Next Level 273: Housing Slowdown or Opportunity? What You Need to Know Now with Josh Mettle

You have to have the balls to get in the game.

You have metaphorically. You could be a winner.

Metaphorically.

Right.

The brass ovaries to get into the game. And what I mean by that is.

Welcome to the Next Level Income show where it's our goal to take your income, your investments and your life to the next level. I'm your host, Chris Larson. If you haven't yet, get a copy of our book for free at our website, nextlevelincome.com. that's www.nextlevelincome.com. just click on the book link and I'll even send you a copy. If you put your address in, you're in for a treat. On today's show, we welcome back Josh Metal. Josh is a visionary entrepreneur, mortgage strategist and real estate investor dedicated to transforming the way self employed professionals achieve home ownership and financial freedom. Today I'm going to dive into Josh some real world examples how you can use the same strategies that he used and I've used over the past 25 years to multiply our wealth in real estate, starting small, using 1031 exchanges, pulling equity out, refinancing and really driving wealth creation through real estate. Then we're going to get into what Josh sees going on in the interest rate market, in the mortgage market and why he believes now is the best time that you can invest in real estate. Stay tuned. Josh, great to see you again. Welcome back to the show.

It is great to be here. Thanks for having me. And let's light this up. Let's talk about some fun stuff.

Absolutely. Absolutely. Yeah. So for those that don't know you, some, some may say, oh, I remember Josh when he's on the show. We have you back on frequently to talk about the housing market, the mortgage market. What we're seeing here, we've seen a lot of turbulence in the last two years but we were catching up before the show and we seeing some real positive things in the market that I want to discuss with you today. But before we get into that, Josh, share a little bit about you, your background, what you do with the audience here.

Sure. So started in mortgage right about the same time that I started and residential mortgage right about the same time that I started buying investment properties. Very thankfully we did that in the early 2000s. In fact, I think 2000 was here that we bought our first investment property with my mom, who's my business partner. She's a recovering attorney. So she was in landlord tenant law, protecting landlords against tenants that needed to be evicted and weren't paying and then she went into asset protection. And for those of you taking notes and you want to pick a business partner, that's the best one you can possibly pick if you attorney or a parent that you get to inherit the business someday. Those are great business partners. And you know, it turns out, Chris, we were stupid to sell anything. And it turns out that if you hold real estate for 25 years, you're a flipping genius. Like, you know, you just, yeah, was a home run 25 years down the road. And as we were kind of getting ready here, I was talking about this, this idea around inflation, which is really kind of a scary word, right. We for most of us in our age bracket, right, let's call those the Gen Xers. We haven't really seen inflation, right. Like that was something that happened in the 80s and the 70s. And so we're, you know, I personally have been fearful of inflation because we know it mortgage rates, it pushes up our costs. It seems like a really bad thing. But as a real estate owner now, you know, my mom and I own 176 units and those are spread throughout Utah. A few residential, although we've 1031 exchanged out of most of those apartments. Medical, office, retail. And we're now working on our biggest project ever in southern Utah, which is industrial flex. But as I look over that portfolio which I mentioned, a lot of those properties we've held 20 years or more. I've seen this magic of inflation. Inflation pushes up the rents. For example, the first aplex we ever bought, Chris, the rents when we bought the building averaged about $315 a month for a two bedroom, 800 square foot right next to the Capitol downtown like bomb location. We now rent those units out for 1500 plus we pay for park, we charge for parking, plus we charge for storage. So we're getting like 1795. So think about that. We've gone from 300amonth to $1800 a month, which is like a 500 increase in rents. But our mortgage payment stayed the same, but actually it didn't because we've refinanced that debt down to a lower interest rate throughout that period of time. And so, you know, inflation, which can sound really scary and does have some detrimental effects to long term hold investors. I'm talking decades or more. Inflation essentially destroys that debt. So we're kind of going through this like Goldilocks period where we refinanced and locked most in, in, you know, let's say between 2018 and 2022, we essentially refinanced everything. And then we've seen inflation increase our rents. And the delta or difference between the mortgage debt service and our rents is now wider than ever. So it's just, you know, that's what we've done for the last 20 years. Work hard in the mortgage business, put families in homes that otherwise couldn't qualify. We serve mostly entrepreneurs and medical professionals and help them get access to housing and then turn those earned dollars into a real estate portfolio that is now just spinning off a ton of cash. And it's really a blast to own real estate now.

