LIVE Q&A with Bob Fraser and Ken McElroy

So, I think we're seeing there's a lot of bad deals that are still being done, but it really is time to be buying. There's a lot of really good deals out there where you're buying below, you know, the debt costs, previous debt costs, other kinds of things. So, it's really a good time for a lot of things, but a lot of deals still are bad deals that are being done. So, it's a mix. What I'm seeing right now, a lot of opportunity, but still a lot of people that are overpaying.

A couple great questions in the chat, um, guys, so continue to do that. I want to prioritize those. Looks like we have a Limitless, uh, uh, conference attender who just saw you, Ken. They're asking, I'm investing in oil and gas, using the cash flow to buy more real estate. Thoughts on that? And Ken, you're muted. I'll have to unmute you. Okay, Ken, you're muted.

There, is that better?

Yep.

Yeah. Um, you know, uh, I typically invest in oil and gas for tax benefits. So, um, you know, and of course that's a whole different world, but, uh, you know, I'm, uh, I'm more of a real estate guy. Uh, you know, when I do things outside of my real estate lane, uh, it's almost always for tax. And, um, you know, so like right now after the big beautiful bill passed they, you know, they open back up the bonus depreciation to 100%, as an example. So if there's a lot of people that may or may not know what that is, that's a huge thing that what that basically means is that you can invest in things and get 100% write-off of what's considered land improvements. So right now I'm doing billboards. You know, billboards are leased land, and so they're considered land improvements. So, you know, so that's why I do alternative investments outside of multifamily. But Typically, I am a big fan of diversification, but I think each one's a little bit different. I have gold, hard asset gold, not ETFs, and it's more like an insurance policy against the dollar. So, everything that I do outside of my multifamily stuff— and by the way, we've done $500 million. We've done 7 deals this year in the multifamily space. So, we're super active. We still have 300 employees. We got about 10,000 units. And we've done 7 transactions through the end of July. And, you know, so, but personally, I do all these other things, you know, legally based on whatever the tax law lets you do with each administration change.

Another question here for Bob. Bob, would you recommend emerging venture capital fund managers include Series A investments in their investment thesis, given your earlier slide on family offices?

Emerging venture capital fund managers include Series A investments in their thesis? Yeah, I'm not sure I understand the question. You know, I think venture capital is a very tough market. I think Justin said, I think 1 in 400 deals actually, you know, wins. So I think it's very tough. I think it's, you know, venture capital has had not great track record in the last few years. That said, of course, a lot of people are doing well with it. So I don't know if that answers the question or not.

Ken, here's a different question. I think a lot of folks are asking this. I mean, clearly with, you know, the last couple of years, it's gotten harder to raise capital. There was a capital flood for a while, and then there's, you know, it's probably harder for everyone. And this person asked, you know, they're an experienced indicator in the self-storage space, but, but challenging. What are you doing, you know, this year and in, in the future to continue to raise equity and continue to raise capital from a retail perspective?

Well, let's go back though. I'm Bob— I think Bob and I agree on this, like, raising money should be hard. Like, right, let's just start there, because what, what we just went through was a period where it wasn't hard. Like, you, you know, and so I think that the expectation, um, needs to be more based on reality. So raising money is hard. What happened was people were online doing influencer stuff, and— but they, you know, so asking people for money is the easy part. The hard part is placing it correctly, returning it correctly, managing it correctly, communicating correctly. That's actually what's unraveling now. So, so the people that have— what, you know, the investors that invested, you know, with, you know, call it inexperienced operators or people that were raising money, that's that, you know, you're seeing that get flushed today. And so you know, we didn't really buy much in the last 3 or 4 years. So, you know, part of raising capital is, is identifying, you know, what, you know, what I would consider to be red flags. And so, you know, when, when we were losing, we were always in the top 2 or 3, let's say, before this, the craze started. Then we dropped to 10th and then we dropped to 20th. And so we were always in the bottom. On being able to, you know, even get a deal. And so what that means is that people were stretching the price, they were shortening their due diligence time, even collapsing it to zero. Uh, they were doing non-refundable, uh, you know, right away without actually stepping on the project. They were doing all these things that I would never do. Um, and so we backed away from the market and that just kept running, uh, specifically I think as a result of the low interest rates at the time. But regardless, that's a different issue. I, I, I, so, so, you know, so when we turn the on button back on, you know, a lot of our investors, we have about 4,000, um, a lot of our investors, you know, knew that we took a pause. And so, you know, that's why I think we've done north of $200 million in equity this year, um, with our existing, uh, you know, base that, that kind of got us here. They, by the way, we've been doing this 25 years, uh, multifamily. So, we've seen multiple cycles. And so, the key was actually identifying the cycle and pushing pause and not running your investors into that high price, low margin, and all based on an exit 2 or 3, 4 years later. That's not our model at all. Our model is cash flow day 1 and then some kind of forced equity component if there is one. Buy below replacement cost and hold 10 years. It's very different. So, you know, so for us, when we turned it back on, we had a lot of investors and LPs that were excited that we were back in the market.

