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at noradacapital.com today. Welcome

1:02

to Passive Real Estate Investing, the show

1:04

where busy people like you learn how

1:06

to build substantial passive income while creating

1:08

wealth for the long term. And

1:11

now, here's your host, Marco Santorelli.

1:14

Hello, my friends, and welcome to another

1:16

episode of Passive Real Estate Investing. I'm

1:18

your host, Marco Santorelli. Today,

1:20

I am joined with my good

1:23

friend and industry associate,

1:25

Dustin Hiner. Dustin, welcome to the show.

1:28

What's up, Marco? Thank you so much for

1:30

having me on the show. It's so great

1:32

meeting other real estate investors who have podcasts

1:35

too, because we're in the industry, we're helping

1:37

people, but at the same time, we

1:40

can actually carry a conversation and have a lot

1:42

of fun doing it. So I really appreciate you

1:44

having me on. It's just so great meeting somebody

1:46

else who invests very similarly, because there's a lot

1:48

of other ways to invest, storage facilities. Those are

1:50

good, don't get me wrong. But

1:53

I just love turnkey type properties.

1:55

I love long term. I love making sure that I'm making

1:57

money every single month. But no, thank you so much for having me. have

2:00

to be on the show. Yeah, no, it's

2:02

great. So the reason I had

2:04

such a quick intro and getting

2:06

you right introed is because this

2:08

is like a very ad hoc,

2:10

unscripted, un-bullet pointed episode on

2:13

really just whatever we want to talk about

2:15

when it comes to crushing it this year

2:17

in real estate investing. In 2024, how does

2:19

a real estate investor crush it? So

2:22

we're going to talk about whatever comes to

2:24

mind. Like we're just doing this because you've

2:26

got the Real Estate Wealth Builders Conference coming

2:29

up very soon, which we're going to talk

2:31

about. And it's something that

2:33

I think a lot of people listening to this

2:35

are going to be interested in. So we want

2:37

to talk about, we want to plug it. It's

2:39

not a shameless plug, but we want people to

2:41

have availability or access to your

2:44

event. Now, this event is now going into

2:46

its third year. I was the keynote speaker

2:48

for the last two years. And

2:51

I'll be there again this year, doing

2:53

whatever I do. I'm going to talk about

2:55

whatever I talk about. I'm not even sure

2:58

what that's going to be, probably the economy

3:00

and whatnot. But yeah, definitely want my audience

3:02

to attend. And obviously we want as many

3:04

people from your audience to attend to learn

3:06

because you've got a whole bunch of speakers.

3:08

So before we kind of deep dive into

3:10

how to invest in real estate today, mortgage

3:12

rates, the economy, and all that stuff, take

3:15

a minute or two and just talk about

3:17

RubeCon, what it is, where it's at, how

3:19

do people attend, and what they can

3:22

expect to learn and take away because you're going

3:24

to be there, obviously. I'm going to be there.

3:26

And let's just see who else is interested in

3:28

going. Absolutely. And with the conference, I've

3:30

been to many conferences. So more than

3:32

likely your audience, they're good investors. They

3:34

already know that they want to invest. They

3:37

are most likely already investing. And with that,

3:39

you've probably gone to an event or some

3:41

sort of real estate event in general. And

3:44

usually, because I've been to these and I hate

3:46

them, it's all hype and sales pitch from the

3:48

stage. And then they say, now run to the

3:50

back. It's normally a billion dollars, but it's a

3:52

thousand dollars today. I hated those

3:54

because it's all just

3:56

sales. And I wanted something

3:58

that was completely opp- opposite of that because

4:00

I wanted something that I would want to go to. So

4:03

if I hate those, let me create something. And then Marco,

4:05

you were one of the first people that I called because

4:07

I said, you know what, this is what I'm trying to

4:09

do. I really just want

4:11

to create an event or a conference or

4:13

something that we can get our communities together,

4:16

our listeners, our students, our investors, and really

4:18

just create a big party where we can

4:20

all come together and help each other to

4:23

invest. So this year, Rubicon, the real

4:25

estate wealth bill is conference. It's going to be in

4:27

St. Louis, March 14th through

4:29

the 16th in downtown St. Louis.

4:31

Got this amazing hotel. It's

4:33

literally an old train station. When I

4:35

say grand central station, it's like that.

4:38

And Hilton refurbished it to be

4:40

a theme park and hotel. So

4:43

it's super awesome. I'm super excited about that place. But

4:45

the greatest thing about this is, not necessarily

4:47

the hotel. Hotel is great. St.

4:49

Louis is very central for everybody to fly

4:51

into. But the great thing is we're getting

4:53

people like me and you and 40 plus

4:55

expert investors who literally are just coming not

4:57

to sell things, but to help

5:00

the people that are coming, all of our

5:02

audiences. In fact, I've got my podcast. You

5:04

have yours, all the other people. We have

5:06

our own students and podcasts and YouTube, but

5:08

it's all of us just helping people how

5:10

to invest. And that's one of the

5:12

biggest reasons why I love you coming is because you bring so

5:14

much. I'm not very analytical. I'll

5:16

be completely honest to say that you are

5:18

so much more analytical. And every

5:20

time you give the keynote, people are saying,

5:22

my goodness, Marco's keynote was so

5:25

amazing because I got so much information.

5:27

I got so much insights. And I

5:29

remember, last thing I'll quickly say is

5:31

2022, when you got it, got up

5:33

there and gave your first

5:35

keynote, I remember you talking about

5:37

why right now is the best time to

5:39

invest, right? Right. Like

5:41

you are helping everybody to continually realize it's

5:44

always the best time to invest. You just need to know how to

5:46

do it. You know, when's the best time?

5:48

20 years ago, the next best time is today.

5:51

And so you got up there, you gave up

5:53

so many and so much data points. It all

5:55

came true. Like everything you were talking about, because

5:57

it's still going on. So with that,

5:59

the conference. is amazing. And for everybody, if

6:01

you want to come, we want to be

6:03

there because Marco's gonna be there. I'm gonna

6:05

be there in 40 plus other expert investors,

6:08

hundreds of other investors there. We just want

6:10

you to invest. We want to help you

6:12

become even better at investing. We talk about

6:14

all types of asset classes. But like I

6:16

said, the best thing that most people say

6:18

is they come away and say, what Marco

6:20

talked about on the main stage was absolutely

6:23

gold. I needed that. Yeah, no,

6:25

I appreciate you saying all that. Very kind words. I

6:27

will try to live up to that again this year.

6:29

So let's knock it out of the

6:31

park. Now, Rubcon is going to be even bigger

6:33

this year. It's a multi-day event. You have even

6:35

more speakers talking about every potential track

6:38

of real estate investing from wholesaling to buy

6:40

and hold to flipping to you name it,

6:42

right? It's all there. You know, I guess

6:44

the best thing for people to do is

6:46

go to the website and learn about, you

6:48

know, everything that's going on. Quickly,

6:51

the website, I'll just

6:53

quickly because I didn't

6:55

say it. It's R-E-W-B-C-O-N.

6:57

Rubcon, r-e-w-b-c-o-n.com. And just

6:59

use the promo code Marco. If you're listening, Marco will

7:02

know that you came from him and he'll want to

7:04

hang out with you just like my students, my

7:06

audience. They want to come hang out with us. And

7:08

so Marco is going to be there. So definitely like

7:10

Marco is a good guy. Like more than likely

7:12

you listen to this, you might be thinking, you know,

7:14

Marco, he's like either a celebrity or he's just somebody

7:17

that's like, you know, far off. No, Marco is

7:19

a regular everyday person just like me. Just think of

7:21

us as like your next-year neighbors that we just want to help

7:23

and just be there for you. Well,

7:26

I have a lot of next-door neighbors then. So, well,

7:31

let's kick things off here. How can,

7:33

you know, investors crush it

7:35

this year? You know, let's just kick this around again.