Yeah, no, I love it. And I think we covered this in one of our previous podcasts maybe when I was on your show. You know, I read a book that was very consequential back in the late 90s called buy and Hold. And the gentleman that wrote it basically said the same thing. He was out in California and said, hey, just buy properties, put long term debt on them and pay them off. You know, hold them and pay them off. And you will see that. And I love what you said about inflation, Josh, because you know, the government makes this work, right? Because they push inflation up. You know, even if the Fed says, hey, we want low inflation, they still want inflation. And what that does for the government is it makes their, their debt basically deflate as the economy grows. And you can take advantage of it as an investor. Specifically, if you are invested in real assets like real estate that, where the value goes up with inflation.

It's exactly right. And I've got a graphic. I know this is a podcast, but let me just, I just want to. May I just share a quick graphic for you real quick?

Absolutely, yeah. So if you're watching on YouTube, you can go ahead and check this out. Obviously, if you're, if you're listening on the podcast, check it out. Check us out on YouTube next level.

Income show and I will articulate it as clearly as I can. It'll help explain it by looking at it. But this is the value of $100 going back to 1913, which is the Federal Reserve was created. And so what do we have there, Chris? 1,112ish years since the Fed was created. And in that period of time, if you'd have put $100 into a coffee can and buried it in the backyard today, you would have seen that that hundred dollars only has $3.20 in buying power today. Meaning you need $100 today to buy would have been $3.20. You've lost 97% of your purchasing power since the federal. And so. And if you look at the cumulative inflation over that period of time, it's over 3,000%. 3,000%. It's crazy. Which means that $100 item in 1913 now cost $3115 to buy. So again, that shows the destruction of the dollar. But back to you and I were just talking about when we buy real estate. One of the reasons why real estate is such an amazing asset class is because of the, that mortgage companies and banks are willing to give you on that asset. Meaning if I'm buying a million dollar asset, I don't need a million dollars. I need $200,000 or whatever it is. And that means I'm taking out an $800,000 mortgage. That mortgage is denominated in dollars. The value of those dollars goes down over time, which means as inflation occurs over long periods of time, the value of the dollar denominated debt is being destroyed. I learned this from a guy named Jason Hartman, which I may have mentioned in a previous podcast, been a great mentor to me. And Jason has this idea around inflation induced debt destruction. He's smarter than me. Those are bigger words than I use. I just say inflation destroys debt and it makes intelligent investors rich. So, you know, if there's a takeaway from this podcast, perhaps it is buy hold forever and let the work that the federal government is doing by inflating the value of the dollar away, that's destructive. If you hold dollars in coffee cans and you bury it under the backyard tree, it is. What's the opposite? It is constructive. It is beneficial to us. If we're borrowing in dollars. And, and then the Federal Reserve is deflating the value of those dollars over long periods of time. So back to your point, who's the biggest, who's the biggest debtor in the world? It's the US government, 100%. Not only do they have the $37 trillion of on, on record debt, and there's all these unfunded liabilities, so hundreds of trillions of dollars. So what's the, what's the best way for them to get out of that? Well, it's to inflate that away because as there's inflation, there's more tax revenue. And then you can pay yesterday's deflated dollars away with today, or you can pay those dollars away with today's deflated value. So we just have to make sure we're on the same side of the, of the sheet of paper. We're working in the same way that the government is, even though I Don't like system. You got to know the system and be on the same side of it.