You know, I've been through 4 business cycles and I've seen, I mean, you know, the crashes and, you know, multifamily is one of the very best places to invest your capital historically. But it's had a really rough period. And no one— I think the inexperienced investors really weren't expecting this and not realizing that, hey, everything sucks at some point. Even the best stuff sucks at some point. But that's not the only thing. And I'm actually grateful that there was a little reset in the multifamily space and even in the real estate space because there's other— it's like staring at the banqueting table that's empty. When there's 10 baconing tables behind you that are full. And it's like, hey, look around, there's a lot of things that are doing really, really well. Oil and gas is awesome. Private credit is insane right now. Industrial real estate really hasn't had hardly any reset. So, it's important to think, and this brings up the whole story of diversification, right? No matter how great something is, Yesterday, it was multifamily. Today, hey, maybe it's Bitcoin or maybe it's industrial. Don't put all your eggs in that basket. Diversify so that when something has a sucky time, it's not killing you. And also, it really says go to more conservative investments and go to more conservative operators. Somebody was complaining about, yeah, I lost everything in this multifamily deal. I said, what happened to the building? Did it vaporize? And no, the apartment complex did not vaporize. It's still there. What happened was a very poorly designed capital structure, right? There was far too risky. And I mean, we're seeing, you know, deals that are being 90% leveraged. That's a bug looking for a windshield. And these are young operators that overpaid for an asset, got debt terms that were stupid because it's the only deal they could get done. And as Ken said, they're an influencer. They could sell the investments. Even though it should never have been done. And, you know, so you want to— you want—

it's—

I think it's good time to remember, pay attention to the capital stack and pay attention to the debt structures and pay attention to leverage, these kind of things. Because the truth is, a multifamily deal, even in the suckiest of times, should not be an equity loss, right? You shouldn't have to endure a loss. Maybe your returns go down, but it should be a temporary thing. So And yeah, I think those are some of the, some of my big takeaways from this reset.

And I'll just add one thing. Like in Bob Fraser's book, he talks— this, I can't remember if it's a chapter or a piece of a chapter, but he says one of the things that are— one of the things the LPs need to learn is they need to learn to invest. And that's right out of the book. And that's it. You know, so a lot of these LPs, you know, they didn't know the right questions to ask. You know, and so that's part of it. That's part of the education. That's part of why we do these things. Exactly. That's why we write books, do this online education, because it's really on the LP to decide, do they want to go with this operator? Do they want to invest in this deal? And then it's really on them to, to ask the appropriate questions and to challenge the business plan, challenge the underwriting and all that stuff. And that's actually what you should be doing.

You know, I'll ask Ken a question here. So you saw, I mean, the whole bubble in the '21, 2021 period, you saw a lot of younger syndicators putting these debt structures in place with, you know, 80%, uh, bridge debt, 10% pref equity on top of that. And they're promising these, you know, killer returns on buying at a 4 cap. And the returns are probably beating what you were promising, but you were promising a, you had a much safer structure, right? This was not a house of cards, right? What was your, what was your feeling in that period? You know, like, like, and how did you, how did you deal with that?