7:37

You know, this is just ad hoc. It's unscripted. You

7:39

know, maybe share some thoughts. I'll share some thoughts. Where

7:42

do you want to start? When

7:44

I think of what my audience, students

7:46

and everybody for Master of Passive Income,

7:48

what they're asking me right now is

7:50

how do you invest with prices still

7:52

pretty high? Now they've come down a

7:54

little bit. Let's say 15, maybe 20%

7:56

at the very

7:58

most. Some places maybe a lot less,

8:01

but they've come down a little bit, but they're

8:03

still pretty darn high. But the

8:05

interest rates are really high. And we

8:07

know the Federal Reserve came out and said, they're

8:09

not going to be cutting rates anytime soon. And

8:11

with that, that means mortgage rates probably are not

8:13

going to be affected very much in a down

8:16

era, like going down, it'll more

8:18

than likely continue to creep its way up, especially

8:20

if the Fed comes out and said, hey, the

8:22

economy is doing better than we thought, we're going

8:24

to actually put more inflation or there's more inflation,

8:26

so we're going to put more interest on there.

8:28

So we're going to raise the interest rate. And

8:30

with that, then our mortgages are going to up. So

8:33

the biggest question that I have had from all the

8:35

people that talk to me about real estate investing is

8:38

how do we invest with this high interest rates? Well,

8:40

I'll be completely honest. Everybody, especially

8:43

those TikTok gurus that say, hey, I have two properties, come

8:45

follow me. Like I'm going to tell you, people are investing

8:47

for maybe a year, two, year, three years. Marco and I

8:49

have been investing for a very long time. Like, Marco, what

8:52

year I started 2006, when did you start? I started about

8:54

32 years ago. Okay. Lots

8:56

of experience between

9:03

the both of us. Yeah. And we've

9:06

seen down economies and we've

9:08

only had a booming economy for the

9:10

last what, 14 years? Eventually

9:12

something's going to happen, but it's always

9:14

been where interest rates are normally five,

9:16

six, seven, eight. When my parents bought

9:18

their first house, it was like 17%.

9:20

So us knowing two and a half

9:23

percent, 3% for the longest time,

9:25

that's not normal. And so what I've

9:27

seen is students saying, oh, it's so

9:29

crazy. These interests are so high. I'm

9:31

like, no, it's actually pretty average. Now

9:33

it's just getting back to where it

9:35

should be. So for me, the

9:38

biggest question is how do we invest with

9:40

the high interest rates? What I look at

9:42

is making sure that I

9:45

actually account for that expense, the mortgage

9:47

expense, the interest, everything, the payments that

9:49

I have to go out before I

9:51

buy the property. If I can't afford

9:53

my mortgage, if I can't afford that

9:55

interest, I don't buy the property. Like

9:57

the tenant needs to be paying enough

9:59

money to for the property managers,

10:01

the contractors, you know, vacancy

10:03

factor, repairs, cap expenses, mortgage

10:05

payment, all that stuff. And then I

10:08

buy the property making sure I suggest I love making

10:10

$250 or more in passive income.

10:13

But I do not buy a property until I make

10:15

sure those expenses are accounted for because the biggest

10:17

thing I try to get everybody understand, if

10:20

you're a real estate investor, yes, you're an

10:22

investor, but what more so you are, you're

10:24

a business owner. You own a

10:26

business that needs to make money every single month

10:28

or every quarter, but it needs to make money.

10:31

You don't just hope to make money, just like

10:33

if you're selling, you know, a candy bar, you

10:35

would not buy it for $2 if

10:38

you could only sell it for a dollar because you'd

10:40

lose money every single month. That's not a good business.

10:42

But same thing with real estate investing. We want to

10:44

make sure that we're making money with every transaction that

10:46

we buy. But that's what I'm saying. What are you

10:48

seeing with interest rates right now? Well,

10:51

you know, fortunately, we've seen mortgage

10:53

rates for investors come down from the 8%, 8.5% range down

10:56

into the 7%. So

10:59

now we're floating plus or minus depending on credit and

11:01

the deal itself, you know, somewhere around 7%. You

11:04

know, the expectation is that these mortgage rates will

11:06

continue to drop and average out to somewhere close

11:09

to 6%, 6.2% over the course of this year.

11:13

So I really think the Fed

11:16

is going to loosen up there, you know, they're going

11:18

to stop pumping the brakes and maybe start to, you

11:20

know, juice the economy. So we'll see mortgage rates come

11:22

down, which will be good. It'll provide liquidity. It'll

11:25

help with, you know, just kind of greasing

11:27

the housing market, if you will. It'll make

11:29

mortgage financing or leverage more affordable. So

11:31

I see that improving, not tremendously, but it

11:34

will improve over the next 12, 24, and

11:36

36 months. It just has to because the

11:38

Fed and the, you know, the government doesn't want to crush

11:40

the economy. They don't want to slow

11:42

things down. And especially this year, 2024 being, you

11:45

know, an election year. Exactly.

11:47

They don't want to create an environment

11:49

as in the economy where it's going

11:51

to hurt them. So I think

11:53

that's going to improve. But investors, you

11:55

know, should still be looking at deals. They

11:57

just have to be more selective. less

12:00

to choose from for two reasons. One, not

12:02

as many markets make sense today as they

12:04

did let's say three and four years ago.

12:06

So there's less choice in

12:09

terms of markets also. In terms of

12:11

availability, inventory has been pretty tight. We've

12:13

seen some crazy appreciation rates especially in

12:15

2020 and 2021 where appreciation

12:19

rates on average have been you know

12:21

in the 20% range like you know

12:24

1920 21% now granted this is not all

12:26

around the country I'm generalizing because I'm looking at

12:28

the country as a whole but

12:30

it was just nuts for two years. Now

12:33

we've seen a tremendous pullback. In

12:35

fact in terms of what is expected in

12:37

this coming year 2024 in terms of resale

12:39

home prices we're probably

12:43

going to see again on average nationwide an

12:45

increase of 1 to 2% which is

12:47

not a lot. It's in fact it's lower

12:49

than historic norms but again you know

12:52

I'm chalking into this you know the

12:54

San Francisco, the Los Angeles, the New

12:56

York the reality is it might

12:59

be higher than that but conservatively

13:01

speaking resale home prices will probably

13:03

appreciate nominal single digits you know

13:05

it could be anywhere from

13:07

the 1 to 3% range. New homes

13:09

on the other hand because there's such

13:11

demand and pressure to build new homes

13:13

you know we're probably gonna see 2 3 maybe

13:15

4% average rates of appreciation

13:17

this year. Still positive, still good but

13:20

it's kind of the breather that the

13:22

market has to take the cooling off

13:24

or the pullback from what we've seen

13:26

but also keep in mind too what's

13:28

also holding back these appreciation rates which

13:30

normally would be much higher if we

13:32

didn't have mortgage rates as high as

13:34

what they are right now in the

13:36

7 to 8% range. These appreciation rates

13:38

would be at least double that if

13:40

we were back in the

13:43

sub 5% mortgage range. So anyway

13:45

that's what I think most people

13:47

should and could expect in terms of what's

13:49

coming up for this year but

13:52

you know just to kind of tie a

13:54

bow on that and then I'll throw it

13:56

back over to you Dustin is this shouldn't

13:58

stop in real estate investors from investing

14:00

in real estate. You still

14:02

can invest, you should invest, you

14:05

can crush it this year by just looking

14:07

in the right markets for the right

14:09

types of deals. This is something, obviously,

14:11

my company here at Norrata Real Estate

14:13

Investments helps investors do. We've got 25

14:16

markets where we have lots of inventory, lots

14:18

of deal flow, the numbers make sense, but

14:20

you're not going to find that in most

14:22

markets. Certainly not the big markets, what I

14:25

call a tier one market. You

14:27

will find it in many of the secondary

14:29

tier or tier two markets. Certainly you do

14:31

find it in the tertiary markets. Not

14:33

everybody wants to invest in tertiary markets. They're smaller, they're

14:36

typically further out from the major metropolitan

14:38

areas, but the deals are out there.

