Inside the Mind of a Finance Maverick | Aaron Chapman | Part 2

When you start looking at the real rate of inflation, it's very, very high and it's extremely high compared to what we're paying in interest. Our interest that we're paying is still single digits. Because of that single digit interest, you get to see that as you're paying it back, you actually give them less and less every single month. If you're just at a flat 8% inflation, which we've been above that since the 90s, actually since the 80s, when you look at the real rate of inflation, a flat 8% means that your dollar is losing 0.666% of its buying power every single month. So as you're paying somebody back, you'll start to see in today's interest rates you'll actually pay less than what you bought.

Hey everybody. Flippin Danny here. Welcome to another episode of the Freedom Show.

We're super excited to be back. If you are coming back because you heard last week's and you were like I can't wait for part two to be released, well then welcome back because we're super excited to be sharing Aaron with you again today. But before we get into that episode, we wanted to talk to you a little bit about, about annual planning and preparing for 2024 because this is the holiday season. That's right, holiday season.

Oh geez. She's been listening to Christmas music since Halloween.

Yes. Yeah, as soon as Halloween. Yeah. That was actually thanks to you. You actually put, you put lights around the house and everything. And I was like, yes, it's Christmas time.

That's right.

So exciting.

But we don't, we don't beat the, the, our team in the Philippines because they, they actually decorated on September 1st.

Yes. Did you know that in the Philippines they spent four months. Right. They start in September, September 1st. So September, October, November, four months of Christmas. And here in the States we get yelled at if, if we have decorations up before Thanksgiving. That's so funny. Oh my goodness. So yeah. So annual planning. Planning. Because it really. It what? Many times we get caught up in working in the business instead of on the business. Right. And then, and when planning comes around, it's the opportunity to take a little step back, put yourself, elevate yourself, you know, way, way, way up here and look down and go oh. Oh. We should probably fix that.

Yeah, we need to fix that part. Yeah, that one right there.

Yeah, yeah. Yep. And I was just, we had a post and we have this channel in our Google chat called Core Leaders and it's really kind of the leadership team within Our company, and we are talking about bandwidth and how that seems to be probably one of our biggest problems right now is that everybody is just at the, you know, very, very limits of what they can handle in terms of bandwidth. And so, you know, I said, okay, well, here's an exercise that, that we can all do. And I actually started it with Caitlin, our marketing director. So I didn't see. Didn't use Tiffany. Hi, Tiffany. I'm talking about Caitlin right now.

So Caitlyn swear the other day, I'm letting everybody know.

Oh, man. Caitlyn's been outed on a podcast.

On a podcast.

So I was talking to Caitlin, and she's, you know, she's the marketing director, and she's, you know, over all of the companies. And so what's on her plate is insane. And we've really grown her team, like, like, heavily, because marketing is really one of the most important things that we could be doing here. And it was a foundation builder in 2023 anyway. We really invested a lot of money into building our foundation in 2023. We redid our website. We buil brought two websites and made them one redesigned our logo. We did all this. This podcast room, like, all of this stuff is brand new. And the fact that we finally launched season two of the Freedom show is literally because we focused on marketing here in 2023. So I. She was. There was two more things that I jumped on, and I'm like, I'm very impulsive. I'm like, yes, we need that. We're working on it anyway, and this is going to get us there faster, so let's get it. And so I got two things, and one thing's actually going to squirrel. It's not squirrel. We are working on it. One thing's actually going to lift the burden a little bit off of one of the team members in the marketing department. And the other thing was a little bit of an addition, but it's going to be more effective in our ability to launch it. So we're launching some courses this year, and we are going to put it on our go high level and just have the website and the normal desktop course. And I was on this webinar, and they were just like, more people use their phones these days than they do desktops. And it's more advantageous to have things at people's fingertips. It makes it simpler for them. So I'm building an app. I'm not building it. My chain's building it. But I put that and I said it, and Katelyn smiles She's so sweet. She smiles and she's like, oh. And so she's happy. At the same time, I can see in her head going, not another project. I can't do another project. I'm not going to do another project. So I was just like, okay, we need to. Let's look at what all the projects are and let's make sure that you've got capacity. And let's like, throw some that don't. Aren't necessary and put them on a QR to one or whatever. So you're always having to do these things in business. So it doesn't matter if it's quarterly planning or annual planning. You should always be checking yourself if you see something that lines up with something that you were doing anyway, and suddenly that becomes a priority over some of the other projects. By all means, you don't have to stick to the script. Just, you know, grab the stuff that isn't as important, dump it down, and then make sure that you're always prioritizing what's most important. So, um, Chris actually mentioned something in the core leader channel about the bandwidth. And so I said, here's an exercise that I'm working on with Caitlin. I didn't say it to Caitlin this way because I'm actually helping her with this so I can figure out what we can. What we can dump. But I told him, I said, if we could just have all team members write down what are you doing right. What are you doing right now? What are the projects that you're working on? And then if you can write next to them the word revenue, the word customer experience, or the word critical process development or improvement. Critical process improvement. So CPI for critical process and improvement, Customer experience is CE and then revenue. If you can write those three words, if something's on your list that has nothing to do with those three things. So for instance, on one of the things on Caitlin's list is swag. We want to get our swag store up. Right. Because we want to have cool shirts and stuff that's. It's barely revenue because we don't really make money on swag. Maybe a dollar customer experience. It would be fun, but it's not the type of customer experience when we're talking about excellence.