You know, I, I'll tell you about— I remember specifically I was on a stage somewhere, I, in Vegas, uh, on a multi-family panel, and the guy sitting next to me, I won't say who, was talking about how he was raising equity at 12%. And the only thing I could think about was That's a problem because, you know, because my properties, you know, like if, if real estate makes 12%, I'm buying all of those I can, you know, as fast as I can, which basically means that the real estate cannot pay the equity, period. So, so, so you're way behind the cost of capital. And so the only way for that to happen is for that push for the property to appreciate and there to be some kind of an exit. And so that— to your— you talked about a capital stack. That's essentially what that means. And so when I, you know, it was the same thing that happened back in '08 when I was checking out at Target and the, the, the checkers, uh, gave me a card for real estate and said, you know, do you want to buy a house? I'm like, okay, this is— we're done. Like, in 2008, you know, this has got to be— it was the same moment for me when I was sitting there listening to this guy raising money at 12%. I was like, That's just a recipe for disaster. And, you know, because the market does transition down, cap rates do go up, interest rates do go up, operating expenses do go up, vacancy goes up, concessions come into the market. You got to anticipate all of those things. And you said it earlier, the inexperienced person doesn't consider those things just precisely because they don't see them. And so, yeah, that was when we were like, okay, I'm done. I'm done raising money into this market.

Ken, let me ask a follow-up question. And for everyone here, you know, be putting your questions in the chat so we can get to them. I see some here. We'll catch up here in a sec. Going to your point on education and how important it is, you know, a lot of investors, limited partner investors entered the market in 2021, 2022 and invested in their first deals in that cycle. And so the things that maybe they were seeing were commonplace But from someone with your perspective of 25 years through multiple cycles investing in multifamily, what are the biggest differences? And from an LP's perspective, what would be some yellow flags that you would say, or you need to dig a little deeper on in a deal that may have been commonplace a few years ago, but as the market settles out and normalizes, that maybe should be commonplace but weren't? And give us some insights there, maybe how you look at things differently than people were doing it a couple of years ago.

Well, I'll give you a real story. So during that period of time, my partner Ross and I decided— we had a 140-unit building in Houston that was really nice that we couldn't move the needle on. In other words, we took 3 or 4 units and we— by the way, it was a newer property built in like 2020 and we renovated and we just couldn't get higher rents. So we're managing the property and we just couldn't get higher rents. We were doing everything we could to try to increase the value. And we just couldn't do it in that market at the time. So we're like, oh, hey, listen, we got some equity here. We're not really making the return. Let's sell it. So we listed it with a CBRE, and lo and behold, we picked a buyer. Well, I was on that buyer's LP list, so they sent me my own deal. I'm the seller now. I'm the seller, but I'm looking at it as an LP. And guess what it says? All the stuff you would imagine. You know, the operator, which is me, you know, there, there, you know, we could save 10, 15, 20% on expenses. There's a lot of upside on the rents. You know, the market's trending this way. You know, all the stuff that you would expect to raise capital. Now, did they believe it? I don't know. But we had already tried all those things. And the point is the business plan can say whatever it wants to say. And the LP has to verify all of those things. And, you know, so why would I sell? And then, you know, somebody else— and we sold that property for, for, you know, a really, really good price at a great time. And so the LP has to be able to sniff out those nuances. You know, on rent growth, on is there concessions in the market? Is there really value add for real? Right. And if anybody— I'll tell you one pro tip. If anybody says that they can bring lower expenses, that's BS. I've been in this business for, you know, 30 years. I've never, ever seen a year where my expenses are more like I'm battling insurance, I'm battling our labor costs, I'm battling my my, you know, all the stuff that we have that, you know, the component piece. I'm battling our property tax stuff like it's constant, it's constant, constant, constant. So, you know, there is that rare one, but generally, you know, it's all on the income side. And they— and so what they do is they project based on, you know, what they think. And so it's the LP's job to dig into that and verify.

Ken, there's a lot of questions here in the chat. Let's get to them. So several questions about the market and how you pick markets. You focus primarily, they say, and maybe this is true, in Arizona, Nevada, and Texas. Have you been following Midwest markets for multifamily? Are there other markets you're considering right now? I think there's just a lot of questions on how you're— what do you think about just regions for multifamily?

