therefore both key rates are close to normal today. But despite that fact, seemingly everyone is waiting for the fed pivot. And what the fed pivot means is when they reverse their monetary policy stance. Meaning when they start lowering rates again after the long increase cycle that we're coming off of. Well, I'm here asking why should the fed pivot in lower rates since they're near normal now? All right. Let me give you some real perspective here. Look I'm going to describe a scenario to you and tell me what you think about this. Imagine a dreamy bygone era where there happened to be this period that saw a strong national labor market, plenty of jobs, steady GDP growth, rising wages and inflation a little above normal. All right, now that you're done imagining that cloudy slice of economic Americana. Pretty rosy scenario. Well, then you might consider raising rates in a situation like that to help cool off wage and price inflation.   Keith Weinhold (00:08:37) - Well, you know what I just did? I actually just described to you where we are today. That's what today's conditions are are. Yet there's still talk of lowering rates later this year. And now you might see why I'm questioning that because the economy doesn't need the help. Sure enough, in front of that same committee, Fed Chair Jerome Powell and other fed officials, they did say that they expect interest rates to come down later this year. I hope they're not doing that for political pressure or to try to reassure the stock market. Those would not be good reasons. And dropping rates to zero at the first sign of a crisis that shouldn't become a habit. Because, look, before the 2008 crisis, when they dropped from the zero, going all the way back to at least the 1950s, maybe longer rates were never zero. That entire time, see if the fed just steps back and doesn't touch rates for a while, then it's all the longer that more free market forces can prevail. I don't know that we need to constantly tinker with rates, like a greasy guy crawling under his classic car in his garage and tinkering around with it.   Keith Weinhold (00:09:52) - Another reason the fed should lower rates, and is because it needs to hold on to some rate cut ammunition in case there's a recession. Because in a recession, one of the best tools that the fed has to cool it off is by lowering rates in order to incentivize investment in a slow economy. But see what happens. If you use up all your ammo, you already start lowering it and you're already near zero. And then we have a recession. I don't know that America is ready for negative interest rate policy like some other nations have tried. And by the way, if you earn a negative interest rate, that means that if you park your money at the bank, you have to pay them interest rather than the bank paying you interest. They get the use of your money and you have to pay them for parking it there. That's a negative interest rate. Well, recessions have a strong correlation with lowering rates. I mean, just look back historically again, history over hunches. But you know, if you don't follow this stuff, the short story of what's happened the past several months is that interest rate cuts keep being delayed because of stubborn inflation that just won't fall down to the Fed's desired 2%.   Keith Weinhold (00:11:06) - And Powell also recently said that he needed just a bit more evidence that inflation was coming back down to normal levels before he'll reduce rates, although we're not far from it. That's exactly what he said. Now, if rates go back down and it's probably when rates go back down, look for the housing market to break loose. The interest rate lock in effect will wither away, property affordability will improve, and there's a good chance then, for a strong upward jolt on property prices on those values. Last year, the. There were some studies done and it was interesting. It showed that 5.5%, that is the magic mortgage rate level that makes the real estate market want to really transact. But this year, with rates that have stayed higher longer, surveys say that level is now up into the high fives. And there is another factor. As interest rates drop, the cost of maintaining our national debt also decreases. That is part of the calculus two. Well, if you're a fed watcher, a fed speak geek, you are in luck.   Keith Weinhold (00:12:15) - Because though it's not really much of a spectator sport, and the parties at Club Fed and all their PhD economists really aren't all that lively, if you're so inclined, one of the Fed's eight annual meetings where they announce any interest rate changes happens in just two days, and then the next two meetings conclude May 1st and June 12th. If you like to track rates, especially if you're perhaps in the mortgage loan process right now, my favorite website is Freddie Mac. The mobile app that I use is the Mortgage News Daily app, coming up here on a future episode of the show. Retirement. Some wanted, some don't. Real estate might give you an early retirement option, but I'm asking the question do you want to retire? Do you ever want to retire? We're going to go deep on that. And then what even is your definition of retirement today? You could learn something about yourself on that upcoming episode about retirement here. Speaking of spectator sports,, no, this is really one either. But you could have gotten on a jet and paid for a ticket to watch me speak.   Keith Weinhold (00:13:23) - Or you can listen free next to part of the recording of that presentation of mine at the Spartan Summit from earlier. They had me kick off their event. I was their opening speaker, and I share some things with that audience that really shake people up that they've never heard before. You will hear it both at new material as we play this and some things that you've heard before here on the show. But even those things I say differently in a format like this. So straight ahead, it'll be wealth mindset first and then the real estate investing fundamentals. If I could condense the best gray content in principles into less than an hour, you know, that's pretty close to what this presentation is. You hear about the first half of it coming up straight ahead. You're listening to get Rich education. You know, I'll just tell you, for the most passive part of my real estate investing, personally, I put my own dollars with Freedom Family Investments because their funds pay me a stream of regular cash flow in returns, or better than a bank savings account, up to 12%.   Keith Weinhold (00:14:31) - Their minimums are as low as 25 K. You don't even need to be accredited for some of them. It's all backed by real estate and that kind of love. How the tax benefit of doing this can offset capital gains and your W-2 jobs income. And they've always given me exactly their stated return paid on time. So it's steady income, no surprises while I'm sleeping or just doing the things I love. For a little insider tip, I've invested in their power fund to get going on that text family to 66866. Oh, and this isn't a solicitation. If you want to invest where I do, just go ahead and text family to six, 686, six. Role under this specific expert with income property, you need Ridge lending Group and MLS 42056 in grey history, from beginners to veterans. They provided our listeners with more mortgages than anyone. It's where I get my own loans for single family rentals up to four Plex's. Start your pre-qualification and chat with President Charlie Ridge personally. They'll even customize a plan tailored to you for growing your portfolio.   Keith Weinhold (00:15:45) - Start at Ridge Lending group.com Ridge lending group.com.   Speaker 4 (00:15:55) - This is Hal Elrod, author of The Miracle Morning. And listen to get Rich education with Keith Weinhold and don't Quit Your Daydream.   Speaker 5 (00:16:16) - It is with great pleasure that I get to introduce you to our first speaker for today. He is the founder of get Rich education and host of the popular get Rich education podcast. His show has nearly 3 million listener downloads from all across the world. He also actively invest in apartment buildings, single family homes and agricultural real estate. He is a member of the Forbes Real Estate Council, and his work regularly appears in Forbes, Business Insider, and Rich Dad Advisors. Today, he's taking us back to the basics to discuss why real estate is such an attractive and solid investment option for those looking to find their own financial freedom. If you've listened to the grit Rich education podcast, then you've heard him speak. But today we are so thrilled that he's kicking off our second annual Spartan Summit. Ladies and gentlemen, here's Keith Reinhold.   Keith Weinhold (00:17:13) - Hi, my name is Keith Weinhold.   Keith Weinhold (00:17:14) - I am the founder of get Rich education. My presentation is called simply Why Real Estate? Because if you don't know why you're doing something, then you really won't care about how. And I'm really pleased to be first up here at the Spartan Summit, you're going to hear some things that you've never heard before today. For example, compound interest does not build wealth. Getting your money to work for you does not build wealth in the real world. And real estate investors, one of the first things they need to do is actually stop looking at property. So what is this financial heresy that I'm talking about? Well, I think it's going to be pretty clear to you in less than an hour's time here. It all starts with you thinking differently. You really need to open yourselves up. And I think you start to have the realization that any outsized thinker or doer, over time, did think outside the box to have that outsized impact, whether that's Thomas Edison or Jeff Bezos or Sara Blakely or Warren Buffett, they all dared to think differently.   Keith Weinhold (00:18:15) - And if you're not getting the results that you want in life, you know, maybe a great question to ask yourself is, am I thinking differently enough when you come of age in the world, whether you finish high school or college or whatever it is, you probably never really had this vision for yourself, or you're intentional and you say, yeah, I can't wait to go out there and live a small life. But then you know what? That's exactly what everyone does. Everyone goes out and lives a small life. So with thinking differently, you know, Mark Twain's got some great quotes about thinking differently. Mark Twain said, as soon as you find yourself on the side of the majority, it is time to pause and reflect. Absolutely love that for Mark Twain. Mark Twain also said one of his lesser known quotes is go out on a limb. That's where the fruit is. Yeah, absolutely. Love that one. So being a conformer does not build wealth or does not have a substantial positive impact on other people.   Keith Weinhold (00:19:16) - And you know, I wouldn't suggest that you think differently or do something differently if I weren't doing that myself. I don't know that I've had the outsized impact of some of those visionaries and inventors that I mentioned earlier. I probably haven't had as many years on this earth yet as them either. But one thing I did that was different is years ago I moved from Pennsylvania, where I was born, raised, and lived much of my life to Anchorage, Alaska. Well, that was deemed by Pennsylvanians and a good part of my peer group is a strange and unusual thing to do. But I knew that a place like Anchorage fit my interests for skiing and mountaineering because I had vacationed there. That was the place for me. The first ever home that I bought of any kind. I was only a rent paying tenant up until the day I bought a fourplex building where I lived in one unit and rented out the other three. That was pretty strange. I didn't start with a single family home. I quit my job, my good paying day job with benefits for residual income from real estate.   Keith Weinhold (00:20:14) - Another strange thing to do. I launched the get Rich education podcast in the year 2014. Kind of weird talking to myself in a little room all by myself. A lot of people didn't understand what I was doing then, so those are just some examples of some different things I've done. You know, you're different things are probably going to be different, but you really don't want to be a conformer if you think about it, high school was the place where you were rewarded for fitting in. But when you become an adult, really you get rewarded when you stand out and you don't be that conformer well, we talk about my presentation called Why Real Estate? We're really taking it from philosophy all the way through to the numbers here. And years ago, I would have loved to know why real estate made ordinary people wealthy. You know, an interesting thing. I'll just tell you, when I bought that first fourplex building, I didn't even know what terms like cash flow and equity meant. I did not even know the meaning of those terms.   Keith Weinhold (00:21:13) - And here I had owned a. Substantial building a $295,000 fourplex, which is a lot for me when I was working a day job and I bought it, and I think as a layperson before I bought that building and got down this road, I kind of thought, now, how could real estate possibly make people wealthy? Because real estate only appreciates at the at about the rate of inflation over time. That's about all it does. And I found that that part's true. And then real estate, it has the elements working on it from the outside. And it has tenants like working on it and wearing it down and degrading it from the inside. So how could real estate possibly be a good investment? I didn't understand that. I tell you, it's really important for you to learn from someone that's actually doing it. That's inside and doing this thing. I'm about as active as real estate investor could possibly be. I own Single-Family rental homes, up to larger apartment buildings, even some agricultural real estate. So it's important to learn from someone that's doing it.   Keith Weinhold (00:22:16) - And this presentation is really what my ears have shown me. And we talk about how you have to think differently and be opened up. You know, interestingly, we're in what people call the information age. We have been for decades this information age. But I like to say we're really in the affirmation age because most people would rather be affirmed and comforted in what they already believe, rather than get informed with information, because it kind of shakes you up a little bit, just like you're going to be shaken up today. So I would say, don't only seek affirmation, which is what most people do, seek information as well, and then make up your own opinion. What is wealth? You know, we kind of begin with the end in mind. It's ask yourself what is? I think that there are a lot of different definitions for that. I mean, money's got to be one of the first things that come to mind. And we are talking about financial betterment here. But, you know, it seems like people that want material things more than experiences, it seems like a lot of those people that want material things get knocked and get criticized.   Keith Weinhold (00:23:21) - I don't know, like I would rather have experiences than stuff. But really the abundance mentality is why not have both experiences and stuff if they're both easily within reach? Because they really are. But I think really the best definition of wealth, it's one that I've never heard criticize once in my life is freedom. Having the ability for you to do whatever you want to do whenever you want to do it. Real wealth is having that time freedom and not having to have a job. Being job optional, you can continue to go if you want to. Wealth really is freedom. So let's talk about money and freedom and what freedom really isn't. I've actually got a really nice proposal for you. Just imagine this. Imagine you're 20 years old. I'm talking to the 20 year old version of you. I'm going to tell you that I want you to mow my lawn for me regularly, and I am going to pay you $114 an hour to mow my lawn. Pretty amazing, right? Like, doesn't that sound incredible? Yeah, that sounds like a good deal.   Keith Weinhold (00:24:29) - You'd probably be pretty excited about that. Maybe even now you'd be excited about that. Not just the 20 year old version of yourself. Sounds amazing, but could you ever really get wealthy off that? Probably not. Probably not. Because in fact, you would have to work every single hour in a year, all 8760 hours in a year just to make your first million bucks. And that ain't happening in this scenario is completely implausible. No one would really pay that much to mow the lawn, most likely. And you couldn't work every hour in a year. You couldn't eat, you couldn't sleep, nothing like that. So it's really numbers like this that I think kind of slap someone in the face if they think they can just hustle and grind their way to wealth. I really don't think that's the best way. In fact, what I would share with you is that this is the exact opposite of being wealthy. This is the opposite of growing rich in your sleep, because you have to continue to trade your time for dollars.   Keith Weinhold (00:25:32) - In order to make this work, you need to continue to sell your time for money in order to make this work. And then really, what happens when you come of age and get older and you're probably not mowing lawns for money anymore. You end up in a place that looks kind of like this. Okay? And this is the workplace. What happens in the workplace? I like to say the workplace is where you pretend to work and your employer pretends to pay you, but there's probably a pretty good chance, and I would probably call this a pre-COVID workplace. But, you know, you probably did spend most of your working years so far in a pre-COVID workplaces. People were packed in pretty tight right there that I think,, but don't worry about being in the workplace. You've got the commute to relax anyway, right? It shouldn't be so bad. You're grinding, trading your time for dollars. But also this worker here, they're doing something else that the lawn mower didn't do. Okay. We're going to say that you mowing the lawn that classified a poor person.   Keith Weinhold (00:26:31) - You had to work for money. But the middle class person here, they're also working for money. But they do have a better and higher use of their investing dollars. They're also getting some of their money to work for them in something like a 401 K or a 403 B, or a thrift savings plan, or an IRA or a 457 plan or something like that. So the middle class person here, they get some of their dollars working for them. That's significant. But look, here's the real point getting your money to work for you doesn't build wealth. And all these middle class people here, they think there couldn't possibly be anything better than me getting my money out there working for me. So I'll just leave it there. It can't get any better than having my money work for me. Well, that's not true. And I find it to be a real conundrum and paradox that people will spend tons of time learning about how work works. They spend zero time learning about how money works, but yet money is the only reason that they even go to work, which is really unusual to me.   Keith Weinhold (00:27:36) - So getting your money to work for you does not build wealth. Now, that doesn't sound too bad on the surface, but if you think about a 10% return over the long term from the S&P 500, which is about what you could expect, most people don't even consider the five deleterious drags on that 10% of inflation and emotion and taxes and fees and volatility, all five of those simultaneous drags. Now, I think some of these are easier to explain and understand than others. For example, if you have a 10% rate of return and 3% inflation, which is a long term historic term, you're already down to a 7% inflation adjusted rate of return. We haven't even subtracted out those other four things yet, and I like to look at things in really long timeline. So let's take a look at some long timelines with some returns you can expect. And therefore I also like to look at inflation in a long timeline. We'll call it 3% inflation. You've got to beat inflation substantially in order to have any real return.   Keith Weinhold (00:28:39) - And things like stocks mutual funds, ETFs just don't do it. So let's look at long timelines of let's say over 100 years here. I talked to you about the drag of inflation. Let's talk about the drag of volatility. This is little understood. Stocks are quite volatile. They go up and down. They're choppy where real estate is a substantially smoother ride. So let's look at two different lines here on this graph okay. Over the last 120 years since about the year 1900, the stock market has averaged roughly that 10% return, 6% from capital appreciation and 4% from dividends. So therefore, the Green Line, this shows capital appreciation. You're probably pretty used to seeing this. The compound return. This looks thrilling. Your mutual fund advisor loves to show you this line. This line goes like exponential. Like, who wouldn't want some of that, right? Some even believe Einstein was purported to say that compound interest is the eighth wonder of the world. So what's wrong with it? Where does it break down? Okay, well, I'm going to show you a second line.   Keith Weinhold (00:29:46) - And both of these lines show a 6% return from the year 1900, more than 120 years of returns. So the green line is what you think you got. But what did you really get with this 6%, quote unquote compounded return? You don't get this. You get this? That's what you really got. This is the deleterious effect of volatility on stock returns. You're like whoa, whoa wait. Well why why did that happen? How did that happen? The difference here is that whole effect of, let's say you have a $100 stock and it loses 50%. Now it's down to 50 bucks, but it gains back 50% the next year. Now it's only up to 75. So you've gone from $100 down to $75, even though you lost 50% in year one, say, and you gain 50% in year two. So it's really a mathematical problem. Another way to say it is that time spent making up previous losses is not the same as growing your money. It's not the same as compounding your money.   Keith Weinhold (00:30:51) - In fact, the tip of the blue line, the end of it there. Today's dollars. That's only 38% of what you get at the tip of the Green Line at what you expect to get. So a lot of investing has to do with expectations. If you expect a green line and you only get the blue line, that's when you end up like this. You know, sort of these stereotypical stock kind of photos when people can't pay the bills. And the interesting thing is we've been in a 401 K based world for 35 to 40 years now, where that's sort of the norm. People continue to end up like this, but yet they still get into 401 K's, and think getting their money to work for them is a way to build wealth. We're here and we're talking about why it isn't and that is the problem. And compound interest and compound interest does not bail people out of their income and savings problem either. Four out of five people have less than one year's worth of income, save for retirement.   Keith Weinhold (00:31:48) - This is why we have a retirement crisis today. You can't count on compound interest alone. So I would like you to imagine another pretty dreamy scenario for yourself. Okay. And this this is a pretty important exercise. This is some better news for you. I want you to think about how much money you think you're going to make, both earned and through investment returns your entire life. We'll say it's inside this vault right here. Okay. And the reason that this is some, some better news is, you know what? If you're in this room, the chances are that you're going to have a greater net worth and greater residual income than other people will. Because you've shown up here, you've shown that you're interested in this. And a lot of people, they don't think about inflation and they underestimate their life's earnings. So let's say that your entire life's net worth, accumulated assets would be the way to say it. Let's say your total accumulated assets are coming up to $8.5 million. How's that sound? $8.5 million.   Keith Weinhold (00:32:58) - That sounds pretty good, doesn't it? Wouldn't that be amazing? Now just imagine this. I'm going to give you all $8.5 million at one time. You're going to receive this all at once. How would that feel like? Wouldn't that be amazing? How fast are you going to quit your job? Hopefully you at least give the two weeks notice. Where are you going to go on vacation? Are you going to have time to care for your loved ones now, or be a volunteer at habitat for humanity? Or finally have time to be a deacon at your church? Or do whatever is important to you because you are job optional. Now with this 8.5 million delivered all at once. But wait, here's the thing I didn't tell you when the 8.5 million is being delivered to you all at once, it's all going to be delivered to you on the last day of your life. That's when you're going to get it. What do you do now? I guess you're not going to do around the world trip anymore, right? You're just saying your goodbyes to people.   Keith Weinhold (00:33:55) - It's the last day of your life. All right. What if you got 80% of this amount, then at age 80, would that be a little better or 70% at age 70? Would that be a little better? So my point is, timing matters. I don't know, what can you really do if you get 70% of it at age 70? You know, maybe when you're 73, that's the last year you can really paddleboard very well because you've had six knee surgeries by that or something. So timing really matters. So you really want to be invested in something that gives you an income stream that provides liquidity to you over time. You really ideally most want this sort of lifestyle smoothing effect where they get this income metered out to them. So liquidity really, really matters. And what helps achieve this smoothing it is those income streams. In fact, I would go as far as to say that the standard advice that you hear out there from people invest for your future, period. I'd actually say that's bad advice or incomplete advice.   Keith Weinhold (00:35:04) - Why would you only invest for your future when you can invest now for a stream of income now and not hemorrhage or sacrifice the future at all, which is really something that you can do with real estate. Build an income stream. Now, it typically appreciates faster than stocks and you didn't sacrifice the future at all., there's more bad advice out there. I think sometimes you'll hear a person say, for example, oh, pay yourself first. That means put your money in a traditional retirement plan or something like that. Pay yourself first. Wait a second. How in the world is it paying myself first if money is deducted from my paycheck when I'm, say, age 35 and I don't get that back until, say, I made 75, look what the 401 K the most popular plan in the United States. You cannot take penalty free distributions until between age 59.5 and 70.5. That's just when they begin. And you also must begin paying taxes on it at that time. So. Would you really find it a good trade if you trade away one hour of your 35 year old self? And in return, you get one hour of your 75 year old self.   Keith Weinhold (00:36:16) - Does that sound like a good trade? A lot of people that invest in these traditional retirement plans, that's really the trade that you're making. And I used to be involved in traditional retirement plans. I used to think they were the best thing until I looked at it. A lot of people talk about the benefits of delayed gratification, and I think delayed gratification. There's something implied in that being a desirable thing, that there's a positive outcome and that there's some big reward for delayed gratification. But it's definitely not guaranteed. We're not guaranteed tomorrow. So I think for one K plans, they're known as tax deferral plans. But I think you could just as easily call them life deferral plans because that's principally what they do in my opinion. So let's go back to the lawn mower. The lawn mower again, I'm classifying that as the poor or however the middle class are doing a little something different. Remember, not only were they working for money, they got some of their money to work for them, oftentimes in a retirement plan.   Keith Weinhold (00:37:14) - I guess they're symbolized by these,, what do they look like here? Construction engineers or something like that. They're middle class, the wealthy. You're doing something that the poor and the middle class aren't doing. The middle class. They get their money to work for them. What are the wealthy do? What is this guy doing right here? What does he have figured out? He knows the best and highest use of his investing. Dollar is not getting his money to work for him. It's getting other people's money to work for him. And in real estate, you can actually get other people's money to work for you three ways at the same time. And you can do it ethically. I think it's important to be ethical. You never get called a slumlord. Like, for example, my mission is to provide housing that's clean, safe, affordable and functional. You can use other people's money three ways at the same time will call this OPM Other People's money. You might have seen that abbreviation before.   Keith Weinhold (00:38:11) - You can do it three ways simultaneously with real estate. And you know, the great thing is you don't need any degree. You don't need any certification at all in order to ethically use other people's money three ways at the same time. The first way is with the bank's money. Like for example, the way I bought that first fourplex is with 3.5% of my own money, is a down payment, and I borrowed the other 96.5. So use the bank's money for the loan and leverage you use the tenant's money for that all important income stream, and for paying down your loan for you. And then the third way you use other people's money simultaneously in real estate is that you use the government's money for very generous tax incentives, like you can defer your capital gains tax endlessly. You can get a mortgage interest deduction. There's something called depreciation which shelters a portion of your rent income from ever getting taxed. Don't get your money to work for you. Or at least don't make that the focus. The focus should be on ethically getting other people's money to work for you.   Keith Weinhold (00:39:18) - And you know, I think really a concept like this harkens back to the late business philosopher Jim Rohn. Right? Jim Rohn said formal education will make you a living, but self-education will make you a fortune. So you really getting a condensed self-education right here? So let's just look at one of these three. Let's talk about that ten in income stream. That's the important one. That's the one where you build residual income. If you do want that freedom, if you do want to build enough of that residual income so that you can be job optional and do what you want to do, think about it conceptually. Think about how amazing it is that the tenant pays you what they pay you. The tenant pays completely one third of their income most of the time in rent to you one third of the time. So that is like you getting paid and that tenant going to work for you ten days every month. We'll call it the first ten days of every month just to work for you and to pay you.   Keith Weinhold (00:40:22) - Do you have any idea how amazing that is? Think about that. What other company gets one third of people's incomes and can do it at scale? Apple doesn't get one third of people's incomes. Think of all the stuff that people buy on Amazon, all those consumer products. But people still don't spend a third of their income on Amazon. So this is amazing. Like, who else gets this? Really nobody but you in real estate. So, you know, we're getting you to think differently here. This is just again one of the three ways that you can ethically employ other people's money. The others were the banks money and the government's money. We're talking about the tenants money here. All right. That was almost the first half of my presentation at the Spartan Summit. We are get rich education. So to review what you learned earlier in the show here today, keeping it real simple. High rates are for a strong economy, and low rates are for a weak economy. A fed pivot means when they reverse their monetary policy stance.   Keith Weinhold (00:41:31) - For example, going from raising rates to lowering rates. From that point where we left off on my presentation there, I go on to discuss more about the importance of cash flow, how leverage beats compound interest, inflation, property selection, properties to avoid, and more. If you'd like to watch all of that presentation, you can in entirety with the video on the get Rich education YouTube channel. Also, the link directly to that full video is in today's show notes. On the way out today, again coming up on a future episode retirement, we polled our great audience with the two you want to retire question. And we're also asking what is retirement anyway? We're discussing both of those huge questions coming up here on the show. If you'd like to hear that episode more, be sure to follow the show on your favorite podcast platform. Until next week, I'm your host, Keith Reinhold. Don't quit your day dream.   Speaker 6 (00:42:32) - 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.   Speaker 6 (00:42:42) - 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. The.   Keith Weinhold (00:43:00) - The preceding program was brought to you by your home for wealth building. Get rich education.com.

