Housing Data Analyst Deep Dives Todays Opportunities (ft. Neal Bawa)

Real Estate Marketing Dude

We are talking about investing today. It's a big one; there are a lot of changes coming in the market and investing might just be something you need to look at.

Be sure to check out Neal Bawa, he's giving away the answers to the top 10 irrational questions that investors ask and how you should answer them.

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Transcript:

So how do you attract new business? You constantly don't have to chase it. Hi, I'm Mike Webmaster Real Estate Marketing, and this podcast is all about building a strong personal brand. People have come to know like trust and most importantly, refer. But remember, it is not their job to remember what you do for a living. It's your job to remind them.

00:01:24:15 - 00:01:36:16

Unknown

Let's get started.

00:01:36:18 - 00:01:52:14

Unknown

What's up? Ladies and gentlemen, welcome. Another episode of the Real Estate Marketing Dude podcast. Folks, we're here with a rock star, a legend. You might have seen his name all over the damn place. This guy knows what he's talking about when it comes to investing in real estate. As a matter of fact, he already has invested and runs and maintains $1,000,000,000 fund.

00:01:52:20 - 00:02:11:08

Unknown

So I'm going to get right to it today because I have a lot of questions for him, mainly around which way the market is going. The reality is a lot of people listen to show are in real estate or in lending. 90% of y'all have never even seen a market that shifted in this capacity, in this way. And a lot of people don't know necessarily how to navigate that either.

00:02:11:13 - 00:02:29:23

Unknown

But where there's doom, there's gold, not gloom, because when you know how to shift and play, navigate these different types of waters and you listen to someone like who I'm going to introduce to you in just a minute, pay close attention and take notes, because when the market shift is often when people get really rich, I mean, I think this is.

00:02:30:00 - 00:02:44:24

Unknown

Would you agree with that, Neal? I mean, that's why a lot of these that's is where a lot of the opportunity comes in. So let me go ahead and introduce our guests and let me give you a proper introduction. And I'm going to line up this because we got all kinds of questions for you today, right, Neal? Neal, want you to write himself, Who are you?

00:02:44:24 - 00:03:06:19

Unknown

Where are you from? What do you do? Let's go. I'm a technologist. I'm a data scientist. I come from the Silicon Valley culture, and it's my job to disrupt real estate, disrupt real estate development. We publish massive amounts of data for free on 323 metros in the United States, and we rank them for real estate investing. We give that data away for free.

00:03:06:21 - 00:03:37:00

Unknown

There's no subscription, there's no upsell. And as a result, we've managed to gather a bunch of nerdy, geeky, you know, folks, mostly in our doctors and engineers and technologists who believe that real estate investing should be data driven. And those folks have given us $300 million of their money, about a thousand investors to both buy and build various different kinds of real estate in the United States were hot on apartment student housing built around.

00:03:37:02 - 00:03:54:24

Unknown

But we also do self-storage and industrial a lot of it. I we've had a couple people on the show that the self-storage space and I my mind was blown at some of those just different conversations. But let's start with the data because I agree, data is where everything goes down. It never lies, the numbers never lie. And in general, I know you do a lot multifamily.

00:03:54:24 - 00:04:22:12

Unknown

You're doing a lot of stuff into the commercial market. Let's stick to residential just for this question and I'll go to the next one. But from residential, what does the data say? Because what I'm seeing, I subscribe to the capacity letter. I like reading their posts a lot right? And I'm seeing high loan defaults on cars. I'm seeing hi, I'm seeing in our data we're seeing a ton of stretched out credit card debt, missed payments just starting to happen.

00:04:22:14 - 00:04:41:08

Unknown

A lot of people will be like, Hey, is this going to be 2007, 2008 all over again? And what do you say to the answer? What's the data say collectively speaking to then and now? Let's first do the economic piece and then I'll talk about real estate. Right? So the economics says that we are definitely on track for a soft landing.