Absolutely. And just doing the quick math as you were going through that, the average inflation over those 112 years was, was about 3%. So you know, it's incredible that a 3% compounded rate turns into, you know, 3,000% and change. So just, just very powerful as you do that now, you know, I, I agree with you. You look over time and you ride these waves and you know, real estate, it's not linear, right? Like it doesn't go up the same amount. We've seen, you know, you and I have seen it through cycles. I've seen it actually in the early 90s, my parents were working for a real estate company. I watched the destructive nature of the savings and loan crisis in the real estate market. You know, obviously 2008, 9, 10, what happened there? You know, we've seen a big pullback in the real estate market here recently. So I think it's great to look at this from a long term perspective, Josh, for investors that may be seeing this here just in a, in a, you know, over the last five years and saying, wow, like, you know, this is crazy. I saw a 20%, you know, decrease in the value of this piece of real estate, for instance. But you know, if you're playing the long game and you are investing, you know, over time, you know, you can take advantage of those decreases, you can take advantage of the refinances that occur for that. Any, any lessons or advice there for people that are newer to the real estate market?

Yeah, I guess if you're watching your real estate portfolio and the value goes down and you have positive cash flow on that property, the question I would ask you is who cares? Like if you're, if, you know, when I, my preferred holding time on a piece of real estate is 100 years. And I think about it in that context, like this is something that hope my children are going to inherit and take over the management and my job is just the financial custodian of that asset to maximize the revenue. So if I'm never going to sell that piece of property, I could care less about the annual or, or, or even a decade swing with, with prices up and down. What I'm focused on is how do I maximize the economic viability, the cash flow of that asset. And that's the only I'm focused on because what I care about is the amount of revenue that thing is building. And, and, and, and if there's periods where, where your equity is down. Great. Don't sell it, don't refinance it unless rates are ridiculous. Ride it out, Figure out how do I invest in this asset throughout that period of time, maximize the cash flow. And then when you have periods of big appreciation, then you go back over your portfolio and you say, okay, is this the right time to 10:31 exchange change something that has a higher return on equity? Or is this a time to restructure the indebtedness? Perhaps you have appreciation, perhaps you have a. Rates have dipped a little bit, you've maximized the cash flow and now you pull some money out tax free. You can still debt service with the cash flow you've created. And I use that to go buy a piece of property cash tax free.

Love it. So let's talk about those two scenarios because this is a great lesson. We've used it repeatedly. So scenario one, is your, your property value gone up and you refinance or maybe put a second loan on there, for instance, and you pull cash out. And when you do that, that is a, that's a loan that you're taking against the property. And for those that aren't aware, you don't pay tax in that scenario. So if you have a property that went from half a million to a million dollars and you take say $300,000 out in equity as a loan, you don't have to pay tax on that, which is phenomenal. So you can go and you can reinvest that money at a higher rate of return because before it was actually earning zero because that equity is just sitting in that property. Right? And then you can leverage that. Now scenario two, you know, you mentioned equity, return on equity, and this is something that I wrote about in my book. So for those of you that either haven't got my book, go to nextlevelincome.com get a free copy of my book. Or two, if you forgot that part, go, go ahead and reread it. But this is what led me to, to, to sell and do some 1030 ones as well. Our residential portfolio, my return on equity, Josh, went from 30% down to about 7%. I had to pay tax on that. So I started selling, doing some 1030 ones on those properties to get my return on equity back up. Talk about a 1031 exchange. And when you make the decision and how you calculate whether it's a good idea to sell that property or hold on to it, Great.

And I'm going to give you a life, a real life example that we literally wrote a contract yesterday Based on an announcement.

Perfect timing.

So this is perfect. So we bought an aplex in 2020ish. No, I'm sorry, 2000ish. And we bought a seven plex in about 2012. Those properties, at one point we had paid off because, you know, we'd had some, some good income come in. We'd have really good rents. And we were in a period where we were just, you know, every six months, hey, the accounts have built up to X. Let's just chunk down the payment. So the properties were paid off. We ended up taking a line of credit on those and pulling out about $2 million on those two properties to buy them another medical office building. And as people know with as inflation is what determines interest rates. So as inflation has moved up, the federal reserv moved up prime rate. Prime rate is what controls ends of credit. And these loans went from 4% interest rate to 7% interest rate. And it kind of sucked all the cash flow out of those two buildings because we saw prime goal. Now the good News is the 2 million bucks, we put it in the metal medical office building.