Get our free real estate course and newsletter: GRE Letter Learn why inflation helps dishonest people and harms honest ones. I use an example of a honeymaker. Both new-build SFRs and apartment units are being shrinkflated. Landlords skimpflate by: delayed maintenance, transferring the electric bill to the tenant, adding a surcharge for storage locker use, firing the doorman, charging to park beneath the carport, or not replacing an old fridge. Instead, raising the rent is the ethical thing to do. To comfortably afford the typical US home, it took $59K in 2020 and $107K today. In a sense, you're both richer and poorer than your grandfather. Learn why investing through IRAs is a poor strategy. I compare RE market conditions from when I bought my first property in 2002 with 2024's conditions. Timestamps: Inflation and Immorality (00:01:51) Explanation of how inflation impacts the economy and the moral dilemma it creates for producers. Housing Affordability (00:04:26) Discussion on the impact of inflation on home affordability and the consequences for renters and homeowners. Rental Affordability and Apartment Shrinkflation (00:05:47) Insights into the shrinking size of new apartment units and the implications for rental affordability. Impact on Middle Class and Homeownership (00:08:29) Analysis of how inflation affects the middle class and the changing dynamics of homeownership. Affordability by Metro Area (00:11:09) Breakdown of home affordability in different metro areas and its correlation with real estate cash flow. Impact of Inflation on Wealth and Society (00:17:11) Discussion on the implications of inflation on wealth accumulation and its societal effects. Conventional Finance and IRAs (00:24:45) Brief mention of conventional investment vehicles like 401(k) and Roth IRA in relation to real estate investing. Conventional Wisdom (00:26:36) Challenges conventional financial wisdom, emphasizing real estate investment over traditional saving and budgeting. Roth IRA vs. Traditional IRA (00:27:45) Discusses the limitations and drawbacks of Roth IRAs and traditional IRAs in relation to increasing income and real estate investment. Market Timing (00:28:59) Emphasizes the importance of having a sound investment strategy and taking advantage of market conditions, using personal experience as an example. Real Estate Market Comparison (00:30:14) Compares the real estate market conditions in 2002 to those in the mid-2020s, highlighting changes in pros, neutrals, and cons. Investment Uncertainty (00:32:53) Addresses the uncertainty of investment and the need to adapt to shifting market conditions, emphasizing the importance of taking what the market offers. Property Highlights (00:34:13) Details three available investment properties in different locations, providing information on purchase price, rent, and potential cash flow. Long-Term Investment Strategy (00:36:55) Advises on the ideal holding period for rental properties and the benefits of new build properties in the current market cycle. New Build vs. Resale Properties (00:38:02) Discusses the advantages of new build properties and the potential impact of declining home price premiums on resale properties. Investment Coach Contact (00:39:12) Encourages listeners to contact investment coaches for assistance in exploring potential income properties. Disclaimer (00:39:42) Provides a disclaimer regarding the information presented in the podcast and advises consulting professionals for personalized advice. Resources mentioned: Show Page: GetRichEducation.com/491 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Speaker 1 (00:00:01) - Welcome to GRE. I'm your host, Keith Weinhold. Sure, you might find monetary inflation annoying today. Learn why inflation is even worse than you think. It is an immoral force. How bad homebuyer affordability has become by metro region. Then why conventional finance and IRAs don't move the meter in your life and more today on get rich education. 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've got pop ups and push notifications and cookies. Disclaimers are. At no other time in history has it been more vital to place nice, clean, free content into your hands that actually adds no hype value to your life? See, 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 to get the letter. It couldn't be more simple. Text gray to 66866. And when you start the free newsletter, you'll also get my one hour fast real estate course completely free.   Speaker 1 (00:01:18) - It's called the Don't Quit Your Daydream letter and it wires your mind for wealth. Make sure you read it. Text GRE to 66866. Text GRE 266866.   Speaker 2 (00:01:35) - You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.   Speaker 1 (00:01:51) - Welcome, Gary. From Gainesville, Florida, to Brownsville, Texas, and across 188 nations worldwide. I'm Keith Weinhold. Hold in your listening to get Rich education. I'm honored to have you here. Inflation is immoral. Now, at best, you might find what the central bank, the fed, does as annoying on the consumer level. It might even severely debase your standard of living, eroding away your one and only quality of life. But how does inflation have an immoral impact on you and the actors? In an economy? A honey maker sells his jars of honey for $20. The fed prints money like crazy. The money supply doubles well. The honey maker now has three options. Keep selling honey for $20, which is where he eats the loss and keeps providing honey for his customers at the same price.   Speaker 1 (00:02:51) - Secondly, he can water down the honey or use other inferior ingredients, which is known as skin deflation or shrink the honey jar size known as shrinkflation. The last option is to be honest and increase the honey price to $40. But if he behaves honestly, he drives away his customers and they look for honey elsewhere. So therefore, those that choose to water down the honey will outcompete the honest guy. And over time, what happens with currency debasement is the producers must now weigh their financial well-being with moral integrity. And that is the problem. This is why inflation has an immoral impact on human beings. It's also a contributor to why food quality suffered during the big wave of inflation in the 1970s and 1980s. It led to rampant obesity and prescription drugs, now comprising half of our TV commercials. All these people now walking around as near zombies that need their meds. And on top of that, somehow society has quickly come to believe that this is normalcy. Then the 2020 wave of inflation is both fueling that trend, and it's now making homes unaffordable for the middle class.   Speaker 1 (00:04:26) - As a landlord, the honest thing to do then is to raise the rent. It's not honey inflation or rent inflation because the honey maker and the landlord didn't create it. It is central bank inflation. Higher rent is simply the consequence of more dollars in circulation and simultaneously new build homes. They are indeed experiencing shrink inflation as a result of this currency inflation. I discussed the incredible shrinking size of new build single family homes with you last week, where that new home size has fallen 14% in the past decade plus or minus. Well, the average American apartment size that's falling to, yes, apartment developers in their new projects. They're cutting square footage, and they're doing that to try to contain rents. The square footage of apartment units being built has not been this small since at least last century, and maybe ever. Soaring construction cost. That means developers have got to either pass along all of those increases through into the rents, or find ways to limit rent. Or one way to do that is by building smaller units.   Speaker 1 (00:05:47) - Yes, apartment construction shrinkflation. And who can blame the builder? Because rental affordability has been of increased importance in recent years, and developers have got to be able to convince their investors and their lenders that there is going to be sufficient demand at proforma rent levels among apartment units completed in 2022. That's the most recent year available. Average unit sizes fell to 1045ft², and that is the lowest level on record for apartments. And we just got confirmation on that through the US Census Bureau figures. Yes, that is for newly built multifamily rental units that therefore apartment sizes are down 8% from just five years ago. And that number could drop a bit further when 2023 stats are released. Yes, American lifestyles are being shrink inflated. All over the place, and it is even worse for those that don't own assets. And a recent peak of apartment sized construction was 2013, when they were just over 130ft². And I told you that the latest figure here is, again, 1045ft². The Covid era really saw new build.   Speaker 1 (00:07:12) - Apartment sizes drop fast because that's when people started to split up. Like if they weren't a family. Now, when rents rise, whether that's for apartments or single family homes or self-storage units or whatever it is, most any kind of real estate, you know, when those rents rise, people try to keep from raising the rent sometimes. Now landlords, instead of raising the rent, they can instead skimp flat themselves. They can do that by delaying maintenance, transferring the electric bill to the tenant, adding a surcharge for storage locker use, firing the doorman, charging to park beneath the carport, or not replacing an old fridge. That might have given you some ideas there, but I do not advocate that. That's the best way. The bottom line is that inflation is not just a persistent economic affliction. It's an immoral force. And the ethical thing to do, like you learn with the honey maker, is raise the rent. Now, when wages don't keep up with prices, that's a problem. Let's take a look at just how bad affordability is.   Speaker 1 (00:08:29) - All right. Here is the lowest salary amount that US households need to at least earn to comfortably afford the typical priced US home. Okay, we're rounding to the nearest thousand dollars here in 2020. That figure was just 59 K. In 2024 it's 107 K. All right, 59 K in household income up to 107 K today to afford the typical US home. Astounding. That is up more than 80% in four years. But at the same time here's how bad it is. Median US household income did not keep pace. You probably figured that much. American incomes are not up 80% in the past four years, but in 2020, the household income, the median was 66 K. Today it's 81 K. Well, that's up only 23%. So the income needed to comfortably afford a home is up 80%, while the actual median income has risen just 23%. That's per Zillow. Well, who does this hurt the most? Of course, it hurts that prospective first time homebuyer, not just because they usually have entry level incomes as well, but it's because they don't have any equity to roll forward into a purchase.   Speaker 1 (00:09:58) - And when first time homebuyers never get that mortgage loan pre-approval, what happens? They have to rent. So this affordability trend is good for income property owners. And you know, this is one big reason why. For a while now, I have said that I expect the homeownership rate to fall and therefore for America to have more renters, more rental demand. Well, that has now begun to fall from 66% in Q3 last year to 65.7% in Q4 of last year, and expect a homeownership rate to keep dropping. And that share of renters in the United States to keep rising. Now, let's break down this poor affordability by city. Let's break it down by metro area. I'll start with some select lowest priced cities, and then let's work our way up to the highest price cities. And I'll tell you as we ascend, when we pass the national mark, and you're going to notice that the lowest price cities, which are the earlier ones that I mentioned here, they tend to be the better areas for real estate cash flow.   Speaker 1 (00:11:09) - Here we go. In 2020, the typical Pittsburgh home could be bought with a 35 K household income. Wow, that's low today. It takes 58 K Memphis a very popular investor city here at GRA. Maybe our top investor city that has gone from 38 K in 2020 to a 70 K household income today. And it appears that more people will have to rent in Memphis. Cleveland from 41 K up to 71 K, Birmingham 42 K up to 70 4KD. Fruit 45 up to 76. Buffalo 42 up to 77. Saint Louis 45 up to 77 Kansas City 52, up to 93 Houston 56 up to 95 San Antonio 57. Up to 95. Columbus, Ohio 52, up to 96 Chicago. Still pretty affordable for such a world class city, but the median household income required to afford the average Chicago home in 2020 was 65 K, and today it's 105 K, and then you've got that aforementioned national average, 59 K and income needed four years ago up to 107 K today Philly 61 K up to 109 Jacksonville 58 K up to 109.   Speaker 1 (00:12:46) - Minneapolis 72. Up to 114 Baltimore 70. Up to 114 Atlanta 59. Up to 115 Tampa 57. Up to 116 I mean, we're looking at more than a doubling in Tampa. Las Vegas 65 up to 120. Dallas 68. Up to 121. Phoenix 66 up to 131. We're looking at about a doubling of the household income that it takes to afford the median home in Phoenix just over the last four years. Miami 76 to 151. That's another basically a doubler there. Denver 101 up to 173. Boston 118 to 205. New York City 135 to 214. And we just got a few left here as we're getting close to the top. Seattle 120 to 214 and then the top three Los Angeles 158 K to 279 K San Francisco 220 up to 340 K today. And number one San Jose, California Silicon Valley 263 K up to 450 4k. That's how much a household needs to earn to afford the typical home in their local market. Not an extravagant home, not a home that's even above average, just the typical home in their local market, as calculated by Zillow.   Speaker 1 (00:14:31) - That's what's happened to affordability, basically since Covid began about four years ago. So some other takeaways from what I just told you about there. The correlation here is that lower priced metros often have high homeownership rates because they are more affordable. Yet, paradoxically, those places, those low cost places with high ownership rates are often the best markets for you to own rental property in due to that affordability. And this is not just true in the United States. When you look at Europe and we shared a map of this on our general education Instagram page last week, Europe also has higher homeownership rates in less expensive nations, led by Kosovo at an astounding 98% homeownership rate. Can you believe that 98% Kosovo, part of the former Yugoslavia and then Kosovo in the high ownership rate, is followed by Albania in second, Romania and third? And again, today's U.S homeownership rate is nearly 66%. And then, conversely, some of Europe's more expensive nations have the lowest homeownership rates. Switzerland is the lowest at just 42%, and that's followed by Germany in Austria, with the next lowest European homeownership rates with declining US affordability.   Speaker 1 (00:15:59) - I mean, sometimes, do you ever think that it just feels like dollars are losing all of their value? I mean, some of these figures just look like funny money anymore. If you visited U.S Debt Record recently, you'll see that our national debt keeps ticking up, nearing $35 trillion now. Now, I recently listened to two guys talking about rising prices back when they were kids and when they were kids, they thought that meant that the economy is prosperous. Have you ever thought that even as a kid, I didn't. I never thought that rising prices were some sign of economic prosperity, like when you were a kid, that pack of baseball cards going up from. $0.50 to $0.60 symbolize that economic prosperity was taking place somewhere else. I never thought that. I guess as a kid, though, I thought that if a 100 K home increased in price to 200 K, that it meant that it doubled in value, although it surely did not. I probably thought that as a kid before I understood things like inflation and leverage.   Speaker 1 (00:17:11) - But inflation is not some law of nature. Not at all. I mean, if you want to look at what happens is technology progresses. Well, of course prices should go down if we are picking apples by hand and then a machine comes along that picks apples 100 times faster, and you don't need to pay all these human harvesters anymore, well, then the price of apples should plummet. Prices should go way down as we get better at producing things. So just imagine how much higher prices would be today if there weren't these productivity gains that try to hold down the inflated prices just somewhat. My gosh. But instead, governments are incentivized to expand the money supply to pay for programs rather than tax you. What's the easiest way to pay for a $1 trillion federal infrastructure program? Just print a trillion bucks out of thin air. That way they didn't have to send you a tax bill because people don't like seeing tax bills. They didn't have to ask for your vote either. Just quietly print it. And now that they printed $1 trillion more, every single dollar that you're holding on to just got diluted.   Speaker 1 (00:18:29) - That's another reason that inflation is immoral. If you hold dollars in a savings account, fed inflation diluted it. If you hold dollars in a stockbroker as account inflation just diluted it. If you hold equity in a property, inflation just diluted it. Well what hedges you against inflation. Gold and bitcoin. They both break the government monopoly on money. That's just simply hedging yourself. And then what doesn't just hedge but help you profit from inflation. As we know that formula is income property with debt. Now the United Nations, they recognize 193 sovereign states across the world, but many with their own currency. And like I said, governments are incentivized to expand the money supply to pay for programs rather than tax you. It's not just an American thing. Everybody does it. It is just a race to the bottom with every currency, all of which eventually go to zero. Historically, they all have. Well, you and I, we actually gotten richer from our technology advancements in some ways. And at the same time, we are horror for our debased dollars by almost any standard out there.   Speaker 1 (00:19:59) - You and I are both richer than our grandfathers were. The technology is better. The iPhone in your pocket would blow away your grandfather or your great grandfather. But back in my grandfather's day. See, here's the difference. He could pay for both of his kids to go to college and do it without student loans. Grandpa could easily find a job in a factory, bought a house. His wife didn't have to work. He supported his kids. His wife was home so she could take care of the house and kids. We have lost that. That wave of high inflation in the 70s and 80s made it so that both parents had to soon work, eroding the nuclear family. Inflation destroys families because wages often don't keep up. When you have these ways of inflation, both parents work and the wife cooks last, meaning even more obesity. And now, in this era of inflation, the 2020s, the first time homebuyer has instead become the renter so that the median age of the first time homebuyer is now 36, per the Nar, which I think I mentioned on a show last year.   Speaker 1 (00:21:13) - And that number looks to be going higher. So the American dream, owning your home, it looks like that soon won't even begin until you're near 40. And it's not just a result of government inflation. Government regulation has driven up the cost of doing business, hence why the prices are so high. You're seeing more and more evidence of inflation widening this chasm between the haves and the have nots. I mean, Macy's, the department store they recently announced. Plans to reorganize their stores around this hollowing out of the middle class businesses are reacting, and inflation is the problem. In fact, it made a lot of news a few weeks ago. You might have seen this story where, gosh, can you believe that a public figure would say this out loud? Kellogg CEO Gary Pinnick commented on how Americans are dealing with high grocery prices when he was quoted as saying, cereal for dinner is something that is probably more on trend now. And he got blasted for it. From malnutrition to family erosion to unaffordable homes, inflation from the central bank is the culprit and it's reached levels of immorality.   Speaker 1 (00:22:35) - More straight ahead. I'm Keith Whitehouse and you're listening to episode 492 of get Rich education. You know, I'll just tell you, for the most passive part of my real estate investing, personally, I put my own dollars with Freedom Family Investments because their funds pay me a stream of regular cash flow in returns, or better than a bank savings account, up to 12%. Their minimums are as low as 25 K. You don't even need to be accredited for some of them. It's all backed by real estate and that kind of love. How the tax benefit of doing this can offset capital gains and your W-2 jobs income. And they've always given me exactly their stated return paid on time. So it's steady income, no surprises while I'm sleeping or just doing the things I love. For a little insider tip, I've invested in their power fund to get going on that text family to 66866. Oh, and this isn't a solicitation. If you want to invest where I do, just go ahead and text family to six, 686, six.   Speaker 1 (00:23:47) - Role under the specific expert with income property you need. Ridge lending Group Nmls 42056. In gray history from beginners to veterans, they provided our listeners with more mortgages than anyone. It's where I get my own loans for single family rentals up to four Plex's. Start your pre-qualification and chat with President Charlie Ridge personally. They'll even customize a plan tailored to you for growing your portfolio. Start at Ridge Lending group.com Ridge lending group.com. Hi, this is Russell Gray.   Speaker 2 (00:24:27) - Co-host of the Real Estate Guys radio show, and you're listening to get Rich education with Keith Reinhold. Don't quit your day dream.   Speaker 1 (00:24:45) - Welcome back to Jewish Education where we are day trading. We are decade trading. I'm your host, Keith Reinhold. As we approach springtime before your tenant considers moving out, this is the time to remind them of the cost of moving. I've seen landlords effectively do this with a well worded letter. If you're raising the rent, this could accompany that notice. Tell them how costly moving is, because tenants often don't realize that until it's too late.   Speaker 1 (00:25:16) - And moving is also one of the most stressful things that a human can do. Vacancy and turnover are your biggest expense, so you should consider doing this before your tenant makes moving plans, because by then it's too late. Andrew Carnegie said that 90% of all millionaires become so through owning real estate. I could still believe that 90% figure today. But sadly, Carnegie's quote wasn't quite inflation proofed, and I'm sure he would admit that if he were alive today, a net worth of $1 million today does not make you rich. Millionaire. Yeah, not a wealth marker, but it probably means that you aren't poor. But yeah, a millionaire is no longer that aspirational. multi-Millionaire might not be a net worth of $2 million or more if you're under, say, 60, a $2 million net worth, that probably means that you better keep doing something to generate income. Here at gray, we probably spend less than 5% of our content, or even less than 2% of our content here, describing what most people think of conventional investment vehicles like, say, a 401 K or a Roth IRA.   Speaker 1 (00:26:36) - Instead, we follow something more like what Andrew Carnegie said, because being conventional, it just doesn't get you anywhere. And trimming your expenses, that really doesn't move the meter much in your life, unless you do enough of it to make you miserable. Saving money by getting your haircut at home is not going to build financial freedom. How many at home haircuts would you need in order for that to happen? There's no number. Neither will finding a way to get a free Thanksgiving turkey, or saving $90 on a flight itinerary by adding a layover and losing three hours of your time. That's not respecting your own time. So this is why we don't talk about conventional stuff here. Savers lose wealth, stock investors maintain wealth, and real estate investors build wealth. But now really, why else don't we discuss something like the benefits of a Roth IRA or comparing them to a traditional IRA? The main difference there being with a Roth you fund with post-tax dollars, meaning that you pay the tax today versus a traditional IRA where you pay the tax later rather than now.   Speaker 1 (00:27:45) - Well, you can't draw the funds penalty free until you're older, for one thing. And also, if you're under age 50, you can only contribute $7,000 a year to an IRA, and it's a care year if you're over 50. It doesn't move the meter in your life. And also, since we're a show about increasing your income, not cutting your expenses in a don't live below your means, grow your means vein. Well, this year's Roth IRA income limits are 161 K for single tax filers in 240 K for those married filing jointly. All right. Well, if you are not there at that income level yet, you are targeting exceeding those limits. So you won't be qualifying to participate anyway. Even if you had wanted to 401 K's in IRAs, they take money out of your pocket every month and every year. And I said with income property, you made a plan to put more money, tax advantaged money in your pocket every month and year. And this is all why I frown on budgeting, too.   Speaker 1 (00:28:59) - Now, one classic investor axiom that makes a little more sense to me is that you can't time the market. This is precisely why time in the market beats timing the market. Another phrase you've surely heard. I think that another way to say this is take what you've been given. Yeah. In general, once you've got a sound strategy, take what you've been given. The epiphany of real estate pays five ways is a motivator to adding more property. For example, when I bought my first property, yes, that modest and seminal Blue fourplex in 2002, there were pros and cons to buying 22 years ago. Just like there always are. Well, what I did is I took what I was given because I begin to understand how real estate could benefit me. And do you want to know what the market conditions were like back then? Let's look at this and compare this to today's income property market. This will be really interesting. What are the big factors that have changed in 22 years? Well, back in 2002 there were pros, neutrals and cons to buying.   Speaker 1 (00:30:14) - Then back then the pros were a good rent price ratio and I got a historically low six and 3/8 mortgage rate. Yes, I still remember that the neutral back then was an average vacancy rate, and the cons back in 2002 were low inflation, a high housing supply. The fact that I had made a $295,000 full price offer for that fourplex, which felt high at the time. I asked the owner if he'd come down and he said no. And another con is that I own in a small metro area, Anchorage, which was more vulnerable to economic change. That's something that I didn't even realize at the time. And another con to me, buying back then, as successfully as that turned out, was weak. Future demographics. Tenants quickly vacated because it was so easy for them to get first time homebuyer loans, liar loans amidst that loose lending environment. So right there were the pros, neutrals and cons in the marketplace. When I first started out taking what I was given, I took what the market gave me and became a profiteer.   Speaker 1 (00:31:32) - Once I had a strategy. Now this current environment, let's look at it. It could very well be better than when I started out. Here's what the market is giving investors here in the middle of the 2020s decade. The pros are low vacancy, higher inflation, though I would not call it high any longer. Another pro low housing supply. The polar opposite of when I begin there is strong future demographic demand. And another pro is like I've been touching on earlier here in that first part of the show, this dreadful first time homebuyer affordability. And what that does is that increases tenancy duration. Those are the pros today. The neutrals are strict loan underwriting and historically average interest rates okay. So those are both neutral conditions. And then the cons today are lower rent to price ratios and higher insurance premiums. So there they are. They're the progression of pros neutrals and cons in the real estate market. Since I bought my first property in 2002, one has got to own assets. When the middle class is hollowing out, it's caving in.   Speaker 1 (00:32:53) - No one wants to end up as desperate as Google's. I struggling to catch up with Microsoft and OpenAI. We don't want that to happen. And uncertainty. As you think about the future and growing your portfolio, you know, uncertainty that is an ever present condition with zero antidote. Uncertainty will only disappear when the world ends. These factors oppose neutrals and cons. They constantly shift. And in fact, life is about not knowing. The only safe years of your life are past years. Live in the question. Take what you've been given. That's the message here. Like I discussed last week, investor purchases are breaking records in today's environment. And speaking of today's market conditions, let me give you something tangible that you can really sink your teeth into with some real property addresses. These are ones that you find at Gray Marketplace. Let me start with the most expensive one first in San Antonio, Texas. It is a 2024 new build fourplex for a price of $1,100,000. Yeah. Hey, big spender, $1.1 million.   Speaker 1 (00:34:13) - The rent is $7,580. Class A neighborhood 5000ft², three bed, two baths per unit. Gosh, I wish this would have been my first ever fourplex. Mine was two beds, one baths, and when I bought it, it was about 20 years old. Well, the interest rate on this new build San Antonio fourplex is 4.25%. You need to use the seller preferred lender for that you're down. Will be $275. Projected monthly cash flow is $1,413. The second property is at 16 1027 Street Northeast in Canton, Ohio. Yes, canton, Ohio, the home of the Pro Football Hall of Fame, which I visited about five years ago. This is a single family rental in canton. The price is 130 K. The rent is 1125 B class neighborhood 1100 and four square feet. It was built in 1952. It has three beds in one bath. 33 K is the down payment, $279 of projected monthly cash flow. And then the last one that I'll detail here is 8700 East 79th Terrace in Kansas City, Missouri.   Speaker 1 (00:35:35) - It's also a single family rental 213 K purchase price. The rent on it is 1875. And gosh, that is a really good rent to price ratio. They're almost 9/10 of 1% here in Kansas City. B is the neighborhood class. It's 1180 eight square feet built in 1967, four beds, two baths. And it is a down payment of 53 K down with a projected monthly cash flow of $449 there in this Kansas City single family rental. Now you don't want to count on rent increases, but rents in the Midwest are now rising faster than any other region in the whole nation. And that's not hard to do, by the way, because in most U.S. regions, rents are hardly rising at all today. Now, as far as homes built in the 50s and 60s, although it's still good for you to mark more for maintenance expenses on properties of that age. You recall that I said earlier that you're likely doing more decade trading than day trading with these rehabbed or new build investor homes and 7 to 10 years.   Speaker 1 (00:36:55) - That's typically how long you want to plan on holding for, because by that time, or even earlier, it might have been as little as three years here recently. But by that time, sufficient equity has built up so that you want to sell in order to keep your return high and trade up tax free. Well, you only need new or rehabbed systems or components, therefore, to last 7 to 10 years, and you're typically selling the property before you need anything like a new roof or new Hvac. I personally don't believe I've ever held any rental property for more than ten years now, as I gave details of those three available properties there. This really is a time in the market cycle for you to consider new build properties. If you can swing the higher price, and that's for a lot of reasons you probably realize. The first one is that because builders are still buying your rate down for you to under 6%, you saw their with that San Antonio new construction fourplex, how a builder is buying down your rate to 4.25.   Speaker 1 (00:38:02) - Gosh, another trend that's been developing is the new home price. Premium over resale property seems to have declined substantially in the US, but builders just cannot keep doing these rate buy downs forever. Once rates go down, they're going to have less incentive to do them. For one thing, there won't be a need there. And also see, it depends on the builder, but a lot of builders, they bought land back in 2021 that they're only building on today, and those builders got to pay lower 2021 prices for that land that they're now building on. Will in a year or two, when builders are selling property where they had to buy the land in 2023, that is going to be reflected in higher prices in a year or two. So go new build if you can swing it. If not, you've got your 7 to 10 year hold strategy for resale properties, and that's 7 to 10 year hold. Strategy also applies to new builds on a scarce asset that everyone is going to need all 340 million Americans.   Speaker 1 (00:39:12) - And if any of these income properties or ones like those seem interesting to you, go ahead and contact your gray investment coach. If you don't have one, they'll help you for free. And our coaches really just make it easy for you. You can book a time right on their calendar, set up a friendly zoom or phone call, and strategize at Gray marketplace.com. Until next week, I'm your host, Keith Weintraub. Don't quit your day dream.   Speaker 3 (00:39:42) - 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 exclusively.   Speaker 4 (00:40:11) - The preceding program was brought to you by your home for wealth building. Get rich education.com.

Others quietly fund a savings account for you with every income property that you own.  This is known as your ROA, your Return on Amortization. Primary residence owners don't have this benefit. Tenants rent a property from you. To own the property, you got to “rent” the money from the bank. Landlord tipflation: have you ever asked your tenant for a tip? I don't recommend it. Integrity: Now that the statistics are in, I follow up on my 2023 Home Price Appreciation (HPA) Forecast. See how it went. When measuring HPA, I explain why I use existing home prices, not new home prices. The size of a new-build home has shrunk 12-15% in just the last decade. Learn about the surprising correlation between rents and home prices. Be honest. Is it completely different that what you thought? Redfin just reported that real estate investor purchases are breaking records. Find the right income property for building your wealth. Our GRE Investment Coaches provide you with free guidance at GREmarketplace.com.  Timestamps: Welcome to Get Rich Education (00:00:01) Introduction to the episode and a brief overview of the topics covered. The Benefits of Real Estate Investing (00:01:58) Discusses the benefits of investing in real estate, including equity growth, cash flow, tax benefits, and inflation profiting. Tenant-Made Equity Growth (00:02:47) Explains how tenants contribute to the landlord's equity growth through monthly principal pay down. Landlord Tip Inflation (00:06:39) Compares the lack of tipping in the landlord-tenant relationship to other service interactions and discusses the concept of "landlord tip inflation." Review of Home Price Appreciation Forecast (00:09:06) Reviews the accuracy of previous home price appreciation forecasts and discusses the factors influencing the real estate market. Use of Existing Home Sales Numbers (00:13:01) Explains the rationale for using existing home sales numbers in home price appreciation forecasts and discusses the trend of new home construction. Impact of Population Growth on Real Estate (00:17:03) Highlights the impact of population growth on real estate prices and rental demand, emphasizing the significance of demographics in real estate investing. Special Episode Announcement (00:21:33) Announces the upcoming special episode 500 and expresses gratitude to listeners, particularly those from Colombia. Listener Guest Invitation (00:22:43) Encourages listeners to share their experiences and the impact of the show on their lives, inviting them to become guest speakers on the podcast. The surprising correlation between rents and home prices (00:26:07) The correlation between the direction of rents and home prices, and how they move together. Investor purchases breaking records (00:29:21) Insights on the increasing investor purchases, housing shortage, and the impact on the real estate market. Real estate anniversary (00:32:11) Keith Weinhold's heartfelt reflection on his parents' 50th anniversary in the same home, emphasizing the significance of providing people with a home. Commitment and growth in real estate investing (00:33:46) Encouragement to commit to real estate investing, learn, grow your portfolio, and build your empire. Conclusion and disclaimer (00:37:10) Disclaimer and conclusion of the podcast episode. Resources mentioned: Show Page: GetRichEducation.com/491 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Keith Weinhold (00:00:01) - Welcome to GRE. I'm your host, Keith Weinhold. Today, get in on a savings account that others fund for you. Landlord Tip Foundation a follow up to see how my last home price appreciation forecast actually performed. The surprising way that rents correlate with home prices. Investors are now feeling a record share of property buys and a heartwarming 50 year anniversary that I'm in awe of today. An get rich education. 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've got pop ups and push notifications and cookies. Disclaimers are. At no other time in history has it been more vital to place nice, clean, free content into your hands that actually adds no hype value to your life? See, 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 to get the letter. It couldn't be more simple. Text gray to 66866.   Keith Weinhold (00:01:17) - And when you start the free newsletter, you'll also get my one hour fast real estate course completely free. It's called the Don't Quit Your Daydream letter and it wires your mind for wealth. Make sure you read it. Text gray to 66866. Text gray 266866.   Corey Coates (00:01:42) - 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 (00:01:58) - Welcome to GRE, from Italy's Sorrento Peninsula to America's Florida peninsula and across 188 nations worldwide. You're listening to the 491st consecutive weekly installment of the get Rich education podcast. I'm your host, Keith Weinhold. And when you invest in real estate with a strategy, which is what we've discussed here for over nine years, you can't help but be a profiteer, even a wild profiteer. It might feel like so much money is falling out of the sky that you might need an umbrella to keep yourself from being hit with it. Raining Benjamins. In fact, with one of the five ways that you expect to be simultaneously paid. All right, let's not focus on the equity growth here, which has been torrid the last four years.   Keith Weinhold (00:02:47) - Not the cash flow, which has been slowed lately, not the tax benefits or the inflation profiting benefit. What else is there that ROA you return on when we talk about so much money falling out of the sky that you catch a case of affluenza, that ROA, it's really one of your quieter profit centers. It is like a savings account that someone else is funding for you. Let's say that you check in at your table of your typical mortgage income property, and it shows that it has $400 of monthly principal pay down. All right. Well, imagine if you had a number of economic actors say you own six rental properties, and then you've got six tenants, six economic actors, perhaps people that you've never met. And all six of them are putting 400 bucks a month into a savings account with your name on it. That is $28,800 a year. That goes into your quote unquote, savings account. Yeah, nearly 30 K a year that your net worth is growing by that you hardly even think about.   Keith Weinhold (00:04:02) - And it's all just part of the profitable background noise that you hardly even hear, along with your leverage depreciation, cash flow taxes and inflation, profiting your tenant builds up your equity. This way, even if your property didn't appreciate at all. And again, in your own primary residence, your ROA is zero because you had to work to pay down your principal, your tenants not doing it for you. Now, this account that they're funding for you, it's not as liquid as a savings account, but it's perhaps more like an old bank CD, a certificate of deposit. It's your money, but you can't access it. In a couple minutes. You would need to do a sale, or you could do a cash out refinance and then it's yours. Your ROA is your tenant made annual principal pay down divided by your equity. Okay. And what if you had more and larger properties? Then this small example I gave you the quietly increases your net worth nearly 30 K every single year. Well, a lot of investors have more or a larger properties where you might have 300 K in annual principal pay down alone.   Keith Weinhold (00:05:22) - The more rental properties you own, the more tenants you have that month in, month out. Every single month they fund a low liquidity savings account with your name on it. And think about it. How did you get in this advantageous position? Well, first you educated yourself. You'll know that they will rent the property from you. And how did you get the property? You don't own an outright. That typically implies too much opportunity cost to have the entire value of your property tied up and paid off. Although they rent the property from you, you got to rent 80% of the money from the bank to buy the property with reap the reward, and you might have to use that umbrella to avoid getting rained on. With the financial windfall. And residential real estate investors have been feeling the rain pouring down for the last three four years. Many commercial real estate investors with short term mortgages don't feel the same way now when you're paid five ways, which has been enhanced by inflation since 2021, you don't really need tip inflation.   Keith Weinhold (00:06:39) - Hunt up of that. In fact, have you ever asked your tenant for a tip, or has a tenant ever paid you a tip for providing housing for them? I wouldn't expect it. It hasn't happened to me. In fact, I've never heard of it. But if. If so, tell us about it right into us at get Rich education. Com slash contact. That's our contact page. A tip for your landlord. Now, think about it this way. You've got all these people asking for tips, really, since the pandemic began. And that's when it really heated up. And then the pandemic receded. And yet the tip requests persist. Baristas, delivery people, fast food workers and the parade of other micro interaction participants that you encounter throughout the day. Those people have no shame in asking you for a tip, and that's even if the service is poor. Now, I'm not saying that you should or shouldn't tip them, but they are micro interaction participants in your life because they're just handing you a coffee, or they're handing you another drink that has too many ice cubes in it.   Keith Weinhold (00:07:55) - On the other hand, what you do is you provide tenants with the roof over their head 30 days in a row, 24 hours a day. By buying the property, you educated yourself. You sunk in a down payment. You build up your own good credit to get a loan to provide housing for a stranger. Well, I guess you'll be asking your tenant a new question each month. Would you like to tip me 18%, 20%, or 25%? Landlord tip inflation? No, I doubt that you're really going to do that. But this is the case that compared to the service level from vendors that you interact with at a lower economic level, you sure could ask for this landlord tip inflation. Let me know if it's ever happened to you now, starting at the end of 2021, near the end of each year here on the show, I have provided you with a home price appreciation forecast for the following year. Well, we have got the results now from last year, so let's check the performance.   Keith Weinhold (00:09:06) - And yeah, don't you wish everyone that made predictions or forecast they reliably review them and followed up with how they actually performed. That's what we're going to do here. Now there are some things that I don't like to predict. In fact, I was the guest on Tom Wheelwright's show at the end of last year as his 2024 Real estate predictions expert. And if you watch that, he really had to press me to get my mortgage rate forecast. I told him back then that 6% by the end of the year was my best guess. But that's all it was not formulaic, not a forecast, and not a 100% confidence level at all. So when we talk about Gray's home price forecasts and our track record, let me share a little context with you here. First, so many other people, including some expert peers that I actually respect. They really got home price appreciation so wrong in this era, especially in 2021. That's when many forecast a home price crash 2021. That's the year we had the highest home price appreciation in a long time, nearly 20% nationally.   Keith Weinhold (00:10:23) - And of course, I have never called for any national home price downturn at all, even a mild one. I'm on record here on the show back in 2020 and 2021. That is when I shared the fact that, look, this administration, our elected officials, whether you like them or not, for better or for worse, they don't want to see people kicked out of their homes and living on the street back then. Remember, like mortgage loan forbearance. But at the end of 2021, I forecast a cooling down of home price appreciation. And I told you then that I expected 9 to 10% for 2022. And at the end of 2022, the result was indeed 10% home price appreciation. And then at the end of 2022, we had already seen mortgage rates spike two and a half times from their lows. And again, many said that was going to catch up with us so that in 2023, home prices would just have to sink. No, they didn't sink. That's when I told you that the only housing crash was going to be a supply crash, and the higher mortgage rates actually correlate with higher home prices, not lower ones.   Keith Weinhold (00:11:39) - That's what historically happens. And I said right here on the show that home prices absolutely can't crash. In fact, they won't fall at all. So 0% was my forecast for last year. No gain, no loss. We now have the number in. Only for last year. Yes, real estate statistics can move slower than an Alaskan glacier. Well, it affirmed that indeed, prices didn't fall. They came in up 3.5% last year. That's the result. We'll round it up to 4%. And we maintain a consistent data set here. The same measuring stick. And that is the Anna's national median single family existing home price. Let me just add that of course I'm neither omniscient nor clairvoyant. I'm giving you the best information my research can provide. It is surely possible that I'll get it wrong sometime. I just haven't yet. Now. And you learn something about real estate here. Why do I use only the existing single family home number? Therefore, why exclude no new build homes? Well, in short, this is how you better compare apples to apples.   Keith Weinhold (00:13:01) - New home construction changes over time. And in fact, the trend for the last decade is that new build homes are shrinking in size and are also being built closer together to each other when they're constructed. So you can see how this disrupts the apples to apples comparison. Ten years ago, the existing single family home was about 1600 square feet and is still 1600 today. But ten years ago, a new build, single family home was about 20 300ft². And it's just 2000ft² today, or 2036 to be exact. So yeah, new build sizes have shrunk 12 to 15% in just the last decade. So this is why I use existing home numbers. And by the way, this shrinking trend, this is the opposite of the early 2000 trend. When you saw a super sizing of homes about 20 years ago, that's when the term McMansion really increased in popularity there about 20 years ago. But it's the opposite now. The shrinking new home trend looks to pick up steam because, like I talked about a few weeks ago, affordability is down.   Keith Weinhold (00:14:19) - Remember, it's worse than it's been since George Jefferson was on television 40 years ago. Don't let's not play The Jeffersons theme music again. The deluxe apartment in the Sky. We played that two weeks ago. Moving on up to the East side. I think that's the music that meant Manhattan's Upper East Side. For those uninitiated on that, that has long been one of New York City's most affluent neighborhoods. Yes. Then the Jeffersons were also funding their landlords return on amortization and more. But getting back to today's new home construction, you can. Therefore, you could say that homes are experiencing shrinkflation today from about 2300ft² to 2000ft² in just a decade, and you can easily see that falling below 2000ft² within two years here. Yes, that type of shrinkflation is more impactful than you paying the same for your shrinking jar of prego spaghetti sauce. Now that you understand why existing home sales numbers are used in Jerry's Home price depreciation forecasts sourced by the Nar, you'll recall that at the end of last year, I forecast 4% home price appreciation for this year.   Keith Weinhold (00:15:43) - We'll check back on that in one year's time. Now, that's amidst the fact that I understand we've got high asset prices all over the place right now, almost everywhere you look, a record high US stock market near record highs in Bitcoin and near record highs in home values. Yes, more home price appreciation is likely. In fact, real estate investor purchases are breaking records. I've got more to tell you about that later. In fact, there is even more fuel being poured out of the housing record right now. And this was breaking news a couple of weeks ago in our Don't Quit Your Daydream newsletter. So if you're a reader, you saw it. And that is the fact that population growth drives real estate prices and rents. News broke that we just experienced the largest one year population increase in all of American history, with an astounding 3.8 million. Our population was up 3.8 million people last year, more than ever in previous census estimates of a 1.6 million person increase had underestimated immigration flows. This was reported in Newsweek and elsewhere.   Keith Weinhold (00:17:03) - Now, look, I've been directly investing in real estate since 2002, and I have rarely encountered a supply demand inflection point like this that requires such attention from you, locating an available property that is already more elusive than finding the missing car keys, and it's going to get even more scarce. This has the appearance of an astounding real estate investment window that we are now entering. See, in most asset classes, the future is largely unknown. Like in stocks, futures markets, derivatives, bonds, crypto, gold, oil, all kinds of other commodities. There are so many unknowns there. And real estate has unknowns too. But there are no three giant certainties for residential real estate in America going forward. Number one is more inflation. Number two is a prolonged scarce housing supply. And thirdly, it is astoundingly good demographics that fuel more demand. This third one is newer. And this is what I'm highlighting here. The demographics were already good, but it's just been turned up another notch. All three of these things are inevitable, and so many people try to predict the future and they fail.   Keith Weinhold (00:18:30) - But these three profitable real estate tailwinds for investors are as assured. I mean, there is a third. Is you forgetting someone's name immediately after they introduce themselves? Yeah. The way to get around that is to recite their name back out loud as soon as you meet them. But what I'm getting at is that this is not hyperbolic to call this potentially a once in a decade opportunity. Other high income countries like Japan and so much of Western Europe, they are sweating buckets, thinking about how their nation's aging populations are sending them over a demographic cliff. And besides just the magnitude of the population growth, again, the biggest one year increase in American history, understand that America's largest group of immigrants are working age producers aged 25 to 54, and they are overwhelmingly renters, not homeowners. So this is your surge in rental demand and this immigration surge. It may or may not last, depending on policy, regulation and the presidential election outcome late this year., you know, Jeff Bezos discussed this one time.   Keith Weinhold (00:19:55) - He discussed about how everyone wants to know the future and understand this. You already know more about the future than what you think, whether it's about your future business life or your investing life or your family life, or the way that you're thinking about technology in autonomous cars or flying cars, in machine learning and artificial intelligence, you know, with things that a lot of people, they ask themselves a question about the future, and they ask, what will be different in ten years? Well, there's nothing wrong with that question. In fact, it's a perfectly good question. But instead, ask yourself the opposite. What will be the same in ten years? Yeah. What will be the same in ten years? Now, black swans aside, in real estate investing, it is indeed those three things more inflation, a prolonged scarce housing supply, and astoundingly good demographics for rental demand. That's what will be the same. And now you have the basis for a sustainable wealth strategy. The bottom line is that even if it comes to a sudden stop, the addition of an all time record 3.8 million Americans in one year, that has left an indelible mark on real estate demand, the economy, and nearly all of society.   Keith Weinhold (00:21:33) - Residential real estate investors are going to own a scarce asset that everyone will need. You're listening to get resuscitation. It's episode 491, and that means that we're just nine weeks away from what is going to be a special, unforgettable episode 500. It's an episode that you probably want to listen to more than one. Coming up in two months on May 6th. And I'll tell you, I really know how to put the performance pressure on myself for May 6th, don't I?, hey, I really want to give a shout out to our great listeners in Columbia. Last month, I spent nine days in Colombia and eight days in Ecuador exploring a coffee farm, checking out urban sites and doing some Andes mountaineering, taking in the best of steak, coffee, chocolate and fruits to. And I've got to say, when Colombians learned that I was there, you Colombians were amazing at reaching out, making me feel welcome, telling me how the show has helped you. Ecuador. And it wasn't quite the same. I love you and your beautiful nation, but frankly, I didn't hear much from the Ecuadorian listeners.   Keith Weinhold (00:22:43) - I don't know why there was a big difference there, but I'm appreciative of some of the South American listenership for a show that's based on about 95% US real estate here. Speaking of listeners and the show, at times, we have listeners here on the show. If gray has impacted your life and you'd like to come on the show and tell us about it, I and our audience like hearing from you and how an abundance mindset and real estate investing has changed your life right into us. At our contact page again, get rich education. Com slash contact and tell us about yourself. We've had some really cool listener guests here on the show, like Grammy Award winning music producer Blake La Grange, the inventor of a home fitness system, Sean Finnegan, and even my former coworker that used to have a neighboring cubicle right next to me, back when I had a day job in a fertile who became a listener. If you think you're just maybe a boring accountant with a spouse and two kids, but Jerry has influenced you, well, you're exactly who we want to hear from a write in and let us know.   Keith Weinhold (00:23:53) - Coming up next, hear the surprising correlation between rents and home prices. Then investor purchases are breaking records in more. I'm Keith Weinhold, you're listening to get rich education. You know, I'll just tell you, for the most passive part of my real estate investing, personally, I put my own dollars with Freedom Family Investments because their funds pay me a stream of regular cash flow in returns, or better than a bank savings account, up to 12%. Their minimums are as low as 25 K. You don't even need to be accredited for some of them. It's all backed by real estate and that kind of love. How the tax benefit of doing this can offset capital gains and your W-2 jobs income. And they've always given me exactly their stated return paid on time. So it's steady income, no surprises while I'm sleeping or just doing the things I love. For a little insider tip, I've invested in their power fund to get going on that text family to 66866. Oh, and this isn't a solicitation.   Keith Weinhold (00:25:01) - If you want to invest where I do, just go ahead and text family to 66866. Role under this specific expert with income property, you need. Ridge lending Group NMLS 42056. In gray history from beginners to veterans, they provided our listeners with more mortgages than anyone. It's where I get my own loans for single family rentals up to four Plex's. Start your pre-qualification and chat with President Caeli Ridge personally. They'll even customize a plan tailored to you for growing your portfolio. Start at RidgeLendingGroup.com. RidgeLendingGroup.com.   Matt Bowles (00:25:48) - 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 daydreaming.   Keith Weinhold (00:26:07) - Welcome back to Get Rich Education. I'm your host, Keith Weinhold. As I like to say, history over hunches, it's easy to have a hunch about how something works in real estate. But take a look at history and see what really happens. History over hunches. So to that point, you might be surprised at the correlation between the direction of rents with respect to home prices.   Keith Weinhold (00:26:31) - Now, the cost of rent has grown over the last 12 years. That's not news to anybody, but many think that rents and home prices move inversely. If demand for home purchases falls, then rents rise, right? No. Instead, they move together. When rents move up, home prices tend to move up to. Rents rose gradually from 2012 to 2020, and they rose rapidly since 2020. Well, home prices, they behaved in a similar way. They also rose modestly from 2012 to 2020, and they rose rapidly since then. Rinse and home prices have therefore been positively correlated. And in fact, I've been investing long enough to remember that when the home price bubble burst from 2008 to 2010, where rents fell a little. Then to an underscore my point some more, both rents and prices bottomed together around 2011. Yes, I think most real estate investors believe that this positive correlation is less likely than that. A movie about Barbie could ever reach $1 billion in sales. Well, that happened too.   Keith Weinhold (00:28:01) - So I simply look at what really occurs when I do my research. It's history over hunches, and that's why these should not be mind blowing discoveries. Just look at what really happens. So if your tenant balks that rents are rising, well, you know what? Home prices are probably rising to the bottom line here with rents and prices being correlated, is that whether it's to rent or own, wait a million homes when the economy grows, that is the real history over any other hunch. Now, as a wealth building show here I am empowering you with the information that you need to improve yourself. You can't follow the herd. You've got two choices. Either you can be a conformer or you can build wealth. Your wealth is not coming from anyone else. Chances are a rich uncle won't be helping you. In fact, getting an inheritance remains a rarity in the US yet as of 2022, data from the Federal Reserve shows only about a fifth of American households had ever received an inheritance at all. And it gets worse.   Keith Weinhold (00:29:21) - According to NYU, the most common inheritance amount is between 10,000 and $50,000. Yeah, that's enough to fund your life for one average month, or maybe one good month, depending on how you're living. The good news is that great listeners and others are getting the message, because last month, Redfin reported that real estate investor purchases are breaking records. Yes, investors bought 26% of the country's most affordable homes in the latest quarter ended, and that is the highest share on record ever. We've got all these on record ever sort of things that we're talking about on the show today. Yes, Redfin let us know that low priced homes are increasingly attractive to investors in today's environment. Redfin agents in Florida and California report that investors are the ones hungry for homes, but they can't find properties to purchase due to an ongoing housing shortage. But we can help you with available supply here at gray. But these overall record investor purchase figures they are, according to a Redfin analysis of county home purchase records across 39 of the most populous US metro areas, not just a couple states.   Keith Weinhold (00:30:45) - There are a lot of investors out there fighting for properties, said a Redfin premier agent in Orlando, Florida. There just aren't enough properties to go around, which is putting a cap on how many homes investors can buy. In fact, single family homes represented over two thirds of investor. Purchases. So congratulations, you are acting. You are making it happen in this canyon, this chasm, this divide that's opening up between the haves and have nots, shrinking the middle class. You are getting on the right side of that. I want to tell you more about being an investor shortly. But first, I have somewhat of a heartfelt real estate anniversary for you, and it has to do with my own family. March 5th, 1974 is a special day. You might note that tomorrow will be the 50th anniversary of that special date. Now look, I can remember every single place that I've ever lived. The modest single family home that I grew up in, college dorm rooms, a pathetic pool house, efficiency apartment in Westchester, Pennsylvania, a condo, a house as an adult.   Keith Weinhold (00:32:11) - Can you can you remember every place that you've ever lived? There's a good chance that you can. It's how intimate, really and important real estate is to your life. And think about how significant you are. You're providing people with a home that they will always remember. This is key. Think about how this contrasts. If you supplied the world with software packages or patio furniture, that stuff is forgettable. You're doing something significant when you help abolish the term slumlord and provide other people with that clean, safe, affordable, functional housing. Well, tomorrow my parents, Curt and Penny Weinhold, will have lived in the same home for 50 years. 50 years in the same home for my parents in sleepy and remote Appalachia. Coudersport, Pennsylvania. I asked my dad about that recently, and he said that when the paperwork with the lawyer was finished, he recalled walking into the house and happily shouting. He was tired of renting. When I visit my parents annually in Pennsylvania, I am still sleeping in the same bedroom of the same home, on the same block in the same small town where they still live in the first home that I ever remember.   Keith Weinhold (00:33:46) - Great job Mom and dad. You committed. You married before you had my brother and I. You're still happy, you're still healthy, and you're still together. You're even in the same home I grew up in. I'm in awe. I won the parent lottery five decades in the same home. You know where the creaky spots in the floor are of that old Victorian place. And when my brother is there, the four of us know right where to sit in our same spots at that same kitchen table. And, you know, as tomorrow is an amazing 50 years there. There are some lessons in this. Find out what the great things in life are, learn about them and commit to them. Like me trying to be the highest man on earth recently, or you buying the property or getting married. So many of the most successful people get diligent and learn and then make lasting commitments. Being a real estate investing devotee is a commitment. Each property that you add is a small commitment itself. I encourage you to act if it resonates with you.   Keith Weinhold (00:35:03) - Learn and grow your portfolio. There are always going to be naysayers that try to hold you to the confines of conformity and mediocrity. So fear, uncertainty. Telling someone that times are uncertain is like telling someone that they're breathing air. Well of course, no kidding. Each condition, uncertainty and breathing air have persisted every day of your entire life. In the year 1920, ten kilos of gold would buy you an average home. Today, ten kilos of gold will buy you an average home. Home prices aren't high so much as the value of the dollar is simply down. Homes are not overvalued by the most timeless financial measure. Gold mortgage rates near 7% are still below. Their long term average. So go forth and build your empire. You can either teach a man to fish or give a man a fish. Here at Jerry, we do both. We teach them in or women to fish at get worse education. Com which this show is a part of and then a great marketplace. Com we give a man a fish.   Keith Weinhold (00:36:30) - We have the supply of housing. You have access to the national providers with the lower cost real estate that makes the best rentals. And starting about two years ago, we added free investment coaching here, giving you that fish and making it easier than ever to get started or get your next property. Play a game worth winning and commit to something worthwhile. If you haven't yet, I encourage you to look into that at GREmarketplace.com. Until next week, I'm.   Speaker 3 (00:37:03) - Your host, Keith Weinhold.   Keith Weinhold (00:37:05) - Don't quit your day dream.   Speaker 4 (00:37:10) - 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 yet Rich Education, LLC exclusively.   Keith Weinhold (00:37:38) - The preceding program was brought to you by your home for wealth building. Get rich education.com.