14:40

The numbers do work. You can make

14:42

it work. And even if you have

14:44

a slow year, things will pick up.

14:46

Real estate works, it always works as

14:48

long as you buy right. It's

14:51

the most historically proven asset class. It

14:53

does produce returns, not necessarily

14:55

great cash flow or great cash

14:58

on cash returns in the beginning, but

15:00

those fix themselves. They heal themselves over

15:02

time because we're always going to be

15:04

in an inflationary environment. So rents will

15:06

go up, something I heard you say

15:08

just a little while ago. But yeah,

15:10

real estate is a great wealth preserver,

15:12

a long-term wealth creator, and over time,

15:15

a great passive income creator. So

15:17

anyway, I'll pass it over to you because once

15:19

you get me going, I won't stop. Yeah,

15:21

totally. Well, same here. And so with that, you

15:23

brought up something that I actually wanted to ask

15:26

you about. So what I perceive

15:28

as a big reason why you brought a

15:30

supply of homes that are out

15:32

there, I see, and obviously

15:35

there's lots of people wanting to buy homes to live

15:37

in, 100%. A

15:39

big reason why I've seen rents go up,

15:41

like my long-term rental properties, the rents went

15:43

up and up and up. And here's the

15:45

big reason why, from 2020 to 2024 now,

15:47

the big reason why that I've seen is

15:54

the supply of rental properties, which means

15:56

talking about supply of selling of homes,

15:58

actual homes for sale. But it

16:00

really comes down to so

16:02

many more people buying short-term

16:04

properties. They're basically, if you

16:07

look at a map

16:09

of Zillow or sorry, go back to Airbnb.

16:11

So if we're at Airbnb, you look at

16:13

Phoenix, there's like, I want to say

16:15

70, might be like 17,000

16:18

Airbnb's or something like that. It's

16:20

a crazy amount of Airbnb's which

16:23

used to be long-term properties or

16:25

properties of people who live in

16:27

permanent residence. And now these are

16:30

turned into short-term properties. So

16:32

that's why all the supply is gone because

16:34

all these short-term people are coming in. They

16:36

watch this TikTok people and say, oh, I

16:38

could do that too. I can make lots

16:40

of money with one property. But then they

16:42

buy it up and they overpay because they say,

16:45

hey, if I could rent it out short-term, I can make

16:47

a lot of money. So a

16:49

combination of all of that, what

16:51

do you see, Marco, about the

16:54

short-term properties? And

16:56

is there anything? Is there maybe a bubble

16:58

where there's so many short-term properties now that

17:01

prices are like you see on Airbnb, prices

17:03

are coming down now because it's the market's

17:05

saturated. But what are your thoughts about that

17:07

short-term properties in general? Well,

17:10

for the longest time and for many, many years,

17:12

your business gets to a certain size and the

17:15

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17:17

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17:19

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estate years I didn't want to venture down

18:33

that road and probably because I was biased

18:35

I you know with my company at no

18:37

router real estate We only sell and talk

18:40

about long-term rentals. So it's the traditional one

18:42

or two year lease, you know long-term buy

18:44

and hold You know things that

18:46

have just historically proven themselves to work and work

18:48

time and time again And I didn't want to

18:51

venture out. So I guess

18:53

I didn't look at it because it's not something

18:55

we wanted to offer Right, but I did invest

18:57

a couple years ago in my own short-term rental

18:59

And now I'm you know kind of doubling down

19:02

in the sense that me and a partner are

19:04

now looking to Potentially acquire six

19:06

or more of them, you know together and

19:08

you know, just build it out I have

19:10

a little bit of a different take on

19:12

the short-term rental thing I just don't want

19:14

plain vanilla short-term rentals because I want something

19:16

that's highly desirable That is

19:18

going to be attractive have strong

19:20

demand and charge a premium And

19:23

so we have a way to do that a

19:25

formula to do that But I didn't care about

19:27

short-term rentals before now I see a need for

19:29

them and I can see how they can be

19:31

profitable But the same rules apply the

19:33

fundamentals you want to be in a good market

19:36

now granted, you know with short-term rentals You know

19:38

You might have to look at it a little

19:40

bit differently because it might be a place where

19:42

people frequent or vacation often or it's it's Geographically

19:44

located somewhere where that is always going to be

19:46

in strong demand or maybe seasonally So you have

19:48

to keep that in mind because that could kind

19:50

of make or break the investment what

19:52

I found with short-term rentals Though is often

19:55

the numbers don't work as a traditional long-term

19:57

rental where you have a one or two

19:59

year lease It won't cash flow positive,

20:02

but it can and it will as a short-term

20:04

rental just because you have a premium in terms

20:06

of the nightly rates and the gross monthly rent

20:09

that you take in from that rental. The numbers

20:11

do end up working out and it could be

20:13

pretty attractive, but it's not the type of investment

20:15

for everybody because it has a lot of turnover.

20:17

You have to have the right management to be

20:20

able to turn it over like a hotel room.

20:22

It's not just something where you're in and out each

20:25

and every year as you turn over to a new

20:27

tenant or maybe less than that if they stay long-term.

20:29

Anyway, I'm not sure if I'm answering your question, Dustin.

20:31

I guess... Well, it's okay. Well, it kind of gets

20:33

me in a direction of... Because you

20:35

said something. I'm going to challenge you here a little bit

20:37

on this. You were saying like high demand

20:39

areas like Disneyland or

20:41

Disney World, like we had a lot of travel.

20:44

I'm going to push back in a little bit and say there

20:47

are lots of areas of the

20:49

country that, let's say, a population is over 30,000

20:51

to 40,000 people, that people have to go. There's

20:56

weddings there. There's graduations. There's somebody

20:58

traveling. Here's the big thing about

21:00

if you went out to what I think you

21:02

call it a tertiary market, but like a secondary

21:04

market, it's not merely like you're paying like $600,000

21:06

for a house. Let's

21:09

say you're paying $200,000 for the house. Well, you're

21:11

getting a dramatic decrease in the amount of money

21:13

that you're paying out. I was talking

21:15

to a good friend of mine. He has 21 rentals. I

21:18

want to say it was in Indiana, somewhere around

21:20

there. I can't remember exactly where it's at,

21:22

but it's in a smaller city. It's maxed

21:24

30,000 people in that city. He has 21

21:26

there, lower priced homes. He said his rents

21:28

are literally 15, maybe 20%

21:31

less than you would get at

21:33

the big cities like Nashville or

21:35

whatever. Just keep that in mind.

21:37

I'm not against short term at all. I think

21:39

short term is fantastic portfolio, the midterm as well.

21:42

In fact, I know a lot

21:44

of my students are crushing it by getting midterm.