I'd love to hear Bob Fraser's perspective on this too. Like, I, I, like, one of the things that blows my mind, I, I grew up in, in the Seattle area, so that's where I cut my teeth. And, um, I cannot believe the landlord-tenant laws. And, you know, they're actually spilling over the governmental stuff on, on the way they run, uh, credit for the tenants, the way that they, that, you know, they're, they're, you know, they're kind of going around the rent control. They're doing that in Oregon. These are markets that I grew up, but I cut my teeth on as a young man, you know. So, so when I look at a market now, I look at those things. I never really had to consider that too much. I mean, I knew that California and New York had rent control. That's— I think that's going to get way worse in the next few years. I look at property taxes now. So, so I know I'm going to get to the market piece, but these are all really important things. We decide not to invest in Florida because of the insurance costs. You know, there are markets that emerge with these crazy policies, these crazy things that really restrict. I had somebody call me from Oregon wanting to sell me a building and said, what should I do? And he said, I go, what's the problem? He said, well, they're capping my rent, so I can't— there's no rent growth, but they're jacking my property taxes, so my margins are going down. And that's exactly— I mean, both are governmental bodies. So you got to like really look at, you know, those things broadly. And then the very basic, easy thing is to— where are, you know, where are the people going? Because real estate doesn't do well without people. So, I mean, people forget this, but it blows my mind. You have to be in an area where there's a lot of people moving. And for all kinds of reasons. So right now, you know, we like several areas in Texas. We're actually— we're buying in Las Vegas right now. I've been there before. We like Arizona. They seem to be— they don't have hurricanes, they don't have tornadoes, they don't have hail, they don't have all that stuff from a property insurance standpoint. Property taxes are pretty, pretty stable. And there's pretty decent growth. And so, you know, those are the markets that we're really focusing on now. But I have— I'm always looking throughout the West Coast at all times. I mean, we have a team of analysts and acquisition folks out on, you know, out meeting with brokers and in multiple markets, including Colorado and New Mexico and, you know, some of those— Idaho, which is where I am now. You know, so we're always looking.

I'll say our favorite markets are Midwest and Rust Belt right now. You know, they're actually having positive rent growth for the last several years where the Sun Belt markets have been very overbuilt. So I think, you know, it's temporary. You're going to see, you know, next 2 or 3 years, Sun Belt continuing to struggle generally because just too much supply coming on the market. So, you have demographics and you have supply, right? And demographics are positive, but actually, Florida demographics, I don't think are that great. People are leaving right now because of the insurance and other reasons. So, that stuff always changes. That's in multifamily and industrial. We love secondary markets. So, a lot of the primary markets are overbuilt. Secondary markets are really nice right now. You have not only the e-commerce boom that's going on, but now you've got a giant reshoring, nearshoring trend that's taking place. So, we love, love, love, love, love industrial, you know, buy a piece of land, pour some walls, tip them up, slap a roof on it, and 9 months later, you're leasing it. And it's just, you know, if you get the market right, it's just a you know, a W every time. So we're loving that as far as markets go.

Are the banks beginning to— no, here's a question: are the banks beginning to no longer extend and pretend? Are underwater deals coming up for sale at good prices? Ken, you mentioned you've purchased a couple deals this year. What has created opportunity for you? I'm curious.