Owning raw land, timberland, and farmland is often the domain of the wealthy. This is partly because it is difficult to obtain loans for this property. Today, we discuss an income-producing timberland that also tends to increase in value. For under $7,000 you can own quarter-acre parcels of producing teak trees in Panama and Nicaragua. You can invest yourself. All at once, this provides diversification with a hard asset in a foreign nation and a different product type. Over a twenty-five year period, each $7K quarter-acre teak parcel is projected to return $94K. You get title to the property. Learn more at: www.GREmarketplace.com/Teak With ownership of two quarter-acre parcels, you can qualify for a second residency in Panama for under $22K with legal fees, etc. A SFR does not grow into a duplex. But teak trees grow in volume while its unit price typically appreciates. Teak price growth is historically 5.5% annually. I've met the company CEO and Chairman in-person. This provider has offered this opportunity for 24+ years. They've recently added a sawmill, increasing profits. What are the risks of teak tree investing? Disease, pests, fire, geopolitics and more. They are proven mitigation plans. In-person teak tours for prospective investors are offered. Trees grow through recessions, COVID, market cycles, and Fed rate decisions. Learn more about teak tree investing at: GREmarketplace.com/Teak Timestamps: Welcome to Get Rich Education (00:00:01) Keith Weinhold introduces the podcast and emphasizes the importance of real estate and financial information. The US economy and land ownership (00:01:44) Keith discusses the strength of the US economy and the importance of diverse and resilient real estate portfolios. America's top 100 landowners (00:02:29) Keith talks about the largest landowners in America and the reasons why land ownership is often associated with the wealthy. Investing like a billionaire (00:05:32) Keith introduces the topic of investing in producing land and the benefits of owning producing land. Introduction to ECI Development (00:06:21) Keith introduces Michael Cobb and discusses the company's projects in Latin America. Marriott resort project in Belize (00:07:08) Mike talks about the construction of a Marriott resort in Ambergris Key, Belize, and the challenges of financing such projects. Development and tourism in Belize (00:08:37) Michael Cobb discusses the development and popularity of Ambergris Key, Belize, and the involvement of major hotel brands. Teak tree parcels investment (00:11:30) Michael Cobb explains the investment opportunity in quarter-acre teak tree parcels and the generational wealth stewardship associated with it. Reasons for teak investing (00:14:05) Michael Cobb discusses the reasons why people are interested in teak investing, including hard asset diversification and international residency opportunities. Cash flow cycles and teak investment (00:16:42) Michael Cobb explains the 25-year cash flow cycle associated with teak investments and the generational income potential. Optimal growing conditions for teak (00:19:26) Michael Cobb discusses the optimal growing conditions for teak and the physical growth of the trees. [End of segment] Teak Plantation Locations and Growth (00:19:42) Discussion on the optimal locations for teak growth and the historical track record of teak price growth. Teak Price Growth and Business Plan (00:20:44) The historical 55% annual increase in the value of teak and the business plan's conservative approach to teak price growth. Physical Properties and Residency Opportunities (00:21:33) The value of teak and the opportunities for achieving residency in Panama by owning teak. Residency and Citizenship (00:24:33) Differentiating between residency and citizenship in Panama and the process and benefits of obtaining permanent residency. Sawmill and Value-Added Component (00:27:56) The integration of a sawmill into the investment proposition and the value-added potential of processing teak into lumber. Sawmill Investment Opportunity (00:30:07) Details of the investment opportunity in the sawmill, including the expected return and investment structure. Risks and Mitigation (00:32:41) Discussion on the risks associated with teak plantation investment abroad and the mitigation strategies in place. Property Management and Tours (00:35:25) Outsourcing property management and the availability of tours to visit the teak plantations in Panama. Long-Term Investment Perspective (00:37:43) The long-term growth potential of teak investments and the comparison to the investment strategies of wealthy families and institutions. Earth's Highest Real Estate (00:38:11) Discussion about Earth's highest point, the equatorial bulge, and the location of teak plantations in Panama and Nicaragua. Investing in Teak Parcels (00:38:11) Information about purchasing teak parcels, the absence of loans, and the potential for building wealth through teak investments. Consultation Disclaimer (00:39:34) Disclaimer about seeking professional advice and the potential for profit or loss in investment strategies. Resources mentioned: Show Page: GetRichEducation.com/490 Learn more about teak investing: GREmarketplace.com/Teak 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Keith Weinhold (00:00:01) - Welcome to gray. I'm your host, Keith Reinhold. An affordable way to simultaneously invest like a billionaire. Get diversified in multiple ways with real estate. Help the earth. And if you prefer, even achieve residency in a second nation today and get rich education. 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've got pop ups and push notifications and cookies. Disclaimers are. At no other time in history has it been more vital to place nice, clean, free content into your hands that actually adds no hype value to your life? See, 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 to get the letter. It couldn't be more simple text gray to 66866. And when you start the free newsletter, you'll also get my one hour fast real estate course completely free. It's called the Don't Quit Your Daydream letter and it wires your mind for wealth.   Keith Weinhold (00:01:16) - Make sure you read it. Text gray to 66866. Text gray 266866.   Corey Coates (00:01:28) - 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 (00:01:44) - What category? From Sorrento, Italy to Sacramento, California, and across 188 nations worldwide. I'm Keith Reinhold, and you're listening to get Rich education the Voice of Real Estate since 2014. As we're two months into the year now and the US economy has continued to stay strong. Let me ask, how's your portfolio doing and how resilient is your real estate? How diverse is it? How would you grade yourself on those criteria?   Donald Trump (00:02:17) - I would give myself, I would look, I hate to do it, but I will do it. I would give myself an A-plus. Is that enough? Can I go higher than that?   Keith Weinhold (00:02:29) - Well, well, whether your, I guess, straight A's or not. Consider this land report.com. They recently published a report about America's top 100 Las donors. Now, Lynn could be vacant and nonresidential, yet have active ranching or agriculture or forestry taking place.   Keith Weinhold (00:02:52) - That way the land produces something while it might increase in value at the same time. But the reason that often land is the domain of the wealthy is that it's harder to get loans for land, and therefore one must often pay all cash. Well, by the time they were done. Today, you'll learn about producing land that's actually available at such a low price point that alone typically is not required for you to buy it. In 2024, America's largest land owner is Red Emerson, and that's what the report found. Read and his family owned 2.4 million acres in California, Oregon and Washington through their Timber products company and the number since they became America's largest landowners in 2021, when they acquired 175,000 acres in Oregon from another timber company. Well, with that acquisition, the Emerson surpassed Liberty Media chairman John Malone's 2.2 million acres. And then in third place is CNN founder Ted Turner. Yeah, he's America's third largest landowner, with 2 million acres in the southeast on the Great Plains and across the West. And it was a few years ago now.   Keith Weinhold (00:04:05) - It was 2020 when news broke that Microsoft co-founder Bill gates was America's largest farm land owner, with more than 260,000 acres. So the wealthy are attracted to real assets that can produce yield in something like land, which they aren't making more of. That's the backdrop for today. Surely we'll talk about income producing land, although most years it won't pay out and it's available to any investor, big or small. But before we do, let me share that. About ten days ago, I climbed up the highest point on Earth here while we're talking about non-residential real estate. Well, where was it? Where was I? Yes, I was on Earth's highest piece of real estate. Kind of a trivia question here, and I used to think that that must mean Mount Everest, but it's not. So there's a clue for you there. Where is Earth's highest point is you ponder that. I'll give you the answer later. Let's talk about investing like a billionaire with the opportunity to own producing land did it to you? We've discussed this topic before, but it's been quite some time and there have been some important updates, including a sawmill for the production timber.   Keith Weinhold (00:05:32) - After success in the computer industry, today's guest formed ECI development in 1996. I suppose going on nearly 30 years now. He served on advisory boards for the Na as a resort community developer. They have projects in Belize, Nicaragua, Costa Rica, El Salvador, Honduras and Panama, and neighborhoods include homes, condominiums, golf courses and over five miles of beachfront. So they got some really beautiful properties. He and I first met in person in 2016. He and his family lived in Central America from 2002 to 2016. It's always fantastic to have back on grea, and I guess I must button up here because it is the chairman and CEO, Michael Cobb. It's good to be with you. Thanks for having me.   Michael Cobb (00:06:21) - Back on the show. It's fun to have these conversations. I didn't realize we met in 2016. That's a little while ago.   Keith Weinhold (00:06:27) - Yeah, it has been eight years. Yes, we met in the region then down there and Mike's about the most relatable and down to earth guy that you can find and literally down to earth is.   Keith Weinhold (00:06:41) - Besides the resort development, you've made it easy and inexpensive for investors worldwide to buy producing teak tree parcels. But before we discuss that, you've got a project that's drawn a lot of interest on Ambergris Key, Belize, which many of our listeners already know, that's Belize's largest island and its top tourist destination. I have visited and owned property there, and it's coming online next year. It's pretty exciting. Tell us about it.   Michael Cobb (00:07:08) - It is exciting. It's been in the works for goodness, eight years. I think we signed our contract with Marriott maybe 7 or 8 years ago. We started construction just about a year ago last January. So almost exactly a year. Yeah, it's a marriott resort, 202 room oceanfront resort. It's fantastic. It will be done in August of 2025. Soft opening heart opening October 25th. So yeah, about 1618 months from now have this project finally finished. You know, the big challenging thing in this part of the world is financing. But it's really hard to get financing or affordable financing.   Michael Cobb (00:07:42) - Let me say it that way. Yeah. And so we took our time and we would not start a project until it was fully funded. I think a lot of challenges are people start these projects are kind of betting on the. Com. Right. Oh well we'll figure it out later. And we don't operate that way. We've been around for yeah 28 years. And so we're very very conservative. And until we had all the money to build the hotel, the resort, we did not start. And so we kicked it off last January. It was just down there last week. Steel is arriving. The superstructure is already going up. Yeah, man. It's just so nice to see it really coming to fruition. But you know, it's prudence and patience to take our time, make sure we have all the funding and then launch so that what we start finishes. And that's really been our mantra for almost three decades now.   Keith Weinhold (00:08:27) - Make it up, make it real, make it happen. In the largest town there on Ambergris Key, Belize, just a few decades ago, it was still this sleepy fishing village.   Keith Weinhold (00:08:37) - And with the setting that that island has and all the great snorkeling and everything else, it's really become popular and is boutique hotels grew into larger hotels. Yeah, it was probably, what, ten years ago perhaps, that you saw some of these big brands start to take more of an interest, like Hilton and Marriott, in branding the buildings what is.   Michael Cobb (00:09:00) - And, you know, I give a presentation called Why Belize, Why Right Now? And you nailed it there when you talked about the timelines. Right. And how a country or a region, it's not even a country in this case. Ambergris key. It's very specific. Right. How ambergris Key Belize has moved through this timeline, this path of progress. And at some point it goes from being a niche market or a no name market to a niche market, to a boutique market. And then all of a sudden, you're right, at some point the brand start to pay attention and then you move into popular acceptance and really mainstream tourism. And so, right.   Michael Cobb (00:09:31) - The cruise ships started going to Belize about 15 years ago, which put Belize as a country into the mind of a more mainstream traveler. And then you're right, about eight, ten years ago, the brand started to pay attention. And we do. We have a Hilton, we have a curio by Hilton, we have an autograph by Marriott, our company, ECI. We picked up the best Western franchise, and so we operate a Best Western on the island for that middle class market. And then Marriott, obviously, for the very high end traveler who wants an oceanfront 4 or 5 star kind of property. So yeah, but the brands are paying attention. And by the way, we're just seeing the beginning of that happening. This popularity curve Belize has entered what I would call the fast growth period. And over the next five, maybe eight years, we're going to see incredible growth in the tourism industry. Airlift is up. JetBlue just started flying down. So we're starting to WestJet. So we've got Canadian Air.   Michael Cobb (00:10:22) - We've got a discount carrier southwest. So when those things start to happen what you see is a market dynamism that's you know really it's exciting and it's going to change. Very, very rapidly. The pace of change is going to grow rapidly as well. So great time to look at Belize. If folks are interested in sort of that positioning in the path of progress in the marketplace.   Keith Weinhold (00:10:43) - Each time I visit Ambergris Key, Belize, the level of development increase is palpable. And, you know, this is an opportunity for a US or Canadian buyer or a buyer from outside that nation to come in. And it's just a very easy step with the English language and the common law in Belize, where you can invest yourself in this Marriott project that Mike discussed. Now, Mike, a while ago, to change topics, you recognize that the world has been really deforested and losing its valuable teak hardwood forests so continuously since 1999, you've offered a program so that individual investors at a really affordable price. We'll get to that price later.   Keith Weinhold (00:11:30) - They can own quarter acre parcels with the property deeded in their name, and reap the benefits and returns from the growth of the teakwood on top of the land. And now this is pretty novel, because for hundreds of years, only the hedge funds and super wealthy had access to an investment like this. So get us up to date with what you're doing on the teak hardwoods, because I know that so many of our listeners and viewers have already gotten involved.   Michael Cobb (00:11:56) - They haven't really. Thank you for being one of the people who put the word out there. Right? Because most people don't even know you can own teak or let's just back it up and you say, own timber, right? You start there. You're right. Only the super rich land barons, hedge funds. Those are the people that have always owned timber for centuries. Right. And so I think in most people's minds it's like, oh, I can't even get there. How would I even do that? Right. Well, then you take it overseas and you take it into something very, very specific, like teak timber.   Michael Cobb (00:12:25) - That's just not on anyone's radar. So. So you have done a great job. Thank you for getting the word out to just let folks know that this is something that they can do. So quarter acre teak parcels. We are now on our third plantation in Panama. We have one in Nicaragua as well. And so we're in our third plantation in Panama. Just because of the incredible number of folks, well over a thousand folks now who have decided they want to invest in own teak. You said something really interesting, Keith. You said you get to own the land, you get title to land and you get the harvest of the trees. That's absolutely correct. But it gets better because when the trees are harvested, they get replanted. And then the next generation of people your children, your grandchildren, whoever that might be, get the next harvest. But because you still own the land and the trees are replanted, a third harvest, you know, and a fourth harvest. So what you've really created with teak ownership is generational wealth stewardship.   Michael Cobb (00:13:24) - And that is something that's just so far beyond the comprehension of so many people that it can be so easy and so affordable to do.   Keith Weinhold (00:13:32) - I'm an investor myself in producing land like this in Latin America, so I know what some of my reasons are for being interested in this. And yes, it's more than the fact that I'm just a geography guy. It's the fact that I know I'm diversifying in multiple ways at the same time, a different product type in residential real estate. And I'm getting international diversification in a different nation, for starters. So are those some of the reasons that you see for why so many people are interested in teak investing like this? What are their reasons?   Michael Cobb (00:14:05) - Yeah, I think you've nailed a big part of it, which is the hard asset. A lot of folks, your listeners, readers in the news that are right, I mean, hard assets are important. I hope more people recognize that. Right. And more and more people are, thank goodness. So hard. Asset real estate being this particular hard asset.   Michael Cobb (00:14:22) - Right. And then the international diversification, one of the challenges we have is us, especially in Canadians to some degree, is that we kind of locked into the US system like we can own, say, Toyota stock, right? Japanese company, we can own Nestlé, a Swiss company, but generally we're doing it on the New York Stock Exchange. And so even if we own an international stock, it's still the US basket are still the Canadian basket that we hold it in. Right. And so when you physically own a titled property outside your home country, you have now truly diversified internationally. And there's a lot of prudence in that. And even just tiny little percentages of your portfolio, 5% of your portfolio, 10% of your portfolio outside your home country and hard assets is prudent because you want some other baskets for those nest eggs. Antiqued because it's such a low price point of entry with a huge yield, by the way, that it has become very, very popular for folks who want that international diversification in a hard asset.   Michael Cobb (00:15:23) - But to have the true international diversification because it's a physical asset outside your home country. And then I. Just say this and we can pick up on the theme or not. The other reason that people are looking at teak in Panama and Nicaragua, by the way, both countries, is because of the availability or the qualification for a visa for a second residency. And a lot of times people look at that as a plan B, if we kind of think maybe the US is going off the rails or Canada or wherever your home country is at, or it could go off the rails. Doesn't have to be now. It could be going off the rails in the future. You sort of that Boy Scout mentality of, you know what, I want a plan B, and if we have a second residency outside our home country, we now have an option. If we don't like the way things are going or where they get to, we can actually pick up and we can move and we have the right legal right, because we have a residency to live in another country.   Michael Cobb (00:16:17) - That's another reason that a lot of people have picked up the teak because it qualifies you for that residency. But I think the bigger reason is the international hard asset diversification. I think that's the leading reason people do it.   Keith Weinhold (00:16:31) - I want to ask you more about the residency shortly, but tell us more about the investment. We're thinking about maybe capital growth as the trees grow. And then what about the income?   Michael Cobb (00:16:42) - Sure. And so I think let me back it up. A lot of people think in cash flow cycles, right? If we have a job, we get paid every two weeks. You know, you have a lot of folks that have invested in properties. We get a monthly rent check, right? Or if we have stocks, maybe we get a quarterly or annual dividend. Right. So those are the what I would call the common time frames that we think about in cash flow. But what the Uber wealthy, what the hedge funds, what the family offices, what the endowment for places like Harvard, Yale, these big institution or big institutional thinkers have known for centuries is that there are actually other cash flow cycles that are largely ignored by the what I would say, the average investor.   Michael Cobb (00:17:21) - And those cash flow cycles are much longer. Teak, for example, is a 25 year cash flow cycle, right? You plant the trees and in 25 years you harvest them. You plant them again, not them. You plant new ones, right? In 25 years you harvest those and then so on and so on. So what you're creating is this 25 year cash flow machine. Now the kinds of returns are truly outsized. I mean you're talking about double digit ers. Now a lot of people say, well Mike, that's great. But what happens if I need the money in year 15? You can't have it because there is no money in year 15. Your trees are still growing, right? So it's this weird investment timeline. It's almost flatlined until the very end. And then it jumps way up and then it drops back down to a flatline again. And so it'd be silly to put tons of money into teak unless you had thousand times tons of money, right? But for some small piece of your investment portfolio where you have enough cash flow coming in from your maybe your job, your rent, your dividends, whatever, that a small piece that moves into this 25 year cash flow cycle with the thought process that this is how I steward wealth into the future, to children, grandchildren, great grandchildren, because the 25 year cycle is almost generational, right? In fact, in the US, it probably is generational because we're having children in the ages of, you know, 25 to 30.   Michael Cobb (00:18:44) - So it kind of starts to line up with generational income as opposed to, you know, sort of that whatever biweekly, monthly, yearly income. So it's just a different cash flow cycle.   Keith Weinhold (00:18:56) - That's right. And I brought up before that, when you think about the growth of one of your investments, you now get to think about it in two ways. If you own a duplex, it might have growth in its price. However, it doesn't grow into a fourplex and have growth in its price. However, with teak, you might have an increase in the value of the wood, perhaps on a board foot unit basis, and at the same time it is growing in height and volume.   Michael Cobb (00:19:26) - Absolutely no. That's a cute way to say it. I never really thought about a duplex growing into a fourplex, right? That's good. Exactly. And so what you do, you're right. You have the physical growth of the trees. And we have located our plantations in the optimal growing conditions, fatigue. And they are very known.   Michael Cobb (00:19:42) - Right? I mean, the British started plantation growing teak 350 almost 400 years ago in Southeast Asia. And so the Brits have just meticulously kept statistical records of every plantation that they were involved with the altitude, soil type, rainfall, temperature, on and on and on. And so it's really well known exactly where teak will grow well, and both where we have our plantations, it does Nicaragua and Panama, and we'll stick on Panama today, but the locations are dead center bull's eye locations for the best optimal growing of teak. So you have this growth of a physical thing, right. But you mentioned the board foot price. And by the way, the track record on teak being grown in plantations is 350 years. So what a track record, right? But since 1970. Two. The average price of teak over 5152 years has been 5.5% a year. That's the growth in the price of teak, right? And so you know who knows the future, right? I mean, the future is the future, right.   Michael Cobb (00:20:44) - But if a 50 year track record on a 5.5% increase in the value of the teak itself is pretty powerful, right? That's the long track record of nice growth. And when we factor in our teak into our business plan, we take that 5.5 and we make it zero. We just say, what if there is no increase in the price of teak over 25 years? How much will the tree grow? And if that tree is cut down and is sold as lumber? When we'll talk about our Solomon in a minute. If that tree is sold as lumber, what's the value of that lumber today? And what will the tree be worth in that value 25 years from now? And so if things do continue to increase at 5.5% a year, that's just all gravy. And that just starts to take that rate of return and just ratcheted up even further.   Keith Weinhold (00:21:33) - Teak has a number of physical properties that make it valuable, from its beauty to its fire resistance and more. Mike has now touched on a few interesting things.   Keith Weinhold (00:21:44) - We'll come back and talk about that soon, including how you can achieve residency in Panama by owning teak, what the risks are, and more about their sawmill that he just mentioned, adding value to the operation there. And then we're going to talk about what the prices are. We're talking with ECI Development Chairman and CEO Michael Cobb more when we come back. I'm your host, Keith Wynn. You know, I'll just tell you, for the most passive part of my real estate investing, personally, I put my own dollars with Freedom Family Investments because their funds pay me a stream of regular cash flow in returns, or better than a bank savings account, up to 12%. Their minimums are as low as 25 K. You don't even need to be accredited for some of them. It's all backed by real estate and that kind of love. How the tax benefit of doing this can offset capital gains and your W-2 jobs income. And they've always given me exactly their stated return paid on time. So it's steady income, no surprises while I'm sleeping or just doing the things I love.   Keith Weinhold (00:22:52) - For a little insider tip, I've invested in their power fund to get going on that text family to 66866. Oh, and this isn't a solicitation. If you want to invest where I do, just go ahead and text family to six, 686, six. Role under this specific expert with income property, you need Ridge Lending Group and MLS for 256 injury history from beginners to veterans. They provided our listeners with more mortgages than anyone. It's where I get my own loans for single family rentals up to four Plex's. Start your pre-qualification and chat with President Charlie Ridge personally. They'll even customize a plan tailored to you for growing your portfolio. Start at Ridge Lending group.com Ridge lending group.com.   Speaker 5 (00:23:49) - This is the Real World Network's Cathy Fekete, and you are listening to the always valuable get Rich education with Keith Reinhold.   Keith Weinhold (00:24:06) - You're listening to the SOS created more financial freedom for busy people just like you than nearly any show in the world. This is guitarist education. I'm your host, Keith Whitehill. We're talking with ECI development chairman and CEO Mike Cobb about teak hardwood investing in Panama and Nicaragua.   Keith Weinhold (00:24:22) - Like, tell us more about how one can achieve residency, for example, in Panama if they own teak there maybe just how residency varies from citizenship?   Michael Cobb (00:24:33) - Sure. Well, why don't we start with the second part, how residency differs from citizenship. And there's a good place to start. You know, citizenship is you become a citizen of the country. You have a passport, you can vote. You have every legal right of that country. Right. The decision would have residency to use a US term is like a green card, right? It's the legal permission to live in that country for some period of time. Many of them are permanent. In fact, Panama's is permanent. So once you have a Panama permanent residency, you could literally pick up, you could move there tomorrow, and you could live for the rest of your life in Panama. And so it gives you the legal right to live there. But you don't have a passport. You can't vote. I guess that's the main difference, right? You don't have a passport, you can't vote.   Michael Cobb (00:25:18) - But for most people, in fact, the overwhelming majority of people, a residency delivers exactly what somebody wants, which is the ability to live somewhere. Right? And we don't care if we vote or not. I mean, right, we'd still be citizens of our home country, US, Canada, or wherever we can vote back home or citizen. We have our passport from those countries, but the right to live somewhere else is powerful. And so the teak in Panama qualifies you in two ways for two quarter acre parcels, and then the legal fees and stuff like that. It's just under 22,000. A little less gives you permanent residency in Panama. Right? That's such an affordable way to be able to I call it the back pocket. Right. The insurance policy or the plan B in the sense that, like, I think a lot of folks are worried about the direction things are headed. And, you know, you have the teak parcels, which are going to produce a tremendous return. And then this byproduct that you qualify for and you have to go, you have to get down there a couple times.   Michael Cobb (00:26:16) - I mean, there's a little bit of administrative stuff, some legal fees, that's all included in that 22,000. Right. So that's all included. You have to go there a couple times. So there's a little bit of friction I would say. But when you get finished with that friction, you are a permanent resident of Panama and you only have to go there one day every two years. So you fly down every other year, whatever. Go, go talk to your trees, maybe sing to your trees a little bit, whatever you want to do and fly. All right. And you have a permanent residency. So it's a very easy, fast way to get that plan B now in the future, if you ever said, well, I really love Panama, I'd like to live here. Panama is beautiful. The city itself, it's got skyscrapers, apartments on the 50th floor of use or killer. You can be out on the beach or somewhere. You can be up in the mountains. So there are a lot of different climates and geographies in Panama where you might say to yourself, yeah, I think I want to come down here and live someday.   Michael Cobb (00:27:09) - Well, you already have your residency. You already have the legal right to do that.   Keith Weinhold (00:27:14) - Yeah, I mean, 100%. Now, Panama isn't predominantly English speaking like Belize is, but Panama just has a lot of inherent familiarity and feel to a lot of Americans. Since the canal is there and there is that strong American presence, and they've even dollarization their economy there, for example, in Panama. So it might be that nice plan B for you. And tell us more about the residency and the investment into the sawmill and how that works. So it sounds like there's now a value added component is you essentially vertically integrated and now have this sawmill with the teeth. Tell us more about that.   Michael Cobb (00:27:56) - So we've always factored in the sawmill into the investment proposition. Because if we were to just take the logs for example, 25 years, you cut down the trees, you stick the logs in the container and send them off to China or India, which is where most of the logs go. The return on investments.   Michael Cobb (00:28:13) - It's not great, it's okay, but it's not great. The way you actually get a phenomenal return on investment is you take those logs and you turn them into lumber, which has about a 3 to 4 x differential, or what we call first stage end product or simple end product, which would be something like flooring, which is basically lumber that's been finished one more level rooted and bulldozed so that you can put them together right on a wood floor. So those two modifications from the log all the way to the first degree of finished product, the returns start to really jack it up into that double digit IRR right over 25 years, which again is phenomenal. So we talked about price. But just to give an idea, a $7,000 quarter acre parcel at harvest turned into lumber and first level finished. Product turns into about $94,000, right? So 7000 turns into $90,000, which is a tremendous return. But the way you get that return is to deliver to the marketplace lumber and first grade finished product. And so Soma has always been part of our business plan.   Michael Cobb (00:29:19) - Well, we are now two years away from our harvest on our first plantation, the one I planted back in 1999. Right? I mean, it's incredible thinking that, you know, 20, gosh, 24 years ago planted a teak plantation. So we're two years from harvest. We have one more set of kind of odds and end thinning of just trees that didn't quite grow. Right. We're going to use those thinning over the next couple of years to practice in our sawmill. Because you know what? We are going to make mistakes. I mean, you don't ever get it right the first time. So we're going to make mistakes. We're going to learn from them. And by the time we actually do the real harvest of that first plantation, 100 acres of teak, two years from now, we will be up to speed with our sawmill will size up, we'll capacity up to do that. But yeah, so folks can actually we have a $2 million opening in the sawmill. And it's a real simple formula.   Michael Cobb (00:30:07) - It's two times your money and then a proportionate 10% interest in the sawmill. So for example, just rough numbers off the top of my head. You put in $100,000, you get twice your money back in about a 3 to 4 year period. As a sawmill really becomes operational. We take the first harvest, like the thinning, aren't going to produce much. In fact, we hope to just basically kind of break even over the next two years while we practice. Then we cut down 100 acres of teak. We start putting that through the sawmill, right? So you get two extra money, you invest 100 to get back to 100, and then your return would be about 13 or $14,000 a year. On going after that, because you get a 10% carried interest in the sawmill into the future as well. So that's the investment opportunity that produces a shorter cash flow, much tighter on the cash flow. But then a nice trailer for many years. But the investment is 100,000. So it's a more significant investment than, say, somebody wanting a little bite sized piece of a quarter acre parcel or two quarter acre type parcels paired with the residency that gets you that.   Michael Cobb (00:31:13) - So a couple different levels of investment depending on what your goals are, but also what your timelines are.   Keith Weinhold (00:31:19) - We described the sawmill investment numbers there. And then just to clarify, on the quarter acre parcels, they cost $7,000 each with an expected value or return of $94,000 after 25 years.   Michael Cobb (00:31:37) - That's correct. 6880. I'm using round numbers, but 6880 is the quarter acre teak and right at harvest when it processes through the sawmill. A little over that, but $94,000 is returned to the investor along the way. I'll mention this. There are maintenance fees. It's about $150 a year. We just take a credit card. We just tap it once a year. That takes care of property taxes, thinning, cleaning, anything that they have to do with the plantation. So $150 a year, your maintenance fee. But yeah, 6880 turns into 94,025 years. If teak continues to go up at 5.5% a year, the return would be better than that.   Keith Weinhold (00:32:16) - You probably have investors that come in oftentimes from North America, maybe some from Europe, and they see this as a really low cost of entry, $6,880 for one quarter acre parcel.   Keith Weinhold (00:32:29) - So are there any risks that one should consider? Therefore, if they're a first time investor abroad, maybe something they're not thinking about if they buy a rental single family home in their own hometown?   Michael Cobb (00:32:41) - Yeah. Very different. I mean, in some ways it's very different. In other ways it's pretty similar. Right. You're going to get title to the property. The process of getting title will be a little different. You're going to have to send in copies of your passport, a notarized utility bill. Just some things that you wouldn't have to do if you were buying a property in the States. But at the end of the day, you will get what's called Escritorio Publica public title. So it's a registered land deed. And so that part of it's all pretty similar risk factors. Absolutely. The business plan has them in there. But the big ones are any kind of disease. It's monoculture. So I mean a disease could come through and kill all the trees. Right. The good thing there is, again, teak has a 350 year track record of being managed and grown in plantations.   Michael Cobb (00:33:24) - So it has a long track record where they've kind of figured out, well, if this happens, then do this or if this pest comes along. This is how we, you know, we mitigate that, but nothing can mitigate all risk. That fire is an interesting one. Fire is a risk in the first three years of teak. So we call it baby teak. But once the tea trees are 3 to 4 years old, they're really above any kind of fire. Because you clean the plantation and the guys are in there with the machetes chopping to keep the, you know, the brushed and grass down in the dry season, which, by the way, you mention the qualities of teak, the hardness of teak is actually the most. Prized quality. And so the hardest of the teak that we get will actually be taken and sold as marine lumber, which is an unbelievable differential in price. But only 5 to 10% of your teak would qualify as marine lumber. So it's a small percentage, but the value of that is very, very high because it's set to hardwood.   Michael Cobb (00:34:20) - But the rest of the tree is also likewise very hard. The dry season is what cures the teak. And so in the dry season teak drops its leaves. And so it's very resistant to fire. If you do good maintenance on the plantation, we do so fires only a risk really in the first three years. And we actually warranty the trees of a fire comes through. In the first three years. We replant the plantation for any parts that are burned. So there's sort of a warranty that comes with the first three years. I mean, the other risks are political risk. What if Panama goes off the rails? The good thing about Panama, it's got the canal. And that is a major, vital strategic US interest. I just don't see the US letting Panama kind of go off the rails. But it could. But those I think are the three what I would call main risk factors. And we mitigate those to the best way possible.   Keith Weinhold (00:35:13) - You heard Mike mention about the thinning and cleaning. Yes, there is ongoing management, but that is already handled and taken care of in any of the prices that you already mentioned.   Keith Weinhold (00:35:24) - Is that right, Mike?   Michael Cobb (00:35:25) - Yeah, correct. And we outsource to a company called Geo Forest. All Geo Forest, all. They've been our plantation manager from since 1999. And and they're phenomenal. What they do, their world class. They've been doing it for longer than 25 years, maybe 30 years at this point. But we outsource what we have to outsource because we're not management plantation managers. So we can find folks that are.   Keith Weinhold (00:35:47) - The same property manager for a quarter century, a property manager that actually doesn't get fired. Hey, that's a novel concept. Two times two is what some investors back here in the U.S. are thinking with their residential real estate investments. If you want to learn more about this investment, I encourage you to check it out. You can do that through Gray Marketplace at Gray marketplace.com/teak. Mike, do you still offer tours.   Michael Cobb (00:36:16) - Oh my goodness yes. And I hope that you will take us up on the opportunity to come down and see the dairy and province. But yes, we do.   Michael Cobb (00:36:24) - And I don't know the dates off the top of my head, but for folks who are interested, uh, two things. One, we actually run a tour that's fun because it's a group of people and it's just, you know, you come down and you do it. But if somebody says, hey, I can't make those dates, but I want to come see the trees. Yeah, it's very reasonable. I think it's a couple hundred bucks. They pick you up at your hotel, they'll run you out to the plantation, bring you back. But it's a whole day. I mean, it's four hours outside of Panama City and four hours back, so it's a long day. And if it's a couple, it's still 200. It's basically for the vehicle out and back. Right? The driver and the vehicle. So you can come anytime or you can come with a group. And if you come with a group there is no charge. I mean, we get the van or the bus and we pay for it all.   Michael Cobb (00:37:03) - And yeah, we make peanut butter and jelly sandwiches and we have fun.   Keith Weinhold (00:37:07) - All right. Well, I think people have probably covered for the tea more than the sandwiches, but that is a nice touch that you do for people because you do that whether someone is a great investor or not, whether they haven't invested at all yet, and they just want to go ahead and check it out. And you can learn more about those dates at GR marketplace.com/teague Mike, it's always such a fun chat to discuss something so exotic. It's been great having you back on the show.   Michael Cobb (00:37:34) - Nice to be back with you. I look forward to seeing you in Panama one of these days.   Keith Weinhold (00:37:43) - Trees grow through recessions, they grow through market cycles, they grow through Covid, and trees just keep growing through every single fed rate decision. The wealthiest families on the planet, the top 1%. They have locked up vast portions of their wealth for timeframes even longer than the 25 year peak harvest cycle. In fact, Harvard has fully 10% of its endowment, specifically in timber.   Keith Weinhold (00:38:11) - To follow up on what I asked earlier, as we're discussing non-residential real estate today, Earth's highest point above sea level is Mount Everest. The highest from base to peak is Monica. But Earth's highest piece of land, uh, the highest point is measured from the center of the Earth is Chimborazo Volcano, Ecuador. That's because Earth is not a perfect sphere. But there's an equatorial bulge. That's what I was climbing ten days ago. Earth's highest real estate, Chimborazo, was also there for the closest real estate to the sun and moon. But back down here at a lower elevation where the teak plantations are in Panama and Nicaragua, there are no loans for teak. But at prices under seven K, many GRI listeners have found that they don't need a loan and they have bought ten or more parcels. But you can buy as few as 1 or 2 a quarter acre teak parcels and then later cash it out for yourself or build that wealth legacy for your family. Kind of like the top 1%. If it sounds interesting to you, learn more.   Keith Weinhold (00:39:22) - Get started at GR marketplace.com/t. Until next week. I'm your host, Keith Wild. Don't quit your day dream.   Speaker 6 (00:39:34) - 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. The.   Keith Weinhold (00:40:02) - The preceding program was brought to you by your home for wealth building. Get rich education.com.