00:04:41:10 - 00:04:58:11

Unknown

I don't feel like this is 2007. I think it's fashionable to say it's like 2007 because you always want to be the person that said, Hey, five years ago, I told you so, I'm not going to go there. So I'm I'm looking at the data and I am absolutely amazed at the unemployment level. So we're at 3.9% unemployment.

00:04:58:15 - 00:05:18:15

Unknown

We produced 322,000 jobs in February. This is being recorded in March of 2024. And when I'm looking at that unemployment rate and I'm looking at the fact that inflation's come from 9% down to 3.1%, that shows us that the Fed has done its job and everyone likes to beat the Fed. And I'm actually no different. I love to beat the Fed.

00:05:18:15 - 00:05:37:17

Unknown

But in this case, I have to grudgingly admit that the Fed has actually been right. The Wall Street thought that we would have seven cuts this year. Then they thought we had six, then they thought we had four. And now they think that we have three. Yes. What, 18 months ago, the Fed was saying we would have three job cuts, two or three cuts into 2024.

00:05:37:21 - 00:05:54:24

Unknown

So for the moment, one has to grudgingly admit that the Fed has been right. The economy is moving towards a soft landing. A soft landing is not fun. Just the you know what the definition of a soft landing is. Yeah. Can you define that? Or a soft landing means that the growth of the U.S. falls to almost zero.

00:05:55:05 - 00:06:11:16

Unknown

And that's going to happen in Q3. That's going to happen in Q4 of this year. So the second half of this year is going to feel really shitty. It's going to be like a recession. You're right. Now you're seeing if you go back and look at the last three months job growth, it's been near 200,000, 300,000. What you're going to start seeing that job growth fall to 100,000, 50,000, 80,000.

00:06:11:16 - 00:06:32:15

Unknown

Those are very low numbers for a country of 330 million people. So when you're only growing 100,000 jobs, the economy is basically at a stall state and you're going to see that stalling happening in the second half of the year. And that's what the Fed wants, because as you get close to a stall date, demand dries up. If there's no new jobs being created or very few new jobs being created, who's going to create the demand?

00:06:32:15 - 00:06:48:10

Unknown

We're going to spend the money. Well, if you don't spend the money, what's going to create inflation? Because there's no competition for new goods when there's no competition, that brings inflation into the tooth. And that's the Fed's job to bring the inflation down into the twos, two and a half percent range so they can achieve their soft landing.

00:06:48:15 - 00:07:08:16

Unknown

So we're going to see some fairly shitty conditions in the second half of this year. But I don't expect the economy to go into a recession, which is negative growth, right? So the rest of the world is ahead of us. So at this point, Germany, the UK, Japan have already gone into recession. China is slowing, India being the bright spot of the world right now at 8% GDP.

00:07:08:18 - 00:07:30:13

Unknown

But when I'm looking at it, all of the other countries are ahead of us. The United States is actually the the primary shining spot with our stock market staying high and our job growth staying high. But that cannot last because people are like, Yeah, but the Fed is an increasing rate anymore. Imagine this when you've raised interest rates by more than 500 basis points or 5%.

00:07:30:15 - 00:07:55:09

Unknown

Imagine a £200 weight sitting on the chest of the economy. Well, that £200 weight has been sitting on the chest of the economy for a year and a half, and it was its heaviest for the last seven months. The Fed hasn't raised interest rates for the last seven months, but you still got a £200 set. You know, it weight sitting on the chest of the economy and that's dragging and slowing things down and it's slowing it down just right.

00:07:55:11 - 00:08:20:18

Unknown

So speaking of rates, what are we looking at? You just mentioned it. You know, we're supposed to have more cuts within it. We did. Or you know what? People don't really know what to expect. And I'm looking at the Fed chocolate and that shows three quarter point cuts, one in June, one in September, one in November. And I think that we're going to get those three rate cuts this year and then we will have an accelerating rate cut next year.

00:08:20:18 - 00:08:40:22

Unknown

Once once inflation's down to two and a half percent, then the Fed can accelerate because that's not interested in keeping rates this high. There's this nonsensical, very social media driven myth that the Fed, the rates are going to stay high. Why would you rates stay high? Have you seen how rapidly world growth is slowing? Population growth is slowing, the world is getting older.