21:46

Short term, like you said, lots of turnover. You have

21:49

to make sure that you're on top of that. The

21:51

property managers are on top of it. Midterm,

21:54

meaning 30, 60, 90 days, it's

21:56

still furnished. You get traveling nurses,

21:59

traveling executives. you know, families that want

22:01

to stay there for 30 days or 60 days, you

22:04

do get still a lot of

22:06

money compared to renting out long-term, you know,

22:08

long-term leases. So you're gonna be paying at,

22:11

they're paying per month as opposed to

22:13

per year in a sense. So they're getting locked in 30,

22:15

60, 90 days. But yeah, so

22:17

that's my little challenge to you is that

22:19

these other smaller areas are fantastic as well,

22:21

but your rents don't drop nearly that much.

22:24

It's not like 50% drop. It's like

22:26

maybe a 15 to 20% drop than what

22:28

you would pay at the, you know, Orlando Disney

22:31

World. Right. Yeah. Yeah.

22:33

No, I, you know, I don't dislike short-term

22:36

rentals. In fact, I do like them. It's just, it

22:38

requires a little bit more homework and due diligence

22:40

to make sure that you're in the right area,

22:43

especially the right community or neighborhood where you have

22:45

that ongoing desirability. And there are tools online to

22:47

help you figure this out. There are quite a

22:49

few tools that you subscribe to that will show

22:51

you the inventory of short-term rentals in the area,

22:53

what they charge per night, you know, on average

22:55

over the course of the year. And you can

22:57

see, you know, what you're looking at in terms

22:59

of competition, then you can work your numbers from

23:01

there. So it requires a little bit of

23:03

more work, but it's certainly an option. And

23:05

just another way for investors to crush it in real

23:08

estate this year, you know, it's just, I jokingly say

23:10

there's 101 ways to make money in real estate. There's

23:12

probably more than that. There's probably, you know, 500 or

23:14

a thousand ways to make money in real estate. Totally

23:17

agree. And every asset class, as long as you

23:19

get the right person, like everybody that listens to

23:21

you, they know that you're the expert, like they

23:24

want to work with you because you've already got

23:26

things figured out, just like if somebody wants to

23:28

invest in storage facilities. Well, you want to be

23:30

around the people who've already done it. That's the

23:32

big thing. Or multifamily, like 100, 200 year department

23:35

complexes, or short term, like you want to be

23:38

around those people. That's why I love my conference,

23:40

the real estate, what those conferences, I literally bring

23:42

on my friends like you, and other investors who

23:44

have different asset classes. Every asset

23:46

class is great, as long as you know what you're

23:49

doing. If you don't know what you're doing, you can

23:51

get in trouble. But that's why you actually want to

23:53

be and find the right people. I keep listening to

23:55

the passive real estate podcast, like you want to continue

23:57

to listen because you're going to be a great person.

24:00

going to be growing in your knowledge and understanding.

24:02

Oh, I remember, I also want to, what are your

24:05

thoughts about the supply? You know,

24:07

we've seen supply was really, really low for a long

24:09

time, prices went up, supply seems like it's coming back

24:11

a little bit. What are you seeing right now? All

24:13

of it, because you have properties all over the country,

24:15

you have for your turn keep company, all over the

24:17

country. But what are your thoughts about supply? Well, let

24:20

me kind of close the loop on the rent thing

24:22

and then I'll talk about the supply thing if you

24:24

don't mind. So you know, we were

24:26

talking about rents for a minute

24:28

ago and we were talking about short

24:30

term rentals versus traditional rentals and whatnot.

24:32

If we just look at what has

24:35

been happening with rental increases over

24:37

the last year or so, apartments for

24:39

the most part have been flat. In

24:41

some areas it's been increasing, but the

24:43

year over year appreciation in terms of

24:45

apartment rents have been declining. But single

24:48

family homes for the most part have

24:50

been going up year after year after

24:52

year. It's been pretty strong. And

24:55

the expectation for 2024, again nationwide as

24:57

a whole, we're taking like a very

24:59

big average across the nation,

25:01

but single family rents are expected to go up 3.5%

25:03

this year, which is

25:06

still a pretty strong bullish rate of

25:08

increase. And that's because

25:10

there is strong demand, a

25:13

lack of supply. And

25:16

if you're a real estate investor, this

25:18

is just wind in your sales.

25:21

And so we're talking about how do you crush it this

25:23

year? Just maximize your rents.

25:25

If you can, charge the maximum fair

25:28

market rent in your area, acquire more

25:30

property, continue building your portfolio, get into

25:32

areas that have strong demand and

25:35

will continue to have that high desirability because

25:37

your rents will continue to go up, especially

25:39

if inflation is going to stay high. Now,

25:43

granted, it's come down quite a bit, but

25:45

as long as that inflation is still

25:47

pretty strong and above historic norms, you're

25:49

going to continue to see single family

25:52

rents go up. Now, that kind of

25:54

segues into your question, Dustin, about supply.

25:58

Supply has improved. but

26:00

it's still pretty tight. There will be some

26:02

more easing this year because in terms of

26:04

single family starts, we expect that to go

26:06

up about 4%, which will

26:09

add more inventory to the supply this

26:11

year. With mortgage rates dropping, we'll see

26:13

existing home sales increase about 8%. It'll

26:16

bring more churn and more inventory onto the market.

26:18

So those people who are now waiting for

26:20

inventory will come out and be able to purchase

26:22

that inventory. But that's just

26:24

still existing inventory. It's not new inventory. There's

26:27

still a lack of new

26:30

households for the existing demand. I mean,

26:32

that has been a problem for years.

26:34

It's not gonna change. And

26:36

it's been expected and continues to be an

26:38

expected problem until 2030, at least 2030. So

26:42

another six years of, let's

26:44

just call an imbalance between supply and

26:46

demand in favor of a seller or

26:48

homeowner or investor, because it's the upward

26:50

pressure in the market that's giving us

26:53

the upper hand in terms of price

26:55

appreciation and rent appreciation. That

26:57

just plays into our wealth creation and

26:59

our cashflow. So, you know, but

27:02

there's two sides to every equation.

27:04

It's gonna be problematic for homeowners

27:06

or wanna-be homeowners and renters because

27:08

it's not helping with affordability. Affordability

27:11

will improve slowly as mortgage rates come

27:13

down. But right now, you know, we're

27:16

still in a higher rate, relatively speaking,

27:18

quote unquote, higher mortgage rates. So rents

27:20

are gonna stay high because of strong

27:22

demand. And the

27:25

affordability is coming down and improving, but

27:27

it's still not where we were, let's say four or five

27:29

years ago, when we had rates in the three to 4%

27:31

range. Will we get there again?