Crushing.

Doing great. So overall, the portfolio is cash flow positive. But when I started to look at the return on equity of this 8 Flex and the 7 Plex, it was very low. Our return on equity was like 4, 4% a year, which means I could essentially sell those buildings, take the cash, put it in a treasury bond, and I would have been making more money from the treasury bond than I would have on, on the amount of equity that we had in those buildings. Because the debt was highest interest rate in our, in our portfolio. It was the only thing we had above 7%. So as I look at those two buildings and I'm going, hey, I've got about two and a half to $3 million in equity. I'm only cash flowing after capital improvements and everything else. About $5,000 a month on two and a half for two and a half million dollars in equity. So we immediately identified those two properties as targets for 1031 exchange. For anybody who doesn't know that's a way to, to sell investment property, buy a new investment property. And even though I paid $315,000 for that 8 Plex that now would sell for about million bucks, I have paid no capital gains that. I'm 1031 or moving the equity, I can't touch the equity. I'm moving into another property. Then when I sell that property that ever happens down the road, I got to make the same decision. Am I going to pay those taxes or am I going to 1031 exchange away? But it's a way to leapfrog the tax event until a future.

So, and real quick, Josh, for those of you that may not be Familiar with the 10:31 exchange, go back just a couple episodes, listen to Dasha Beardley Beardsley's podcast, get her book on 1031 exchanges, and we'll go through it all. So if you're like, wait, what is that? I want, I want to know more. Dasha Beardsley, 1031 exchanges. Great podcast.

Yeah, great, great call out. Thank you. Yeah. What I say, Chris, is you either invest in real estate or you pay taxes, but you don't have to do both. So if you're, if you're facing a tax bill, you're probably not maximizing the advantages of real estate. And you should definitely. That's one of the greatest tools ever created. So back story, I've got an 8 plex and a 7 plex. I'm only netting about $5,000 a month net after everything is paid. And I'm talking cap improvements like, it's all in, Chris. But I've got about two to two and a half million dollars in equity out there on those two properties. So I'm saying to myself, okay, how I increase my return on equity, I've got this big equity and this small cash flow. How do I increase that return on equity? So this is a real deal that literally just did the analysis on. We wrote the contract yesterday. This is a medical office building in Utah. It's about a 25,000 square foot property. You see my screen looks great. Okay, cool. And by the way, anybody who wants to use this calculator, you're more than welcome to do so. It's free. It's just the investment analyzer. Com. And then once you put in all your information at the bottom, you just hit generate share link, and then it'll create you a unique share link which you see up here, which is tied to your particular investment. I, I literally don't monetize this. This is just a gift because, you know, you, you all are, are in Chris's tribe. And I want, you know, give as generously as possible to this amazing, amazing audience. I don't even get, like, I don't even know what anybody puts in this stuff. So this, this is literally just your spreadsheet you can use. So annual rental income, 754,000. We plug in the annual rent increases, we plug in the expected vacancy rate. We plug in the number of Years which before we sell. Now I do not plan to sell this building in 10 years. But if you're going to, if you're going to to calculate what's called an internal rate of return which is a comprehensive return from your property. It takes into account your cash flow, it takes into account the amortization as you pay down the mortgage and it takes into account the estimated appreciation which we estimate the appreciation based upon the increase in annual rents of 3%. And it gives you an internal rate of return which is just a, a useful measuring instrument to tell you if you're in a good investment or not. And you need a number of years in order to calculate an IRR internal rate of return. So that's why that I picked 10 years. Then I throw in the expenses which you'll notice are quite low. That's because two of the three tenants here are on called triple net leases where they pay absolutely everything. One of the tenants is, is on a self service lease where I pay the expenses. They pay a higher dollar per square foot. So the expenses you might go wait, how's your deal? They have 89,000 expenses in 754. I've got a management fee in here because our management fee needs pay our amazing employees. And I'm going to estimate that my increases, my fees go up annually 3%. So I plug all this stuff in, we put in, we put in. Oh, that's weird. It just took out my purchase price but I think it'll be down here. Yeah. All right, so purchase price 6.3 million, down payment 30%. So here's the $2 million I just got from those two buildings I just sold. Right Chris?