00:08:41:00 - 00:08:56:19

Unknown

And as the world gets older, it consumes less. People who are 65 years old consume a lot less than people who are 45 years old. So when you look at demographic trends, when you look at large scale trends in the world, all of these trends are leading towards deflation, none of them leading towards inflation. Perfect example, Japan, right?

00:08:56:21 - 00:09:18:21

Unknown

Their stock market last week hit the same number that it hit last in 1989, which meant that basically for the last 25 years. Right. It wasn't just 35 years. Their stock market has been down from where they are. Why? Because their population is getting older, right? They have a very, very low birth rate. Their population is falling. And so Japan's state a great country in those 35 years.

00:09:18:21 - 00:09:36:09

Unknown

There's still a magnificent economy, still number three in the world. So they they haven't crashed and burned, even though their debt to GDP is double that of the United States, double that of the U.S. They haven't crashed and burned, but it has meant deflation in their economy. They constantly have to create inflation in their economy to keep things going.

00:09:36:13 - 00:09:57:19

Unknown

And so when people actually come in and say inflation will stay high, there's no data behind that at all. Interesting. This is good stuff, Neil. Very good stuff. I'm sure I know what our listeners are doing in two different directions, right? So like the Ukraine war was pulling in the direction of energy being expensive, which means inflation up.

00:09:57:21 - 00:10:21:03

Unknown

But the rest of the world, when you look at the world, maybe with the exception of the African continent, everywhere, birth rates are falling everywhere, growth is slowing everywhere, people are getting over everywhere, consumption trends are going downwards. Inflation is simply a factor of demand. And if in 90% of the world growth is slowing, demand is slowing, how do you create inflation?

00:10:21:05 - 00:10:40:09

Unknown

I can predict that in two or three years we'll be trying to create inflation. And finally, I want to share a data point with you. Like forget forget what happened in the last 24 months, because we all know that this inflation was created by a break in supply chains and the ridiculous $4 trillion that be injected into the economy like idiots.

00:10:40:11 - 00:10:58:17

Unknown

Right. If you hadn't done those two things, let's look at what happened to inflation ten years before that. All of the things that people scream and yell about were happening for those ten years. But inflation in the United States was under one and a half percent for the ten years before COVID. Right? So all the bad stuff that we're talking about, money printing, it was happening, right?

00:10:58:21 - 00:11:23:24

Unknown

We were doing quantitative easing. It was happening. Inflation was at one and a half percent. The Fed was struggling to get it up to 2%. Right. So look at the Fed struggle. Study those things, go out and stare at charts on the St Louis Fed website to understand that in the real world, right, economists have challenges and their biggest challenges are not supply chains because those are obviously fixed.

00:11:24:01 - 00:11:46:12

Unknown

Those challenges are that we are not producing enough babies. That's a problem. How do you fix that problem when the world is 100 million baby short every year? Wow. So this is a big picture. And you opened up saying I'm a data scientist, which is interesting. I mean, anyone who should actually come on like that is like I'm an investor, I'm a data scientist, and I love that approach.

00:11:46:17 - 00:12:08:09

Unknown

So let's now I think we've got a good picture of the economy here. We got some good worldview here. What's going on overall or saying here, guys? So you're tracking at home. Consumption is down and with consumption down, demand's down with demand down, then, you know, this is how it all eases out into inflation. Now, in terms of real estate and investing and or whatnot, what are you guys doing right now?

00:12:08:09 - 00:12:25:14

Unknown

What do you see based on your data, your brain? I don't know what the hell is going on up there, but there's all kinds of gears turning right here. What's happening? What are you where do you see the opportunity? Where are you going? Where are you advising your investors to go? So for the for the moment, the single family and multifamily markets have diverged.