Well, I'll tell you a deal I passed on. I think that— and why. So I got an email from a broker in Dallas that had like a 250-unit, 35% occupied, and they were going to sell it for $14 million. And it was 250 units. So I'm like, oh, I'll take a look at that. Well, the loan was $25 million. So it meant that the— this is the key part— 100% of the equity was gone. All LPs wiped out, and the lender was going to take an $11 million write-off. Okay, so these are the deals we're seeing. Um, we looked at it, uh, we figured it was at least 2 years to, to fix it. No cash flow, obviously. Um, can't be financed because it's 35% plus, and the 35%, it had a horrible tenant base in there, and there was a bunch of cap backs and all that stuff. So by the time I had negative carry By the time I had to fix it, by the time I had to wait, I passed. So those are the deals that we're seeing, you know, and not all that extreme, but we've been buying multiple projects for different reasons. We've been buying newer Class A stuff actually at below replacement cost. So we bought a deal in Vegas at $260 a door, brand new in Henderson. 330 units, I think it is. And so, and it cash flows day one. And we just did that in Scottsdale on another one, 2020 build. And, you know, so, and then we're doing some other value-add stuff. But, you know, we are seeing the distress. I think that these, these syndicators have run out of money. They've, they've been trying to Band-Aid these things for a while, though. We're starting to see a resurgence of listings and stuff. And the brokers know about all these deals, by the way. I mean, they're— they, you know, they've been asked to do BOVs or brokers' opinions of values on these repeatedly over and over and over and over. So they're starting to hit the market. I think— I think you're going to see an inordinate amount of multifamily this year hit the market. We're looking at construction deals that are built and 50% occupied. I love those deals because it takes all the construction risk out, um, and, uh, you know, we could step into something for the cost of the note. For example, we made a couple offers on those in the last two, uh, last couple weeks. So there's definitely deals out there, but, you know, it's like anything, like, you know, you got to say no on everything and then, um, you know, maybe let it get through on a yes. And for me you know, we'll probably look at well over 100 deals easily. We looked at 7 or 8, 8 Tuesday. I said no to all of them. So that's a pretty common week. And so you just got to really, as we've been talking here, stick to the fundamentals. You know, you shouldn't buy something just because you can raise capital.

Yeah. I mean, I think we've seen, you know, the lenders take a very soft approach for the last few years. You know, I mean, these lenders don't want they don't want to run all these properties, you know, thousands and thousands of these properties. So, they're trying to work with the borrowers. And so, I don't think we've seen the flood that a lot of people predicted, right, of market sales and kind of a crash in the market. We've seen more just cap rates slowly kind of trending up and then kind of stabilizing. And, you know, I think we are going to see more deals as the equity guys are, you They're tired of putting in money. So I think we'll see that tick up, but I think a lot of people are still hoping that interest rates bail them out. And now we're talking about a possible rate cut in September. Of course, we don't know if that's the beginning of something or what, but everybody's hoping that that solves the problem for us.

Here's a good question for passive investors. This is what the whole point of this this summit is for both of you guys. How do you guys approach allocating your real estate portfolios or alternative portfolios? You traditionally stick to one or two asset classes, especially for you, Ken. I mean, you're specialized in multifamily, but do you diversify outside of that with your— with the rest of your cash, or do you try and spread exposure across multiple deals, multiple real estate asset classes? It's a question for you guys both.

Yeah, I— well, I think— well, the first thing we do is we believe that the market is more important than the property. That's the first thing. So because the market doesn't matter if you're in A, B, or C, the market will save your butt, right? So if the market's trending correctly, if you, you know, if you know when you're, when you're going in somewhere. So that's, that's really, really, really important. And then the second thing is we take a look at is it oversupplied, is it undersupplied? So I'll give you a harsh example. Downtown Phoenix, which is an area that I know well because I have a home in Paradise Valley. The— you can rent a brand new Class A building for 4 months free on a 12-month lease right now.

Oh my God.