Yep.

I'm going to take out a new loan for 4.4 million at about 6 and a half, 30 year amortization. For those of you who aren't familiar with commercial property, if you're lucky you can get a 25 or 30 year amortization which keeps your payment low. But you probably only have a period for seven to 10 years. So I know I have to do something with this debt again in seven to 10 years. There's some complicated shit in here I'm not going to get into, but let me just.

This is a great tool by the way. So we're going to put this link in the show notes and we're also going to add it to our coaching community. So thank you for that.

Yeah, my pleasure. But let me just skip to the punchline. The punchline is I moved from $5,000 a month in income on two and a half million dollars in equity to $19,000 a month in income. And guys, that's just your monthly cash flow. That doesn't include the paying off of your, your debt service, your. This shows you that each year I'm also going to be paying about $53,000 reduction. So really that's another $4,000 in here. On top of that cash flow that, that, that I have to figure. So I turn 5,000 in cash flow to 24,000 or 23,000amonth in cash total no brainer. If you look at it over 10 years, if I put debt on this property based on the criteria above, I go to a 22% internal rate of return. So it's like a total no brainer to analyze your portfolio, look at the properties that you've got, lots of equity and small amounts of cash flow, and then be saying, should I still be in the small apartment business or should I still be in the residential single family duplex business, or should I be moving that into an asset that is going to let me greatly expand my return on equity and my monthly cash flow?

I love it. I love it. That's a phenomenal example. And we've done a similar strategy. Real quick, Josh, to wrap that up. Do you remember what you paid combined for those two, those 15 units total back?

Yeah, 635,000. For the seven plex, it's now it's just figure 300,000 a unit. So that building's worth about two, 2.1 million. And the eight plex we bought in 2000 for about 315,350, I think we paid six. So combined. Nine hundred and fifty ish.

Yeah. So nine hundred and fifty. And what did you put down? Would you. What kind of down payment did you bring total for those, do you think?

We put 200k down on the 8 Plex we did seller financing. 315,000. I think we paid 8% or 7.75%. Zero down. Yeah, on the 7 Plex, we put a 20% down payment down.

Okay, so you probably had like 150k total in between the two of them somewhere in there. So yeah, if you look at that. So Josh, you turned 150, 150 thousand dollars into about two and a half million dollars. That's right. Over, over the course of the last.

12 years on one investment, 25 years on the other investment. Yeah, but Chris, here's what that does encompass. It doesn't encompass all my cash flow over that period of time.

No, no, not at all. Yeah.

And I levered $2 million out of that property to buy another medical office building that we bought for 6 million in 2021 and is now worth at least 8 million because we've gone through and raised all the rents and done all the things. So it's like can't even freaking calculate the return on investment. Right.

It's amazing.

Yeah, Amazing.

It's amazing. Yeah. So I think, you know, just to recap some of these lessons before we, we kind of talk about where we are in the market today to wrap up lesson number one, have a long term time horizon. Lesson two, be comfortable riding the waves as the, as property values go up and down, make sure you have long term debt, you have adequate reserves, you have positive cash flow. Take advantage of the downturns when rates drop. So you can either refinance, pull cash out. Continually assess your portfolio for your return on equity and when appropriate, be flexible with your strategy. You know, residential, commercial. You know, we bought office, you know, you were talking about medical, industrial flex. We bought a car wash and pulled and did a similar strategy, pulling out about a quarter of a million dollars and turning that into a 20% cash flow. Now it's a business with a car wash, but haven't paid any tax on that money the whole time, pulling that money out. So just some phenomenal lessons there, Josh, that we've talked about before that you've highlighted in this example. Thank you for that.