00:12:25:19 - 00:12:49:23

Unknown

So single family and multifamily are the two largest asset classes in real estate. Nothing else comes close in terms of large after classes, right? They've diverged. And it's an interesting diversion since interest rates started rising, Single family homes in the United States are up about 3 to 4%. So they've gone up, right? So it's been slow growth because we are talking about a two year time frame where, you know, prices have gone up by two or 3%.

00:12:49:23 - 00:13:11:15

Unknown

So you're talking nationwide. You're doing nationwide. Nationwide, Right. So it varies. You know, the hot boom towns are down a few percent. And and the Midwest markets and the Northeast markets are up more like 6%. But the overall average in the U.S. is about 2% up in the same exact time frame. Multifamily prices in the United States are down 20 to 25%, once again varying by metros.

00:13:11:15 - 00:13:38:03

Unknown

Some metros are down ten, 12%, other metros are down 25, 26, 27%, especially the Boomtown metros like Phenix, which have oversupply. But bottom line is normally single family and multi-family tracked together because they're dependent on the same sort of things, but because single family has something that multifamily doesn't have the lock in effect. Remember, what happened is with multifamily, we all were tied to addicted to bridge lending.

00:13:38:03 - 00:13:59:00

Unknown

So we were basically taking floating rates, whereas with single family, 99% of all homes that were purchased in the last four years were purchased with ultra low interest rate. 30 year fixed loans. That lock in effects means that 20 to 25 million American families like me, I have a 1.75% mortgage. If I go somewhere, my mortgage jumps from 6000 a month to 15,000 a month.

00:13:59:00 - 00:14:18:01

Unknown

Right? I can't go. I'm locked in. You're locked. 25 million families are locked in. That's keeping supply ridiculously low. And that's put a floor under single family prices. They're not going up, but they're not going down. And they probably won't go down for a number of years, especially now that interest rates slowly over the next year will start to come down.

00:14:18:06 - 00:14:35:07

Unknown

So as they start coming down, affordability will actually improve on the single family side. And I think that the single family market geniuses here's my prediction for the next five years, just stays where it is. It's going to stay where it is. It might go up 1%, but it won't go up as fast as inflation application. 3%. Single family might go up 1%, 2%.

00:14:35:12 - 00:14:53:08

Unknown

Why? Because it was supposed to drop like multifamily. Multi-family dropped 25%. Single family didn't drop because of the lock in effect. And you take 100% for the lock in effect for at this point in time, it sort of it's hit a plateau. It stays near that plateau. It might go up a little bit, might go down a little, but it stays at that plateau.

00:14:53:08 - 00:15:14:24

Unknown

So over five years, the lock in problem is stalled because over five years we'll have maybe 15% inflation. If home prices stay the same. Well, in a way, they're coming down 15%, right, because they're supposed to go up with inflation and they didn't. So if if the price of a single family home in the United States five years from now is the same as it is today, well, then we fixed the issue of them being too expensive because of inflation.

00:15:14:24 - 00:15:34:13

Unknown

They should have gone up 15%. They didn't. Well, we've sort of fixed that issue, kind of fixed it. I'm in. Right. I'm in Southern California and I got here in 2017 and I literally seen the prices go up later because I watch this all time. I'm on Zillow. Like it's like, what's going on? You're going on your 40% all day in San Diego area and like a 40.

00:15:34:13 - 00:15:57:20

Unknown

And it's hitting affordability ceilings, right? Yeah, big question. But they can't go up any further because the average mortgage in the U.S. has gone up 112% in the last three years. So once again, from the start of COVID to when we're recording this, the average mortgage in the United States is up 112%. The average salaries in the U.S. are up 19.7%.

00:15:57:22 - 00:16:16:15

Unknown

How do you reconcile those two things? How do you because the banks won't give you a loan. The banks lenders give you a loan based on your income. So your incomes up 19.7%, but your mortgage is up 112. Wouldn't that put a ceiling on what you can pay? And we're seeing that ceiling across the United States, not just in California.

00:16:16:15 - 00:16:34:17

Unknown

We're seeing it everywhere. Right. And and California is a market known for busting through those ceilings. And it's still just you know, it's like I can't get through. There's nowhere to go. Like literally and even I'm even seeing the opposite effect to even the people that have rented their houses are sort of like reconsidering, like, why would I sell this?