27:34

Who knows, maybe, but you know, it's not gonna

27:36

be right around the corner and certainly won't be

27:38

this year. So. Do

27:41

you think there's ever gonna be another 2008 again? I

27:46

mean, because we had the subprime loans, that caused

27:48

a lot. I was like, I was mentioning

27:50

a little bit earlier, I just see a lot of short-term

27:53

properties, people who don't know what they're doing,

27:55

just a way over paying for a property,

27:57

hoping that they're gonna rent it out every single

27:59

mile. 30 days a month, 365 days a

28:01

year, because that's how they, in order to pay their

28:03

mortgage. Do you think there's ever going to be some

28:06

sort of correction or crash like that? Because I honestly

28:08

thought it was going to come like five years ago,

28:10

but it still hasn't come and it seems like it's

28:12

been good for a long time. But what are your

28:15

thoughts with that? Well,

28:17

to kind of play into our overall theme for

28:20

this episode on how does a real

28:22

estate investor crush it in 2024, you

28:25

shouldn't be in this environment with the

28:27

fear that we're heading towards a housing

28:29

crash, or you shouldn't be

28:31

standing on the sidelines thinking, well, I'll wait

28:33

for prices to correct or correct tremendously because

28:36

I'm expecting some sort of major correction or

28:38

a crash like we had in 2008. I

28:41

can tell you that's just not going to happen. It's

28:44

not going to happen. And the reason for that is, well,

28:46

there's many reasons for that, but the biggest reasons for that

28:48

is this. In 2006, we

28:50

had a situation where we had a lot of

28:52

liquidity. Leverage was easy to qualify

28:54

for. So everybody was able to qualify for

28:56

financing. And that means that anybody and everybody

28:58

who wanted to be a so-called real estate

29:00

investor, and I say that in air quotes,

29:02

could be because if you could fog a

29:04

mirror, you can get a loan. And that

29:06

just means everybody was now investing in the

29:08

market, but truly they weren't investing. They were

29:10

speculating. So it was driving,

29:13

it was a bunch of speculation, driving

29:15

construction through the roof in many areas

29:17

around the country, from Florida to Southern

29:20

California. And that pushed prices

29:22

up because it was a false sense of

29:24

demand. And there really weren't true buyers

29:26

out there. So there was a lot of overbuilding. And

29:29

because of cheap rates, investors were

29:31

getting into the market and hoping

29:33

to flip, not hold for long-term

29:35

cash flow, but flip properties. And

29:37

it created a dynamic where we

29:39

had too much supply. In

29:42

fact, 2007 was actually the only

29:44

year in the last three plus

29:46

decades where we actually had more

29:48

inventory available than the actual demand

29:50

for that inventory. But

29:52

then once that cleared out through the great recession

29:54

of 2008, and that inventory started

29:56

to come back down, and the real demand

29:59

for housing exceeded. the supply that was really

30:01

there. We were back into a supply imbalance

30:03

where demand outstrips supply and we've been in

30:05

that situation ever since and we continue to

30:07

be in that situation. So we just can't

30:09

keep up. We need about 1.5 million housing

30:11

units every single year to just stay up

30:14

with the organic growth in the country. Right

30:16

now, we're producing between 1.1 and 1.2 million

30:19

units per year. So we're constantly in this deficit

30:22

of 3 to 500,000 units shortage. Now, we've

30:26

been able to catch up in the last

30:28

recent year or so, but we're still not

30:30

there. We still have a ways to go. Like,

30:32

you know, supply has been increasing year over year

30:34

and it'll get us there. And maybe the prediction

30:36

is that by 2030, we'll be there where we're

30:38

going to see some sort of level of equilibrium

30:40

where supply and demand are more or less in

30:43

balance. Of course, you know, the general economy is

30:45

going to play into that. Mortgage rates are going

30:47

to play into that, but just based on the

30:49

trajectory, that's where we're at. But we're

30:51

not going to see another 2008 to your

30:53

question because right now,

30:55

number one, homeowners and people who

30:57

hold property as a whole are

31:00

equity rich. We don't have a situation

31:02

where people are underwater or upside down

31:04

because they were able to get mortgages

31:06

at a low rate or refinance at

31:08

a low rate where they can afford

31:10

the mortgage. And because of

31:12

the massive amount of appreciation that we've seen

31:14

year over year over the last five plus

31:16

years, they're at a position where they

31:18

have lots of equity in their property and they

31:20

don't have a lot of debt compared to that.

31:22

So they're equity rich. Second, there's a very high

31:24

percentage. I forgot the number, but it was in

31:26

the 30% range. 30 some percent of homes in

31:30

the country, if I remember my data

31:33

right, are actually free and clear. Third,

31:35

the qualification standards are much more stringent

31:37

now and for years compared to the

31:40

way they were from 2000, let's

31:43

say 2003 through 2006 when

31:45

we got into trouble. Back then, like

31:47

I said, you know, you could have a no-doc

31:50

loan, a stated income loan, a ninja loan,

31:52

which is no income, no assets, no job.

31:54

You could get financing quite easily. Today,

31:56

the average credit score for most mortgages, well, pretty

31:59

much for the... Mortgages as a

32:01

whole is 720. So the average

32:03

credit score is 720 or above

32:06

they're qualified borrowers qualified investors they

32:08

have the capacity and the capability

32:11

to afford the mortgage and be able to

32:14

To service that mortgage and I think people

32:16

are more prudent today There's far fewer speculators

32:18

today than there were back then there one

32:20

thing one quick thing speculators I

32:23

think these short-term property because there's so

32:25

many of them Those guys are

32:27

speculating that they can actually keep them rented

32:29

for the high rates that they can because

32:32

they have these five six thousand dollars a

32:34

month mortgage so I just pay a little

32:36

like devil's advocate or like on the opposite

32:38

side is Not

32:40

thinking there's gonna be 2008 again. I don't I don't

32:42

believe it's gonna be something like that But there's gonna

32:44

be some turmoil because as soon

32:47

as people start having issues with traveling

32:49

You know like I'm not saying 2020 all over again where

32:51

people were having something where he locks us down But

32:54

let's say the economy does stall or

32:56

it does have happened to where people

32:59

might be losing their job Then fewer

33:01

people are going to be actually traveling

33:03

which means all these air beam Like

33:05

I said 17 I think it was

33:07

like 17 20,000 something that ridiculous amount

33:09

of Airbnbs in the Phoenix area which

33:12

those would normally be long-term homes

33:14

or rentals or primary

33:17

residences for people and so what I'm seeing

33:19

is there are more Airbnb's coming on the

33:21

market now for sale because they can't keep

33:24

that up the mortgage payment They can't afford

33:26

the strokes every month So I do see

33:28

that if there is some turbulence in the

33:30

economy We're gonna see something like that happen

33:32

where these these people that speculated they paid

33:34

way too much for these Airbnbs They're gonna

33:37

have to sadly short sell them or foreclose

33:39

on them because they can't afford the mortgage

33:42

Yeah, yeah, and that's a good point Dustin You know

33:44

this again plays into kind of the general theme here of

33:46

how do you crush it in 2024? One

33:49

of my business partners Josh and I are

33:51

keeping an eye on the Orlando area

33:53

around the theme parks Because

33:55

we're already starting to see some

33:57

capitulation from people who were buying property

34:00

over the last, let's say, two, three, four

34:02

years, where now there's a bit of a

34:04

softening and with mortgage rates going up and

34:07

whatever may be going on, we're seeing actually

34:09

prices coming down on properties

34:12

that are short-term rentals, but they haven't

34:14

been able to keep them occupied enough

34:16

to really cover their expenses. And

34:19

so now they're selling them basically at

34:21

what they bought them for or even less. So

34:23

there are opportunities out there that are popping up.

34:25

And that's kind of one of the differences between

34:27

short-term rentals and traditional rentals is that short-term rental

34:30

seems to be very, very price sensitive.

34:32

They can fluctuate, especially in changes in

34:34

the area or in the economy. And

34:36

if the economy is suffering and people

34:38

are traveling less, that just means that

34:40

there are fewer people who are filling

34:42

up these short-term rentals. And that means

34:44

demand has dropped and then owners adjust

34:46

the price. They start to lower their

34:48

nightly rate in order to attract fewer

34:50

people that are out there. And

34:53

that just causes a problem for everybody that

34:55

owns short-term rentals in the area, because now

34:57

your gross rents are lower. And now

35:00

it's a question of whether you can afford to keep that property or

35:02

not. So that can drive some opportunity.