Welcome. Yeah, my pleasure. Yeah. So you have to get in the game, right? So somebody that's at the beginning of this, this is going to sound a little overwhelming, right? And you're going to be like, wow, these strategies sound complex and, and, and you know, I don't have the cash and all the excuses that might be running through somebody's. Through somebody's head. I think the underlying point is you have to have the balls to get in the game.

You have metaphorically. You could be a woman.

Metaphorically.

Right.

The brass ovaries to get into the game. And what I mean by that is I see so many people that are analysis to the point of complete paralysis and they never get in the game. And then a decade goes by and it's like, you know, it's not timing the mark, it's time in the market. Now, that doesn't mean buy something that is an obvious negative cash flow. It doesn't mean don't weigh all the pros and cons. Where can this go? Right? Where can it go wrong? Where it can go wrong? How can I Insure against it. Right. Chris, you mentioned have added liquidity, have debt that is fixed over a long enough period of time that you can take advantage of this. Increasing rents and decreasing ability to refinance. Mortgage indebtedness.

Yes.

Have to do all those things. But if you analyze too far too much to the point of paralysis, you'll never get in the game. And you've got to get in the game and let time and inflation and rent increases. Inflation equals rent increases. You have to, you have to be in the game long enough for those things to manifest.

Absolutely. And look, this is exactly what our coaching group does. So if you're, if you have fear and you got a deal, you know, you can join our coaching group. We'll walk through. We do this on our ask me anything sessions all the time with our coaching clients. They hop in, they bring a deal in, we go through it, we look at any blind spots that they may be seeing, talk about how we can work it. I help one of my coaching clients with an industrial deal figure out, figure out how to structure the same thing. He's like, dude, he's like, you just made me a million dollars in an hour, you know, on this. Yeah. He was like, this is, this is fantastic. So, yeah, look, the, the point that Josh makes is, is very good, which is, you know, it seems overwhelming, but we're talking about what You've done over 25 years with these strategies and there are people out there like Josh, like myself that can help you out with this. So yeah, don't, don't. It's okay to be a little nervous when you go into this, but there are people that can help you with that. Josh, you, you are in the business every day. That's your, that's your day job. That's your main business with mortgages. Obviously we both love real estate as a wealth building vehicle. You know, we're, everybody's anxiously watching the Fed. We've seen some real positive movement here over the, over the summer. We've seen cap rates start to come back down. We've seen interest rates start to come back down. We've seen deal flows start back up. What are you seeing and what you expect to see over, you know, the remainder of this year going into 2026?

Yeah, well, inflation is the predictor of mortgage rates and the rate that you can borrow at, on against real estate, whether it's commercial or residential, has a great impact on these short term valuations. So, you know, this market is as any market that I've ever seen and.

It'S, it's been wild, man.

Just kooky. I'm not sure I can believe any of the numbers that are coming out about the labor market, the employment market, even the inflation numbers seem kooky. We get one reading that inflation is down and two days later, when this is inflation up, this market is just kooky. I attended the Strategic Investment Conference, which is put on by John Malden.

Yeah, no, John. I mean, I follow. I read his stuff every week. Phenomenal. Yeah.