00:16:34:17 - 00:17:06:18

Unknown

I have like a 1% rate, you know, why would I ever sell this? And yeah, there's no inventory. But do you think that some of these high areas like Southern California, Phenix, Austin, some of the areas are just really, really boom, Do you see a correction in these areas in residential? Then how about for multifamily? So the you know, when we look at, you know, and I've been researching this for single family, when we look at the risk in the marketplace, the risk is actually very tightly contained within certain very expensive markets.

00:17:06:18 - 00:17:23:17

Unknown

There's a number of them, three of them in California. And then you're looking at markets that are very expensive for their income, like Austin. Austin might be saved if its incomes shoot up all of a sudden because there's a lot of demand there. You know, you know, the population growth, home price growth, income growth in Austin is much higher than California.

00:17:23:17 - 00:17:43:24

Unknown

So maybe they work their way through that, maybe they muddle through it or they see a decline. But if the decline happens even in California, I do not expect it to be double digit. So in the San Francisco Bay area where I live, this is the most expensive metro in the United States. We are seeing a decline. But the decline, interestingly enough, and I would not have predicted this is happening mostly in the $2 million home.

00:17:43:24 - 00:18:08:20

Unknown

So what what in the Bay Area, million dollar home prices are still selling like hotcakes. I live in Fremont, California, and so I looked at three homes that were sold in the last 30 days. They were all above a million, 1.31.4, 1.6. And they had lots and lots of offers. But the homes that are above that $2 million range in the Bay Area and maybe above $1,000,000 in other metros in the United States, they are the ones that are likely to suffer be simply because people can't afford them.

00:18:08:20 - 00:18:30:23

Unknown

They can get a loan for those. Yeah, it's the same situation here. You buy you could buy the same house or rent the same house for the difference per month. It's probably like $8,000. Know, like I said, it's a shocking number, so it's crazy. I want to share that with you. The difference between the average rent and the average mortgage payment in the United States is the highest in history.

00:18:31:04 - 00:18:53:05

Unknown

There's a lot of people saying, well, the rental market is not going to do well. Right. How do you reconcile this statement? The difference between the average mortgage and the average rent is the highest in history. Three, it crushes 2007. How can this not be a good time to rent? How can this not be a good time to buy a land, be a landlord when that difference is the highest in history?

00:18:53:11 - 00:19:11:02

Unknown

We then in the last three years the United States way. That's a very good way to put it. You might say that one more time, just so people can hear that the difference between the average a mortgage payment, including especially if you include taxes and insurance and the average rent for the same property for the same exact property if you rent it.

00:19:11:04 - 00:19:39:13

Unknown

That gap is the highest in history by far. That gas gap is now over 1200 dollars a month nationwide, probably for a $6,000 in California. Right. So obviously, California is the worst case example of all of these things. And so in New York, yeah, nationwide, 1200 dollars is a huge number. The gap between rents and mortgages has typically been 200, $300.

00:19:39:15 - 00:20:02:06

Unknown

If you look at history, five years, ten years, 20 years, that gap between renting and buying is a couple hundred dollars. Now it's over $1,000. And that's an insane growth. And so that number will adjust over time as rates come down. Some mortgages will come down a little bit because of that, but rents will also go up. So a combination of two things will fix that rents going upwards and mortgages going downwards.

00:20:02:06 - 00:20:22:23

Unknown

I'm not talking about home prices going down, I'm talking about mortgages going down because interest rates will come down over time. Yep. What about investing wise? What would you touch? I see. And then here's a question I have for you, because I didn't know these numbers, so I want to repeat some. You just said the single family home appreciation last 12 months has gone up 2 to 3%.

00:20:22:23 - 00:20:45:17

Unknown

Very modest rate. But at the same time, the multifamily properties have depreciated 20 to 25%. And I remember just a couple of years ago, there's all kinds of gurus buying by this by this syndicate Syndicate syndicate, right. And how many people what's the exposure? How many people even call with their pants down? Because that's a big like if I'm a syndicator and I got into that bubble, how big is that issue?