35:04

So if you're in the market for short-term rentals,

35:06

that's something to keep an eye on is just

35:08

keep a close eye on the market for

35:11

what's coming up for sale. Because a lot

35:13

of times you'll see things come up in

35:15

areas that are swimming in short-term rental properties

35:17

where people are capitulating and just saying, hey,

35:19

I just can't afford it. I maxed out

35:21

the financing on this property. And I just

35:23

need to get out now because I'm just

35:25

not making enough to make it work. So

35:28

it does seem like that's the direction that it

35:31

will eventually go because of speculation. And

35:33

it's not speculating a flipping. It's speculating

35:35

of renting it for a higher amount.

35:37

Okay, so one other thought too, as

35:39

I was thinking about how we're going

35:41

to be able to crush our real

35:43

estate investing, the biggest thing that I've

35:45

seen is if you know

35:47

how to invest and you've invested

35:50

through markets where there's up and down high

35:52

than low interest rates. And I

35:54

love making money whether or not the

35:56

market goes up, down, or sideways.

35:59

I love that. because I don't have

36:01

to speculate, I'm not guessing it. The

36:03

reason why my students do so well and

36:05

the way I invest is when I started

36:08

back in 2006, that

36:10

was before the crash of 2008 and

36:12

all the gurus are saying, you know, you want to buy

36:15

and you want to get appreciation, like that's what you're

36:17

gonna invest for. I didn't because

36:19

I can't feed my family with

36:22

appreciation. I needed passive income. So I

36:24

was buying long-term properties I could make a minimum of

36:26

$250 a month in passive income.

36:28

And then when 2008 happened, not

36:30

saying it will happen again, but even when

36:32

it did in 2008, I

36:35

made more money in rents because sadly what happens is,

36:37

if somebody has to foreclose on their home,

36:40

they were normally a home buyer, well that

36:42

gives them the opportunity to now rent or

36:44

makes them, forces them to actually rent where the

36:46

demand for rentals goes up. My rents go up

36:48

if there is a downturn. So I love being

36:50

able to, I guess they call it, you know,

36:53

hedge my bets. No matter what happens if the

36:55

mark goes up, I make more money because I

36:57

make more money in rents. I make more money

36:59

in the value of the home goes up. I

37:01

take it out in equity to buy more properties.

37:04

Same thing if the market goes sideways, I'm still making

37:06

money every single month in my long-term properties short-term as

37:08

well. I love residential.

37:11

I love buying hold, but it could

37:13

be long-term, short-term, mid-term. In fact, I own midterms as

37:15

well. But yeah, so if the market

37:17

goes down though, I'm still making

37:19

money in passive income. That's what I

37:22

love is I want to

37:24

be safe no matter what. That's why

37:26

I don't want to pay like some

37:28

people, let's say in Orlando, they're

37:30

paying, you know, a million dollars for a home that they

37:32

need to rent it out every single day of the year

37:34

at like, I don't know, $200 a month or

37:36

sorry, $200 a day, $250 a day. And

37:40

if they don't get that, then they're actually gonna be hurting. I

37:43

don't like to speculate. I like to make sure as

37:45

best as I can, I don't lose

37:47

money. But that's how my students are actually, I

37:49

would say crushing it is because, in fact, one

37:51

of my students, oh, I actually wanna hear any

37:54

stories that you have. So one of my students,

37:56

he literally was trying to invest for two years

37:58

and was not getting it down. never taken

38:01

a step, never actually doing it. He started investing me, and

38:03

this is 2024, we're recording

38:05

this in 2023, in July of 2023, he

38:08

started working with me and Master of Passive

38:10

Income got one on one coaching, he now

38:12

literally has seven units, I

38:14

think like three duplexes and one

38:16

single family home, that he's making like $4,000

38:19

a month from these properties, he bought them

38:21

well, and he's making passive income on these

38:23

properties. And he has all these equity now

38:25

because he bought them, brought them really well.

38:27

But a lot of my students

38:30

or audiences are saying to me, well, there's

38:32

no properties out there, interest rates are too

38:34

high, there's always these excuses or harsh

38:36

way to say it, but like reasons why it's hard to

38:38

invest. Well, it's only hard if you

38:40

don't work with somebody like Marco or myself that

38:42

we show you, hey, we've had experience in this

38:45

area, or we know what's actually working.

38:47

So for my students, it's literally knowing

38:49

how to find the right properties, buying

38:52

them at the right price, so you're not way

38:54

overpaying, you know, speculating 20% over

38:56

value, but then making sure that you're

38:58

having long term, mid term or short

39:00

term properties that are not going to

39:02

be dependent on a booming economy. I've

39:05

talked to a lot of amazing people on

39:07

this podcast, but if you're like me, you

39:09

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estate. masterclass.com/real

40:13

estate. Yeah,

40:17

a couple things. So you know, like another

40:19

way for a real estate investor to essentially

40:21

crush it this year is not

40:23

so much to be crushing it this year, but

40:26

to set yourself up or position yourself to be

40:28

able to crush it going forward from

40:30

this year forward. And that is this, if

40:32

you're one of those people that are thinking that

40:34

I should wait either for a market

40:37

correction, which is more

40:39

or less already happened in many of the markets. Now

40:42

we're just kind of, we're going

40:44

to range sideways for a while. And

40:46

then in the next year or two, as

40:48

mortgage rates drop, we're going to

40:50

start seeing some acceleration, more momentum,

40:52

and again, an increase in

40:54

property values, in rental rates, as

40:58

demand continues to increase without the supply

41:00

catching up and mortgage rates coming down,

41:02

making affordability for everybody, including investors there.

41:05

So that's just going to happen. But what

41:07

I was going through my mind is this, don't

41:09

sit on the sidelines and wait, especially if you

41:11

think that your mortgage rates are too high. Don't

41:13

forget, there was a time when 9% mortgage

41:16

rates was the average. And when it

41:19

dropped below 10% into the 9% range,

41:21

there was a flurry of refinancing because people

41:24

were getting, you know, the rate of a

41:26

lifetime. It was single digit, it was back

41:28

into the single digit range. You

41:31

know, today we're in the 7% range,

41:33

something like that, which is

41:35

a steal of a deal if you

41:38

think about it. And we're actually at

41:40

the long-term historic average. You know, that's

41:42

6% to 7% is where

41:44

we've been for the longest time. But

41:46

think about this as far as crushing it, you know, this

41:49

year going forward, you can crush it by

41:51

getting yourself in the market if you're not

41:53

already in the real estate market or increasing

41:56

your portfolio size. Continue to invest and

41:58

continue to buy even if you're not already in the real estate market. your rate is

42:00

6, 7, 8% or more. And

42:03

here's why. One thing

42:05

we do know, because it works like

42:07

clockwork, is mortgage rates will come back

42:09

down. They go up and they go

42:11

down cyclical over a long period of

42:13

time, like over the course of years,

42:15

not months. But they have to come

42:17

back down. We cannot stall the economy

42:19

with the housing market being a good

42:21

30-some percent of the overall US economy

42:23

when you factor in everything combined. It's

42:26

about a third of our US economy. We can't stall that.

42:28

Politicians don't want to do that. The Fed doesn't want to

42:30

do that. They don't want to see a recession.

42:33

They don't want to stall the economy.

42:35

So at some point, they need to start

42:37

making sure that they're putting some more fuel

42:39

on the fire to keep things burning and

42:41

moving forward. That means this,

42:43

that means that mortgage rates will continue to

42:45

decline over time, maybe slowly at first, but

42:48

they will continue to decline. So if you

42:50

get into a good rental property today, one

42:52

that makes sense, a year

42:54

from now, or two years from now, guess

42:56

what? You'll be able to refinance that 7%

42:58

rate down to your 6%

43:00

rate or your 5% rate, just

43:02

like everybody did year after year after year

43:05

as the rates were going down over the

43:07

last decade or in last two decades. So

43:09

when rates are going up, grab

43:11

the deals that you can. When rates are coming down,

43:14

you refinance the deals that you have.