You'll get an exact mortgage rate prediction from the President of the lending company that's provided investors with more financial freedom than anyone in the nation.  Learn how to best access your equity, yet keep your low mortgage rate first loan untouched. In this Get Rich Education podcast episode, host Keith Weinhold and guest Caeli Ridge, President of Ridge Lending Group, delve into the direction of mortgage rates.  They highlight the importance of understanding today's environment and discuss refinancing opportunities in the current market.  Caeli outlines various loan products available to investors and predicts over 50% of appraisals now come in high, indicating strong future valuations.  She also forecasts higher mortgage rates to persist, with a possible Fed Funds Rate reduction by June and a 6.125% rate for 30-year fixed mortgages, non-OO, with 25% down, by the end of 2024.  The episode emphasizes education and strategic planning in real estate investment. I get my own loans at Ridge. You can too at RidgeLendingGroup.com Timestamps: The impact of inflation on real estate investing (00:00:00) Discusses leveraging properties to increase wealth, the relationship between mortgage rates and real estate, and the impact of inflation on property values. Understanding the importance of mortgage rates (00:03:52) Explores the neutral relationship real estate investors have with mortgage rates, the impact of mortgage rates on home affordability, and the significance of current mortgage rates. Historical perspective on home price affordability (00:06:18) Provides insights into the historical trends in home affordability, comparing past and current median home prices and the impact of inflation on home values. The power of leverage in borrowing (00:10:14) Illustrates the impact of inflation on loan principal balances and monthly mortgage payments, emphasizing the benefits of optimizing borrowing. Mortgage rate prediction and refinancing trends (00:16:57) Discusses the future direction of mortgage rates, refinancing trends, and the importance of considering interest rates in the context of overall investment strategies. Explanation of high points charged on investment property loans (00:23:12) Provides an explanation for the high points charged on investment property loans, related to the servicing of mortgage-backed securities and the absence of prepayment penalties. Accessing Equity with HELOC and HE Loan (00:24:21) Discussion on accessing equity using keylock and HE loan, including LTV ratios and interest rate comparisons. Trade-offs Between HELOC and HE Loan (00:25:27) Comparison of trade-offs between keylock and HE loan, including flexibility and interest payment structures. Considerations for Second Mortgages (00:26:36) Exploration of the benefits of having a second mortgage as an option and the potential drawbacks related to minimum draw requirements. Blended Mortgage Rates (00:27:56) Explanation of how to calculate blended mortgage rates based on the balances and interest rates of first and second mortgages. Appetite for Adjustable Rate Mortgages (00:28:44) Assessment of the current environment for adjustable rate mortgages and comparison with fixed-rate mortgages. Obstacles for New and Repeat Investors (00:29:45) Common obstacles faced by new and repeat real estate investors, including understanding investment goals and managing debt-to-income ratios. Forecast for Mortgage Rates (00:33:45) Prediction for future mortgage rates based on inflation indicators and the potential impact of the Fed's decisions. Loan Types Offered by Ridge Lending Group (00:35:54) Overview of the various loan types offered by Ridge Lending Group, including Fannie and Freddie loans, non-QM loans, and commercial loans. Resources and Tools for Investors (00:38:03) Information about free resources and tools available on the Ridge Lending Group website, including simulators and educational content. Conclusion and Recommendation (00:39:38) Summary of the discussion with Caeli Ridge and a recommendation to explore the services offered by Ridge Lending Group for real estate financing needs. Resources mentioned: Show Page: GetRichEducation.com/489 Ridge Lending Group: RidgeLendingGroup.com Call 855-74-RIDGE 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Keith Weinhold (00:00:00) - Welcome to GRE. I'm your host, Keith Weinhold. A new take on how to profit from inflation. The best strategies for accessing equity from your property while leaving your low rate loan in place. A surprising trend with real estate appraisals. Then the president of one of the most prominent national mortgage companies joins me to give a firm mortgage rate prediction today on get rich education. If you like the Get Rich Education podcast, you're going to love our Don't Quit Your Daydream newsletter. No, a eye here I write every word of the letter myself. It wires your mind for wealth. It helps you make money in your sleep and updates you on vital real estate investing trends. It's free sign up egg get rich education.com/letter. It's real content that makes a real difference in your life. Spice with a dash of humor rather than living below your means, learn how to grow your means right now. You can also easily get the letter by texting GRE to 66866. Text GRE to 66866.   Speaker 2 (00:01:11) - You're listening to the show that has created more financial freedom than nearly any show in the world.   Speaker 2 (00:01:18) - This is Get Rich Education.   Keith Weinhold (00:01:27) - Welcome to Gary from Oak Park Heights, Minneapolis, to Crown Heights, Brooklyn in New York City and across 188 nations worldwide. I'm Keith Weinhold, and this is Get Rich education. When you have that epiphany, that leverage creates wealth, it can be enough to make you want to be the town iconoclast. Walk around, beat your chest, and boldly proclaim that financially free beats debt free. You might remember that I helped drive that point home a few weeks ago when I talked about the old fourplex owner, Patrick, who owned his fourplex next to mine years ago. He wanted to pay his down and I wanted to leverage mine up. I told you then that rushing to pay off one property by making extra payments on the principal is like drilling a deep hole into one property. And the deeper you drill, the more likely that hole is to cave in. Your return goes down and now you've got more of your prosperity tied up in just one property, just one neighborhood and just one market.   Keith Weinhold (00:02:34) - The most sure fire way to wealth, and exactly what wealthy people do, is optimize and almost maximize the number of properties that you own. And as long as you buy right as they inevitably inflate, just keep borrowing against them. And that way you never have to pay capital gains tax either. And that goes beyond just real estate. That's assets of many types. You'll want to own more assets. The way to do that is with more loans. And paradoxically, that is why the richest people have the most debt. As you watch your debt column grow, watch your column grow even faster. And as we're talking about mortgages and the direction of interest rates today, us as real estate investors, you and I, we have a somewhat neutral relationship with mortgage rates. Yeah, it's often a neutral relationship. Now, prospective homebuyers, they often want mortgage rates to be low. Sellers often want rates to be low two so that they'll have more home bidders, legacy landlords, ones that own a bunch of property and they're not buying anymore.   Keith Weinhold (00:03:52) - They often want mortgage rates to be high because it hurts first time homebuyer affordability, and then it keeps the rents high and it keeps the occupancy high. And then you and I see we both own real estate. We also look to opportunistically put more in our portfolio. Well then we want rates to be high in a sense and low in a sense too. So you might have relative neutrality, feeling aloof about it all because you're thinking about it from both sides. But in any case, we can always predict the future. But the one thing that you know for sure is what you have now. A lot of people don't optimize their potential for what they have now. Instead, they speculate about the future. Now, one thing a lot of people have now is so many Americans are still loving their 3% and 4% mortgage rates they locked in 2 or 3 years ago, and they're refusing to give it up. However, over the past two years, when the number of real estate listings were at historic lows, a lot of life changing events have occurred in the past two years 7 million newborn babies with a need for a larger sized home and a desire to get out of the starter home.   Keith Weinhold (00:05:11) - Also in the last two years, 3 million marriages, including some of those marriages, are among older couples who now need to sell a home that can help solve the market. And then, of course, most home sellers. They also become home buyers. Next, they need another place to live. So home sellers, they often don't add a net one to the supply. We had a million and a half divorces, 7 million Americans turning 65 years old that might want to trade down during the retirement years and also during the last two years. Consider that there were 4 million deaths and 50 million job changes, some of those inconsequential, while others with fundamentally changed commuting patterns. So the point here is that life moves on. For some, though still a minority, but a growing minority, it is time to give up the three and 4% mortgage rate. Still not enough of them, but for better or worse, that is what it's going to take to move this market and put some available supply out there.   Keith Weinhold (00:06:18) - Now, today we have apparently finally just come off this period where home price of. Affordability had hit 40 year lows for 40 years for decades. Again, with low affordability, you dislike that if you're a home buyer or seller, you might feel neutral about low affordability as a landlord or a real estate investor because it makes your new purchases less affordable. But it keeps your renters as renters when you buy that income property. From an affordability standpoint, the very best time to buy was 2013. Yep, 2013 is when prices hadn't fully recovered from the GFC and mortgage rates had fallen dramatically. Now, to open up that range in years, from an affordability standpoint, it was just a sensational time to buy a home or property from 2009 to 2021, just historically extraordinary, that sensational affordability level during that decade or so, 2009 to 2021, that added to the exceptional rise in home values over end since that time. But yeah, a few months ago, affordability reached its worst level in 40 years and it has since improved.   Keith Weinhold (00:07:43) - I mean, 40 year lows in affordability reach then in 1984 and what happened in 1984, that is when Ronald Reagan defeated Walter Mondale for his second presidential term. Steve Jobs launched the Macintosh personal computer. John Schnatter opened the first Papa John's store in Indiana. LeBron James was born in 1984, and on television running were The Cosby Show and The Dukes of Hazzard. Hey, if you were alive then and you watch those shows, um, I know you wouldn't confess to watching Charles in Charge back then, and you'll never get back those socially redeeming hours that you spent watching Punky Brewster, and you would not admit to doing that either. What is this show, the Jeffersons still on TV in 1984? Look into that. Yeah. You know, that was kind of a real estate ish show. The deluxe apartment in the sky. Yes. It was on then. Yeah. Sherman Hemsley, Isabel Sanford Q that up.   Speaker UU (00:08:55) - Where we're moving on now? All up to this island, to a deluxe apartment in the sky.   Keith Weinhold (00:09:06) - Yeah, they even had the episode where the landlord came over and threatened not to renew their lease. I'll tell you. Has there ever been a television show in history where the landlord was depicted as a good guy? I mean, a landlord in television, they're always cast is a money hungry bad guy that won't fix anything, or is just trying to unscrupulously kick out the tenant, a slack jawed slumlord, every single time. I never really understood that show's theme music, either Beans or Burden on the grill or something. Let's get back to mortgage loans. Understand this. It might be in a way that, okay, you've never thought about it before. It's the power of leverage in borrowing. Now, you probably won't hold any 30 year fixed rate loan all 30 years in reality, but they'll make this effect clear. Let's just act like you have done this on a property. Now the median home price is near 400 K today. But what was it not 40 years ago, but in this case 30 years ago? All right.   Keith Weinhold (00:10:14) - So 1994, per the Fred numbers, which are sourced from the census and HUD, it was 130 K. Yes, a 130 K median priced home in 1994. So then if you put a 20% down payment on that property, you'd have a loan principal balance of 104 K. Now imagine it was an interest only loan somehow, and you still just owed a 104 K balance on that home today, whose median price is up to 400 K. Well, that 104 K. That just seems like a little math that you could almost swat away. I mean, this is how inflation makes the numbers of yesteryear feel tiny. But now if you're 104 K loan were an amortizing loan and the principal were being paid down to hopefully all principal pay down made by the tenant. During all those years, mortgage rates were 9% back then. So if you were making the final payment today on what's now still a median priced home, today your mortgage payment would just be 837 bucks a month. It feels like nothing. Inflation benefited you both ways on the total principal balance and the monthly payment.   Keith Weinhold (00:11:35) - Just feeling lighter and lighter and lighter in inflation adjusted terms now. And if your mortgage rate were 6% on that property, your payment would only be 623 bucks. You might have refinanced to something like that. I mean, 623 bucks. That is lower than the average new car payment today of 726. But if you had not gotten that loan back in 1994 and instead would have paid all cash for the 130 K property, were you 130 K all cash that was put into the property back then? Well, that would have had the purchasing power of today's approximately 400 K reflected in the price of today's median priced home. But to take it back ten years further to 1984, the George Jefferson year, the median home price was 80 K and your loan would be 60 4k. I mean, these numbers feel like little toys or almost lunch money or something. So this is the power of optimizing your borrowing and perhaps but not quite maximizing your borrowing power because that does risk over leverage. That is the inflation profiting benefit that you're feeling right there.   Keith Weinhold (00:12:59) - Coming up in just a few minutes, the president of one of the most prominent national mortgage companies for investor loans will be here with me. We're going to talk about mortgage rates some more, the overall temperature of the mortgage market. And I expect that she'll give a firm mortgage rate prediction for where we're going to be at year end, because she's done that with us before. They see so many investor loans in there at their lending companies. They've really got a great pulse on the market. We have set up the makeshift gray studio again for yet another week. Here is this week I'm in Nevada, where I will be the best man at my brother's wedding. I have been on the road a lot lately. That's what a geography guy like me does. Gotta get out and see the world. Life is meant to be lived, not postpone. Before we discuss both general and some intermediate Murray's concepts shortly. If you happen to be new to real estate investing. And you just like to listen to that one episode that tells you, step by step, how to get started and how to build your credit score and make an offer on a property, and best navigate the inspection process and the property appraisal inside the management agreement and more.   Keith Weinhold (00:14:15) - You can find that on get Rich Education podcast episode 368. It's simply called How to Buy Your First Rental Property. More next. I'm Keith Reinhold, you're listening to get Rich education. You know, I'll just tell you, for the most passive part of my real estate investing, personally, I put my own dollars with Freedom Family Investments because their funds pay me a stream of regular cash flow in returns are better than a bank savings account up to 12%. Their minimums are as low as 25 K. You don't even need to be accredited for some of them. It's all backed by real estate and that kind of love. How the tax benefit of doing this can offset capital gains and your W-2 jobs income. And they've always given me exactly their stated return paid on time. So it's steady income, no surprises while I'm sleeping or just doing the things I love. For a little insider tip, I've invested in their power fund to get going on that text family to 66866. Oh, and this isn't a solicitation.   Keith Weinhold (00:15:24) - If you want to invest where I do, just go ahead and text family to six, 686, six. Role under the specific expert with income property, you need Ridge Lending Group and MLS for 256. In gray history, from beginners to veterans, they provided our listeners with more mortgages than anyone. It's where I get my own loans for single family rentals up to four plex's. Start your pre-qualification and chat with President Charlie Ridge. Personally, though, even customized plan tailored to you for growing your portfolio. Start at Ridge Lending group.com. Ridge lending group.com.   Speaker 3 (00:16:12) - Hi, this is Tom Hopkins, and I can't tell you how smart you are to be with get rich education and make these ideas you.   Keith Weinhold (00:16:32) - What is the future direction of mortgage rates? How do you qualify for more mortgage loans at the best terms with the lowest interest rates, and Americans have at near record equity levels in their properties? So what's the best way to access that equity yet? Keep your low rate mortgage in place. We're answering all of that today with a company president that's created more financial freedom through real estate than any other lender in the entire nation.   Keith Weinhold (00:16:57) - That is, the top tier and eponymous ridge lending group is time for a big welcome back to Charlie Ridge. Keith, you flatter me. Thank you very much.   Caeli Ridge (00:17:07) - I'm very happy to be here, sir. Good to see you.   Keith Weinhold (00:17:09) - Well, you help us here because debt and loan are our favored four letter words around here at gray. Can you help us efficiently optimize them both, Charlie? Interest rates have just been on so many people's minds. Shortly after, they had their all time low in January of 2021, and they since rose and then have settled down. Charlie, I've been trying to think through myself why people seem to put this over emphasis on the interest rate now. It's surely important. It is your cost of money. But the way I've thought that people overemphasize the rate is because maybe people love to discuss the direction of interest rates, even more so than real estate prices in rents is because prices and rents nearly always go up in interest rates can go up and down. So therefore it's maybe more interesting for people to talk about.   Keith Weinhold (00:17:57) - I also think about how rates sort of tap into that human fear of loss by paying interest, trumping the triumph of gain through cash flow or appreciation. And then maybe as well, it's because higher mortgage rates, they mean higher rates of all types which permeate into all of one's life's debt. So these are my thoughts about why people maybe put an over emphasis on mortgage interest rates. What are your thoughts?   Caeli Ridge (00:18:23) - I'm sure there's probably something to that. And you're right, Keith. Interest rates are always the hot topic. Everybody wants to talk about interest rates. I think that overall though, it is a lack of education and there's a psychology to it. You and I have talked about interest rates at nauseam over the years, and I do understand, but I think you and I agree, because we live in this space and we're constantly looking at the math. They are probably third or fourth on the list of priorities. When you're deciding on if this investment is valid. For fitting into my goal box, I think it's more about getting information out there and informing the masses about interest rates, and doing that math to make sure that they're not just pigeonholing themselves into keeping a 3% interest rate, or not expanding their portfolio because they're afraid of giving up what they have and not really realizing the power of the equity, the tax deduction, the rent increases.   Caeli Ridge (00:19:15) - All of those variables are often ignored when people start talking about interest rates, until you start to have that reasonable, rational conversation that helps them identify what the math is. Because the math won't lie, right? The math will not lie.   Keith Weinhold (00:19:29) - Yeah, that's right. Things more important than interest rate with an investment property might be the price you're paying for that property, or the level of rent that's there, or even maybe knowing you already have a good property manager that you trust in that market where that property is. But of course, rates matter somewhat. Now we're going to get a future looking prediction from you later. But your last mortgage rate prediction, Charlie, you may not remember the details of it. It was made here on the show in November of 2022. That's when rates were 7%. Back at that time, you said that rates should keep climbing but at a slower pace, and that happened. And you predicted the peak by spring of 2023 of 7.625%. What happened is in October of 2023, they hit 7.8% per Freddie Mac.   Keith Weinhold (00:20:17) - So you almost completely nailed it because most everyone believes that that was the peak for this cycle. And if so, you're within a few months in just 2/10 of 1% of identifying the peak.   Caeli Ridge (00:20:32) - Thank you Keith. I appreciate that acknowledgement. I get it right a lot. My crystal ball has been broken several times over, especially the last couple of years, so I'll want to acknowledge that too. I pay attention to the fed and as a good friend of mine is always saying, don't fight the fed if you are listening to what they're saying, actually listening to the words that are coming out of their mouths, it's not too terribly hard to kind of predict where we're going to be in certain milestones of any given year. So I do have a good prediction for this year. We'll share later. As you said, rates are not completely irrelevant. I just want to impress upon your listeners that they really should be looking at the investment holistically, and not just laser focused on that interest rate. There's more to it.   Keith Weinhold (00:21:15) - That was excellent. You have more audacity than me when it comes to predicting interest rates. It's a business I typically stay out of, so I'm going to outsource that to you later. I'll predict things like real estate prices, but I think rates are notoriously difficult. And what's happened with rates now that they have come off their peak substantially from back in October of 2023. What's happened with the refinance business, is that something that's picked up again there?   Caeli Ridge (00:21:39) - Yeah, we're starting to see a bit more. I would say that last year refi numbers were down right for obvious reasons. But we are seeing some more business in the refinance department. I think depending on the individual and largely the strategy of the investment, the long term versus the mid-term versus the short term, we're seeing a little bit more on the refi side for the short term rentals than we are in the long term. But overall, yes, I would agree that they're starting to pick up. I may mention to Keith it might be useful for the listeners.   Caeli Ridge (00:22:06) - So while I agree, we've seen that interest rates started on their descent, which was great news, everybody was excited to see that. We're still finding that the points that are being secured or paid on, especially investment property loans, are still on the high end of the spectrum. And for those that aren't aware of the why behind that, how might be important. Just to mention that when we talk about mortgage backed securities, the overall servicing of these mortgage backed securities that are bought and sold and traded on on the secondary markets, they're pretty smart in forecasting when rates are high, what happens to those mortgages? When they come back down, they start to refinance, right? They start to pay off. And the servicing rights of these loans take 2 to 3 years before they're even profitable. So the servicers and the secondary markets know that they have to charge those extra points to hedge their losses, because when the loans that they're paying for and servicing today are going to pay off in six months or 12 months, they're going to be at a loss.   Caeli Ridge (00:23:01) - If it takes them 24 to 36 months to be profitable. That's why investors are seeing especially investors are seeing extra points being charged on the loans that they're securing today.   Keith Weinhold (00:23:12) - Oh, that's a great explanation. And really, this is because there's no prepayment penalty associated with residential mortgage loans in the United States typically. So therefore, the person that's on the back end of these loans, the investor there needs to be sure that they're compensated somehow when one goes ahead and maybe refinances out of their loan at a presumably lower interest rate, maybe in as little as 12 months or so.   Caeli Ridge (00:23:39) - Yes, sir. Exactly right. Yeah. And prepayment penalties on conventional. There are no prepayment penalties on conventional. Just to clarify on a non QM product which of course we have to, you know, debt service coverage ratio products etc. on non-owner occupied those typically will have prepayment penalties. But the Fannie Freddie stuff, the GSE stuff no prepay ever.   Keith Weinhold (00:23:57) - Now the rates have come down presumably off their peak in this cycle. You know, I think a lot of people wonder about all right now, what's a prudent way for me to harvest my equity since we have near-record equity levels in property and yet keep my low rate mortgage in place? I think a lot of people don't even understand that you can do that and take a second mortgage to access some of that dead equity.   Keith Weinhold (00:24:20) - What are your thoughts?   Caeli Ridge (00:24:21) - I love a keylock in general. We do now have one of our newer product lines is a second lien lock. We have two options there. Both of them cap at 70% LTV. That's combined loan to value. So all you need to do to figure out what you're going to have access to is take the value that you think the property would appraise for times 70% from that number, subtract the first lien balance, and that will give you what your line on a key lock. Secondly, and position you lock would be. And I love it.   Keith Weinhold (00:24:49) - All right. So therefore if one has 50% equity in a property they could access 20% more up to that 70% CLTV. That combined loan to value ratio between your first mortgage and your second mortgage, which might take the form of a keylock a home equity line of credit.   Caeli Ridge (00:25:07) - Perfectly said. We also have second lien he loans worth mention. He loan is really exactly the same thing as your first lien mortgage. It's a fixed rate.   Caeli Ridge (00:25:15) - Second it's just in second lean position 30 year fixed. Those go to 85% CLTV. So you get quite a bit more leverage. But the rates are going to be on the 1,213% range.   Keith Weinhold (00:25:27) - That's interesting. Tell us about some more of the trade offs between the key lock, where we typically have a fixed rate period in a floating period afterwards, and the he loan some more of those trade offs as we devise our strategy.   Caeli Ridge (00:25:41) - Yeah. The key lock is variable right. The interest rate can change. As you said. The reason I prefer the He lock, if the numbers made sense, is that you're only paying interest on monies that you're using at that point in time. So if you had $100,000 key lock and you're only using 20,000 of it for whatever investment purposes or whatever, then you're paying interest just on the 20 that he loan is exactly as you would expect. You're getting all of that money at once, and you will be paying interest on all of it, whether or not you're using it.   Caeli Ridge (00:26:10) - There's less flexibility on a key loan. While it does provide extra leverage, I do generally prefer that he lock.   Keith Weinhold (00:26:18) - Now, sometimes a question that I've asked myself in the past, Charlie, when I was new as an investor, is sort of why wouldn't I take a second mortgage? He lock or he loan? Because I don't necessarily have to draw against it, but it might be good for me to have it as an option just to be sure that it's there.   Caeli Ridge (00:26:36) - Absolutely. Especially the key lock, because like I said, I will not pay interest on anything you're not using. And to have it when the time comes, right. If you want to be prepared, which I think is huge. We both agree there. The one thing I would mention about that though, is oftentimes on the helocs there will be a minimum draw at closing. You can put it right back after closing, but chances are there's going to be a 50,000 or 100,000 minimum draw, depending on what the line limit is.   Caeli Ridge (00:27:01) - Maybe 75% of the entire limit is what the minimum draw would be. But again, you can put it right back after closing. So maybe you pay 30 days of interest on that before you're able to to stick it back in the lock. Otherwise, it's one of my favorite strategies for investors and having access to those funds when the time comes.   Keith Weinhold (00:27:20) - That's an interesting piece there. So you as an investor is you're devising your strategy as you're looking at the equity position in your own home as well as your rental properties. Maybe you're looking at a low rate of, say, you have a 4% mortgage loan, but you've had a bloated equity position, and you go ahead and you take out a second mortgage in any of the forms of Charlie is talking about. And that second mortgage has, say, a 10% interest rate. Well, you don't simply take the 4% on your first loan and your 10% on the second and average it and say, well, now I'm paying 7%. Of course, you have to wait those averages.   Keith Weinhold (00:27:56) - It's pretty likely that you have a higher mortgage balance on your first loan than your second loan. So depending on their balances, therefore, if your first mortgage has a 4% interest rate and your second mortgage has a 10% interest rate, you're blended rate might be something like five and a half.   Caeli Ridge (00:28:10) - Exactly right. And there's all kinds of tools and calculators online. If somebody wanted to check that out you can find them very easily. Just the weighted average of mortgage rates. And you can plug in your numbers. It'll tell you exactly if you're using this amount or this amount or whatever it is, what your weighted average would be.   Keith Weinhold (00:28:27) - Yeah, definitely important for you as an investor checking your arbitrage and your cash flow. Certainly, Charlie, I wonder now that we are in an environment finally where rates have actually fallen, how is the appetite for arms adjustable rate mortgages looked in there?   Caeli Ridge (00:28:44) - We're still on what's called an inverted yield from the 0809 housing and lending kind of debacle, we found ourselves in a place where adjustable rate mortgage or arm's actually priced in interest rate higher than a 30 year fixed, creating that inverted yield.   Caeli Ridge (00:28:58) - We have yet to see the correction of that. So we're still kind of in that place where depending on the characteristics of the transaction, the arm might be a higher interest rate. Maybe it's about the same as the 30 year fixed. If there is a scenario where the arm is lower, it might be an eighth or a quarter of a percentage point. So it's unlikely that we would recommend an arm over a fixed. There'd be have to be some very specific circumstances. If it's only a quarter point improvement to rate for a five year arm versus a 30 year fixed.   Keith Weinhold (00:29:26) - Charlie, you deal with so many investors in there, both newer investors and veteran real estate investors. So when we talk first about the new investors, are there any just sort of common obstacles to overcome that you see in there for people that are looking to get their first investment property?   Caeli Ridge (00:29:45) - I think they're why a lot of times we'll have investors come to us and really not even understand more than they just don't want their money in the stock market anymore, and they want to find another venue or another vehicle in which to create their investment freedom, their financial freedom through.   Caeli Ridge (00:29:59) - So I would say for brand new investors, really start to ask that question, what is your why? What is it that you want to get out of this? Do you want total replacement income of your ordinary income today? Do you love what you do for work and you just want supplemental income? How much does that income need to be? Does it need to be what you're making today? Can it be a little bit less? Does it need to be more based on what you expect your lifestyle to be? So lots of different questions to be asking yourself. So I would say that commonly just really understanding at least a baseline. And then we can start connecting some dots together and planting seeds that I talk about a baseline of, of what it is that you're hoping to accomplish through real estate.   Keith Weinhold (00:30:37) - So that's what you often see with the beginning investor. How about that repeat investor. Their obstacles to overcome that are common in there on expanding one's portfolio. Maybe that's a debt to income ratio threshold that one reaches and you need to strategize with them there.   Caeli Ridge (00:30:54) - Yeah, the debt to income ratio problem ultimately when you get there is probably a good problem to have, right when you're having to have conversations that way. I think that the obstacles to overcome is making sure that you have a good support team, and I think that would start with your lender, someone that has a multitude of loan products that aren't just one size fits all. I would say that we check that box very well, but strategizing. One of my favorite conversations with my clients is having those strategy one on one calls about their debt to income ratio and figuring out from a scheduling perspective, how can we maximize their deductions, because that's one of the beautiful things about real estate investing, right? Is that schedule E so maximizing over there without it taking you over certain thresholds to continue to qualify, there can be a weighted scale there as well. And those are the conversations that we have with our clients usually earlier in the year. But we're always looking at our client's draft tax returns. That's important.   Caeli Ridge (00:31:47) - Before you ring that bell, get us copies of your draft tax returns so that we can run the math, and we'll even show them how the pluses and minuses work. It's pretty interesting to most people. And then come up with a solution that says, okay, if you want to do this for 2024, here are our recommendations X, Y, or Z. And then they can make the informed decision that fits what their goals are for the year.   Keith Weinhold (00:32:08) - Yeah, these are the scenarios that a mortgage loan company that specializes in income property loans can help you with your future planning. How can you set yourself up considering your personal situation, your tax deductions, how much income do you want to show, and all those sorts of things to give you more runway to add income properties to your portfolio. And you do see so many scenarios in there and so many investors. Sometimes when you're here, I like to ask you to get a temperature of the appraisal market. What percent of appraisals are you seeing coming high on and what percent are coming in low? Approximately.   Caeli Ridge (00:32:43) - We're probably over 50% on the high, but not by any large margin. I'll see 10,015 thousand regularly over what we had expected in the actual value. Pretty commonly, just right on the money, right on the mark. I think it's real market specific, to be sure. I don't see that the short values come in all that much. If it is, generally it's probably because the investor is brand new, didn't unfortunately talk to us in advance. They were doing the BR method and they didn't get the right comps or have the right advice about what that RV might end up being. So they got trapped in a situation where they learned the hard way.   Keith Weinhold (00:33:21) - Interesting. I don't know that I remember that from the past, where more than 50% of appraisals have come in high. That pretends well for future valuations, at least here in the near term. All right, Charlie, well, we talked about your record with mortgage rate predictions here and how good that track record was. Why don't you let us know where you think mortgage rates are going to be by the end of 2024.   Caeli Ridge (00:33:45) - I do think that the rates are going to be higher for longer. Don't fight the fed, remember? Listen to what they have to say. I would preface this by saying that all of the indicators for inflation, except for one of them, have been hot to the side. That does not help us with interest rates. The employment jobs report, you've got the CPI, all these different metrics have come in hot where they're higher than what we would want to see them for that inflationary measure, where the feds have been extremely clear that they want to hit that 2% mark, where that number came from, I don't know. That's another conversation. There's only been one metric that actually worked to the rate environment to get it lowered, which is the PCE, the personal consumption expenditure. For those that aren't familiar with that acronym, I think they're going to be higher for longer. There's been a lot of headlines out there saying that I'm getting to a rate. I promise. I'm just going to to preface this first, that March might be the first reduction in the fed funds rate, which, by the way, remember, is not the same as a long term 30 year fixed mortgage rate.   Caeli Ridge (00:34:42) - There are links to them, but they are different. I don't think that's going to happen. I think that if we're going to see rates come down, the first fed funds rate reduction, probably sometime in June, is where I may put my predictions. And then by the end of the year, the interest rate, I'm going to put at 6.125 for 30 year fixed mortgages and non-owner occupied purchase with 25% down. That's my prediction.   Keith Weinhold (00:35:09) - You are on the record though, and it's so interesting, at least with what the fed does with rates generally. It's like an entire world where good news is bad news, right? If you've got great job growth and great GDP, well, that's bad news because they're probably going to keep rates high since those things tend to keep inflation high. It's like, what if you want the lowest mortgage rate, everyone in the world would be unemployed except you. You know, it's just so funny. I'm glad you said that. Yeah.   Caeli Ridge (00:35:36) - The worse the economy is, the better the rates are.   Keith Weinhold (00:35:38) - Yeah. That's right. You offer so many products in there, mostly to investors, but you have other ones that it's not just for buy and hold type of investors. It's for those that are doing better strategies like you mentioned in other strategies. Well, you tell us about all the loan types that you offer in there.   Caeli Ridge (00:35:54) - Yeah, we do have quite a few. Thank you for asking. So we start with the Fannie Freddie's. We call these the golden tickets. Everybody. Highest leverage, lowest interest rate. A lot of times the newer investors will start by exhausting those. There are ten per qualified individual. If you're a married couple, you can have up to 20, as you and I have talked about in the past, Keith. Beyond that, we've got something called Non-cumulative. QM stands for Qualified Mortgage. Fannie Mae and Freddie Mac are the definition of what a qualified mortgage is. So everything outside of that box of underwriting is now non QM. And non QM in and of itself is extremely diverse, not just for investors, for anybody, but within that subset of product you've got debt service coverage ratio where there is no personal income documentation.   Caeli Ridge (00:36:33) - It's all about the properties rents divided by the payment. We have bank statement loans in there. We've got asset depletion. So if you've got $1 million in an exchange, a stock exchange account, there's a formula that we can use to utilize that as income. Beyond that, we have short term bridge loans for those that are fixed and flipping or fixed and holding where you need cash for the purchase and the renovation or rehab. So we have second lien helocs. Those are newer to our product line. So I'm pretty excited about those. We touched on that. We have commercial loans for commercial property, commercial loans for residential if it were applicable. And then of course the all in one, which is a first lien Helocs still my favorite, but we've spent lots of time talking about that. So that's probably a good overview or at least abbreviated checklist of products we have.   Keith Weinhold (00:37:16) - And I've got investor loans in there myself or new purchases I've done investor loans in there myself or Refinancings. I mean, you're who I go to for my own loans and you're in nearly all 50 states, right? And these are the states where the property is not where the investor resides.   Caeli Ridge (00:37:34) - Yes, sir. Exactly right. We are in 48 states. We are not in New York or North Dakota. Otherwise we're going to be funding everywhere that they're looking to purchase, refi, sell, etc..   Keith Weinhold (00:37:45) - We'll let our audience know where they can learn more, because I know you offer a lot of good free tools, like something we didn't get a chance to talk about a first lien helocs all in one loan. Like for example, you have a simulator there when an investor can just go ahead and run through that. So we're one find all of those resources.   Caeli Ridge (00:38:03) - So check out our website. There's a lot of good information on there. Lots of video content free education. The simulator link will be on there. If you wanted to check out the comparison between what you have now, your 3% interest rate, or your 2.5% interest rate compared to this all in one. I'll tell you guys that I've run that scenario all the time, and people are very surprised when they see that this adjustable rate first line is beating the pants off of a 2.25% rate.   Caeli Ridge (00:38:26) - So check that out. Our community is in the website we meet every other Tuesday. It's called live with Charlie. That's Ridge Lending group. Com. Email us info at Ridge Lending Group. Com and then you can call us of course toll free at (855) 747-4343. The easy way to remember is 85574 Ridge.   Keith Weinhold (00:38:45) - Charlie Ridge. Informative as always. And brazen. With the mortgage rate predictions. You can learn more about how they can help you at Ridge Lending group.com. It's been great having you back on the show Charlie.   Caeli Ridge (00:38:58) - Thank you Keith.   Keith Weinhold (00:39:06) - Oh, yeah, there's such experienced pros in there. And as you can see, they offer nearly every loan type. In fact, there were so many that I almost asked her, do you even loan lunch money to elementary school kids? Uh, because, uh, because they've seemingly got a loan type for most every real estate investment scenario that there is primary residence loans as well. Helpful people over there at Ridge. In fact, I even visited their headquarters office and I was hosted by Charlie there one day.   Keith Weinhold (00:39:38) - See what they can do for you in there. They are real strategists in helping you grow your real estate portfolio, going beyond just what a typical retail mortgage company does. It helps people with primary residences. You can join their free community events too, and they've really expanded their educational offerings to a giant degree the past couple of years. Financially free beats debt free, and she helps bring it to life and make it real. So big thanks to Charlie Ridge at Ridge Lending Group. Until next week, I'm your host, Keith Wangled. Don't quit your day dream.   Speaker 5 (00:40:17) - 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.   Speaker 6 (00:40:45) - The preceding program was brought to you by your home for wealth building. Get rich education.com.