00:20:45:17 - 00:21:04:23

Unknown

And there must be a huge opportunity to go buy these assets that were born too high. It may not seem that correctly, or there are 3000 assets in the United States that are distressed at an average value of 30 million. The total distressed in multifamily is $90 billion. 3000 multiplied by 30 million is $90 billion of total distress.

00:21:04:23 - 00:21:23:23

Unknown

Now, these properties are not worthless. This is in 2008, so they're probably worth about 65 to $0.70 on the dollar. And what were these purchased like? What do you see in this bubble from these properties that were purchased in the second half of 2020 and the first half of 2021 in the second half of 2021. So basically purchased over an 18 month time frame.

00:21:24:03 - 00:21:53:17

Unknown

Why are they in distress? Because they all have bridge loans right now. There's a huge number. I mean, multifamily is a very large market and there's no distress in the overall market. But in the syndication portion of the multifamily market, at least ten, 20% of all properties are distressed. And folks just see understand what what he's seeing. Just off your filings and alike as well as your listeners when you're in your treadmill or you're working out or whatnot, it's that when that bridge loan hits, they're locked into a low rate and that's going to adjust to whatever it's going to adjust or has already adjusted or is already in.

00:21:53:17 - 00:22:10:15

Unknown

And now that that property that was cash flow is no longer cash flow. It's it's it's a right it's negative cash flowing and it's cost money. Therefore the value is not there. That's what we're talking about and that's driving the prices down 25%. So if you asked me, you know, what do I invest in? Well, I invest in two things.

00:22:10:16 - 00:22:33:06

Unknown

Number one, right now, I'm investing, I'm buying multifamily. Two years ago, I was on every podcast in America telling people, this is insanity. Do not buy, I'm not buying. I'm pencils down. My team hasn't underwritten anything in months. Nobody was listening. I mean, I was being made fun of on podcast like as the the the Dr. Roubini the gloom doom man of multifamily.

00:22:33:06 - 00:22:55:14

Unknown

Well, you know, we saw how that worked out. So right now I don't have ten properties that are upside down. I want write I still bought some properties and so i1i dealt with that and I raised private equity too to make that property get a fixed loan. And so now it's cash flowing. So I fix that problem, but I don't have to deal with ten or 20 like many of my syndicate households have to deal with it.

00:22:55:14 - 00:23:11:04

Unknown

You saw it coming in to do it. Let them go. Yeah. To me, it just made it made sense to stay away from the frenzy that we saw two years ago. Right. So I was very lucky to have stayed away from it. Bottom line is, today I am on the hunt. Today, my investors are saying, Yeah, you saw this coming.

00:23:11:04 - 00:23:31:11

Unknown

Good for you. And you send us all these emails and we didn't listen to you invested with seven different syndicators. Now we have six cashflow. And so we're coming back to you and now you're on the prowl. So right now I'm in predator mode. I'm going out making offers on dozens or hundreds of properties. I'm focused on the ones that have as zoomable low rate loans.

00:23:31:11 - 00:23:53:10

Unknown

For example, we just bought a property that had a 4% fixed rate because, you know, the 25% discount is only there because of one reason interest rate. So if I can get the discount but not have to deal with the interest rate because I'm buying an asset with a fixed loan, how can that be bad? That has to be an incredible deal.

00:23:53:10 - 00:24:14:23

Unknown

So I'm incentivizing my team to find assets that have a zoomable loans with a minimum of three years left on them and that are fixed loans. So I'm not buying $1,000,000 rate cap, so I'm not wasting money on these stupid rate caps. That is number one opportunity. And here's the second opportunity. And this is really for people that want to invest in, you know, maybe maybe don't want to invest with people like me.