43:16

That just improves your cashflow and

43:19

just improves the position you have on those properties and

43:21

it just accelerates everything for you. So that's how you

43:23

crush it. Just still stay in the game. Get in

43:26

the game if you're not, be in the game, stay

43:28

in the game and then continue to refinance. Absolutely,

43:31

and I love what you're saying, and

43:33

I have a quote or a

43:35

saying, so you do not wait to

43:37

buy real estate. You buy real

43:40

estate and then wait. The more

43:42

time that you have and you own a property,

43:44

the more money you make in rents, the more

43:46

the appreciation goes up, the more you pay down

43:48

the mortgage, the more tax benefits you get. There's

43:50

so many great things about it. So you don't

43:52

just wait and say, well, when it's this or

43:54

when the interest rates are that. You don't just

43:57

wait to buy it. You buy it and then

43:59

wait. you hit the nail on

44:01

the head with these interest rates being high because that's

44:03

usually the biggest question. What about these high interest rates

44:05

quote unquote high because you and I know it can

44:07

get much higher than this but if you

44:09

lock in let's say 7 on a property and you're going to

44:11

be At

44:13

7 making sure you're not losing money every single month. That's the

44:16

big thing I would suggest but if it goes up you're going

44:18

to be glad that you've got a 7 like if it's at

44:20

12 percent You're like, oh, i'm

44:22

so glad I bought back when I listened to

44:24

marco or dusted on the podcast and I got

44:26

this 7 But then you're right

44:28

marco if the rents or sorry interest

44:30

rates come down It's at 6

44:33

5 whatever it might come down to then you

44:35

refinance it and you're back Even better

44:37

than you were when you got 7

44:40

either way we buy real estate and

44:42

then wait Yeah, yeah,

44:44

you know and just again to repeat the whole

44:47

mortgage rate thing This year in 2024

44:49

we're expecting the mortgage rates to drop a little bit

44:51

over the course of the year and probably average out

44:53

around 6 to 6.2 percent But

44:56

but that's going to continue into 2025 the expectation

44:58

is that the rates will be in the 5

45:00

to 5 Probably closer to

45:02

5 and a half percent And you know, I don't have a crystal

45:04

ball the data is showing that will be in the 5 range

45:07

somewhere in there next year So all right. So

45:09

you have 7 this year and in a year

45:11

or two You're going to be able to refinance

45:14

to 5 and a half maybe 5 You

45:17

know that that just improves your cash flow and that's

45:19

not including the the fact that you could potentially be

45:21

increasing your rent a little bit You

45:23

know by 3 4 5 percent each and

45:25

every year just through just rent inflation, you know, that's

45:27

it's just going to happen You you have no control

45:30

over it. It's going to happen Absolutely

45:32

agree and even with one

45:34

thing I also love about real estate investing is if

45:37

it know there's inflation We know inflation like year

45:39

over year It's probably been a total of like,

45:41

you know 5 and 8 and

45:43

almost 9 10 percent and kept going

45:45

up now it's back down a little bit But

45:48

community over time it's gone up a lot But

45:50

the great thing about real estate investing my rents

45:52

have gone up over that time So even

45:54

though there's inflation it hasn't really affected me

45:56

very much because my rents my money keeps

45:58

going up just like go to your boss

46:00

and say, Hey, boss, inflation's up. He's like, I know

46:03

it's up, you're not getting any more money. But with

46:05

my rent, it's the value of the other

46:08

properties in the area that those

46:10

rents are all going up so I can raise up

46:12

my rent as well. So that's why, you know, seriously,

46:15

like we use that idea of crushing your

46:17

real estate investing, you do it right, you

46:19

make sure that you do it now. But

46:21

then you also on top of that, with

46:24

the interest rates and inflation,

46:26

it helps you to make

46:28

sure that you're making money in the future. Like

46:30

if it in fact, for me, I look at

46:32

it as being generational wealth. I've got four kids,

46:34

I'm really blessed with my wife having our fifth

46:37

child, she's pregnant right now. And she'll

46:39

be doing two or three months. And with

46:41

that, I will literally be giving

46:43

these properties to my kids 30 plus properties I

46:46

own hotels and stuff like that. I'll

46:48

literally like all especially all the homes because I own them free and

46:50

clear. I'm gonna give them to my kids. With

46:53

that, they're gonna be able to make passive

46:55

income from these properties. Obviously, they're not trust

46:57

fund kids. I'm actually teaching them how to

46:59

invest, teaching how to be wise in their

47:01

money. I personally got because I've quit my

47:03

job, I have 40 plus hours

47:05

of my life back that I now build businesses.

47:08

So I currently have five businesses that make me

47:10

money and now I hire my kids. And my

47:12

kids actually work in the business. Like a quick

47:14

example, my daughter is actually editing my podcast now.

47:16

So with my podcast, I was just doing the

47:19

editing all myself and she's 15 years old, she

47:21

was 14 when she started. And she said, Hey,

47:23

dad, I'd like to help. I said, well, let

47:25

me teach you how to start editing the podcast.

47:28

She does an amazing job, better job than I

47:30

did. And so that's the great thing about real

47:32

estate is it's everything and even generational wealth. Yeah,

47:35

I love it. Very, very well said. And congratulations

47:37

on your upcoming child. Thanks,

47:39

man. You know, just kind of a

47:41

final thought about the whole affordability thing. A lot of

47:43

people think that, you know, having the high interest rates

47:45

is a bad thing. Like when I say interest rates,

47:47

I mean mortgage rates, you know, you have to remember

47:50

that there's two sides to every coin. In fact, you

47:52

know, there's actually three sides to every coin. There's the

47:54

edge and it allows you to look on both sides

47:56

of the coin. But you know, the thing with affordability

47:58

is that if mortgage... rates are

48:00

high, that means a lot of people can't

48:02

afford to buy their own home, which means

48:04

that they have to rent because everybody needs

48:06

a roof over their head. Well, if you're

48:08

a real estate investor, that's good for you

48:10

because now there's more people being pushed into

48:12

the tenant pool, which again, increases demand for

48:14

the limited supply of whatever is out

48:16

there for rental properties. That's to your benefit as a

48:19

real estate investor. If you're not in the game, it's

48:21

not going to help you. You're not going to benefit

48:23

from this in any way, shape, or form. Now,

48:26

affordability, like I said before, is going to improve

48:29

a little bit this year and into next

48:31

year. But you have to

48:33

stay the course and keep in mind that

48:35

even though things are looking crappy from

48:39

an affordability perspective and slowly improving,

48:42

it's still in your favor. But unless

48:44

you're in the game or investing or

48:46

building a portfolio, you're not going to

48:48

benefit from that. Even

48:50

though the pendulum swings one way,

48:53

which is bad in some sense,

48:56

there's always some good that comes along with

48:58

it because no matter whether the pendulum is

49:00

swinging left or right, it takes away from

49:02

one area of profitability or attractiveness with real

49:05

estate investing, but it adds to another part

49:07

of that equation. There's many variables with real

49:09

estate. You're always going to win if you

49:11

do it right. You're always going to win.

49:13

You're always going to profit. Sometimes

49:16

it's just the depreciation. Sometimes it's

49:18

the cash flow. It's the equity

49:20

growth and the appreciation. But

49:23

as long as your property is

49:25

well located and occupied, it

49:27

will carry itself. It'll

49:30

pay for itself. It'll generate passive income.