Immigrants keep pouring into the US' southern border.  How are we going to house them? We're already millions of housing units undersupplied. Some migrants get free housing. Yet there are homeless veterans. Here's what to expect from more immigration: more rental housing demand, more multigenerational dwellings, more homelessness, higher labor supply. Get a simple explanation about title insurance. Our in-house Investment Coach, Naresh, joins us with a real estate market update.  Two popular investment markets are Memphis BRRRRs and Florida new-builds. He provides free coaching at GREmarketplace.com. Timestamps: The immigrant crisis worsens (00:00:01) Discussion on the increasing number of immigrants and the housing shortage crisis in the United States. Housing supply shortage (00:02:44) Analysis of the shortage in housing supply, estimated to be around 4 million units, and the decline in available housing units. Impact of immigration on housing demand (00:05:07) Forecasted impacts of immigration on housing demand and the expected population growth due to immigration. Challenges and solutions for housing immigrants (00:09:03) Discussion on the challenges of housing immigrants and potential solutions, including easing construction restrictions and promoting the building of entry-level housing. Title insurance explained (00:17:29) Explanation of title insurance, its types, and its significance in real estate transactions. Update on property manager's situation (00:15:08) An update on the property manager's situation involving stolen rent payments and the tenant's agreement to compensate for the loss. Mortgage rates and inflation (00:21:52) Discussion on the current mortgage rates and their correlation with inflation, as well as predictions for future rate movements. Mortgage Rates and Fed's Strategy (00:22:54) Discussion on the impact of the Fed's decision to hold rates and its potential effect on mortgage rates. Incentives and Real Estate Markets (00:25:08) Explanation of incentives offered in Memphis and Florida real estate markets, including the BR method and new build properties. Real Estate Investment Strategies (00:29:04) Comparison of the Memphis BR method and Florida new build as investment strategies, emphasizing the benefits of each approach. Property Investment Insights (00:32:16) Discussion on the impact of property ownership and the potential for life-changing outcomes through real estate investment. Economic Uncertainty and Real Estate (00:37:07) Anticipation of potential economic volatility and its impact on real estate investment decisions, emphasizing the stability of real estate during uncertain times. Resources mentioned: Show Page: GetRichEducation.com/487 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Keith Weinhold (00:00:01) - Welcome to GRE. I'm your host, Keith Weinhold. Hold. The immigrant crisis worsens. Where are we going? To house all these people. A simple explainer on what title insurance is. Then where do you find the best real estate deals in this market today on get Rich education. If you like the get Rich education podcast, you're going to love our Don't Quit Your Daydream newsletter. No, I here I write every word of the letter myself. It wires your mind for wealth. It helps you make money in your sleep and updates you on vital real estate investing trends. It's free! Sign up and get rich education.com/letter. It's real content that makes a real difference in your life, spiced with a dash of humor. Rather than living below your means, learn how to grow your means right now. You can also easily get the letter by texting gray to 66866. Text gray to 66866.   Speaker 2 (00:01:06) - 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 (00:01:22) - Welcome to jewelry heard in 188 world nations from Lima, Ohio to Lima, Peru. I'm your host, Keith Weinhold. Get rich education founder, Forbes Real Estate Council member and longtime real estate investor. Our mission here. Let's provide people with good housing, help abolish the term slumlord and get paid five ways at the same time. Immigrants keep pouring into our southern border. In fact, federal agents encountered roughly 2.5 million migrants there just last year alone. Now, though, not all will become permanent residents. Understand? 2.5 million. That's the population of the city proper of Chicago or Houston. All in just one year. How are we going to house all these migrants? This crisis has only worsened in that 2.5 million migrants in a year figure is, according to US Customs and Border Protection data. Now, understand first that America has about 140 million existing housing units. That's what we're dealing with today. By every estimate out there, we already have a housing shortage. The layperson on the street knows that and estimates about its magnitude.   Keith Weinhold (00:02:44) - I mean, they're all over the map, some as high is America is already 7 million housing units undersupplied in order to house our current population. And you have other estimates as low is that we're only 1.5 million housing units. Undersupplied. So let's interpolate and kind of be conservative, or just use a figure closer to a common consensus and say that we are 4 million housing units. Undersupplied. All right. But if that's our given, here's what that means. 4 million housing units undersupplied to merely reach a balanced housing supply, we'd need to build enough homes to meet population growth, plus 400,000 on top of that. And we'd have to do that every single year for an entire decade. Just astounding. And to be clear, that's not to be oversupplied with housing. That's just to reach an equilibrium between supply and demand. Now, the supply of available housing, and this is basically what I'm going to talk about next, is the number of homes for sale at any given time, right. That began gradually descending in 2016.   Keith Weinhold (00:04:02) - And back then it was one and a half to 2 million available units. And in the spring of 2020, like I've talked about before, the housing supply just crashed to well below 1 million, and it still hasn't gotten up from its mighty fall. In fact, it's only about 700,000 units available today. All right, that is the Fred active listing count and Fred's sources there. Statistics from Realtor.com. All right, so that's what we're dealing with. That's a dire situation. All right, well, how do housing starts? Look, are we building up out of the ground enough to maybe start getting a handle on this sometime in the next decade? I mean, is there anything that could be more encouraging than more housing starts? Well, really, there's nothing encouraging there at all. In fact, new housing construction starts have hit a ten month low. My gosh. So that's the supply side. All right. What about the housing demand side? Well America's population grew by 1.6 to 1.8 million people between 2022 and 2023.   Keith Weinhold (00:05:07) - And that number is forecast to climb during the next few years, worsening the housing shortage crisis. And with US births falling and deaths rising, it's immigration, immigration is what is going to fuel the majority of population growth for the next decade. Immigrant related growth that is going to impact local housing markets across the country. And it's expected to hit especially hard in the northeast, Florida, California, Nevada and Texas. And what's happening is outraging some people. Some cities are housing migrants in public places, even arenas, including ones that Texas Governor Greg Abbott has bused to the northeast. And, of course, New York City Mayor Eric Adams has been outspoken about how to handle the migrant crisis. Understand that there are homeless veterans out there in America, yet the state of Maine is giving migrants up to two years of free rent for new apartments. In that right there has made a lot of people. And there are a lot of other cases out there like that of migrants getting free housing. Now, just consider this John Burroughs research and consulting.   Keith Weinhold (00:06:31) - They provide a lot of good information to the real estate market, and they have for a long time credit to them. And by the way, if you'd like us to invite John Burns onto the show here or if you have any other comments or questions or concerns, feel free to write into us through get Rich education. Com slash contact. So you can send either an email or leave a voice message. Well, according to their industry respected data, some of which is compiled through the US Census Bureau back in 2021, that's when we reached an inflection point where the US population grew more through immigration than it did through natural increase in natural change. That is simply the births minus deaths, and that is continued each year since there is more US population growth through immigration than there is through natural increase. In fact, bring it up to last year, our population grew by 1.1 million through immigration and just 500,000 through natural increase, more than double more than double the increase through immigration as natural change. And John Burns makes the forecast through the year 2033.   Keith Weinhold (00:07:47) - So the next nine years, the growth through immigration will outstrip that some more and become double to triple that of natural growth overall. Every single year through 2033, we'll add 1.7 to 2 million Americans. And they all need to be housed somewhere. So the bottom line here is that immigration fueled growth already outstrips natural growth. And that should continue and only be weighted more heavily toward immigrants every single year for the next decade, probably beyond the next decade. We just don't have projections that far yet. Well, how are you going to house all these people when we're already badly undersupplied and understand I'm not making any judgments on saying who or who should not be able to enter our nation. That is for someone else to decide. And in fact, I'm the descendant of immigrants. They're my ancestors. And you may very well be too. And over the long term, immigrants can be an asset. I am simply here asking where and how are we going to house them for the next decade and what that means to you.   Keith Weinhold (00:09:03) - Tiny homes, 3D printed homes, shipping container homes none of them seem to be the answer. And of course, population forecasts. When you look out in the future like that, they're going to vary based on the percentage of successful asylum seekers in the 2024 presidential election winner, and more. So, the figures that I shared with you, they are only the average case. In any case, the crisis is poised to worsen because now you've seen that there is a terrible mismatch between population growth and housing starts. How are you going to solve this? The government needs to ease construction restrictions and promote the building of entry level housing. More up zoning should be allowed. Do you know what up zoning is? It means just what it sounds like increasing the housing density, often by building taller buildings. So up zoning is taller building heights. All right. Well let's look at really.   Speaker 3 (00:10:02) - Four.   Keith Weinhold (00:10:03) - Big impacts that this immigration wave is having on America's already scarce supply of housing. New immigrants typically rent property. They don't buy property.   Keith Weinhold (00:10:16) - So that's higher rental housing demand. Secondly, expect more multigenerational and family oriented dwellings. That's what's needed with additional bedrooms and affordable price points like entry level single family rentals. If you want to own rental property, that right there is the spot for durable demand. And thirdly, I'm sorry, another impact is expect to see more homeless people in your community like I've touched on before. In fact, homelessness is already up 12% year over year. That's partly due to inflation, and that is already the biggest jump. Since these point in time surveys have been used. The biggest ever jump in homelessness are ready. Those stats only go back to 2007. That's when they begin measuring it. And that's according to HUD and federal officials. And then the fourth and final impact of all this immigration is that builders and manufacturers will probably see a small uptick in labor availability these next. Few years. Okay, that part could help. America could help with this labor shortage crunch. But all the other major impacts put more demand and strain on what's already a paucity of American housing supply.   Keith Weinhold (00:11:36) - And the bottom line is that there are too many people competing for too little housing, driving up prices and driving up rents this decade. I've been talking about lots of people moving north across borders. Me, I've recently moved south across borders, though for only a few weeks here. I'm joining you from here in Medellin, Colombia today, where in between doing my real estate research here, I'll be trekking in the Colombian Andes this week and the Ecuadorian Andes next week, when I'll be based in Ecuador's national capital of Quito. And, you know, there's a real estate lesson in this itself. Really? Okay, me traveling to Colombia and Ecuador, people often label and mischaracterize areas that they haven't been to or say they hear of the drug trade in Colombia or of some of the more recent, I guess, civil unrest in Ecuador, where I'll be next week. And they think, sheesh, isn't it dangerous in those places? Oh come on, I mean, sheesh, Colombia is a nation of 52 million people and it's almost twice the size of Texas.   Keith Weinhold (00:12:44) - The question is where? Where in Colombia do you think is dangerous? Don't you expect there would be great variability there? Now you the great listener. You're smarter than the average American. So I think that you get it with last month's continued civil uprising in Ecuador, seeing that story in the news that actually reminded me to book a trip there, the opposite of staying away when they held up all the people at that TV station that was way out in Guayaquil, Ecuador. To tie in the real estate lesson here. Back to your home nation. If you do live in the US or wherever you live like I do, see our investment coach, Andrea. She moved from Georgia to the Detroit Metro a couple of years ago. I don't think you'd want to invest in real estate in Andrea's neighborhood, where she lives in Detroit, because it's too nice. The property prices are high and the numbers wouldn't work for you in an upper end neighborhood of metro Detroit. But people that haven't been to Detroit don't think about areas being too ritzy for investment.   Keith Weinhold (00:13:49) - Well, of course, some of the areas are. Some of my point is, stereotypes are hard to shake. I encourage you to get out and see the world now. I've got an interesting and really an unlikely update on my property manager that had the tenant rent payments stolen from his drop box, meaning I didn't get paid the rent. The property manager, he didn't make good on that and pay me the rent. He wanted me to take the loss from the rent payment that he failed to secure from the paper money order stolen from his overnight drop box. So the manager doesn't want to take the loss. I don't want to take the loss well, and I can hardly believe this, but apparently the tenant has agreed to make the property manager hold. The tenant would effectively pay rent twice for that month, and then the property manager will apparently finally pay me the missing rent after it flows through him. The manager. I don't know if the property manager had to convince the tenant that it's the tenant's responsibility to put the payment right into the manager's hands, or what? So the tenant, what they're going to do is pay an extra $200 a month until the $1,950 stolen rent is compensated, I guess what, eight months of stepped up rent.   Keith Weinhold (00:15:08) - And so I was just really surprised that the tenant would agree to do that. And, you know, in this saga that I've been describing to you for, I guess, the third week in a row now, you know, one Jerry listener, they asked me something like, doesn't your property manager know that you're rather influential in the real estate world? Like thinking maybe I'd get preferential treatment? Oh, to that I say, no, I don't want preferential treatment. I mean, few things are more annoying in society than people that position themselves like that. But I will tell you that I actually did meet this property manager in person before he started managing my properties, and he did wear a suit and tie in the conference room for meeting me, which I thought was interesting. Later today on the show, we've got a guest that's familiar to you. He was somewhat bearish on real estate when he was here with us back in November. That's when he talked about how activity was slow, and you might even want to sit on the sidelines of adding more property to your portfolio.   Keith Weinhold (00:16:10) - We'll see if that's changed today. Now over on YouTube, you might very much like watching me in our explained. Video series because in a video format, I can show you where the numbers come from at. Very simply, break down an investing term like net worth for one video or cash flow, or your return on amortization in another one. There's also a new video in our explained series about title insurance, and this is what you'll hear over there. The title to a house is the document that proves that the owner owns it. Without that proof, the house can't be bought or sold, and title insurance is written by title insurance companies. What a title insurance company does is research the history of the house to see if there are any complications, also known as clouds, in its ownership issues that cloud the title could be like an outstanding old mortgage that the prospective seller has on the property. A previous deed that wasn't signed or wasn't written correctly and unresolved legal debt or a levy by a creditor, like an old lien placed by a contractor who once did some work on the windows and was never paid for it.   Keith Weinhold (00:17:29) - They're all examples of clouds on a title, and make transferring the property ownership difficult or impossible. But if the title appears to be clean, no clouds, then the title insurer writes a policy promising to cover the expenses of correcting any title problems if they would happen to get discovered after the sale. Title companies may refuse to insure a clouded title to be transferred, so it's important to know about any potential issues as soon as possible. Now there are two types of title insurance. There is lender's title insurance and owner's title insurance. First, lenders title insurance. In most areas of the country, the mortgage lender requires that the property buyer purchase a lender title insurance policy to protect the lender's security interest in the real estate. Lender's title insurance is issued in the amount of the mortgage loan and the amount of coverage decreases and finally disappears as the mortgage loan is paid off. And then secondly, owner's title insurance. It protects the homebuyers interest and is normally issued in the amount of the purchase price of the property. Coverage means that the insurer will pay all valid claims on the title as insured, and in most real estate transactions, separate title policies are purchased for the lender and the buyer, and although it can vary by location, the buyer typically purchases the policy for the lender, whereas the seller often pays for the policy for the buyer.   Keith Weinhold (00:19:12) - And that's title insurance, if you like. Simple to the point education by video like that, and you'd want to get a really good look at me for some inexplicable reason. Uh, for more, check out the new explained series. It is now on our get Rich education YouTube channel or next. I'm Keith Reinhold, you're listening to get Rich education. Render this a specific expert with income property you need. Ridge lending Group Nmls 42056. In gray history, from beginners to veterans, they provided our listeners with more mortgages than anyone. It's where I get my own loans for single family rentals up to four Plex's. Start your pre-qualification and chat with President Charlie Ridge personally. They'll even customize a plan tailored to you for growing your portfolio. Start at Ridge Lending group.com Ridge lending group.com. You know, I'll just tell you, for the most passive part of my real estate investing, personally, I put my own dollars with Freedom Family Investments because their funds pay me a stream of regular cash flow in returns are better than a bank savings account up to 12%.   Keith Weinhold (00:20:35) - Their minimums are as low as 25 K. You don't even need to be accredited for some of them. It's all backed by real estate and that kind of love. How the tax benefit of doing this can offset capital gains and your W-2 jobs income. And they've always given me exactly their stated return paid on time. So it's steady income, no surprises while I'm sleeping or just doing the things I love. For a little insider tip, I've invested in their power fund to get going on that text family to 66866. Oh, and this isn't a solicitation. If you want to invest where I do, just go ahead and text family to six, six eight, six, six.   Speaker 4 (00:21:21) - Anybody? It's Robert Elms with a Real Estate Guys radio program. So glad you found Keith White old and get rich education. Don't quit your day dream.   Keith Weinhold (00:21:40) - Hey. Well, I'd like to welcome in someone that you might have met by now. That is one of our terrific investment coaches. Narration. The race. Hey, welcome back onto the show.   Naresh Vissa (00:21:49) - Keith. It's a pleasure to be back on race.   Keith Weinhold (00:21:52) - I know you've got mortgage rates on your mind. It's been such an interesting topic lately, since they peaked at about 8% back in October of 2023, and almost everyone this year anticipates that now that embedded inflation is lower, that rates of all types are going to fall, rates in inflation are typically correlated. And why don't you talk to us with your thoughts about where mortgage rates are currently and where they go from here?   Naresh Vissa (00:22:19) - Like you said, mortgage rates peaked around October. The fed did their last rate hike in July 2023, so that's why the lagging effect caused rates to rise a little. And then they've been slowly creeping down since October. And what does that mean? Or where do we go from here in this new year 2024? I've been pretty spot on with what the Fed's going to do. I think they made some mistakes. I think they should have done 2 or 3 more 25 basis point hikes in 2023 because we're seeing inflation creep back up.   Naresh Vissa (00:22:54) - And that's a huge problem for the fed because their target is 2%. But that's a completely different topic. We get Monday morning quarterback the fed all we want. The fed has essentially come out and said that their rate hiking campaign is over. They've hiked enough and it's a take it or leave it. They're just going to hold and hold and hold until inflation reaches that 2% target. So what does that mean for mortgage rates? If we know that the fed isn't going to raise rates anymore, that means we are. We've already seen it. Mortgage rates have slowly creeped down. And there is a legitimate chance that the inflation rate that the CPI hits 2% by this summer, there is a chance of that. Right now we're at 3.3 or 3.4%, but there is a good chance that by the end of this summer, let's say August, we hit that 2% target, which means the fed will immediately start cutting rates after that whenever the next meeting is, I think September 2024, they'll start cutting rates, which means that's going to have an effect on mortgage rates.   Naresh Vissa (00:24:00) - We can see mortgage rates plummet even more later this year going into 2025. Now, this is just a prediction. There's a chance that inflation could go up if there is a middle East crisis or World War three or whatever you want to call it, there's a chance that inflation spikes back up and the fed just they could hold rates where they are for two years. I don't have a crystal ball in front of me. There was a black swan event that happened in 2020. Obviously, there could be a black swan event that happens in 2024. We won't know. But what we do know is the fed is done hiking rates and they're going to hold as long as possible until we get to that 2% inflation target. What does that mean for real estate? If mortgage rates are going back down, you're getting a better deal today than you were in October 2023 or November 2023. So it's almost 100 basis points lower from the peak that we saw in October. So interest rates have gone down. They've somewhat normalized to a level that digestible for investors, still not quite digestible for the average homeowner.   Naresh Vissa (00:25:08) - And the best part about this, Keith, is that the providers who we work with are still offering amazing incentives, the same amazing incentives, if not better, with the lower interest rates. So previously we brought up a 5.75% interest rate incentive program, one year free property management, another program that was two two for two years of free property management, 2% closing cost credit, $4,000 property management credit, all sorts of incentives. And those incentives are still in play while interest rates have gone down. So instead of 5.75% incentive that these providers are offering, they're now offering 4.5% interest rate. So that's why I think if there were no incentives, hey, you know what? We should probably wait until the fed starts cutting again. But with these incentives, this is incredible because they're going to be gone again the moment the fed starts cutting aggressively. These incentives are all gone. So you may as well get in. Now when home values have somewhat corrected and some markets are seeing precipitous declines, home value declines, real estate declines.   Naresh Vissa (00:26:20) - So right now it's still an excellent time to invest. Given this economic landscape.   Keith Weinhold (00:26:26) - Gray listeners are pretty savvy. And you the listener, you realize that changes in the fed funds rate don't have a direct change, and they don't move in lockstep with the 30 year fixed rate mortgages. The fed has really loaded up with the fed funds rate near 5%. Now they basically have a whole lot of ammo in the cartridge where they can go ahead and lower rates if the economy begins to get into trouble. One reason mortgage rates are higher than other long term rates is that US mortgages can be prepaid without any penalty. The anomaly in what's been different and what's been happening here is that typically there's a spread of about 1.75% between the ten year note, which has been 4% or so recently. And the 30 year mortgage rate is about 1.75% higher, which. She would put it at 5.75, but instead mortgage rates have been almost 7%. So a greater than usual historic spread between the ten year teno, which is more what mortgage rates are based off of and what that rate actually is, and the reason that that spread has been so high as this perceived greater credit risk or anticipated economic changes like this recession that is always just perpetually around the corner.   Keith Weinhold (00:27:44) - So we don't really know where mortgage rates are going to go. We know that they're not high. They're actually below their long term average. But of course, they just feel high because the only thing that was unusual is the rate at which they've increased. With that in mind here as we talk about mortgage rates nowadays. Why don't you tell us more about the incentives that are being offered right now?   Naresh Vissa (00:28:03) - The incentives are still being offered. The question is, Keith, I want to share two different strategies or two different markets. It's kind of a mix of strategy and market. The two most popular markets we are seeing right now are in Memphis, Tennessee, and in Florida. Still, Florida continues to be hot. Why is that? Why these two markets? Well, number one, Memphis still has a lot of rehab properties that you can purchase in the 100 to $150,000 range. Before the pandemic, it was common to see properties selling for 60 to $80,000. Those properties are a dime a dozen now, because of what we've already talked about the inflation, the home values, rising real estate going up.   Naresh Vissa (00:28:51) - Memphis still offers those options. Now we work with a provider in Memphis who specializes in the BR method, the B or R r. So it's for cause the BR.   Keith Weinhold (00:29:04) - It's not the February temperatures. BR yes.   Naresh Vissa (00:29:07) - Yeah. It's not the February temperatures. It stands for you buy rehab rent then you refinance and then you repeat it with the next property. So buy rehab rent refinance repeat. So this is a little different from your traditional real estate investing where you're just buying. It's already rehabbed. So you're buying renting it out. And then end of story here. It's a strategy that is meant to build equity. Almost immediately. You rehab it. And look we're not going to get into the details of this right now. I highly recommend that, folks, they can go to the GRE marketplace and set up a meeting with me if they want to talk some more about BR or if their experience and they know about BR, they may not know that we offer BR properties. But our investors have loved Memphis, BR.   Naresh Vissa (00:30:02) - They have loved it. They have bought more and more is one of our hottest asset classes or strategies right now. Memphis BR so highly recommend it. What are the incentives? There actually no incentives that our Memphis, BR provider is offering, because the incentive of the BR strategy is enough to get people to keep buying. They keep getting inventory, they don't run out. They find ways to make it work. Now in Florida, we work with a provider who we've featured on this show a couple of times before, and they're owned by the largest Japanese real estate developer called Sumitomo Forestry. They're one of the largest Japanese companies in the world. Warren Buffett owns a huge stake, Berkshire Hathaway in Sumitomo. So I highly recommend this Florida provider because they're able to offer properties that values that other providers can't compete with at prices that other providers can't compete with. They're offering the incentives that I told you, the 4.5% program, in some cases, you can buy down the rate all the way down to 4.25% if you want.   Naresh Vissa (00:31:10) - They have two years free property management or one year free property. It just depends on the package that you choose. They're offering closing cost credits. You can negotiate the list price. These are the two most popular partners we are currently working with, and I highly recommend if you are liking this real estate market, you're seeing lower interest rates. You're seeing that there's been a correction in home values and you want to get in right now. Contact your investment coach. If you don't have an investment coach, go to the marketplace. You can select me if you want, or you can select the other investment coach Andrea, it's up to you and we can share more information.   Keith Weinhold (00:31:52) - You're talking about two different strategies here, the Memphis BR and the Florida Newbuild. And I think of the Memphis burger is something that's lower cost. It's for an investor with a more aggressive disposition where it will take some of your involvement, even though it's still only going to be remote involvement. And then on the flip side, with the Florida new build, you're going to benefit from those low bought down rates that the builder will buy down for you.   Keith Weinhold (00:32:16) - The longer you plan to hold the property, the more the rate buy down is going to benefit you. And then also think of the Florida new build is kind of being a low noise investment.   Naresh Vissa (00:32:29) - You're absolutely correct, Keith. So I highly recommend those who are sitting on the fence. I've come on this podcast before and said, hey, Keith, you know, right now I'm not really sure where things are going. Like it's a little dead. Maybe investors should hold off.   Keith Weinhold (00:32:44) - Yeah, back in November, that was your guidance?   Naresh Vissa (00:32:46) - Yep. That was. And now I think because we've seen the lower interest rates, you can just get in at a much better deal. Everyone can be happy. I think our investors would be happy. And it's a great time to start investing in real estate again. Don't put it off. I remember when I first got into real estate, I was putting it off, putting it off, and I look back and I say, man, I should have gotten in four years earlier or five years earlier.   Keith Weinhold (00:33:13) - How many properties do you think it took for you to buy until it changed your life? For me, it was probably when I bought my second fourplex and I had eight units. But I think if you're buying single family homes, it takes probably fewer units than that to really start changing your life.   Naresh Vissa (00:33:30) - Yeah, one units aren't going to change your life. Two units aren't going to change your life. In my case, it's just a personal story. I bought one the first year, another one the second year, and then my third year I scaled from 2 to 7. That was the life changing experience right there. And the last two properties I bought were new construction. So number seven and number eight were new constructions. And that also changed my strategy too, because I said, hey, new construction is just so much better than these older rehab properties, just less headache. We've talked about this before on previous episodes, and so moving forward, I'm actually saving up right now to buy my next new construction property.   Naresh Vissa (00:34:13) - New construction. Me personally, I think that's a way to go, there's no doubt about it. And because I went from 2 to 7, that was the game changer for me, at least on the taxes on the passive cash flow. And look, I'm relatively young. I'm in my mid 30s. But when I think about retirement, which I don't think about much, but sometimes I do, and when I do think about it, I'm like these eight properties, if I hold on to them, that's a nice retirement that I have in retirement. That's a great passive cash flow. By then the mortgages will be paid off. Although we believe in refi til you die. Just to get a little more specific about some of these incentives, I'm looking at the Florida ones right in front of me. Option one, for example, is a 4.25% interest rate. That's where the buy down the 2.75% buyer paid point buy down. But it comes with two years of free property management. I think the best deal if you want zero buy down it's two years of free property management seller paid closing costs of 1.5%.   Naresh Vissa (00:35:19) - So that's a 1.5% closing cost credit and a 5.75% interest rate that you'll be locked into. I think that's a pretty darn good deal.   Keith Weinhold (00:35:30) - There are some attractive options there. Yeah. It's interesting you raised when you talk about how many properties does it take to change one's life. Yeah. You're right. When you buy your first property, your second property, it isn't life changing. You probably haven't own property long enough yet to benefit from leverage, and surely not cash flow just off 1 or 2 properties. But what happens is you accumulate more is sometimes you don't have to use and save up your own money to buy a new property. You might want to do that, but at the same time, the properties that you bought a few years ago have built up enough equity. So now that rather than your money buying new properties, it's like your properties, buy your new properties for you as you do these cash out refinances. And that's where you really get things rolling. So it can take a few properties and a few years.   Keith Weinhold (00:36:16) - But nowadays you're so right about the opportunity really being with New Build. Today I'm a guest on other shows and a lot of people are just an economics host. They think about real estate investing, they think about higher mortgage rates, and they're like, you know, where's the opportunity for an investor today? And that's usually what I tell him. It's with these builder rate buy downs on new build properties. Take advantage of that this year.   Naresh Vissa (00:36:38) - Absolutely. So like I said great marketplace. You can get more information set up meetings with Andrea or me or whoever you're assigned investment coaches. If you don't have an assigned investment coach, take your pick and let's get your real estate investment journey either started or on cruise control.   Keith Weinhold (00:36:57) - If you have any last thoughts, whether that's this year's direction of prices or rents or the economy as it relates to real estate or anything else at all.   Naresh Vissa (00:37:07) - Well, Keith, I think we're about to see and we don't get political on here, but for whatever reason, we tend to see crazy financial markets during election years, whether it's presidential elections or midterm elections.   Naresh Vissa (00:37:22) - We saw the stock market drop wildly in 2022 during a midterm election year. Of course, 2020 will never forget the craziness of lockdowns and masking and social distancing and what the financial markets did. I mean, all the at least the stock market. President Trump lost all the gains that he had in the stock market as president, were lost in over a two month period in February and March 2020 because of pandemic. And then they came surging back. So the point that I'm making here is economically, I shared my vision of just systematically, I think inflation is going to hit the 2% by the end of the summer. The experts initially thought it would hit the 2% by March. In the latest CPI reading showed that inflation actually went up. I think we're going to see some type of, I don't want to call it a black swan, but this year is not going to go according to plan. Maybe the inflation plummets because something deflationary happens. Or maybe the inflation rises again because something inflationary happens. That's just not on our radar.   Naresh Vissa (00:38:30) - So how does that affect real estate. Well that doesn't change what we said five minutes ago, which is right now, today. Given all this uncertainty, today is still a great time to jump in, because if there is a deflationary event, you can always refinance your rate in a year or two when rates are much lower. And remember, mortgage rates are tax deductible.   Keith Weinhold (00:38:54) - A presidential election year brings more uncertainty than usual. You can buffer yourself from that volatility with real estate and investment that's more stable than most anything else out there. I encourage you, the listener, to check out Naresh and the other coach, Andrea at Great Marketplace, and it can really help you out and help you put a plan together. Hey, it's been great having your thoughts. I think the listeners are going to find this helpful. Thanks for sharing your expertise. Thanks, Keith. Yeah, there's some valuable guidance from Naresh on where the real deals are in this market today. Memphis Bears and Florida, new builds. They're really just two of the dozens of options from Gray's nationwide provider network.   Keith Weinhold (00:39:44) - Learn more, see all the markets or connect with a coach all at Gray marketplace.com. Enjoy the Super Bowl I'm Keith Weinhold. Don't quit your Daydream.   Speaker 6 (00:39:59) - 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.   Speaker 7 (00:40:27) - The preceding program was brought to you by your home for wealth building. Get rich education.com.