Brilliant guy, brilliant economist. And he's very, not too far extreme, one or the other. He's very middle of the road and very pragmatic. Very pragmatic. That's the right way to describe it. And I took away something different. This market, this from this conference this year. We had like these are, these, these are the smartest asset allocators. Economists guys run. These are the guys advising family offices that control billions of dollars. Right. And they were split down the middle. Inflation go higher tariffs, all the things, the reduction of all the rules and regulations that Trump's going to take out. You know, the economy is going to boom and inflation's going to go crazy. The other half equally as smart people. This economy is going to crash. We're going to see another major recession. Inflation and interest rates are going to go down. I don't know, man, I don't know. But I know today, interest rates are lower today than when we started the year. That's great. We're headed in the right direction. In the residential world, we're seeing inventory increase. You're seeing more and more people be able to negotiate seller concessions which you can use to permanently or temporarily buy down your mortgage interest rates, depending on your usage. There's a lot of negotiating that can be done in this market right now and I think that's good for buyers on the residential side, on the commercial side. I was you, Chris, like right now, today I have more dollar amount of property tied up, meaning I have letters of intent or I have signed purchase agreements on assets that I'm buying, I'm buying. I have more under contract today than I ever have in my 25 year career. I'm seeing opportunities to sell my low return on equity properties, move into larger properties and exactly as what I just illustrated in example, that's the smaller of one of the deals that we're going after right now that we can drastically increase the cash flow and the return on equity. Oh, so I don't know that my magic wand works right now in terms of where mortgage rates, inflation or prices are going, I don't care because I. What I know. Yes. With what I have to work with right now, a six and a half percent commercial interest rate market, six and a quarter in the larger stuff and the assets that I've had appreciation on, I can turn that equity into more cash flow and a higher return on equity right now in this market because sellers are more willing to sell. They'll, they've come down on prices. They'll give us money towards closing costs, which I can use to buy down my, my rates. And this is a phenomenal market to make money right now. That's the only thing I really care about.

Absolutely. We're, as you say that we're closing on a deal this month and we're getting it 20% below what the seller purchased it at. And, and well, probably about 30% discount to, to replacement costs right now in Houston, Texas. So, yeah, there's some, there's some great deals out there for those with capital to deploy that can get in the market. So it's, you know, it's one of those things. If you've been in the market over a long period of time, you've seen some phenomenal deals over the last 10 years. You've seen some deals that have been challenging, but we're seeing some really, really great opportunities right now as well.

You underwrite a lot of deals, so you may not know this off the top of your head, but just ballpark. Could I ask you what is the asset class of that asset?

That's a multifamily deal, famous with apartments.

For those who don't know multifamily. And do you have a ballpark what your, your cash on cash return is for that, for that property? Any idea?

Yeah, Cash on cash to investors is going to be about 6%. It's going to end up being about 18% annualized.

Okay, great. And is that your IRR once you calculate appreciation and your amortization?

Correct.

Yeah, that's phenomenal.

And I happen to believe in a class A deal in one of the top three markets in the country right now. Yeah. So stabilized in place cash flow in place rents, it's had renovations by the prior buyer. So yeah, to be able to go and buy a core asset like that and see in place 6% cash flow plus significant upside is pretty phenomenal.

Tremendous. And what that all means to you and me is it's very low risk that something's going to go wonky on that deal and it's still an incredible return. And there is a Decently high probability. At some point in the future, you're going to be able to restructure that debt at a lower rate, enabling you to vastly increase that cash flow. Or you refinance, you pull that equity out, you disperse it back to investors, or you roll it into the next deal, so.

Exactly. Yeah.

I mean, I'm finally at a place like, Chris, I haven't done a really great deal since 2023. Like, I've. We've probably done 100 offers. I just couldn't figure out something that really worked for me. Right now is the time. Like, I'm loving this market.

Yeah, no, it's been the same past couple years. We've had to get creative with some tax abatements and stuff like that to make deals work. Other than that, it's been. It's been real slim. So, Josh, we gotta run. I know you do. I gotta run here as well, but I can't believe. I can't believe we've been talking for as long as we have. This been a great conversation. I hope if you've been listening this long, you've got a ton of value and super great nuggets out of this call spanning all kinds of different options. So, Josh, as always, thank you so much for your time. I look forward to seeing you in a couple weeks when I'm out in one of my favorite areas of the country and your neck of the woods in Utah.

I can't wait. We're gonna get on a mountain bike trail and have as much fun as we can with our clothes on.

Let's do it. Thank you, sir.

All right, brother. Great to see you.

You too. Hey, Chris, here again. I hope you found this episode valuable. Now, I have one more thing to give to you. We have a page for my coaching clients where you can get a free copy of my book as well as much more from previous guests on the show. Just check out nextlevelincome.com coaching to get a free copy of my book, audiobook, and much more. I'll send you a copy of my book and cover all the shipping costs as a thank you for listening to the podcast. Also, please, like, share and take just 90 seconds to give us a rating on Apple Podcasts.