49:32

It'll grow over time. Your equity will

49:34

increase. Your net worth will increase. And

49:37

you just need to start stacking one after

49:39

another after another. And guess what? When

49:42

you have time on your side, it's like you said,

49:44

don't wait to buy real estate. Buy real estate and

49:46

wait. It'll start to compound for you. It

49:49

absolutely does. That's why I

49:51

love the snowball. It just keeps growing. In fact,

49:53

I love how my properties, I literally... Oh, one

49:56

thing I wanted to add. So my properties and

49:58

the equity that I have in my properties. is I

50:00

want to have access to that capital. I don't want to

50:03

just sell my property, get that money to buy more property.

50:05

How about instead refinancing, pulling that cash out? Or

50:07

if you have a residence and you can actually

50:09

do a home equity line of credit, I know

50:11

one or two companies that you could do it

50:13

on an investment property, there's not a lot. But

50:15

definitely your primary residence. Like I've literally owned my

50:17

house, pretty clear. But I got

50:20

a home equity line of credit because

50:22

I wanted access to capital. So that when there is

50:24

something that comes up, it's not like I'm already paying

50:26

interest on it because of the home equity line of

50:28

credit, but I have that access to capital. Like, oh

50:30

man, there's a great deal that came up. Let

50:33

me go ahead and buy it now. Then I

50:35

could refinance it, pull that cash out, pay off

50:37

my home equity credit. I've literally done that many,

50:39

many times. In fact, one of my students up

50:41

in Sacramento, he's a pastor up

50:43

in Sacramento. He knows he can't work literally for the rest

50:45

of his life. So he said, hey Dustin, I don't have

50:47

any money, but I want to invest in

50:49

real estate. I said, okay, let's look at it. Turns out he has

50:51

a house, bought it in 2016, had

50:54

a good amount of equity. We got a home equity line of

50:56

credit. He bought a house in, I want to say it was

50:58

Atlanta, and then refinance it, pulled that

51:00

cash back out, plus $30,000 extra put in his pocket,

51:04

paid off his home equity line of credit, had the $30,000 by

51:06

the next property. So it's having access to

51:08

capital. That is a huge, huge deal in

51:10

your real estate investing because if you don't

51:13

have that, it's gonna be very, very hard.

51:15

It's not impossible to do no money down.

51:17

It's not impossible, but it's very, very, very hard.

51:20

So much better if you have that access

51:22

to capital. Yeah, 100% agree.

51:25

Well, I mean, obviously we can all help

51:27

investors find their way and give them access

51:29

to deals and all that stuff. I mean,

51:31

you and I are both here

51:33

to help real estate investors do whatever they

51:35

want to do and achieve their goals. So

51:37

do you have any final thoughts, Dustin? No,

51:40

that was it, was I wanted people to realize

51:42

that they need to have capital if they're gonna

51:45

move on, especially, let's say Mark

51:47

and I don't see it, but let's say there is a crash.

51:50

And all of a sudden, everything's back in 2009 and 10 again, where

51:52

it was like, it was so great. I wish I had more

51:55

money. I would have bought a lot

51:57

more properties. Then if you had that access to capital, then...

52:00

you would be able to absolutely deploy that money

52:02

into properties and just gobble as many as

52:04

you can. So my suggestion, whether the

52:06

market goes up, down or sideways, you'd be

52:08

buying. If it goes up, then great. You make

52:10

more money, you keep buying. If it goes sideways,

52:12

you keep making money, keep buying. If it goes

52:14

down, you buy even more because the prices are

52:16

better, you keep making even more money. Yeah,

52:18

no, I love it. I guess my closing thoughts

52:20

are this, you know, just keep stacking, keep investing,

52:23

keep building. You know, right now, it's not

52:25

the frenzy we saw in 2020, 2021. About

52:28

70% of the markets around the country are what

52:30

we would call normal in terms

52:33

of market conditions, which means that, you

52:35

know, there are healthy markets,

52:37

there's sales activity, prices

52:39

are rising ahead of inflation. You know, that's about

52:41

70% of the country, at least in the

52:43

major metro markets that, you know, we're tracking. About

52:46

12% of those are strong to very strong, you

52:48

know, there's very strong growth. And

52:51

it's about 19% that I would call

52:53

slow at this point in time, which

52:55

means that it's just lagging. But these

52:57

are markets that are, you know, either

52:59

correcting because they ran up too fast

53:01

in a short period of time, or

53:03

there's just excess inventory because of a

53:05

lot of new construction, or it's just a

53:07

weak environment right now, you know, that in

53:09

that subject to change. But there's a

53:11

lot of opportunity out there. Keep in mind that most

53:14

of the markets around the country have normalized, which

53:16

means that there's going to be inventory, there's going

53:18

to be opportunities, there are deals out there to

53:20

be had and to be found. And

53:22

you know, we're seeing, at least on our

53:25

end, supply increase, you know, in markets in

53:27

the Midwest, pockets of the Northeast, you

53:29

know, throughout the South, Southeast into Florida, you

53:31

know, the markets that we're, you know,

53:33

pretty active in as far as our turnkey

53:36

rentals go, we're just seeing opportunity, there's no

53:38

excuse not to invest right now. As

53:40

long as you qualify for financing, you know, you can be

53:42

in the game or you can get in the game. Absolutely

53:45

right. It's access to capital, getting

53:47

financing, and being ready to invest. And obviously,

53:49

keep listening to both of our podcasts. Like,

53:51

you keep listening, you'll be learning so much

53:53

more on how to do it. If

53:56

you have that ammunition, like if you, you go

53:58

to college to get education to knowledge I

54:00

hope they get a job, but man, there's so

54:02

much great information on Marco's podcast, my podcast, like

54:05

what we just give out, it's like we're just

54:07

here to help you to invest. So

54:09

let's just wrap it up with Rubicon. Where

54:11

can people get information on Rubicon and tickets

54:13

and all that kind of stuff? Yeah,

54:15

so let's do this. You

54:18

go to rubicon.com,

54:20

r-e-w-b-c-o-n.com, and you

54:22

get your ticket. Use the promo code MARCO. Marco

54:24

and I, I just came up with this right now. Marco

54:27

and I, I wanted to give all of his audience 10%. I'm

54:29

going to up it on my end. I'm going to give you guys

54:31

20%. So if you guys go, I'm

54:33

going to give you more. I want you guys to do it

54:35

20% off. Use the

54:38

promo code MARCO, but go to r-e-w-b-c-o-n.com,

54:40

but we want to see you there.

54:42

It's in March and it's an annual

54:44

conference. So always, we're basically

54:46

doing it all the time to help you

54:48

to invest. But yeah, come check out Rubicon.

54:51

See Marco speak. He's absolutely amazing on the

54:53

keynote stage. You're going to love that. But

54:55

then also, you know, you're on Marco's podcast and

54:57

this is actually going to be playing on my

54:59

podcast as well, the Master Passive Income podcast, where

55:01

we just love helping people and Marco and I

55:03

are friends. And especially when we get to hang

55:05

out with each other on a good conference and

55:07

stuff, I still need to go to one of

55:09

your plays though. I still have yet to go

55:12

to any play, a Broadway play

55:14

especially. So I need to go check out one

55:16

of your Broadway plays. Well,

55:18

let's go together. You can come as my

55:20

guest. It'll be fun. Let's do it,

55:22

man. I'm down. All right. Right

55:24

on. Well, cool. Well,

55:26

Dustin, thanks for taking the time. Thanks, Art, at Rubicon

55:29

and anything I could do to help you, let me

55:31

know. But thank you for the generous discount. So discount

55:34

code, Marco, at Rubicon, R-E-W-B-C-O-N. Real

55:38

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55:40

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