Okay, so what does that tell you? It tells you that there's a tremendous amount of new Class A that entered the market at the same time. It's kind of what Bob Fraser was talking about. Um, now I love the distressed stuff like that, so it's way too early to jump in on something like that. But it'll go from 4 months to 3 months to 2 months to 1 month. That's what will happen. Some of those will go back to the banks. Now, the reason I bring that up is because the Class A's, when, when they're 4 months free, affect the B's, and because then the B's have to do something which affect the C's. So, you know, so it does— it is a waterfall effect. So, so what you do is you, you completely stay away from a market like that, but you watch it. And then what we would do in a market like that is we would try to buy the Class A's when they're somewhat stabilized after they've absorbed. And it's probably a couple of years away, but we're keeping an eye on that. And then you fast forward to Scottsdale, which is my backyard. You don't have that kind of construction and development, maybe in some particular submarkets, but the absorption's much, much different. So in Scottsdale, I would buy probably Class A or a B unrenovated, let's say. So it's very, very— it's really market-driven for us. This last cycle, we bought a building from a guy in Florida, hadn't touched it for 25 years, right next to Arizona State. And, you know, it's literally untouched, unrenovated. So it's a huge value add. But we're not doing the value-add yet because, you know, rent's being disrupted right now. It's flat. There's concessions. So I'm a long-term hold guy. So I'm like, I don't really need a value-add in year 1, 2, or 3. I can do it in year 5 or 6. I can do it whenever. I just have the asset ready to go and I know that there's forced equity in it. So, and it cash flows today. So, so, you know, I look at pretty much everything except for, I would say, anything that has environmental issues, really poorly located. That could be A, B, or C, you know. But if there's a C that I could scrape and build new, we would do that. You know, we're also building 1,500 units right now. We have 6 projects going. We're in lease-up on some, we're in construction on 2, even with today's high rates, because they're going to open in 2027. And when, when the, you know, all this disruption is going to be over, like there's no construction, really no meaningful construction that's opening in 2020 after '26. And so we're going to start, we're going to open, we're going to see really, really nice rent growth because rents for the most part are stabilizing, not in the area of Phoenix, not in some other areas. You're, you're going to see most little disruption for a couple of years. But the cool part about real estate is you can go 10 minutes this way, 15 minutes that way, 30 minutes that way, and you have entirely different markets going, you know, different things going on because people, they congregate where they want to be based on where they're working or, you know, their, their, you know, walkability or the lifestyle that they want. So you can have extremely different submarkets with very, very different results, even in, you know, like Arizona. Tucson's so different than Phoenix. And then there's There's 50 different submarkets of Phoenix, and they're all very, very, very different.

I think one of the main lessons of the book and The Billionaire Model is diversification. And professional investors never put all their eggs in one basket. They just don't do it. And so, I think you want to think about diversification in our ALTs continuum, the very first stop is private real estate. And a lot of people are heavily in multifamily. And of course, that's been a tough market. And I think you need to think about diversification. That means diversifying geographically in multifamily, it means diversifying across sponsors and operators. It means diverse, but it also means diversifying into other real estate classes. And ultimately, it really means diversifying outside of real estate. I think a lot of people are overinvested in real estate. And to looking into private credit and looking into natural resources, private equity, and these other things that the billionaires are invested in. So, I think we always want to be thinking about diversification because there's magic in the math of doing that. And there's magic in the peace. If multifamily has a meltdown, hey, that's not the only thing I'm in. Public markets have a meltdown, hey, that's only X percent of my portfolio. So you want to have diversification, huh, as really a core, core, core tenet and be disciplined in your allocations. So awesome.

Uh, guys, we're going to wrap up here in just a few minutes. Got one question, so let's be quick on this, okay? So a year from now, we're back at the Invest Like a Billionaire Summit year 2. Where are interest rates at? Ken, you're our guest.

We'll let you— we'll let you go. Yeah, I mean, you know, they're, uh, I think the, uh, you know, we follow the 10-year, right? So a lot of people look at the Fed funds rate, and depends on where you are, but for us, uh, we just did it. We've been doing deals this year, Fannie and Freddie, at low 5s. Uh, so I, you know, the cash flow's there. So I, I, I think, you know, 3 quarter point cuts, a lot of people are saying that, but Is that really going to move the needle that much? It's not, in my opinion. Not this year. And by the time Trump gets his Fed chair in there next May, there's a lag as well. So I think people should just strap on and try to make deals for the next 18 months based on these rates. And then maybe in '27, when Trump gets his way, we'll start to see that 3% cut that that, you know, that he wants. And it's just going to create a bubble again. But that, that, you know what's going to happen then? All the big boys are going to come out, all the big managed money. That's when they're going to jump into the market. So this is the time for the nimble small private investor to be able to scoop up deals and weather the storm for the next year and a half. And then if that happens, then that'll be a blessing. But I, I don't I don't really— there's two things the Fed has on their mandate. One is interest rates. The other is unemployment, which is a wild card with AI. So, we just had our conference, the Limitless Conference, and George Gammon and I were chatting. And he thinks we could be at 10% unemployment. And I know— I don't know how much this is on Trump's radar. I've talked to multiple people. The job market's hard right now, the entry-level white-collar stuff. I have a buddy that owns a big law firm. The one sold it, he's a securities lawyer, sold it because he said AI is going to be— the PPMs and all that stuff are going to be basically AI'd. He said the paralegals, we don't really need them much anymore with all the stuff that's going on. And by the way, this is the worst. It'll ever be. So I think that's a big wildcard. And that's another issue the Fed's going to have to contend with. And we all think inflation's higher than it is. And I think unemployment's a little bit of a wildcard. I know Trump just fired the BLS director. I think we're at 4.2%. That'll be really interesting to see what happens there. But this isn't all about you know, uh, that— I mean, the Fed's going to be looking at both of those things. And don't forget, there's what, 12 or 13 governors, not just Powell. He's the one taking the brunt. So it, it'll be— Trump's gonna have to stack the deck to get what he wants, but all that's going to do is create another bubble.