California is strengthening protections for tenants. I discuss. It's already a disadvantageous state for real estate investors.  My Property Manager had my tenant's $1,550 rent payment stolen from his drop box last year. He expects me to take the loss. I won't. Who is liable for the payment - the thief, bank, tenant, manager, or the investor (me)? Tom Wheelwright, CEO of WealthAbility, joins me. We discuss the role of property tax in funding essential services.  The conversation touches on the regressive nature of property tax, alternatives to it, and the importance of understanding tax strategies. US taxes of all types keep ratcheting higher over time. But they're still lower than most world nations.  The episode also considers the impact of elections on tax policies, emphasizing the need for informed voting regarding taxation. You need a tax professional that knows how to find you all the deductions for real estate investors here: GetRichEducation.com/Tax Timestamps: Landlord-Tenant Relationships (00:00:00) Discussion on landlord-tenant relationships, stolen rent payment, and potential elimination of property tax. New Renter Protections in California (00:02:30) Overview of new laws in California regarding upfront deposit amounts, eviction protections, and banning of crime-free housing policies. Options for Homeowners in California (00:03:50) Details about new housing laws in California, including more options for accessory dwelling units and their impact on the housing crisis. Stolen Rent Payment Dilemma (00:05:53) Narrative about a stolen rent payment, liability concerns, and the property manager's proposed resolution. Feasibility of Eliminating Property Tax (00:13:45) Discussion on the possibility of abolishing property tax and its funding of schools, fire departments, and police services. Property Tax Funding (00:18:37) Insights into the funding of property tax and its allocation to schools, fire departments, and police services. Property Tax and Its Impact (00:19:37) Discussion on the challenges and implications of property tax as a wealth tax and its regressive nature. National Property Tax Rates (00:20:40) Exploration of the national average property tax rate and its impact on property value and inflation. Proposition 13 in California (00:21:34) Analysis of the impact and benefits of Proposition 13 in California, which limits property tax increases for homeowners staying in the same home. Alternatives to Property Tax (00:23:27) Exploration of alternative taxation methods, such as transaction tax and the potential elimination of property tax in favor of a transaction tax. Primary Residence Capital Gains Tax Exemption (00:25:16) Insights into the primary residence capital gains tax exemption and its impact on homeowners, including the need for inflation adjustments. Future Taxation Trends (00:27:24) Discussion on the potential for heavier taxation and comparisons with taxation policies in other countries. Potential New Tax Types (00:29:16) Exploration of the possibility of new tax types, including the concept of a poll tax and its implications. Value Added Tax and Tax Reduction Strategies (00:31:17) Insights into the potential implementation of a value-added tax in the United States and strategies for tax reduction through understanding the tax code. Selecting the Right Tax Advisor (00:33:00) Advice on choosing a qualified CPA and the importance of having a knowledgeable tax advisor for effective tax planning. Election Year and Taxation Policies (00:34:54) Analysis of the potential impact of the upcoming election on taxation policies and the importance of considering tax implications when voting. Property Tax and School Funding (end) Perspective on property tax funding for schools and the broader community impact, addressing objections to paying property tax. Property Tax (00:37:07) Discussion on the controversial nature of property tax and its impact on property ownership. Tax Strategy and Deductions (00:38:13) Importance of finding the right tax professional for real estate investors to maximize deductions and benefits. Disclaimer (00:39:25) Legal disclaimer regarding the information provided in the podcast and the need to consult appropriate professionals for personalized advice. Resources mentioned: Show Page: GetRichEducation.com/486 Get matched with the right tax pro: www.GetRichEducation.com/Tax Tom's book, “Tax-Free Wealth”: https://www.amazon.com/Tax-Free-Wealth-Massive-Permanently-Lowering/dp/1612681204 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Keith Weinhold (00:00:00) - Welcome to GRE. I'm your host, Keith Weinhold. California and new renter protections. My own property manager had my tenants rent payments stolen from his drop box, and he wants me to take the loss. Then Tom Wheelwright joins me for a discussion about can we abolish the property tax today on get rich education? If you like the Get Rich Education podcast, you're going to love our Don't Quit Your Daydream newsletter. No, I here I write every word of the letter myself. It wires your mind for wealth. It helps you make money in your sleep and updates you on vital real estate investing trends. It's free. Sign up and Get Rich Education. Com slash letter. It's real content that makes a real difference in your life, spiced with a dash of humor. Rather than living below your means, learn how to grow your means right now. You can also easily get the letter by texting GRE to 66866. Text GRE to 66866.   Speaker 2 (00:01:06) - You're listening to the show that has created more financial freedom than nearly any show in the world.   Speaker 2 (00:01:13) - This is get rich education.   Keith Weinhold (00:01:22) - Welcome to GRE! From Montpelier, France, to Montpelier, Vermont, and across 188 nations worldwide. And Keith Weinhold, in your listening to get rich education across the United States, it's fortunate for us that states with landlord friendly policies also tend to be those states where the numbers make sense to. And for landlord tenant relationships, it's the state and local policies that often trump the national ones. Now, of course, in residential real estate or any real estate for that matter. I mean, you can make money in all 50 states, of course, but there's a reason that we generally avoid certain places, and that includes California. One difficulty in California has long been the process of getting a prompt eviction. It can be hard to do that even if you have just cause, where it can take months and months, or even longer than a year to get an eviction. Let's listen in to this minute and a half clip on how tenants rights are being strengthened in California. Just a little more.   Speaker 3 (00:02:30) - Well, every month, renters in California spend a hefty portion of their paychecks on housing. And as we kick off, 2024, seven is on your side with the new laws. Renters should know to save some money and also protect themselves against eviction. Before you lock in an apartment, you usually need your first month plus a security deposit in advance. Well, now the amount you have to pay up front could potentially drop by thousands of dollars.   Speaker 4 (00:02:54) - Landlords can now charge just one month of security deposit up front, and previously they could charge two months if the unit was unfurnished or even up to three months of the unit was furnished.   Speaker 3 (00:03:05) - Renters are also getting new eviction protections. Soon, it will be harder for landlords to evict a tenant under the no fault, just cause policy. Currently, a tenant can be evicted if the landlord or landlord's family is going to move in, but starting April 1st, the landlord or their family will have to move in within 90 days and live there for at least a year.   Speaker 3 (00:03:24) - Local governments are also now banned from crime free housing policies. Cities and counties can't mandate penalties or evictions against people who have been charged, convicted or had police called on them. The ban also applies to the family members of tenants. Now, renters are not the only ones benefiting from the new housing laws. Homeowners will now have more options when it comes to so-called granny flats or accessory dwelling units.   Speaker 4 (00:03:50) - Now they can separate and either build or sell an Adu and accessory dwelling unit and sell that separately as a condo. Lawmakers think that that's something that's going to help the state's housing crisis.   Speaker 3 (00:04:02) - And with housing prices sky high, this could give many would be homebuyers the opportunity they need to afford a starter home.   Keith Weinhold (00:04:09) - Yeah. So there it is in California this year. Lower upfront deposit amounts for tenants and more protection from evictions. California landlords, they can now charge just one month of security deposit upfront. That's the most they can charge. Previously, they could charge two months if the unit was unfurnished and up to three months security deposit if the unit was furnished.   Keith Weinhold (00:04:36) - Now, on the flip side, you've got to give California credit for helping homeowners, existing homeowners. They will now have more options when it comes to so-called ADUs accessory dwelling units, which some people call granny flats, because now they can separate and either build or sell in Adu. They could sell that separately as a condo, and that might help California's affordable housing crisis and the housing shortage crisis that could give more California homebuyers the opportunity that they need to afford a starter home. So that is better for first time homebuyers in California. And whether you live there or not, this matters. California has the same population as all of Canada in between 11 and 12% of all US residents are indeed Californians. Let me tell you about a completely weird situation that I have with one of my property managers. Now, I own rental properties in different states around the US, and each of those local markets has their own manager, and you might have this situation as well. Or perhaps that's what you would soon like to do to have this situation of having properties in multiple markets.   Keith Weinhold (00:05:53) - Well, about 12 months ago now, I got a message from a property manager that manages a bunch of single family homes for me in this one particular area, and he let me know that I was not going to be seeing a rent payment for one of my tenants. And that's because the tenant paid the rent, but they paid it with a paper money order that was left in the manager's overnight drop box and the mail from that box. Was broken into by a thief and stolen. And then apparently the thief converted the money order at the bank by in this house. Unbelievable. By waiting out the name of the money order recipient, which I guess would have been the manager. And then the thief wrote in his own name on the Wite-out. Now there were three tenants that had their payments stolen from my property manager like this. So mine was one of the three from my tenant. And the thief also broke into two other real estate offices around the same time. So the thief broke into three offices total, apparently.   Keith Weinhold (00:07:01) - Now, the question that we're leading up to here is, I tell you more about this. Who is liable for this missing payment? And really, there are five parties here where you could give an answer. Is it the thief, the manager, the tenant, the bank or me? The investor who is liable for that stolen payment? Who should make good on it? Who will make good on it? Now, the amount that we're talking about is a stolen rent of $1,550. Okay. This is a rental single family home that I have. So I've been out this $1,550 for about a year now. And by the way, the tenant that had the rent payment stolen a full year ago, they still live there in their rent is now 1750, but it was 1550 them. Now I'm only making a thing of this a full year later and starting to ask my manager to make me whole now. And that's just because I've got a lot going on in life and $1,550. That's just not enough to make that big of a deal over.   Keith Weinhold (00:08:03) - But when life took a pause and I got to thinking about this some more, the principle of it is really bothersome. Wouldn't it bother you? I mean, if I let others like my manager get away with something like this, then I could get walked all over in other ways. Now, when I requested that the manager paid me because it was their drop box that it was stolen from, really, the only answer that they want to give me is that they can't pay because they don't have insurance to cover that type of loss. Well, I don't either. Now, should the bank be the liable party here for processing a payment where the pay to name was whited out, and then the criminal wrote over it with his name? And by the way, the criminal used his real name. And that's also part of how he got caught, which is unbelievable. And they also, though they do know who the criminal is because they have video surveillance of him at the bank depositing the money orders. I mean, how should he have been able to catch them? But the process of trying to get the criminal to remedy this or the bank to remedy this, those approaches have not worked.   Keith Weinhold (00:09:14) - And I think that the manager wants me to take the loss and pay because he doesn't want to take the loss. And you know, something? Admittedly, between the tenant, the manager and I, I'm probably the one that could most afford the loss, but that does not make it right now. At last, check the property manager who keeps refusing to pay up. They propose something ridiculous that I want to share with you in a moment. You're not going to believe it. Well, as you know, you have a written management agreement when you enter in an agreement to have your manager manage your property for you and that management agreement that's between you, the investor and your manager, just those two parties. And as we know, one job that your manager does for you is that they collect the rent for you. So I figured what I would go do is look at my management agreement, and I'm going to go cite that line where it says that the manager collects the money for the property owner.   Keith Weinhold (00:10:16) - But would you believe it? Nowhere in our agreement does it state that the manager collects the payment for the owner. So here's one lesson. The next time you're signing a new management agreement, see that that line is in there. I think it's just kind of easy to assume that it is. But, you know, those agreements, they're typically written by the property management company. So they might write it in ways that protect them. But here's the thing. The manager still doesn't want to pay $1,550 and was stolen from the drop box. They had proposed something that seems wild to me when I said I'm not going to let go. They told me that their plan is to ask the tenant to pay by adding an extra 150 or $200 to their monthly rent payment until the deficit is paid up. So that would be what, something like eight months of payments. Now, I doubt that the tenant would agree to something like that. If the manager is accepting rent in a drop box, it seems like it's the manager's responsibility to make sure that it's secured.   Keith Weinhold (00:11:20) - So to me, of the five parties involved here, it should be either the criminal, the bank for processing the payment that way, or the manager that should be held liable. One of those three parties, not the property owner and not the tenant. So you've got to believe that I consider firing this property manager and using someone else. And by the way, whenever you have to do that, if you ever do have to do that, and I've had to do it before, you can ask the provider that sold you the property for new property management recommendations, or you can find some new property managers by checking online forums with other clients that have actually used property managers. If you replace your manager. What that does is that your manager, they're going to lose more than just that 8 to 10% monthly management fee. They'd also lose future leasing fees. They lose any arrangements that they have with service providers to service your property, like plumbers and electricians. When it comes time for you to sell your properties that your manager manages for you, that manager might also lose the ability to collect referral fees at that, manager has the real estate license so you can make firing your manager hurt them more than you might think.   Keith Weinhold (00:12:40) - Now, I don't like hurting anyone in business. That's why I'm trying to find a constructive way to resolve this. But the manager has had a long time to make this right with me. They're probably just hoping I would forget about the whole thing. The property manager does not want to take the loss, and I will not either. I'll keep you updated on how this weird situation concludes here, but yeah. Hey, I'm an investor just like you. I want to dig in and get involved sometimes and see if something like a stolen rent payment happened with a stock that you own. I mean, you might take the loss there and you wouldn't even know that it happened. So I like real estate investing trends agency with a manager. I don't have the day to day involvement responsibility, but yet I can see a lot of what's going on with the monthly statements that they send me. Or if I have a concern, I know who I can directly contact to remedy something. And if you're a new real estate investor, please be mindful that this situation with my manager and the stolen rent payment is not typical at all.   Keith Weinhold (00:13:45) - In 20 years of doing this, I have never had a situation like this. In a few minutes here, we're going to discuss how feasible it is that America could eliminate the property tax altogether. And our guests. He's also going to tell us why he's been seeing more people like you paying tax on the gain from the sale of your primary residence. Hey, would you like to see me at breaking down real estate investing concepts on a whiteboard? Yes, a magic marker in hand with a whiteboard and an easel. Well, you can watch me do that from the comfort of your home. Over on our YouTube channel, we recently launched our explained series, and I begin it by breaking down basics and just showing you an actual net worth and actual cash flow statement, and then figuring out how you can take those and learn exactly when you can quit your job and retire. It's easier to do the numbers over there than it is here on an audio format, and later I'll whiteboard some more advanced concepts for you soon, like explaining an inverted yield curve.   Keith Weinhold (00:15:00) - Watch me on the whiteboard in our explained series. It is free on YouTube right now and our channel is pretty easy to find because it's called get Rich education. Eliminating the property tax. Next I'm Keith White hold. You're listening to get rich education. Role under the specific expert with income property, you need Ridge lending group and MLS 42056 in gray history, from beginners to veterans, they provided our listeners with more mortgages than anyone. It's where I get my own loans for single family rentals up to four Plex's. Start your pre-qualification and chat with President Charlie Ridge personally. They'll even customize a plan tailored to you for growing your portfolio. Start at Ridge Lending group.com Ridge lending group.com. You know, I'll just tell you, for the most passive part of my real estate investing, personally, I put my own dollars with Freedom Family Investments because their funds pay me a stream of regular cash flow in returns are better than a bank savings account up to 12%. Their minimums are as low as 25 K. You don't even need to be accredited for some of them.   Keith Weinhold (00:16:20) - It's all backed by real estate and that kind of love. How the tax benefit of doing this can offset capital gains and your W-2 jobs income. And they've always given me exactly their stated return paid on time. So it's steady income, no surprises while I'm sleeping or just doing the things I love. For a little insider tip, I've invested in their power fund to get going on that text family to 66866. Oh, and this isn't a solicitation. If you want to invest where I do, just go ahead and text family to six, 686, six.   Speaker 5 (00:17:02) - This is author Christine Tait. Listen to get Rich education with Keith Reinhold and don't quit your Daydream.   Keith Weinhold (00:17:19) - A renowned tax and wealth expert is back on the show with us today. He's also a CPA, and he's the CEO of a terrific tax firm called Wealth Ability. He's the best selling author of the Mega-popular book Tax Free Wealth, which you may very well want to check out again, because he just updated that book with a third edition. I have the original tax free wealth on my bookshelf.   Keith Weinhold (00:17:40) - Welcome back to Dr. Tom Wheelwright. Thanks, Keith. Always good to be on your show. Tom, we have a lot of real estate investors listening. Why don't we talk about property tax? It applies to one whether they own income, property or whether they own a primary residence. Tom, I thought about the discussion that we were going to have today. I was thinking about it yesterday. And you know what happened? I looked out my window and the garbage had just been picked up from the curb, and this was shortly after my driveway was plowed of snow. Okay, now, if an alien came down from another planet and we described that there's a property tax in the United States, so we'll probably believe, oh, all right. Well, they're going to like, pick up your trash and like, plow your driveway for you and everything for that property tax you pay. It's like, oh no. Well those are separate services that I pay. So really what I'm getting at is maybe more philosophically in big picture, should there be a property tax? That's a big question.   Keith Weinhold (00:18:37) - Yeah. But let's do talk about what property tax funds. So property tax funds schools. It's the primary funding mechanism of schools. If you talk to an old timer they still call it school tax sometimes. Yeah it funds schools. It funds fire departments. It funds the police. So those are the three big services that have funds. This is why, by the way, Keith, when there was that group in Seattle that took over that section of the city and the government refused to send to kick those people out. I don't know if you remember this a couple of years ago. And I'm going, wait a minute, why are we paying property taxes? Because the police force and the fire department were being paid by property taxes on the buildings that had been taken over by this renegade group. Wow. And so I have a commercial property. I pay a huge property tax on that commercial property doesn't house children, so I don't send children to school, but I still pay tax for education. Why? Because I need educated employees, so I'm happy to do that.   Keith Weinhold (00:19:37) - I pay for fire protection. I pay it for police protection. I think what the money is used for generally is fine. I don't have an issue with that. The challenge I have with the property tax is twofold. One is it is a true wealth tax. If your property goes up in value, you pay more tax and it's a tax on inflation, because if you're a property goes up in value because of inflation, you pay more tax. And then second of all, you're out to sell your property. But it's also a regressive tax. So people who have no more income, they're on fixed income, they're Social Security. They have a pension plan whatever that their property goes up because of inflation, not because it's a better property and they're paying more tax even though their incomes not going up. That's my biggest challenge with property tax. That's really a good point. I had never thought about it that way before. The property tax can be a regressive tax. Therefore you pay a higher rate with a lower income, which is what a regressive tax means.   Keith Weinhold (00:20:40) - I know that some jurisdictions try to help senior citizens out with that. Maybe you both say like the first 100 K of assessed property value is exempt. But yeah, on basis you're right about that. With it being a regressive tax. Tom, I kind of look around the landscape. We deal with a lot of markets and properties and providers nationwide here at gray, and I seem to see a national effect of property tax rate of about 1%, something like that's pretty common 1% of value on a 500 K property. You're going to pay about $5,000 in property tax. Of course, that varies substantially. New Jersey is a really high one. So the states in the Deep South are really low ones. But what are your thoughts about that 1% average national effect? Think about that tax rate. Let's say you bought that property for $50,000. You bought the property for $50,000 based on your income. You bought it for $50,000. Now, because of inflation, it's $500,000. Now it's really a 10% of what you bought it for.   Keith Weinhold (00:21:34) - So it's not really 1% anymore. It's 1% of the price value. It's not 1% of what you paid for it. This is where California with prop 13 they apt their property tax. Right. If you didn't move into a new property. I loved that proposition. Frankly, I love prop 13 because what I said was, look, if you're staying the same home, your property tax isn't going to go up. Because you get no more value out of it than you did when you bought it. So why are you getting more tax even though you're not getting more value? That makes no sense. I'm not a big fan. You know, like Texas has a they rely heavily on property. Remember we have three types of taxes. We have an income tax. We have a transaction tax which the biggest one is sales tax. But it's also excise taxes. And then we have property tax. And property tax and estate tax are the only two wealth taxes we have. And property tax is a true wealth tax.   Keith Weinhold (00:22:29) - Why is it allowed. Why can we have a property tax in our hometown. But we can't have a federal property tax because Constitution doesn't allow a federal property tax. But our state constitution probably does allow a state property tax. And so robbery taxes are really interesting. I talk about in tax free wealth. Tax wealth has a chapter on property sales and property tax. It's my least favorite tax because again A it's regressive and B it's a tax on something I've never realized. The only benefit I have is that I live in it. But that benefit's not gone up even though the property tax goes up. You brought up so many interesting things there. Sure, that proposition in California is what kept people staying in their homes for a very long time. But we think about property tax and should there even be one? As we ponder that big question, what do other nations do? Because a lot of times I know you look at foreign nations tax policies. Most localities. A lot of them have a local property tax.   Keith Weinhold (00:23:27) - I don't think it's uncommon. What's interesting to me is that Missouri is looking at getting rid of their property tax and putting in a transaction tax instead. So in other words, you don't pay a tax for owning the property. You only pay a tax when you sell it. Well, that actually makes more sense. You know, in previous episode we talked about more versus United States. We talked about that whole idea of a wealth tax and realized gain. And some states do this already. California does this, Hawaii does this, Pennsylvania does this where you have a tax when you sell the property, an excise tax when you sell the property, or a transfer tax, if you will? That makes some sense because you did get the money. You actually have the ability to pay the tax. It's not coming out of your earnings. It came out of the sale of the property. So it's a tax on the sale. Frankly, if I had to choose, I would probably choose the transaction tax.   Keith Weinhold (00:24:23) - I mean, I would choose to have very little tax. I think we need fire. We need police. Those two things we absolutely need we need roads. We should have taxes to pay for those school. I'm a fan of school choice. And should we have property tax pay for those? Or is that something that we ought to pay for some other way? I don't know, there is argument that, again, that should be maybe you ought to pay that out of sales tax or a transaction tax. Yeah. I think I'm feeling your vibe on that one time that a transfer tax of real estate is somewhat more palatable than this ongoing property tax that you have to pay, because the transfer tax probably is realizing a gain there. Along with that, even though we probably don't like that piled on top of ongoing property tax, for sure. We think about property taxes, something that applies to every homeowner, whether they own income, property or not, is the pretty well known primary residence capital gains tax exemption for quite a while.   Keith Weinhold (00:25:16) - That's been 250 K if you're single and 500 K if you're married. Can you tell us more about that and where the direction of that's going? And is that adjusting with inflation or what are your thoughts. Yeah, it's not adjusting for inflation unfortunately. It's interesting. Some things adjust for inflation. Some things don't. Tax brackets adjust the exclusion for your primary residence doesn't. And your deduction for miles driven for charity doesn't adjust for inflation. But your deduction for miles driven for work does adjust for inflation. So it's very interesting to see what does Congress say. We're going to adjust for for inflation. What they don't. That came into effect under Bill Clinton prior to his presidency. You had to actually put your new house, had to be worth more than your old house is very much like a 1031 exchange where as long as you bought a new house that was equal to or greater in price than the sales price of your old house, you paid no tax but the minute you went down. So when, for example, you're retiring and you decide, well, I don't need all this house, my kids are gone, I'm going to go move into a condo on the golf course, or I just don't need that much space.   Keith Weinhold (00:26:25) - Then you had to pay tax. What happened in the Clinton era was we actually got this exclusion, which is as long as you live in the house for two years, two out of the last five years, you get 100% exclusion on the gain, up to 250, like you said, 250 single, 500 joint. I would love to see them index that. I think it needs to be indexed. Frankly, they need to adjust it retroactively because too many people got caught in this last run up where for the first time ever, I saw a lot of people paying tax on the gain from the sale of their house. Yeah, that's something that you hope that you don't have to do. We'll see if and when they do adjust that for inflation. I'm not always talked about property tax bill. Why don't we open it up somewhat more and talk more about what we discussed the last time you were here on the show with us? Well, I think we already learned then whether Americans, just over time, over the long term, are more likely taxed or more heavily taxed.   Keith Weinhold (00:27:24) - It seems like they're always piling on more and more taxes. What are your thoughts with where we're going on lighter taxation or heavier taxation? I said, well, we rarely get taxed less. We're actually taxed less than just about any other country. Just to be clear, we pay a lower share of our income in taxes than just about any other country. But of course, we have much, many fewer benefits. We don't have national health care. We have Social Security, but it's a small amount, right. In France, remember, they had these big protests, right? Because the French president raised the retirement age from 62 to 64. Why were so many people protesting that? Well, it's because in France the salaries aren't enough to keep up. And so they're relying on that. They can't save up and say, I'm going to retire earlier because I've saved up money. There's not enough income for them to save. So they're relying on the government to save for them. That was a hard thing for them.   Keith Weinhold (00:28:18) - We have a hard time understanding that in the US because our tax rates are so much lower. France, for example, I was. Reading. That's the other day. 50% of GDP goes to taxes in France. In the US it's about 26% of GDP. So we're almost half of what percentage of our GDP goes to taxes. So they're the highest. What's happening is you're seeing Germany. There's this going up Korea. Theirs has gone up, Japan theirs has gone up. And the US, they expect ours to be up. It's 28% of GDP within a few years. So it's all relative, right. The problem is, is that the taxes are more and more as a proportion of our gross domestic product. If you think the government should stay out of our lives, then you're on the wrong end of that stick, because that means that the government's getting more and more involved, and more and more money is being spent by the government instead of the private sector. Well, Tom, you've been here on the show with us a lot of times.   Keith Weinhold (00:29:16) - We've talked about how your rental income gets taxed. We've talked about capital gains tax and property tax and sales tax and income tax, one tax type we haven't talked about. When we think about whether things just get worse as the government piles on more taxes, is there any threat in your mind of a tax for those that don't know what that is? That's basically a head tax. That's a tax that's imposed on you just for existing. Is that a possibility? Zionist capitation tax and not a decapitation tax. It might feel like one. Yeah. It's, uh, commonly called the poll tax write poll. As in poll. You go to the polls that the number of people that is actually allowed, the government could impose that that is allowed under a constitution, a poll tax. Great Britain has a poll tax. So it's not unheard of. I haven't heard a lot of people talk about. The problem is, is that a poll tax is a tax on voters. And we know politicians don't want to put a tax on voters.   Keith Weinhold (00:30:16) - Right. So where's the incentive to vote? They're more likely to put a tax on corporations who don't vote. I'll tell you the favourite tax. The favourite tax is to put a tax on out-of-towners. Somebody who's coming into your place like a travel tax. One of the key policy points of any tax unit is you want to export your tax to people who don't vote for you. So you're always trying to put the tax on somebody who doesn't can't vote for you. Because if you put on people who do vote for you, you will soon lose your job. Interesting point. That's why you see taxes on Ubers and taxis and hotels, resort taxes. You see those kind of tax skills are basically export tax, right? They're taxing people who don't live and vote in your state or in your location. A poll tax would be a tax on people who do live in your state or location. I have a hard time seeing that one coming down the line. More likely is you really wanted us to be more competitive with the rest of the world.   Keith Weinhold (00:31:17) - We'd have a value added tax in the United States, we do not have one. And if you wanted to make us more competitive with the rest of the world, if you really want to raise funds or you want to pay off the deficit, or you want to get rid of an income tax, the best way to do it would be a value added tax. Well, maybe you, the listener, just have a shred of a little something to be thankful for. There are tax types you've heard of that we don't actually have yet. There actually are some remaining. It seems like they'll all get used up. Europe has a. Europe uniformly has a 20% value added tax that just goes to increases the price of your meals at a restaurant, increases the price of every product you buy. That's a value added tax. That's a national sales tax that is common in the rest of the world. We're the only major developed country that doesn't have one. Well, at least in Europe, they're not asking that.   Keith Weinhold (00:32:06) - When you get your restaurant meal bill that you add a tip onto the tax about, like what's happening a lot of times here. And I think a lot of people aren't even aware of that. That's another absurdity. Yeah. Another absurdity of being a consumer in the United States today. Tom, you're really an expert in helping people understand that there are so many parts of the tax code out there for reducing one's taxes. The tax code, mostly most of the pages are about tax reduction. There are just a few pages about the tax tables. And then basically the rest of the tax code says you have to pay the tax in those tables if you don't do these other things. So tell us more about how one and everyday people can learn and get informed by being matched up with the right professional, so they can learn about all those exceptions to paying those taxes in the tables. I appreciate your promotion of tax free wealth because that's the starting point. You really do need to understand the concepts, and the concepts are all in tax free wealth.   Keith Weinhold (00:33:00) - Okay, so really inexpensive way for you to get an education. Once you've got the education though, you do need a team around you. And what I think the most important person, well outside of your bookkeeper, who I actually think is the most important person of that team, I think your number two person is your CPA. And I'm going to be very specific. There are a lot of people who hold themselves out as tax advisors, and I would not touch them with a ten foot pole. Whether it's I don't want a financial planner giving me tax advice, nor do I want a CPA, give me financial advice. Let's have a specialist do the specialist work. I don't want an enrolled agent. And the reason I don't want enrolled agent. If I'm really simple, that's great. But remember enrolled agent, they have very little education. They took a test. An IRS test that takes a couple of hours. That's all they did. If you're a business owner, you're a serious investor. You need a CPA and you need a CPA who cares more about you than they do about protecting themselves from the IRS.   Keith Weinhold (00:33:59) - This is one of my big complaints about some of my fellow CPAs is they seem to be so concerned about an audit. And my question is, if you're so concerned about an audit, does that mean you're afraid of the IRS? And if your CPA is afraid of the IRS, it's probably time to get a new CPA. That's right. Well, please, I tell you, we have a resource on our website where you can connect with Tom's team and get messed up with the right advisor. That is it. Get rich education complex. But like Tom said, a good thing to do is read his book, Tax Free Wealth first. That way you'll be able to ask the right questions so you can get the right answers from the right professional that you can be messed up with. Tom, do you have any last thoughts? Here is we're still relatively new in a year here when it comes to taxation, and one taking their plans forward through the year. Let's remember that we have an election coming up this year.   Keith Weinhold (00:34:54) - And one of the biggest issues in this election is going to be taxation. There's certain politicians that would like to take the 2017 tax reductions and extend them. There are others that would like to eliminate them and actually raise taxes. A couple of years ago, we had a proposal called Build Back Better. Great. Started as a $6 trillion proposal and ended up being $2 trillion and change the name to, quote unquote, the Inflation Reduction Act, or as I like to call it, the Inflation Enhancement Act. But that's going to be back. So you may love one party. You may hate the other party. Just know that when you go to vote, think about you are voting for a tax increase or a tax decrease depending on who you vote for. Look at their policies. Look at what they propose. Look at what they've been talking about. Don't believe for a second that they're gonna all of a sudden say, well, we're not going to raise taxes, when in fact they're looking at you and they're going, is that my money in your pocket? It is a presidential election year.   Keith Weinhold (00:35:59) - The good news is you now have a way for your voice to be heard this year in taxes are part of that, Tom. We're right. It's a great having you back on the show. Thanks, Keith. Sometimes I hear people that pay property tax but yet don't have any children themselves. They say that, well, since property tax often funds schools that they're opposed to paying it. Well, let's look at it this way. I'm a person that doesn't have any kids yet. And even if I never do have kids, well, when I was a kid myself, I attended public school. So therefore I was the beneficiary of adults paying property tax to fund the school that I went to. So therefore, when you think of it in those terms, it's more palatable for a, I suppose, non father like me to pay it forward, pass it along and pay school tax for others. So though there may be other objections to paying property taxes, not having children, that's often not such a valid reason when you think about it that way.   Keith Weinhold (00:37:07) - Now, I think that the Liberty First Society's Christian Hall, she has an interesting take on property tax. Here's what she said. And I quote, property tax should end when you complete the sale or purchase, just like you do when you buy groceries or a bicycle. It's theft of ownership to keep paying property taxes, especially when government has the authority to take your property. When you don't pay your taxes for three years. That's not property tax, that's rent, and you're a tenant in your own home. Property tax makes government the owner of your property, not you. End quote. And again, that is from the Liberty First Society's Chris Ian Hall, thought provoking, if nothing else. Now, when it comes to finding the right professional to get real estate investors, all of our generous and legitimate deductions that we enjoy, I mean, it is one of the five ways real estate pays. After all, you do need to find the right pro so that they can find all the deductions for you.   Keith Weinhold (00:38:13) - And this is just the time of year to get that right. For more than ten years now, I have had the world's number one tax firm do my wealth strategy, my tax strategy and my tax preparation. I even use my bookkeeper through them. They understand what real estate investors need. They make sure that I don't miss out on optimizing benefits and deductions for mortgage interest and tax depreciation and property tax and cost segregation, which accelerates my deductions. And they make sure I get infinite capital gains tax deferrals and bonus depreciation and so much more. All the good things that real estate investors get when you work with an investor centric tax professional. In this way, you can also legally write off many of your expenses for property management and maintenance and utilities and even your travel. So you can do that by connecting with Tom's team by visiting get rich education.com/tax. That is this week's actionable resource. Until next week I'm your host Keith White. Hold don't quit your day dream.   Speaker 6 (00:39:25) - Nothing on this show should be considered specific, personal or professional advice.   Speaker 6 (00:39:29) - 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.   Speaker 7 (00:39:53) - The preceding program was brought to you by your home for wealth building. Get rich education.com.  