Right.

And really serving our investors better. And then critical process improvement definitely doesn't do that. So that got dropped off our listen into Q1.

Yep.

Even though it would be fun to do, she might throw it back on our list because she has the capacity to do it and it's Fun. So it might move back up. But that was the point of the exercise. If it doesn't fall in those three categories, it can get moved. But if it's revenue, it is first. Well, anything you wrote revenue on, you're going to put it at the very, very top of the list. Anything that you wrote customer experience on, you're going to put it third in this scenario and I'm going to explain why. And then where we shift it for customer critical process improvement, you're going to put it number two. Because typically a critical process improvement is a bottleneck in the company which affects revenue. And so revenue one CPI is number two because it has to do with revenue and it has to do with customer experience. If it's a bottleneck, it's not only affecting revenue, it's affect customer experience. Is three only because those other two had to be put first.

Right.

So but the customer experience, then you have those things and depending if your job is to really focus on the first two, you could say, hey flip, you actually don't have these first two on your list. Can I give you these three customer experience pieces? And boom, now it's number one priority for you.

Right.

So now we lifted the customer back into a number one seat as far as a priority. So we're going through that process and I just encourage everybody to go through it, no matter if it's planning stages or not. Those are all always important processes. But I just get excited when it comes to this because we really get clarity. We like, we, we put our blinders on just like the horse and we go, this is where we want to go. We fine tuned it. We know what direction, we put some accountability pieces in place. We know like who's responsible for what. We know what they're reporting on every single week. And that type of clarity, like fuels me.

Yeah. No, and plus it's, it's also make sure that everybody on the team knows exactly what we're doing, you know, in case somebody's like, oh, I'm not sure, you know, our quarterly planning, that puts everyone back in line, you know, because two, three months, that's enough to get somebody start straggling over here.

Yes.

So yeah, I love it.

Yeah, absolutely. And also I think it really helps new team members too. Right. We talked last episode about how hard it is sometimes to make sure that you're conveying the vision that's in your head to the team and making sure that they understand where the company is going. That's just as important for the investors.

Right.

Where Is the company going? So that 12 part series that we did that helped communicate that. So we're just getting better and better. And so those are the things that we do and those are the things that we talk about, and those are the things that we want our investors to know. We want active investors to know. So you can apply. Hey. Oh, that's a good idea. Let me go ahead and do this. Because we only know what we know now, through all the trials and the pain and the suffering that we went through, to go, oh, this is how we should do it. So, yeah, I love talking about this type of stuff at the very beginning. So now we're going to dive back into Aaron.

Yes.

So this episode is going into Superpower.

Yes.

Yeah. And we're doing math.

Yes.