00:24:14:23 - 00:24:42:13

Unknown

They want to invest themselves. People like the people who two years, three years ago paid too much for the properties. Those people are now having to recapitalize. Meaning put more equity into the properties to take them from a 10% bridge loan to a 5% fixed loan or five and a half percent fixed line. Right. Well, the best deal today, me as an investor, as a personal investor, is to put money into that.

00:24:42:13 - 00:25:09:17

Unknown

It's called equity. Rev equity is ahead of the common equity. So the property has six, seven, eight, $9 million of common equity. And if you do your underwriting right and this is a good property, so the property is good, it has done well, it's caught it the wrong time. Those properties putting money in at equity and making 15%, 14%, I will do that all frickin day long because that is that is like lending and lending is supposed to be lower risk than than investing in equity.

00:25:09:17 - 00:25:32:03

Unknown

Well, equity is kind of like lending. So right now I have a three person team. I'm actually going to read this from my calendar on the left here, gather equity opportunities. 330 to 4:30 p.m. today my team will come in and present equity opportunity opportunities not for my company, for Neil Bawa, who invested like it. You're smart, dude, man.

00:25:32:08 - 00:25:56:23

Unknown

This guy is smart, sharp and follow him in really good stuff. This is, this is really interesting. So I didn't the thing I'm most shocked about is the multifamily. I'm not in that space. I don't know it very well. I just see what I see on social media in DC. Those numbers are insane. 25% is the largest discount we've seen in multifamily since the eighties.

00:25:57:03 - 00:26:23:05

Unknown

And what's amazing is we're seeing this discount with an economy under 4% unemployment. So it's just the rates. I mean, I expect multifamily to bounce back very strongly. I listen to Blackstone today, so Blackstone's head of CRT, this is a company with a $100 billion asset. Yeah, there. Sit here. What are the words out of his mouth? He said this is a generational opportunity to buy commercial real estate.

00:26:23:07 - 00:26:45:03

Unknown

It's only cheap because of one reason, and that reason goes away in the next two years, he says. We see it as a general up or a generational opportunity. We were not engaged two years ago when everything was expensive. Now we think everything's cheap and so we're buying a lot. He's also doing things like they're also buying out office because office is going to go down 40 or 50%, down about 20 to 30%.

00:26:45:03 - 00:27:03:17

Unknown

Places like New York, it's down more places like San Francisco is down more, though Blackstone saying I will happily buy offices at, you know, 40 to 50% off and I will hold them for a significant amount of time and then do adaptive reuse. Maybe we turn some of it into apartments or condos or things like that. Yeah, but we want to buy at a low basis.

00:27:03:17 - 00:27:30:14

Unknown

So I am very, very excited by the fact that investors are extremely disappointed right now. They're very fearful. The last two years have been bad for them. They've had cash calls. I love it. I love it because they're my competition. I don't want competition. I want to be able to make 50 lowball offers and have somebody accept a 30, 30% under market offer from me, which is what's happening all the time these days.

00:27:30:16 - 00:27:47:05

Unknown

So I love the fact that all of the investors out there are terrified. That's, you know, I read a lot of things. One that stands out, they say that is the quote Buffett said he zigzag, I zag. And they zig and honestly, everyone who's doing the opposite of what everyone else is doing are usually the ones that are always the ones winning.

00:27:47:07 - 00:28:15:10

Unknown

Not at the current time. People probably don't think you're crazy like they did the first time, but obviously you've proven them wrong. Well, what I what I do is I mean, I have a group of about 25,000 people that are following me for data. So what I do is I release data every week or every month that gives them confidence that I'm following data, I'm following systems, I'm looking at the last five years, ten years, 50 years, and I'm understanding market trends.

00:28:15:12 - 00:28:37:13

Unknown

Then when I bring out a project, they are still hesitant, they are shell shocked with what happened in the last 24 months, especially with multifamily. But eventually they realized this guy is taking advantage of it and so enough of them give me money. We just bought a $30 million property with a ZOOMABLE loan. It's down about 25 35% from, you know, peak value.