Today's guest, Shawn Finnegan, failed in California real estate investing pre-2008. But in 2019 he listened to GRE, came back, and succeeded. He now benefits from $2,000 in monthly residual cash flow from 11 Memphis income properties. He wants a fourplex next. Shawn and his family moved from Los Angeles, CA to Costa Rica where he now lives financially-free. He's a former abdominal model, appearing on magazine covers. He invented “The Anchor Gym” home gym system. By listening to GRE, he had the confidence to invest with our “Financially-Free Beats Debt-Free” mantra. “Don't Quit Your Daydream” resonates with him most.  Resources mentioned: Show Notes: www.GetRichEducation.com/464 The Anchor Gym: www.TheAnchorGym.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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold

More homeless people have been created due to the housing supply crisis. Homelessness is up 11% since last year, per the WSJ. The opioid crisis, consumer inflation, and NIMBYism have contributed too. California has the most homelessness on both a total and per capita basis. States with higher housing costs have more homeless people. I share our poll results: “Should we pay to house the homeless?” Are you a NIMBY? We find out today. We can increase housing supply with rezoning, construction training, and lower mortgage rates. The cycle of investor emotions led to wild investing manias. It was tulip bulbs in the 1600s Netherlands and Beanie Babies in the 1990s United States.  I discuss exactly why “buy low, sell high” is more difficult than it sounds. Timestamps: The correlation between homelessness and the housing market [00:00:00] Discusses the relationship between the housing market and the increasing problem of homelessness in America. Investing manias and lessons from history [00:00:00] Explores the phenomenon of investing manias and the lessons that can be learned from historical examples. The tight inventory market conditions and potential solutions [00:04:56] Lawrence Yun, Chief Economist of the National Association of Realtors, discusses the tight housing market conditions and suggests tax incentives to increase housing supply. Timestamp 1 [00:10:32] Affordability of moving to different cities and the proposal of a tax incentive for real estate investors. Timestamp 2 [00:11:49] Discussion on the housing supply crisis, mortgage rates, and the homeless population in the US. Timestamp 3 [00:14:14] Increase in homelessness in America, reasons behind it, and the correlation between housing prices and homelessness rates. The impact of high density housing on quality of life and home value [00:21:12] Discussion on the potential negative effects of building high density housing near single family homes, including reduced home value, increased traffic and noise, and loss of nearby open space. Alternative solutions to increase housing supply and reduce homelessness [00:23:30] Exploration of alternative measures to address homelessness, such as trade training for the homeless and relaxing excessive safety requirements in home building. Giving real change to the homeless [00:25:50] Encouragement to give directly to homeless shelters or soup kitchens instead of giving small change to individuals on the street, with the concept of "give real change not small change" explained. Note: The timestamps provided are approximate and may vary slightly depending on the podcast episode. The Origins of Tulip Mania [00:31:37] Tulips were introduced to Europe in the 1500s and became a luxury item for the affluent. The cultivation of tulips locally in the Netherlands led to a flourishing business sector. The Tulip Bubble [00:32:55] By 1634, tulip mania had swept through the Netherlands, with the demand for tulip bulbs exceeding supply. Prices reached exorbitant levels, and futures contracts were being bought and sold. Lessons from Tulip Mania [00:37:53] Tulip mania serves as a model for financial bubbles, with similar cycles observed in other speculative assets like beanie babies, baseball cards, NFTs, and stocks. It highlights the dangers of excess, greed, and speculation without tangible value. The cycle of investor emotions [00:44:32] Explanation of the different stages of investor emotions, from optimism to panic, in relation to stock market investing. The peak of the stock market [00:46:43] Discussion on the peak of the stock market being the point of maximum financial risk and the difficulty of selling at the right time. Real estate as a stable investment [00:51:56] Comparison of real estate investment to speculative bubbles, highlighting the stability and income stream provided by real estate. Explains how the integration of HOA (Homeowners Association) helps maintain uniformity and cleanliness in the rental property investing world. Details about the upcoming real estate event [00:38:31] Promotion of a live event where listeners can learn about new construction fourplexes and have their questions answered in real time. Resources mentioned: Show Notes: www.GetRichEducation.com/463 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Welcome to Get Rich Education. I'm your host, Keith Weinhold. America's homeless problem has become FRIGHTENING. I describe how that correlates… with the housing market.  Then, investing MANIAS. What drives people to spend more for one tulip flower bulb than they would for an entire luxury home?    And lessons you can learn that'll benefit you the rest of your life from other manias throughout history. All today, on Get Rich Education.   ___________   Welcome to GRE! From Seaford, DE to Carmel-by-the-Sea, CA and across 188 nations worldwide, you're listening to one of America's longest-running and most listened to shows on real estate investing. Along with plenty of ongoing hot takes on wealth mindset and the real estate economy.    I'm your host, Keith Weinhold.    See, the crash in the SUPPLY of available American homes is bad and it isn't just creating more upward prices, it's a contributor to homelessness.    Let's talk about some of the drivers of homelessness, understand the problem a little more, how many homeless people ARE there in America, and then… what can we do about it?   As you'll soon see, one prominent real estate industry influencer actually suggests that you actually SELL your rental single family homes in order to help serve the homeless. More on that shortly.    Also, I have the results from a GRE Instagram Poll. The poll question is: “Should we pay to HOUSE the homeless?”    And the answers that you - the GRE listeners gave… actually surprised me. I'll give you those super-interesting poll results later, because I have more to explain there.   But first, what IS a homeless person? Let's define it. I think most anyone knows that since it's a person without a home, it's thought of as living on the street.   Really, then, that person might not be homeless but “houseless” in a literal sense. Even if they live in a tent under a bridge, that is then, their home. Though it might be INADEQUATE housing.   More accurately, the unsheltered or undersheltered population could be more apropos.     Then there's vagrancy. A vagrant is defined as a person without a settled home OR regular work… who wanders from place to place and lives by begging.   So vagrants are PART of the homeless population then. This all helps DEFINE what we're discussing.   Now, the lack of available American housing supply - especially the affordable segment - is OBVIOUSLY a big contributor to homelessness.   For example, anymore, how many builders even construct a new-build entry-level home for $200 or 250K? Practically nobody… anywhere.   And just how bad is the supply problem now? Well, the NAR has been tracking housing supply since 1982 and it just hit its lowest level ever this summer - EVER - and that's in 40+ years of tracking.    That's one reason why just last week, it was announced that Warren Buffett is making a big bet on housing by investing in homebuilders.   Now to keep consistent with the same stats I've been reporting to you for you, to update that, again 1-and-a-half million available homes is the baseline supply. That's the long-term “normal” per the FRED Active listing count.   And through last month, it's still under 650,000. That is STILL a housing SUPPLY crash of 57% from its peak of 1 ½ million.   I want you & I to listen to this upcoming piece together. This recent interview with NAR Chief Economist Lawrence Yun is from the 8th of this month.   Yes, HE is the one that basically wants you to sell your SF rental properties. And he makes his case for an inducement to get you to do this. (Ha!)   He's not proposing anything COMPLETELY ludicrous. It's REALLY interesting. Listen closely for that.   This about 5 minutes in length and there's a lot of material here within this clip - a nutrient dense piece, so I've got SO much to say about this when I come back to comment.    [Yun clip]    Yeah, the NAR Chief Economist there talking about how, much like I have for years, great opportunity is in the Midwest and Southeastern parts of the US.    With this greater ability for people to work from anywhere, when people move in from the pricy coasts, it's sooo affordable to them.   Moving from Manhattan to Cincinnati feels incredibly affordable.  Moving from San Francisco to St. Louis feels like you've upgraded from serfdom to a kingdom. Moving from Boston to Jacksonville feels like a total life makeover.   That's why, here at GRE, we're focused on properties in those INbound destinations.    Before I continue, especially for those outside the US, I know that it seems a little odd that Ohio and Indiana are in what we call the Midwest when they're actually in the northeastern quadrant of the nation.   But the fact that they ARE midwestern states is rooted in history and in cultural tradition.   So, getting back some new angles on the housing supply crisis.   Lawrence Yun proposed that a tax incentive be introduced to unleash the inventory of SF rentals from individual REIs.    And says that there are over 20 million single-family housing units that are rented out.    If we reduced or canceled the capital gains tax & just got 1% of that inventory on the market, he states that that would help.   Well, yeah, but even that then would only put about 200,000 units of the market - and they'd get snatched up so fast.   Now, if mortgage rates come down to say, 5%, it would unleash both housing demand AND supply.    Both - like Lawrence Yun says. So it's not apparent that that would help this shortage, if both demand and supply go up.   In a nation of about one-third of a BILLION people now - that's how I like to express it this year - America now has one-third of a billion people… also known as 333 million - how many do you think are classified as homeless?   As you think about that - as you think about how many of America's 333 million Americans are homeless, this homeless population figure that I'm about to share with you is from HUD and it's through last year, so it's their latest year-end figure.    And I'll tell ya, it's hard to believe this number. The Department of Housing and Urban Development states that about 582,000 Americans are experiencing homelessness.   Now, how HUD does this is that their number is a snapshot of the homeless population as of a single night at the end of January each year.    The total number of people who experience homelessness for SOME PERIOD each year will be higher than that.   I just did the math and then that means that just 1 in every 572 Americans are homeless. C'mon. Do you believe that? Only one in every 572 Americans are homeless?   I might believe that it's something like more than 1 in 200. What are your thoughts?   Even HUD would probably concede that there are shortcomings in that stat and that it's only a starting point.   And over the last decade, according to HUD, the homeless population is little changed… apparently until just this past year.   Homelessness is surging in America. The number of people experiencing homelessness in the US has increased 11% so far this year over 2022. That would be the biggest jump by far in equivalent government records beginning in 2007.   Now this 11% homeless jump is according to a WSJ analysis of hundreds of smaller & local agencies.    Most  agencies say the alarming rise is because of the lack of affordable housing and rental units, and the ongoing opioid crisis.   Inflation is part of that affordable housing problem. Inflation widens the disparity between the haves and have-nots.   To cut some slack to census-type of surveying, homelessness can be hard to measure. Some live on skid row, some live in the woods, some homeless people live in their cars.    Some aren't interested in being counted. Others are essentially invisible. I mean, if someone's between jobs and needs to couch surf at their aunt and uncle's place for three months, are they homeless or not? So, to be sure, there's a lot of leeway in those numbers.   One in 572 as homeless - that should just be a minimum - a starting point in my opinion.   Now, homelessness broken down by STATE is really interesting.   California at 171,000, has the most of any state, more than double of next-most New York, and then Florida is third.   But let's break that down by rate - on a per capita basis. So… think of this as the highest CONCENTRATION of homeless:   Washington DC has 65 homeless per 10,000 people. That's not really a state though, so…   #1 on a per capita basis is STILL California, with 44 per 10,000. So California leads in the nation in homeless on both bases then - both absolute and relative.   The second highest rate is Vermont.  Third Oregon Fourth Hawaii Fifth is New York And then numbers 6 through 10 on the most homeless per capita are Washington, Maine, Alaska, Nevada, and Delaware.   Now, strictly anecdotally. You've probably seen just what I've seen in the last year-plus - more visible homeless people in your city and other cities.   The state with the FEWEST homeless of all 50 states is Mississippi - and see, housing is quite affordable there. MS is one of the most affordable states for housing.    There is at least SOME correlation between your cost of housing and homelessness.   Recently on our Instagram page, and the handle there is easy to remember - it's @getricheducation - if you want to participate in future polls, we ran a poll on homelessness.   Here is the poll question that we ran - and I'd like you to think about your answer to this too.   “Should we pay to house the homeless?”    That's the question.    And in polling, the way that the question is phrased, of course, can skew your answer.    See, if instead, we phrased it as, “Should the government house the homeless?” you might have more ‘yes' answers - even though it's the same question - because you FUND the government.    But the question as we phrased it: “Should we pay to house the homeless?” - it also showed a photo of vagrants on a street curb under the question.   Here we the results, which surprised me, to:  Should we pay to house the homeless?   Those answering “Yes” were just 6% The no's were 45% But we also had a third option: “It's complicated”. 48% answered with that option.   So again, just 6% of you said we should pay to house the homeless and 45% said “no”. “48% said it's complicated”.   In a way, that makes sense to me since we have a largely entrepreneurial, self-made type of audience. I thought that might have happened.   But what surprised me is in how emphatic it was. It was a landslide. 7 to 8 TIMES as many of you said we should not pay for the homeless as those that said we should.   Well, the reason that I added - and I'm the one that ran the poll myself - they're quick to do. I added the paying to house the homeless “It's complicated” option because it IS complicated… that WAS the most popular answer.   I mean, why should you go to work and pay to house a stranger that has no income because he or she doesn't want to work?   But what if they're disabled and they can kinda work but not really work… or a zillion other complications.    Substance abuse is obviously a big problem that keeps homeless people homeless… and there's a substantial thought paradigm that says, if they're an abuser, then why would I pay for THEIR housing?   Substance abuse is just one reason that there is a population that's VOLUNTARILY homeless. They don't want to have to comply with a group home's ban on substances.    I wanted to address the homeless problem somewhat today, because here we are on Episode 463 of a real estate show and this is the most that we've even discussed it.   I think the perspective it gives you is that it helps you be grateful for what you've got.    But it's abundance mentality here. You can be grateful for what you have and at the same time, grow your means.   What else would help with more housing supply which would also move us toward mitigating the homeless problem?   Well, we've already discussed a number of them so I'll only go in depth with some fresh angles here.   Obviously, more homebuilding. We've done episodes on how 3D printed homes and shipping container homes are not quick, easy answers. Tiny homes might be but then you could get into a zoning density problem again.   Just last week, my assistant brought me this Marketwatch article that reported that the average American home size is shrinking just a little & that often times, new-build houses tend to be a little closer together.   That's what gets us into relaxing zoning requirements. But you know something, OK, this is going to be interesting.    This plays into NIMBYism. Not In My Backyard: communities saying that they don't want high-density housing built next to them.    Now, I think that there are a lot of critics of NIMBYism. But the criticism comes from people that live far out of that area and aren't affected.   Let me just play a fun little experiment with you here. Let me paint a picture of a fictitious life for you and just… place yourself there.   Say that you live in a nice single-family home, with a quarter acre lot. It's not a sprawling estate but you've got a good measure of privacy that way.   You're in a SFH, quarter-acre lot and two car garage. That is classic suburbia.   And… just a hundred yards away from your home there's a big, wide-open field where you walk your dog and use as a little makeshift golf driving range or whatever. Nice open space nearby.   Say you've got a fairly idyllic life here. It's always been this way since you bought the home years ago.   Suddenly, in your neighborhood of all SFHs, you learn that they want to build a bunch of fourplexes in the nearby lot where you used to throw tennis balls to your dog.   What can that do to your quality of life & your home's value, now that a bunch of new fourplexes and eightplexes were built nearby?   It reduces your home's value because there are less valuable, high density properties nearby.   It also increases the amount of traffic & even noise in your neighborhood. Now you can't use that nearby park anymore - it's been all-built up with these higher-density apartments.   So, let me go back and ask - point blank - did you really want all those new high-density developments near your home?   If that made you uncomfortable, that's NIMBYism. So it's quite natural to evoke that feeling type. You're just a human being.   How else can we increase housing supply to help reduce homelessness?   NOT with rent control. Over time, capping the amount of rent that a LL can charge gives property owners no incentive to improve their property and neighborhoods end up dilapidated.   We need more training for tradesman and laborers. How about training the homeless for that? But then someone's got to pay for that training.   Another measure that's become ridiculous is that we've gotta relax these excessive safety requirements in homebuilding. Now, some safety is good.   But when every single home - entry-level and all needs to have fire-rated shingles and fired-rated doors and GFCI outlets and smoke detectors in every room and carbon monoxide detectors all over the place, sheesh! Well, that raises the cost of housing for everyone.   In some earthquake-prone areas, you've got to have seismic restraining straps on your water heater or you can't even sell your home. Do you know how big of an earthquake it would take to damage your water heater like that?   And an excessive safety PROPONENT might say, yeah, but did you hear about that one family that died ten years ago that would have lived if they had carbon monoxide detectors?   Well, the counterargument to that is, yeah, but what about all the homeless people that were exposed to the elements and died in the cold because they couldn't AFFORD the more basic housing, the prices of which have escalated for all this excessive safety stuff.   Are you saying a middle class person's life is worth more than a poor, homeless person's life? That's the counterargument.    Again, some safety is good. But we've gone overboard in too many places - in housing & beyond.   Rising housing costs keep people homeless. A few weeks ago, I did that episode about escalating insurance costs.   I now own some properties that have extremely low mortgage rates and the insurance has gone up to the point where I pay more in monthly escrow expenses than I do principal & interest.    But, hey. I'm not homeless, and if you're listening to this, neither are you.   So when it comes to helping the homeless in the short-term, that campaign called, “Give real change, not small change.” - that really resonates with me.   Don't give 5 bucks to a vagrant on the corner. That just keeps them showing up at that corner, plus they're going to spend your 5 bucks on a cheap bottle of Monarch vodka.   Instead, if you're going to give, give to a homeless shelter or soup kitchen.    That's what's meant by “Give real change, not small change.” And that's something actionable.   Coming up next, investing MANIAS. How wild it gets - paying more for a tulip flower than a SFH, shooting and killing someone over a Beanie Baby toy… and then I'm going to wrap it all up with what all this has to do with the cycle of your investor emotions.   Around here, we don't run ads for the Swiffer. This week's sponsors that support the show are people that I've personally done real estate business with myself and have benefited from.    Ridge Lending Group specializes in INVESTMENT property loans in nearly all 50 states. Start your prequalification at: RidgeLendingGroup.com    Then, for super-passive real estate returns, check out Freedom Family Investments. Right now, what you can do, is just text “FAMILY” to 66866.   I'm Keith Weinhold. You're listening to Get Rich Education. ___________ Welcome back to the GRE Podcast. I'm your host and my name is Keith Weinhold.    If you've got a friend or family member that you think would benefit from the knowledge drops here on the show, you can simply tell them to grab the free Get Rich Education mobile app.   That's a convenient option for listening every week for both iOS and Android.   Today's topics of homelessness and investing manias could very well bring a new audience here, so…    A little more about my backstory. I'm from PA but got my real estate comeuppance in Anchorage, Alaska of all places & grew out nationally & internationally from there. I had humble beginnings and wasn't born anywhere near wealthy. I had to figure out how to build it myself.   But see, if I were born wealthy, I wouldn't have learned how to build it, and then I wouldn't be of much help to you. Likewise, if you're building it yourself, you'll be able to help others too.   BTW, I was born in the same PA town as Taylor Swift.    Though she & I don't have much ELSE in common, I guess that she & I are both best-known for using a microphone.   Though I think that I'm about as likely to start using this microphone to sing into your ears like Taylor Swift does… as Taylor is to launch a real estate investing show.   For hundreds of years, the tulip has been one of the most-loved flowers in the Netherlands. It's an enduring icon - as synonymous with the country as clogs, windmills, bicycles, and cheese. The tulip has a long and storied history - including the infamous shortage in the 1600s known as “tulip mania”. If you're someone that has even a fleeting interest in investing, you should at least know what this is.   Tulips first appeared in Europe in the 1500s, arriving from the spice trading routes… and that lent this sense of exoticism to these imported flowers that looked like no other flower native to the continent. It's no surprise, then, that tulips became a luxury item destined for the gardens of the affluent.  According to The Library of Economics and Liberty, “it was deemed a proof of bad taste in any man of fortune to be without a collection of [tulips].” Hmmm. Well, following the affluent, the merchant MIDDLE classes of Dutch society sought to emulate their wealthier neighbors and also demanded tulips. So to start out with, it was purchased as a status symbol for the sole reason that it was expensive. But at the same time, tulips were known to be notoriously fragile, and would die without careful cultivation. In the early 1600s, professional cultivators of tulips began to refine techniques to grow and produce the flowers locally in the Netherlands. They established a flourishing business sector that persists to this day. By 1634, tulipmania swept through the Netherlands. The Library of Economics and Liberty writes, “The rage among the Dutch to possess tulip bulbs was so great that the ORDINARY INDUSTRY of the country was neglected, and the population, even to its lowest dregs, embarked in the tulip trade. Now, everyone's in - rich to poor. It's a little hard to say for sure how much people paid for tulips.  But Scottish journalist Charles Mackay, wrote an extremely popular 1841 book - you've probably heard of this book - it's called the Memoirs of Extraordinary Popular Delusions and the Madness of Crowds… It does give us some points of reference such that the best of tulips cost upwards of $1 million in today's money (but a lot of bulbs traded in the $50,000–$150,000 range).  By 1636, the demand for the tulip trade was so large that regular markets for their sale - like a little Dow Jones Industrial Average - got established on the Stock Exchange of Amsterdam, in Rotterdam, Haarlem, and other towns. It was at that time that PROFESSIONAL TRADERS got in on the action - that's all that some people do now - is trade tulips… and everybody appeared to be making money simply by possessing some of these rare bulbs.  Dutch speculators at the time spent incredible amounts of money on bulbs that only produced flowers for a Week—many companies were formed with the SOLE PURPOSE of trading tulips.  To everyone, at the time, it seemed that the price could only go up forever. Pretty soon, demand for tulips EXCEEDED THE AVAILABLE SUPPLY of tulips by so much that people were into buying futures contracts, basically saying, I'll pay you this much money TODAY for a tulip that you provide to me in 3 years. By the last 1630s, these futures contracts were like a crack that appeared in the price runup. Demand began to wane when people were just buying a token for a future tulip that hadn't even started growing yet.  People felt like they weren't buying anything tangible anymore. That's one factor that helped create an oversupply of tulips in the market and started depressing the prices. Supply caught up with - and exceeded - demand. A large part of this rapid decline was driven by the fact that people had purchased bulbs on credit, hoping to repay their loans when they sold their bulbs for a profit. But once prices started to drop, holders were forced to sell their bulbs at any price and to declare bankruptcy in the process. So people had begun buying tulips with leverage, using margined derivatives contracts to buy more than they could afford. But as quickly as the run-up began, confidence was dashed. By the end of 1637 is when prices began to fall and never recovered.   And the bubble burst. Buyers announced that they could not pay the high price previously agreed upon for bulbs, and that made the market fall apart.  While it wasn't actually a devastating occurrence for the entire nation's economy, it did undermine social expectations. The event destroyed relationships built on trust and people's willingness and ability to pay. It's been said that “the wealthiest merchants to the poorest chimney sweeps jumped into the tulip fray, buying bulbs at high prices and selling them for even more.” Well, this is what can happen - today it happens with financialization and nothing real backing up purchases. Tulipmania is a model for the general cycle of a financial bubble. That's what happened with Dutch tulips. Now, here in more recent times, similar cycles have been observed in the price of Beanie Babies, baseball cards - I got caught up in the baseball cards as a kid, owning more than 100,000 baseball cards at one time, also non-fungible tokens (NFTs), and shipping stocks.       The example of tulipmania is now used as a parable for other speculative assets, such as cryptocurrencies today or dotcom stocks from around the year 2000. So, when you hear someone likening an investment to a Dutch tulip bulb, now you'll know what they're talking about. It's a symbol of excess, greed, and FOMO. But there has been a good bit of more modern scholarship that tells you that tulip mania did indeed occur in the 1600s Netherlands. But that the tale has been exaggerated and it's something that the upper classes of society were mostly involved in. Now, that's the Dutch tulip bubble. But for a more modern-day parable about an investing mania, there's a new movie about the rise & fall of BEANIE BABIES that's on Apple TV+. These were little stuffed, plush toy animals that became more popular among adults than children. The rise and fall of Beanie Babies—toys that people mistakenly thought would make them rich. The movie is called “The Beanie Bubble”.  It's a MOSTLY TRUE account of the lovable toys' boom and bust in the '90s -  comparable to the meme stock frenzies that took place during the Covid-19 pandemic. These $5 pellet-stuffed plush toys had astronomical appreciation estimates: Stripes the Tiger, released in 1996, was predicted by collectors to surge from $5 to $1,000 by 2008.  Forecasts like these were so enticing that one dad invested his kids' college funds in Beanie Babies, thinking he'd resell them later for a hefty profit. At the height of the frenzy, people were ruining relationships and committing felonies to get their hands on some of these sacks of fuzz. Border officials confiscated more than 8,000 smuggled Beanie Babies at a US–Canada border crossing in 1998. A West Virginia man shot and killed a former coworker in 1999 after an argument partly about $150 worth of Beanie Babies. That same year, a divorcing couple couldn't agree on how to split up their collection, so the judge made them divvy up the toys in person, right on the courtroom floor. How did that all happen? Barely anyone cared about Beanie Babies when a company called Ty Inc. launched them in 1994. Stores only got lines out the door once the toy's creator, now-billionaire Ty Warner, began pulling strings to juice demand. Here's what Warner did. OK, so here's how you induce people into a speculative bubble. He refused to stock Beanie Babies at Toys R Us and Walmart. Instead he created an illusion of rarity by only selling them at small toy stores and independent shops. Even if you did find a retailer, every store's supply of Beanie Babies was limited to 36 of each animal, so inventory restocks drew a crowd. This, combined with Warner's decision to start “retiring” certain animals in 1995, created artificial scarcity and a mass panic to stock up on Beanie Babies.  Soon, an aggressive resale market was born, replete with magazines and blogs and even trade shows for these Beanie Babies. One woman's guide to the secondary Beanie Babies market got so popular that she was selling 650,000 copies per month and, on many days, she did two or three radio interviews before her kids woke up for school. Ty Inc. later gave her an award for boosting sales. At Peak Beanie mania, Ty Inc. and legions of speculators actually made hordes of money: The stuffed animals accounted for 6% of eBay's sitewide sales in 1997 and 10% in 1998. Beanies averaged a resale value of $30—six times their retail price—but rare ones, like the Princess Diana bear, went for hundreds or thousands of dollars (and now you can find one online for $15 bucks). Ty Inc. hit $1.4 billion in sales in 1998, which is what Mattel grossed in Barbie dolls in 1995. At the end of the year, Ty Warner gave all ~250 employees holiday bonuses equal to their annual salaries. But most regular people didn't sell their Beanie Babies at their peak price. And unfortunately for them, the hype subsided. Anticipating a drop in interest as more kids reached for Pokémon and Furbies, Ty Inc. announced it would stop making Beanie Babies at the end of 1999, and that poked a hole in collectors' this-will-never-not-be-popular mentality and that sent demand plummeting. There were no underlying fundamentals to Beanie Babies' value. That's all that I've got on that speculative craze.   So let's review how this happened with both speculative crazes - Dutch tulips and Beanie Babies: Investors lose track of rational expectations. Psychological biases lead to a massive upswing in the price of an asset or a sector. A positive-feedback cycle keeps inflating prices. And soon, investors realize that they are holding an irrationally-priced asset. Prices collapse due to a massive sell-off, and an overwhelming majority go bankrupt. Now, much stock market investing is based off of buy low and sell high mentality. And stock investors can get caught up in similar crazes.    But because many stocks are tied to productive companies, the stock investor deals with smaller bubbles. A lot of times, the stock price can double, triple, or even 10X even though that company is not even profitable. Buy low & sell high. Well, that sounds easy. But why is this harder to do than it sounds? It's called the cycle of investor emotions.   It starts here with… optimism. Because you HEAR about 10% stock returns or people making money with Dutch tulips or Beanie babies.    Let's say that you aren't fully invested in the stock market. But some friends are, and they're achieving small gains.   Then comes excitement. The market is now up some more. Hey, what's in motion tends to stay in motion.   More friends are telling you how much money they're "making".    You're soon experiencing a full-blown case of FOMO—Fear Of Missing Out.   The next stage is the Thrill you feel. So you jump into the stock market fully, rationalizing with something like, "Hey, I'm a momentum investor". Sounds pretty good, I guess.   Now that you're in, it actually feels fantastic to you for a short time. You figure that some days, you're making more from stocks than your job. Winning activates dopamine.    Dopamine is a brain chemical that's known as the “feel-good” hormone. It gives you a sense of pleasure. It also gives you the motivation to DO SOMETHING when you're feeling the pleasure.    So then, you add MORE shares… at an elevated price until you are FULLY invested. Now everyone is "making money", even your Uber driver.   The next stage is Euphoria - The peak! As you can see, this is the Point of Maximum Financial Risk.    OK, now, remember the simplicity of “buy low, sell high”?   Well then, savvy stock investors should now be SELLING here in my example - at the HEIGHT.   Now be “selling”? Leaving the party at its crescendo? Stopping the dopamine flow? Yes, exactly… and THAT'S why it's so difficult.    What happens after the stock market peak? Overbought, with bloated price-to-earnings ratios, the market soon drops 10% from its recent high.    That's what's known as a correction - a drop of 10% or more. Now you feel a little ANXIETY. Your dopamine flow is stifled.   Next, you tell yourself, "I shouldn't be worried because I'm a long-term investor." It's down 15%. You're experiencing DENIAL & FEAR.   Now you're checking the Robinhood app almost hourly to see if it will recover.   Next, comes Desperation & Panic - Stocks are down 20%, that's the definition of a bear market. You're devoting more mindshare to this each day than what's healthy.   Then there's Capitulation - Down 30%, you finally surrender to a FEAR of FURTHER LOSS. You're getting so sick of months of losing. You finally do it and cash out your stocks into a safe money market fund. Now you're out.   And you rationalize and justify doing this because you tell yourself, "You know, at least when I wake up tomorrow, I'll know that I haven't lost money AGAIN. And THAT gives me certainty.”    The next stage in the Cycle of Investor Emotions is Despondency - You realize that what you've done is the polar opposite of successful investing. It's complete. You've now bought high… and then sold low.    Next, stocks completely bottom out. But this is actually the Point of Maximum Financial Opportunity. Instead, you should be buying.   But you can't. Because you're experiencing the next investor stage - Depression. You're so full of contempt for the situation that the idea of actually buying at bargain-basement levels again is simply inconceivable. You've been burnt badly.   Then, there's Hope & Relief - The market has begun ticking up after the crash. It soon should be clear that share prices are FAIRLY VALUED again.    But you don't buy the recovery story. You wait until enough price growth occurs that the confidence and Optimism stage is felt again before you'll even consider getting back in and buying.   And the entire pattern repeats.   That's the “cycle of investor emotions”. There's an average of 3-and-a-half years between each stock bear market, BTW.   Of course, we've been kind to call this all “investing”. It's more like speculating.   But here's the real problem—most investors THINK they're better than average stock pickers, so they keep playing this game. This effect has a name. It's called illusory superiority.   It's like how at least 70% of people think they're better than average drivers, despite the statistical impossibility.   Even professional money managers fall prey to this! Fewer than 10% of active U.S. stock funds manage to beat THEIR benchmarks.   The renowned British economist and value investor Benjamin Graham once said: "The investor's chief problem—even his worst enemy—is likely to be HIMSELF." Well, as real estate investors, we largely SIDESTEP the cycle of investor emotions for two main reasons.   Returns are more stable.   Real estate, we sidestep this emotional roller coaster. Not only do we have stable prices, but appreciation is one of just 5 ways that you're simultaneously paid.   RE also has monthly income. Dutch tulips or Beanie Babies don't pay you a durable monthly income stream. They don't provide an income stream at all.   And finally, RE is a REAL asset that fulfills a REAL human need.   I hope that you enjoyed this journey through speculative bubbles today and how they play into human psychology and investor emotions.   Go ahead and tell a friend about Get Rich Education.   If you've got a friend or family member that you think would benefit from the knowledge drops here on the show, you can simply tell them to grab the free Get Rich Education mobile app.   That's a convenient option for listening every week for both iOS and Android.   My name's Keith Weinhold and I'll be back with you right here… next week. Don't Quit Your Daydream!