Yeah. Uh, Bob, just real quick, just so we can wrap up here, your thoughts?

Yeah, well, which interest rate? Um, so I, I think we probably see the Fed funds rate come down because Trump is banging on it so much. And yeah, I think he's personally going to are enough people to raise the unemployment rate.

So, yeah, great.

And so I think we'll see the Fed funds rate come down. But, but as Ken pointed out, he pays attention to the 10-year. Well, that's— there's a reason, because that's the rate that most investment is based on. And the 10-year is, is determined at auction. It's not determined by the Federal Reserve. And it's— and what's happened, we've seen structural changes in the Treasury markets. Since the great financial crisis, we've seen the amount of debt outstanding, the amount of government debt outstanding, US Treasury debt outstanding, go up sixfold. Sixfold. Well, that means you've got to find buyers. So, who's going to buy? You've got— it's just supply and demand. And if we've got the supply that's crazy because of the deficits, so anytime the government runs a deficit, they take the deficit and they issue treasuries. Well, you got to find buyers for all that. And if there's not enough buyers, you have to raise rates to attract more buyers. And we're seeing this. So I do not believe the 10-year is going to soften that much, if any. So I think it might come down a little bit. And then I— then absolutely, I'm with Ken. I think you create another bubble and inflation is this monster hiding in the closet right now. And, you know, we've not seen the end of it yet. And again, for structural reasons, you know, I personally, I'm not super afraid of AI. I went through the, you know, the internet was supposed to do the same thing and it didn't. It just changed jobs. It didn't create, it didn't just disappear jobs. And I think we'll see the same thing with AI. So I'm less of a doomsday type person there, but I do think we're going to see inflation It's just not going away and it's going to continue sitting there.

Guys, amazing. Hey, I'm going to wrap up here. Can I do one more thing? So of course, thank you for being here. What an honor to have you at this summit, someone like yourself with your experience. You've also added a bonus to our offer today. You've read Bob Fraser's book. People are getting access to your membership, $1,000 value for free for an entire month. With all of your resources. Wow. Just highlight what your bonus is and, and why you would recommend— I know you've read the book— for people to grab this book.

Yeah, well, I— there's a few things I love about the book. One is, uh, you know, early on Bob talks about, you know, focus on the balance sheet, not on the income statement, right? Like, the, the billionaires really do focus on, uh, on that, on net worth. And, and, um, obviously he talks about debt, inflation, tax. So it's very aligned with the way I think. And, you know, we have a membership called KenPro, which, which we have all our videos, all our teaching, all my books. I have 7 books. You know, we have, uh, we're doing 20 million views on our YouTube channel, our podcasts, all that stuff, all ad-free. So, uh, you know, and access to us and discounts on things that we do too, like our Limitless Expo that we just had last week in Dallas where we had 2,000 people. So That's all that one big package, uh, you know, uh, if, if they, uh, buy the books. Yeah, awesome, guys.

So literally for $299, you're getting all of this— Justin Donald's, uh, Walker Dibles, and Ken. So go check the link. Uh, Ken, thank you so much.

Appreciate you, Bob, as always. Appreciate you.