00:28:37:15 - 00:28:59:19

Unknown

And I'm not saying that it's it's 35% discount. It's probably 15% discount, right. Because some of those values were too high anyway, that those were pretty crazy values there. You know, I'm not saying my property's 35% off of its value. It's probably 15% off of its value. But the beauty of it is there's no downside. It's already a locked in loan for five years.

00:28:59:19 - 00:29:15:07

Unknown

It's already interest only. I don't have a rate captive by. So I'm just getting a discount because the market's back. Right. And I love that. And we we did this raise and we thought this is going to be a really difficult race because it was $9.8 million. We had about 90 days to close and it just flew past.

00:29:15:09 - 00:29:35:19

Unknown

People understand that this is a good time to be a predator. This is, you know, back then I was really big in those seven or eight short sale days in the single family market. And everything that you're saying right now is just feels like it's what's happening in the commercial in that it's happened to commercial like that whole wave because I, I in hindsight I was too young man.

00:29:35:19 - 00:29:53:01

Unknown

I was like 27, you know, making too much money didn't even have the discipline to invest or even think about the future. No kids, you know, I was buying a property every month in 2008 and my family, when they realized what I was doing, they banned me from all of the family parties because they thought I would infect the other men in the family.

00:29:53:06 - 00:30:09:07

Unknown

So for 18 months, I was not allowed to go to a family party. You know, I live in a family with a big Don who's kind of the big, big shot. You know, he helped us come here from India. And so he was he was the guy that everyone kowtow to, including me, you know, because he made my life.

00:30:09:09 - 00:30:27:03

Unknown

And he said, no, you're not showing up here because you're infecting these people with these stupid ideas. And by the time I had 18 of those properties in my pocket, everyone was listening. Man. The only way to do something to get people to pay attention to you folks, and this goes for you to listening is that Prove it and prove it with action.

00:30:27:03 - 00:30:49:23

Unknown

Talk's cheap. Well said, Neal. This is a really excellent show. Why don't you tell our listeners where they can find you guys if you have anything for them? Any other closing thought you want to add? This is very insightful. Yeah, we published single family and multifamily data on an ongoing basis. It's highly entertaining, very interesting. We also published data about things like the nonsense around the dollar's demise.

00:30:49:23 - 00:31:12:06

Unknown

We publish data on how climate change is changing real estate. We publish data on how artificial intelligence is changing markets around the U.S.. This is all very, very entertaining. These are hour long webinars. They're data driven, lots of charts, lots of graphs, but also some fun. And 25,000, you know, slightly nerdy. You know, geeky investors come in and learn from us.

00:31:12:07 - 00:31:32:17

Unknown

Only a thousand invest with us. So the best way is really to join that community. It's free. It's always free. There's no subscription, there's no upsell. There never will be a subscription. They'll never be an upsell. The website is multifamily, followed by the letter Yahoo.com. So that's multifamily. You don't go there, you'll see an amazing tool kit and that'll give you all of the metros in the U.S. that you should be investing in right now.

00:31:32:22 - 00:31:53:06

Unknown

Step by step, we rank 323 metros. Our top ten are in their every February like it. Thank you for your insight today and thank you folks for listening there. So the real estate marketing dude podcast folks if you like we said here today, make sure you subscribe to our show files on our channels and definitely check out our new software referral suite.

00:31:53:06 - 00:32:11:18

Unknown

If you're stuck figuring out how to sign for in your database, let us make it simple for you. Quit losing people, letting people forget your real estate. Let's start farming, your nurturing, your relationships. They start referring you and you start attracting business. I appreciate, guys. We'll see you guys next week. Piece Thank you for watching. Another episode of the Real Estate Marketing Do Podcast.

00:32:11:18 - 00:32:32:13

Unknown

If you need help with video or finding out what your brand is. Visit our website at WW Dot Real Estate Marketing dude dot com. We make branding and video content creation simple and do everything for you. So if you have any additional questions, visit the site, download the training and then schedule time to speak with the dude and get you rolling in your local marketplace.

00:32:32:18 - 00:32:35:12

Unknown

Thanks for watching another episode of the podcast. We'll see you next time.