Join our live event for new-build Utah fourplexes on Wednesday. Register at: GREwebinars.com Home prices fell three times since 1975. We explore the reasons why. The homeownership rate is 66% today. (The long-term average is 65%.) I expect the homeownership rate to fall due to low affordability, which will increase renter households. If you have dollars in a savings account that pays 5% interest, I describe why you're losing prosperit. Our Investment Coach, Aundrea & I discuss the state of the real estate market. Then we discuss our upcoming live event for new-build Utah fourplexes. They produce cash flow, have great tenant amenities and come with built-in equity. This area is extremely fast-growing: Register here. Timestamps: National Home Prices Fall and Causes [00:00:01] Discussion on the historical trends of national home prices, the causes of price falls, and the impact of the 2008 global financial crisis. Housing Affordability Crisis [00:00:50] Exploration of the current state of housing affordability and the impact of the pandemic on home prices. Upcoming Real Estate Event [00:01:44] Announcement of an informative live real estate event that listeners are invited to join. The current state of housing affordability [00:11:45] Discussion on the challenges faced by first-time homebuyers due to higher prices, mortgage rates, and lending requirements. Homeownership rate trends [00:13:11] Analysis of the historical homeownership rates, including the impact of aging population and low affordability on the rate. Future outlook for homeownership rate [00:19:40] Prediction of a decline in the homeownership rate below the current 66% due to poor affordability and increasing number of renters. Rental Market Overview [00:24:10] Discussion on the current state of the rental market, including cash flowing properties, stable prices, and limited inventory. Demand for Investment Opportunities [00:26:14] Exploration of the demand from investors who are looking to invest their existing equity and the regions they are interested in, such as the Southeast and Midwest. New Build Income Properties [00:28:14] Introduction of a provider offering new construction fourplexes in the Intermountain West, discussing the market growth, population demographics, and amenities of the properties. The opportunity for new build properties in a fast growth area [00:34:59] Discussion on the benefits of investing in new construction properties in a rapidly growing area with good cash flow. The role of HOA in maintaining property values [00:36:04] Explains how the integration of HOA (Homeowners Association) helps maintain uniformity and cleanliness in the rental property investing world. Details about the upcoming real estate event [00:38:31] Promotion of a live event where listeners can learn about new construction fourplexes and have their questions answered in real time. Resources mentioned: Show Notes: www.GetRichEducation.com/462 Join our Utah fourplexes live event: GREwebinars.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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Welcome to GRE! I'm your host, Keith Weinhold. Historically, just how often DO national home prices fall… and what causes it?    Then, learn more about how TODAY'S housing affordability is absolutely awful. Then, our informative live real estate event that you're invited to join. All today, on Get Rich Education. __________   Welcome to GRE! From Pennsylvania's MONongahela River to Mono Lake, CA and across 188 nations worldwide. I'm Keith Weinhold and you are listening to our one big weekly show. This is Get Rich Education.   "Real estate never goes down."    Yeah, a handful of people actually told me those five exact words in the mid-2000s decade. “Real estate never goes down.”   Of course, 2008's Global Financial Crisis (GFC) and Mortgage Meltdown proved them ALL wrong.   And ya know what, I've never heard one single person utter those words since!   Late last year, national home prices took just a small dip for a few months on a m-o-m basis. That's not something that often happens though.   So as minor as THAT was, that's the event that actually precipitated the creation of this segment of our episode.   There's a colorful chart that provides a… terrific visual of the month-over-month shifts in US home prices, per Case-Shiller, dating back to 1975. And if you're one of our “Don't Quit Your Daydream” letter subscribers, you got to see it last week.   Winston Churchill said, "The farther backward you can look, the farther FORward you can see."    I don't know that I've contributed anything quite that proverbial to the world on that exact subject yet.    I just say that when it comes to future expectations, I favor "history over hunches".   So, before we look at WHY home prices historically fall, first of all, why go back to 1975 when we're looking at a history of home prices. Why that slice of time, 1975 to present?   Well, that's almost 50 years. It's two generations, so it stops just short of your grandfather's generation which was back when the dollar was still pegged to gold.   Here's what we can we learn from almost 50 years of home price history on a relatively untethered dollar: Nominal home prices usually rise, but not always. This is NOT inflation-adjusted. That's the first takeaway. Of the 500 to 600 little rectangles, that's how many months there have been since 1975, they're nearly all blue, which means prices rose. Before we center on the red areas, which is when & where prices dipped… The next thing I can tell you is that it shows that home prices are remarkably stable. A SEASONAL fluctuation is quite apparent. Year after year, home price growth is weaker in winter and stronger in summer. But do you know how many times national home prices have dipped since 1975? Any idea? It is… three. Three periods of falling prices in the last… 48 years. Those periods were the erstwhile Global Financial Crisis period from 2007 to 2011, then that tiny dip that occurred in the last few months of last year.  That was due to a late pandemic slowdown. Before I tell you about the other time, that third time, that so few discuss, let me tell ya, the 2008 GFC went deep red. Most markets had losses of 20% or more. I WAS an active RE investor at that time. And that downturn was caused by irresponsible lending, rampant speculation, and an OVERsupply of housing. That's well documented. Look around today, and we don't have any of those conditions today. Today it's tough lending standards, no wild speculation, and oppositely, as you know, it's that STARK UNDERsupply of housing. But few people seem to know about an earlier attrition in prices. It was a mild early '90s downturn. It was really small, just a percent or two per year in a lot of places, but it persisted for more than 5 years. I think a lot of people DON'T KNOW about that small early ‘90s downturn, that's why before the Global Financial Crisis, they said what we all know to be false, “Real estate never goes down.” The start of the ‘90s. That's before my time - I mean, I was alive but not old enough to be investing, so I had to do some research about what caused prices to circle the drain just a little. And to boil it down, it occurred for two main reasons - it was from defaults created by high household debt and also, adjustable-rate mortgages kicking in, making those homeowners pay higher rates - and some couldn't pay it. So as we look back like Winston Churchill to get lessons from history, I like to look at today's landscape and see if we have any of those two early ‘90s conditions. High household debt? Well, rather, really this era's aberration is the opposite condition. Today it's households sitting on a lot of cash and equity. And then the second reason for the early ‘90s price dip - adjustable rate mortgages kicking in.  Well, that is affecting the commercial space, not the residential side, where homeowners have now been long accustomed to FIXED rate debt.  Now, before we look into the future of home prices - and I've got some good stats there… To summarize, the top takeaways from 48 years of looking at monthly HP growth are that: Prices typically rise, not always Prices are remarkably stable Prices rise more in the summer than the winter And that historically, let's distill it down to three - three chief culprits for falling prices are an OVERsupply of homes, irresponsible lending, and a distressed borrower Now, with housing, people tended to use the word “uncertainty” a lot - really, constantly, ever since the pandemic began in 2020.  Now, I think that we can finally say that the clouds have begun to clear. Though, of course, we never have 100% clairvoyance. Most everyone is confident that the majority of interest rate hikes are done, inflation has come down, mortgage rates are back at historic NORMS right now actually, and home prices are rising at historic NORMS again too.  You have all this money sloshing around the economy that is still fueling consumer wealth from the pandemic. All this money sloshing around AGAINST a low housing supply, and with more economic certainty.  All this really has a lot of people more bullish than I've seen in a couple years. Homebuilder confidence is really surging right now. And looking into the next year, more and more analysts are now forecast increasing national home prices.   Fannie Mae recently revised their forecast upward to 3.9% appreciation for THIS YEAR.   CoreLogic now expects prices 4.3% higher from June of this year to of next year. And Zillow expects 6.3% price appreciation over this same time period.   And, our core investor areas have just kept climbing and really didn't experience last year's slowdown at all.   I guess this isn't necessarily good news, right? The bad news might be that there's no price BREAK.   Higher RATES still didn't break the market.   Now, I've heard some analysts at real estate research firms speculate that if INTEREST RATES fall in the next year with all these other favorable conditions that 10% HPA is possible.   I'd say, that's speculative alright. It's so hard to predict future interest rates that I'm not willing to do it.   And like I've shared with you here, which is contrary to what people USED to believe, it's that:   Mortgage rates really don't have that much to do with home prices!   So when it comes to home prices over the next couple years, I think that the most commonsense expectation is slow price growth and stability.   Now, just wait until you see what's happening with the homeownership rate today. I want to share that with you shortly.   Before we get back to RE, let's Zoom out for a moment and look at the broader investing landscape while we're here at mid-quarter.   Bitcoin is getting less volatile than stocks. That's one trend lately. Another way to say that though, is that bitcoin prices are in a period of historic stagnation.   Gold has fallen from the $2,000 an ounce mark that it touched recently.   Oil prices have been on a multi-month tear, but you know, when you look at it on an inflation-adjusted basis, which so many people forget to do, oil at under $100 a barrel feels inexpensive.   Elsewhere in investing, some online savings accounts have hit the 5% yield mark.   That might sound good when you consider that inflation has backed off.    But as most agree that the CPI is understated, if you think that the true diminished purchasing power of the dollar is 5% and your savings account rate is 5%, aren't you at least treading water?   Well, first of all, just treading water means that you aren't going anywhere or growing.    But you're not even treading water. Because don't forget that your interest earnings on savings accounts get taxed.    So it's good to hold some liquidity - always. But you're likely underwater with a 5% savings account in this era.   Yes, on your interest earnings, you're taxed at your earned income tax rate, between 10 and 37%. Say that you're in the 32% tax bracket.    Well then, real inflation is 5% and your 5% savings account only yielded 3.4%.    On an inflation-adjusted basis, even if you happen to have a savings account with a yield that high, your inflation-adjusted return is negative 1.6%.   That's why, here at GRE, we typically invest in vehicles that target returns VASTLY exceeding both inflation and taxes.   As much as that might hurt, you know who today's real estate market is actually really bad for? Even worse for the saver that isn't even treading water.   It is downright AWFUL out there for those wannabe first-time homebuyers.   They are looking at this triple-headed monster of higher prices, higher mortgage rates, and stringent lending requirements. And then if they overcome ALL that, they've got to compete for that tight supply.   It's made affordability for people in THAT position really awful.    In a lot of markets, a starter home is $400K. With your 20% down payment plus closing costs, that's $100,000 out of pocket, right upfront, as well as your ongoing monthly payment… all for an asset that doesn't generate income when it's your HOME.   Well, that's an insurmountable hurdle for a lot of people.   This low affordability moves people out of the homebuyer class and adds them to the ranks of the RENTER class.    Well, there's our opportunity as landlords.   You aren't preying on them. You're risking your capital to provide good housing for them.    But curiously, the HOMEOWNERSHIP RATE is actually just a touch higher than usual right now, despite souring affordability.   So, let's take a look at this. And then I'll break down what it means to you as well as where we're headed.   Since 1965, the average homeownership since 65% and currently, it's 66%, running a little high.   BTW, homeownership peaked at 69% in 2004—that's back when you could outright lie about your income, job, and assets, and still get a mortgage. Many people did just that. NINJA loans.   When you hear the acronym, NINJA loans, what that stands for is no income, no job, or assets.   Well, you either rent your home or you own your home. It's one or the other.    So then, today's 66% homeownership rate means that everyone else, 34%, are renters.    When the homeownership rate drops, then you've got more renters.   The low point for homeownership was in 2016 at 63%.    It's grown since then, and you might wonder… how in the heck is homeownership above average today in the face of this low affordability? How is it 66%. Well, there's a few reasons for that and it's not always intuitive. America's population keeps AGING.  And that skews figures… because homeowners tend to BE older. Secondly, incumbents - those that already GOT their home have really low, affordable payments. They're not going to lose their home & become renters.  80% of borrowers have a mortgage rate under 5%. You're really happy to stay put when your mortgage rate begins with a “4” or less - and you can also keep making the payment.  It's a payment amount that does not rise with inflation. That introduces a lag effect in the stats. It'll be a little while until this low affordability gets reflected in a lower HO rate. There's a low FORECLOSURE rate, under 1%. Americans can afford their payments and they have the motivation to keep making them. Now, over on YouTube, I shared a great map with you, the Homeownership Rate by state and broke that down. Join us over there. On YouTube, we're called “Get Rich Education”, of course. I host THAT show and it's different from THIS show. What's the trend here? Well, HO is highest in low cost states like the Midwest and Southeast, and HO is lower in high cost states.  WV has the highest rate at 78%... because it's low cost.  NY has the lowest HO at 54%... because it's high cost. NYC drags down the number for upstate NY.   So where are we headed? In the future, I expect a NATIONAL DROP in the homeownership rate.   This is because few expect property prices or mortgage rates to fall significantly. Lending requirements should stay strict.    So it's the awful FTHB affordability that will continue to take homeownership lower.    See, FTHBers are also exactly the type of people that often have student loan debt repayments to make… if they ever have to begin repaying them.    That's also going to make it tougher for people to clear that affordability bar. They're going to keep being your renter.     And that's why I expect the homeownership rate to plummet below 66% where it is now, and then below the long-term average of 65% by 2025 or 2026. That's where we're likely headed if market forces prevail.   Depending on who our president is in 2025, government relief programs are just about the only thing that I can see getting in the way of a declining HO rate.   Household FORMATION is high right now… because you have sooo many Americans between ages 25 and 40.   So that question you've got to ask is - is that new HH going to be formed as a OO residence or as a rental?   Increasingly, it's gonna be a rental because of that continued poor affordability.   See, for a ton of people, if they didn't get their ultra-low rate mortgage the past couple years, then, well, it's too late.    That era is over and that's why their affordability ship has sailed. That ship has passed. It's gone.   And that's why more RENTERS are being made every single day.   So if you're a LL, this is expected to both increase your occupancy rate AND the amount of rent that you can charge.   Carefully-chosen rental property is really where today's opportunity is.   I've got more on that shortly, as I'm about to bring in one of our two Investment Coaches.   You know, you're telling us that you find it so helpful to have free one-on-one coaching with them, either Aundrea or nuh-RAYSH.    Both coaches have their MBAs. When you read their bios on our Coaching Page, they've got some impressive international corporate experience.   But they both live right here in the USA and they're active REIs themselves - that's really how they help get you started and connect you with the right market and property.   It's an in-house conversation with an IC & I straight ahead and we'll discuss how we can help you.   I'm Keith Weinhold. You're listening to Get Rich Education. __________________   Aundrea talked about cash flow. OK, that exists. Great. Yet, I still think of these as better for appreciation than cash flow over time. She'd probably agree.   Maybe you're thinking a brand new construction duplex in the path of progress IM West could cost $1M or $2M, but no, this builder provides them for less than that.    And then, of course, you're probably going to finance most of that cost yourself too.   And, BTW, Aundrea did smile at my dorky joke about her loving rap music. A big smile that you couldn't see through the audio-only podcast here.    But, yeah. You didn't quite hear a laugh. See, one prerequisite to laughing is that a joke actually be funny.   In any case, Aundrea and the provider are your two co-hosts on Wednesday.   The provider is a powerhouse of knowledge about not just real estate and demographics and fourplexes, but construction and financing too and everything that goes into it in order to optimize the investor experience for you.    HE can answer questions in real-time for you.   It is almost time for the Beehive State to shine as Utah is front, center and under the stage lights on GRE's Live Event in just two days.   You are cordially invited to join… as long as you don't ask Aundrea about rap music.    But, really. When you put this all together - a 4-unit building is the most that you can get with best financing terms, the cash flow, new construction, often this BUILT-IN equity at purchase time too, a fast population growth market, all inside a demographic population in Utah that's young and has good incomes… it's really quite remarkable. Quite a confluence.   We haven't had an event for a product type like this before, and I don't know if we'll ever have an event quite like this again.    Attend live to get your questions answered and get the first look at the inventory.   But if you can't make it on Wednesday, then sign up anyway and we will effort to get the replay link for you.   You can do it all at: GREwebinars.com   Until next week, I'm your host, Keith Weinhold. DQYD!

The New Moon in Leo is Wednesday, August 16th. We will feel the energy all week. In this episode, Stephanie shares what the Leo New Moon means, as well as what to expect.We speak about:Why some people let go of daydreamsHow to resurrect themHer personal experience with losing a dreamHow to not let the music die within you...Your relationship to Love & Money: the forces that can make or break a dream.This is an episode you dont wanna miss! The information shared will last longer than the new moon....*** Want to learn how to work with the daily moon transits? Purchase Stephanie's Moon Journal 'It's Just a Phase' right here *Want to learn Astrology directly from Stephanie?  Click Here to get access! To book a reading with Stephanie: www.lightworkers-lounge.com Intro song:  Feeling - MILANO Outro song: Feeling - MILANO *All Songs Featured in Lightworkers Lounge can be found on our Spotify Playlist! Follow us on Social Media!Instagram: @stephanie__powers , @lightworkerslounge, @cosmic___coconutSupport the show

A subtle snow theme in this episode with sketch comedian and improviser Karl Bradley (Cigarette Sandwich).Content warning: suicidal consideration, black hole event horizons, wishing to be at least 200 different people, I DO NOT BELIEVE ANYONE HAS ACTUALLY EXPERIENCED DEJA VU.Patreon supporters make This Is Your Afterlife possible and get awesome bonus episodes. Become an Afterhead at patreon.com/davemaher. I'll be announcing the details of my new one-man show in the next few weeks. Stay tuned!Watch Karl live on stage in Trigger Happy at the Annoyance Theatre (Wednesdays at 9:30pm), the Armando at iO (Thursdays at 8pm), and whenever he happens to understudy the current Second City main stage show, Don't Quit Your Daydream.Follow me @thisisdavemaher on Twitter and Instagram.And check out my other podcast, Genre Reveal Party!, where I'm analyzing TV and movies with writer and cultural critic Madeline Lane-McKinley.---Music = Future: "Use Me" / James Blackshaw: "The Cloud of Unknowing" / Johnnie Frierson: "Miracles"

Get our newsletter free here or text “GRE” to 66866. Storing your money at a bank entails more risk than you think. Your deposit is a bank's liability. Banks must take risks with your money because they don't charge you fees. Banks used to have a 10:1 reserve ratio. As of March 2020, all reserve requirements are now eliminated. Rather than storing lots of money at the bank, borrow lots of money from the bank. US households own $41T of owner-occupied property—$29T in equity, $12T in debt. The national LTV ratio is 30%, historically low. That's 70% equity. Of the five ways real estate pays: one profit source is the market, two are from the tenant's job, and two come from the government. Many Millennials plan to rent forever. 63% have nothing saved for a down payment. The interest-rate lock in effect keeps constraining the available supply of homes. This forces more homebuilders to build. Last week, NBC Nightly News covered the rise of build-to-rent communities. Resources mentioned: Show Notes: www.GetRichEducation.com/455 Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE  or e-mail: info@RidgeLendingGroup.com Find cash-flowing Jacksonville property at: www.JWBrealestate.com/GRE 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”  Top Properties & Providers: GREmarketplace.com 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 Keith's personal Instagram: @keithweinhold   Complete episode transcript:   Welcome to GRE! I'm your host, Keith Weinhold. Do you have any idea what banks do with your money? How home equity is like a bank, hot Millennial rental trends, and the proliferation of Build To Rent real estate, today on Get Rich Education! ___________   Welcome to GRE! From Glens Falls, NY to Klamath Falls, OR and across 188 nations worldwide, the voice of real estate investing since 2014. You're listening to Get Rich Education. I'm your host, Keith Weinhold.   You did not wake up to be mediocre today. So we don't focus on long-term budgeting here.    Correlating financial betterment chiefly with reducing your expenses is just a race to the bottom. You and your peers would just be racing to the bottom.   We know that, instead, yes, arbitrage is created when you  borrow low and invest high. But the ultimate arbitrage - which is the gap or that spread, is when your quality of life vastly exceeds your cost of living.    That's that gap that you & I pry open ever wider together right here, every week.    Savers lose wealth. Stock investors maintain wealth. REIs build wealth.   Savers lose wealth because inflation makes holding onto a dollar like a block of ice melting in your hand.    Retail stock investors only MAINTAIN wealth because their 9 to 10% long-term return is worn down to less than nothing with inflation, emotion, taxes, fees, and volatility.   And real estate investors BUILD real, durable wealth.     If you have a mentality of trading time for dollars, then you  have a certain way of looking at your life.    If you realize that your investing mission in your life is to build things that pay you to own them, then you have a different way of looking at life.    The resources that you need to build those things are what we cultivate here on this show.    You know something though, by the time that I bought my first rental property, I didn't have all of that figured out yet.    It really wasn't until I bought my second property. It was also a fourplex, just like the first one. This second one cost $530,000. And check out how I bought it.    I bought it with a 10% down payment, interest-only loan, and interest rate of 7⅝%.    Yep, I took accumulated equity from my first four-plex and used it as a down payment on the second four plex.   Now, that way, I essentially had zero money in the deal - which is an infinite return strategy - and both fourplexes cashflowed.   Now, the interest-only loan on my second fourplex there… that gives some people pause.   Why would I do that?   That kept my monthly payment amount down - since I could pay only interest - and didn't have to pay principal. That turned a property with a small cash flow into a nice cash flow.   Yeah, some people don't like interest-onlys because then the tenant isn't paying down your principal for you.    I typically take interest-only loans because for every dollar that doesn't go into your illiquid principal as equity, instead, it becomes a dollar of liquid cash flow that goes into your pocket.   In fact, changes are that the reason that you have fat equity in home right now is from market appreciation, not principal paydown.   In fact, why don't I approach the classic GRE principle of “your return from home equity is always zero” from a new and novel angle here today.    Gosh, this could make you hundreds of thousands or millions over your investor career.   Imagine a bank. We'll call it a red bank. This bank is offering you zero rate of return, it's difficult for you to withdraw your money from it, and this red bank might not even let you withdraw your own money at all - it is at their discretion.    How motivated are you to hold your money at that bank? Well, you aren't at all.    Well, I just described equity that's locked inside properties… and that's why… your properties make terrible banks.   Equity is the opposite of you being liquid.   Instead, the GRE Way is leverage and arbitrage, but it needs to be supported by cash flow.    So, we are not quite on an island here with our strategy, because we're still connected with the mainstream finance world - but we're, say, a peninsula then.    And, like a peninsula, maybe, real estate keeps you insulated - though not completely disconnected from that more volatile stock and bond shuffle that most people are on - which provides little to zero leverage or cash flow.    Do you know what that stock and bond shuffle is - that seesaw?   Let's remind ourselves… that when money flees the stock market, it usually ends up in bonds. As demand for bonds goes UP, interest rates go DOWN. Then, as interest rates go down, investors go back to stocks in pursuit of yield, and everything reverses. It's an ebb and flow of funds which often provides you with zero real return. That's how that seesaw goes. So rather than get a part-time job, which is selling your time for dollars, get a few rental properties instead.    Whether you manage them yourself or you manage the manager - like I do, I manage managers… you've got the income stream of a part-time job with an asset that appreciates at the same time.   As time passes, the reason that you will feel satisfied is because you took strategic risk.   Now, to stick to the bank analogy theme here, a lot of people still don't realize that when you take your money to the bank, you are a creditor of the bank, and the bank is now lending your money out.   So, just think about what you're doing - well, you yourself probably aren't doing so much of this - you're probably a better than average investor since you're listening here.   But think about those depositors that keep a lot of money at the bank.   Yes, we know you're losing to inflation, but besides that, just think about what happens to your money this way.   What about a parking garage and your car? OK, when you park your car at a valet, the valet is supposed to turn around and park it in a garage.   The valet does not have the right to take your car and let an Uber driver go make money with it while you're off having dinner.   And then maybe they'll give you the same make & model back at the end of the night… and they stick YOU with the risk of having a problem with your car - or your money.    That's what banks are doing with your money when you park it there. It's like a valet letting an Uber driver use it and take risks with it without your knowledge.   What isn't FDIC-insured is… at… risk.   Well, what's the alternative to banks lending out the money that you deposited with them? Well, the alternative to the existing system is that banks, instead, could make money off of fees that they charge you.   How is it that you avoid paying fees to your bank right now, like you are? I mean, afterall, banks have capital expenses, technology expenses, and employee expenses.   If banks charge fees to you rather than profiting from the spread that they get on lending your money out, we could have a safer system.   But most people like the allure of fee-free banking, partly because that's what they're used to.   Banks used to have to hold onto a dollar for every $10 they had in deposits. That's also known as a 10:1 fractional reserve ratio.    Well, the risks of parking your money at a bank went up in March of 2020. That's when the Fed just COMPLETELY eliminated reserve ratios for banks.    Now, for every $10 they have in deposits, banks can hold zero dollars in reserve.    Instead of parking your money at a bank, you do the opposite. You borrow from the bank, pay them their 7% interest and invest it in “Real Estate Pays Five Ways” property that beats 7%. Right there's… your arbitrage.   Now you're using their money instead of them using your money - like the valet that you entrusted your car with that lent out your car to the Uber driver while you were at dinner.    So outside of inflation, why is it risky to keep your money parked AT a bank - rather than borrowing from them. Because, as has often happened this year, banks implode.     Why are they imploding?   Well, just a couple years ago, when banks lent on mortgages at 3%, they're only collecting 3% for 30 years.    What happens to the BANK when interest rates go up? No one wants to buy their 3% debt. The depositor (that's you, the customer) wants their money back - because they can go invest it for 5% elsewhere. That's a problem for the bank.   And if the government does come in to give a bailout of your bank - we know by now that they're more likely to do it if it's a large bank, like Chase, Wells Fargo, or B of A.   Well, more gov't bailouts of banks… means more money printing… which means more inflation, making our eventual problems even worse.   So rather than keeping too much money at the bank, BEAT the bank.   Now, earlier, I mentioned how having a glut of equity in your properties is like keeping your money in a rather illiquid bank.    That is a germane point - a pertinent discussion to have right now, because take a look at this. This is America's equity position, right now.   This is for the latest quarter ended. The Federal Reserve Flow of Funds report tells us that    U.S. households owned $41 trillion in owner-occupied real estate. Alright, $41T is the value of that US residential property.   Of that $41T, how much do you think is in debt, and how much is in equity? I'm just doing some rounding here.   $12 trillion in debt and the remaining $29 trillion is in equity.   Therefore, the national loan-to-value "LTV" right now is about 30%. That is historically quite low.   Another way to say it is that America's primary residences have a 70% equity position today.    Yes, 70% of the value of American homes is locked into that vehicle that's famously unsafe, illiquid, and always has an ROI of zero.    Homeowners today have an average of $302,000 of equity in their homes.    Now, as inefficient as that might sound from an opportunity cost perspective from homeowners.   There is, at least, a little upside to your neighbors having a glut of equity even if you try to opportunistically hold a low equity position.   This equity provides a cushion to withstand potential price declines, but also prevents any future housing distress from turning into a foreclosure situation.    Those equity cushions around American neighborhoods help prevent the down… drain in prices that we saw from 2007 to 2009.   I've got more for you coming shortly, including, has the Build-To-Rent concept that we've discussed on this show for years & years finally gone mainstream now that NBC news is discussing it?   You'll hear that audio clip and get my commentary on it.   But first, I want to ask you, is this the "Golden Age" of quality NEWSLETTERS or what?    News WEBSITES are increasingly riddled with: paywalls, logins, banner ads, and pop-ups about cookies, the hassle of 2FA. Instead, a quality newsletter is just automatically “there” in your inbox.    Our valuable Don't Quit Your Daydream newsletter is full of real estate investing industry trends and forecasts, broader economic forces that are going to affect you in the future & more.    Get top investment property news in under 5 minutes.  You can sign up and get the letter free now at GetRichEducation.com/Letter.   In there, you get updates about what provider has inventory now - even exact physical addresses of properties.    In fact, I've featured two of my own rental properties in the newsletter as I broke down their financials. Again, sign up at GetRichEducation.com/Letter   I STILL write every single word of that letter myself. I don't think that a lot of founders do that.   Upon signup, you'll receive some lay of the land e-mails, and thereafter, I only send it about weekly. Not daily.   Alternatively, you can easily sign up for the letter by text. If you aren't yet one of many subscribers expanding your means with my letter, you can simply text “GRE” to 66866 for our DQYD Letter. It is free.   Again, you can sign up by simply texting “GRE” to 66866. More next. I'm Keith Weinhold. You're listening to Get Rich Education. _____________   Welcome back. You're listening to Episode 455 of Get Rich Education. I'm your host, Keith Weinhold.   Five weeks ago on the show, you'll remember that I reiterated why real estate does not pay 4 ways and does not pay 6 ways - it pays exactly five ways simultaneously.   Sometimes, amid uncertainty - and note that there's ALWAYS - uncertainty.   It never abates. People wondered when the Fed would stop hiking rates at a meeting. Now they did. People wondered when inflation would get down to 4 - now it has.    But those that worry excessively will still point to something else that's uncertain.   But in good times, bad times, and uncertain investing times, you might want to get more offensive. Other times, more defensive.   Real estate is both. Of the 5 ways you're paid, appreciation and cash flow serve your offensive side.   At the same time, your return on Amortization, Tax Benefits, and Inflation-Profiting all serve your defensive side.   Now, let's go and look at the sources - the headwaters - the genesis.    What are your 5 profit sources - for appreciation - it's the market. It's the vibrancy and diversity of the economic market that you bought in. That's where your appreciation emanates from.   For the second way you're paid, cash flow, it's your tenant and your tenant's job.   For the third way, your Return on Amortization - that ROA, that also comes from your tenant, since that pays your loan's Principal & Interest.   The fourth way, tax benefits, that's the gov't.   And the fifth way, your inflation-profiting, that also comes from the gov't.    Yes, that's the source, the headwaters for each of the five ways you're paid and knowing that can help you be mindful about what to pay attention to in your investment real estate portfolio long-term.   Yes, this is just with carefully-bought buy & hold real estate. Unlike most investments, if the value of your property goes down, you still get paid 4 ways.    So to review the 5 Ways Real Estate Pays SOURCES - where your money actually originates, it's:   Appreciation - from the market Cash flow - from the tenant ROA - tenant Tax Benefits - gov't And Inflation-Profiting - also from the gov't   Now, here at GRE, when we focus on your tenant and where your tenant comes from, you know, one word that comes up an awful lot is Millennials.   Why do we discuss Millennials so regularly? It's not because we're the first generation to embrace avocados or online dating over “in real life” dating or, it's the first generation to be raised in a world of participation trophies. Ha!    It's because, not only are Millennials the largest generation in American history, but they are in their prime household formation years.   Though there's a bit of dissension among demographers, many agree that Millennials were born between 1981 and 1996. That makes them Age 27 to 42 - they are prime household formation years.    BTW, you probably know of the generation after that, Gen Z. They were born between 1997 and 2012, making Gen Z age 11 to 26.   But do you know about the generation after that? That is Generation Alpha. They were born between 2012 and today, making Generation Alpha age 0 to 11.    Well, the Millennial homeownership rate lags that of previous generations of people that were the same age. So this is why you have such a deep pool of people that's driving demand for your rentals.   Millennials have the misfortune of being stung by back-to-back global crises.    When they were coming of age in 2008, many couldn't get a job during the Global Financial Crisis. Then the pandemic disruption made getting their independence pretty bumpy.   In fact, fully 18% of Millennials say that they plan to rent forever. Forever! That's up from 11% just five years ago.    Not just a few, but the MAJORITY of Millennial Renters have zero down payment for house savings. 63% of them have absolutely nothing saved for a house.    And in fact, another 14% have less than $5,000 saved - which is close to nothing. That is all according to a survey from Apartment List.    More Millennials plan to rent forever.    Now, I've done a fair bit of research on Generation Z  real estate trends - again they're the age between 11 and 26. And there are a few more Gen Z homeowners than you might think already.    But the short story on Gen Z, just isn't that compelling. To distill everything I've researched, most Gen Zers want to own a home but few can afford it. Well, no kidding. That's not a very novel takeaway, but that's the REAL story there.   If Millennials are your current renters, then Gen Z are your current and future renters.   Now, I've talked to you a good bit about the “interest rate lock-in” effect. So many homeowners have ultra-low mortgage rates that they don't want to sell their home, and when they don't put it on the market, that further constrains supply.   Well, Redfin recently brought some new color to the interest-rate lock-in effect. They've shared some really interesting material with us.   92% of mortgage borrowers have an interest rate under 6%.   80% of them have an interest rate below 5%.   62% of these people have an interest rate below 4%.   And a quarter have a rate below 3%.   New listings of homes for sale and the total number of listings have both dropped to their lowest level on record for this time of year… and that is fueling homebuyer competition in some markets and preventing home prices from falling.    In fact, Redfin tells us that the national ASKING price for homes is the same that it was one year ago.   Sale prices increased most in these 5 metro areas. Cincinnati leading the way at (9.2%). We've got cash-flowing Cincinnati property at GRE Marketplace. Miami (8%) not really a cash flow market there. Third-best is Milwaukee (8%), rounded out by Fort Lauderdale, FL (6%) and Virginia Beach, VA (5%).  They are the 5 metros with the highest appreciation. Current months of national housing supply is still just 2.6 months - scarce inventory. 6 months is a balance market.   Homes that sold were on the market for a median of 28 days. That is the shortest span since September. There's a bit of a seasonal factor there though.   Now, when we talk about the paltry supply of homes since existing homeowners don't want to lose their low rate, it's forced more homebuilders to build - in order to make some inventory available.   It's made a good opportunity for you to buy these homes that are built for renters from Day 1, and rent it to a tenant yourself.    Now, I know that your life is more interesting than watching the NBC Nightly News with Lester Holt and then dozing off to sleep at 9:30 PM (ha!), so in case you didn't catch it, here it is on “Build-To-Rent” last week.   It really takes the perspective of the RENTER and why they want to pay your rent to stay in a Build-To-Rent home… longer than they do for an apartment. This is about 2 minutes long & I'll be back to comment.   BTR on NBC News:  https://youtu.be/BXwTerRQWNo?t=954   Yes, that's the popularity of build-to-rent homes. Something that we've been discussing here at GRE, for, gosh, maybe 8 years now.   Like they said there, rents are on the rise. But they're not rising nearly as fast as they were 1 and 2 years ago. Rent growth has slowed for both SFHs and apartments.   I think that the assurance for prospective income property owners like you is that in your Build-To-Rent properties, you can have a reasonable expectation of high occupancy and low vacancy as long as you buy your SFRs in a decent market.   And see, more often than not, a builder is only going to build new, rental single-family homes if there are plentiful jobs nearby to support that.   So you can kind of crowdsource the due diligence that the builder did on what's demographically and economically feasible if you choose to add these property types.   Despite the build-to-rent properties added, today, America only has half as many homes available as 2019.   Compared to just a year ago, there are 5% fewer available properties today.    But, we've got available Build-To-Rent and existing income property here at GRE Marketplace. Yes, just create one login, one time, and get access to all national providers at GRE Marketplace.com.   But say you want a little help, a little coaching. Say perhaps you haven't bought property before, or you haven't bought one in a while, or you haven't bought property across state lines yet - since that's where the best deals usually are - or you just want to lean on a coach to bounce ideas off of as you're looking for your next investment property.   Well, in that case, you can rely on our free coaching service. That's at GREmarketplace.com/Coach   Our coaches don't blow the whistle at you for missing a play. You'll never find them as grumpy as, say, New England Patriots' Coach Bill Belichick. They're not that kind of coach. It's not the kind of coach that will ask you to start your morning with an ice bath.   And if you're new to real estate, there's no such thing as a stupid question with GRE Investment Coaches. No penalty flags are thrown.   To find that property that builds your residual income and pays you five ways, you can choose which coach you want to have help you.     Coaching is a completely free service to you.   What they do is... Learn your goals Find you the best off-market deals nationwide Find the property provider with incentives. (One provider recently offered 4.75% interest rates, another free PM for one year.) Help write your offer if you would like that Submit earnest money Navigate the inspection Interpret your appraisal Check your management agreement And just ensure a smooth closing day for you Your Investment Coach can do more than this. If you prefer, they can do less than this.   GRE Marketplace is where the coaches source the properties. It is more like an organic farmers' market than a big box store. Property offerings change frequently.   Because there are limited slots available to talk with them through phone or Zoom, it helps if you've got your down payment and are ready to go.   Sheesh. If it were any easier, they'd even make your down payment for you.   Did I mention that it's completely free? To get started, choose your coach and book a time. Start at GREmarketplace.com/Coach   Until next week, I'm your host, Keith Weinhold. DQYD!