And I think that's what they call it. And I think last week we said have a calculator ready if you're not in a car.

Yeah.

If you're not driving, calculator would be helpful.

Yeah.

For most.

Yeah.

There's some people out there that could handle the simple calculations that he's going to ask. Not me.

We had some fun with it, though. We're not going to give you any more secrets about what's about to happen. We're just going to let you guys dive in. Here is part two.

That's right.

Of Erin Chapman. Enjoy. Let's jump into your superpower. This is really why I wanted to have you on this podcast, really share what's going on in the market right now. Share your superpower, which is really the finance industry. And you serve investors like ourselves, so you serve our clients. And that's why I'm so excited to introduce you to everybody. So we've already talked about how you got started. So tell us a little bit about how you help investors and what the real estate investor needs to know about today's market right now.

Thank you. The superpower. I don't know if it's really superpower. I just believe it's. I have the ability to dumb things down to a way that people can understand it. Because what we have in the world, between the attorneys and between the people out on Wall street and the politicians, they take the most simple things and complicate the piss out of it so it makes it look like we need them. And then when we start to feel like we're starting to get ahead of them a little bit and we don't really need them as bad, they change the rules just so you need them again. They keep manipulating everything and messing with it so my goal is to help people understand where the real value of things are. And the main thing is understanding where the value in real estate is. We spent the last 12, 13 years mistakenly understanding where value in investing in real estate was and it was because everybody kept using the cash on cash return metric as the key to understanding whether it's a good product property or not a good property. Now, albeit a great metric, if you get great cash on cash return, why would you not. But the problem of it is is those that ship sail be able to get a stupid cash on cash return 14, 15 right out of the gate. One unachievable. If it is achievable, I guarantee this property that you're buying is going to eat you alive in maintenance because there you're underpaying probably for a piece of crap that's going to rent high. But every time you get the person out of it it's going to cost you a fortune to maintain it and get it ready again. And you didn't get any cash on cash. Great on paper. So what I explain to people is where the real value is and that makes me, you and I are going to have to do some math to to be able to illustrate this. So okay, what we're going to you guys pick amongst you who's going to do the math because we're going to do it together. I'm going to ask the question, you're going to explain the answer and just know it's simple math and you are prone to get it wrong because your brain sees one thing, but the reality is something else. Even though it's simple and the reason I do it this way is it's going to sync up our minds and I need the people listening to be able to say oh okay, yeah now I it because if we can't sink their minds up, they'll glaze over it. So I need everybody to check the math here. So we're going to say a person's buying a $200,000 single family residence. They're going to put 20% down, they're going to finance 80%, they're going to get $1800 a month in rent and they're going to only get say $100 a month in cash flow and this is a 30 year fixed loan. So we're a person needs to focus their energy at is not what's my cash on cash. It's going to be can I keep this property reasonably rented the entire time I own it? Does it appreciate and can I raise rents that's it. Now we're even going to beat depreciation up. We're going to beat everything up on these numbers. So here's where the math comes in. If you're putting, buying a $200,000 home, you're putting 20% down. How much are you putting down?

$40,000.

40,000 bucks. Okay, everybody check that math. Make sure we all agree it's 40 grand. Now, let's say between the lender fees, appraisals, taxes, insurance, title fees, all this crap, it's very expensive. Let's say it's ten grand. I'm not saying that's what people pay us. I'm just saying let's do round numbers. Is 10,000. So if you put 40,000 down, now you have 10,000. How much did you invest?

$50,000.

50,000 invested. That's your money in the deal. How much was the loan amount?

The loan amount was $160,000.

$60,000. A lot of people, you did very, very well. A lot of people like to say 150 because automatically in their mind they think I invested $50,000. It's amazing how often that happens. $160,000. So if you, we said this is 30 are fixed. If you did your job as the CEO of your investment real estate investment business and you got keep it reasonably rented the entire time you own it, who pays off the $160,000 loan? My resident, the tenants or group of tenants over 30 years. So let's take 160,000, divide it by 30, and let's see how much they're actually giving you averaged over that 30 years.

I don't have my phone and I can't do that math in my head.

Flip roughly 53,000.

It's 5,300.

5,300.

Sorry. Yeah, we had just a decimal point off, which, I mean, you got that right. $5,333.34 per year is what they're averaging payoff. Now, I know there's an amortization table and it's only gonna be about probably 1200 bucks to 1300 bucks first year. I'm talking about an average because we're talking about a 30 year long game. So their average giving you $5,300 a year. Well, what percentage of 50,000 which is your investment is 5,300?

It is 10%.

Close to 10.

Yeah, a little over 10%.

0.66%. Okay, so we're getting 10.66% increase every single year averaged over 30 years. Correct?

Correct.

Just by having somebody paying off the loan, you're not getting a single dollar of cash put in your pocket. They're just paying off the loan. That you got that right there is increasing your investment by 10.66% averaged over 30 years. Now I know the first year is going to be probably like 3 or 4%, but we see where the potential is now we split that on the shelf. That right there we know that growth, growth. Now we live in an inflationary environment. Do you know what Case Shiller, Black Knight and CoreLogic said that properties are appreciating in 2023?

No.

They said they're averaging 8.9%, much higher than what they thought coming into 2023 because every new rates were going to go up. So they thought maybe 5, maybe 6%, 8.9. So let's beat that number way down. Let's say you're only appreciating this $200,000 house by two and a half percent. That's a very, very low number and easily number in any market. So what's two and a half percent of $200,000?

Two and a half, two. Oh, two, four, six. 5,000. We both gave you different answers. So which one is it?

5,000 was correct.

All right. Bam.

Oh man. And the easiest way to do that, the way I had to do it in my head is, well, for 100 is two and a half percent of 100,000 is 2500 bucks. You just double it, right? So, so 25, so it's $5,000 is what you're gaining every single year. Now it's compounds, right? It's not 5,000 every year it's 5,000. Then it's two and a half percent of $200,500 or 200,000. Right. So you can see how they compound. But just that first year, that 5,000, what percentage of your 50,000 is that? 5,000?

5%, 10%, 5,000. Right.

So look at double digit percentages, right? Not even factoring the compound that there, that is a 20.6% average increase. Not even factoring the compounding effect. Right. So when you only take into a consideration compound effect, you're already at 20%, 20% plus. And that's before any cash flow hits your pocket. And that's before any, any tax benefits that hit your pocket. Right. So now we talk about the cash flow. We said he was making 100 bucks a month, right, for the, for the first year. But then you get to raise rents. How much are rents going up by year over year? Right now in your guys markets we.

Predict 3%, but it's actually higher.

Yeah, it's between 6 and 8 depending upon where you're at. But let's say 3. Let's just use your 3.

Okay.

What's 3% of 1800? Because that's the rent. We said it was 1800 bucks a month. What's 3% of 1800, 480. It's 56 bucks.

We needed our calculator for this episode.

$56. Mike. When you people think about it, it's like, oh, it should be going up high. No, it's only 56 bucks. Here's the thing about this. You don't get excited about 56 bu. Your landlords don't get excited about 60 by 56 bucks. And your tenants do not get excited about 56 bucks. Like, oh cool, you only went by 56 bucks. But wouldn't that do? Your cash flow went from 100 to 156. That's a 56% increase in your cash flow. Look at the compound growth there. People think these small percentages, they look and say, oh, it's only 3% increase in rents. I'm going to go find a different house. No. Can this house stay reasonably rented? Is it one that is in a good area? Is it. What type of grade are we talking about? Is a C grade house? Is an A grade house? What type of house is it? It. Look at all the factors. Just by having somebody stay in there long term, look at that growth. You will within year five, six or seven, you'll see some massive cash on cash return. But you got to be patient. It's all the other things where the wealth is being created now. That's where not where it gets sexy. Does the lender get to raise the payment on the loan because of inflation? No, it's a 30 year fixed that some is locked for the entire 30 years. Here's what's very interesting about that. We live in an inflationary environment. We just talk about, that's why we get to raise rents and that's why appreciation happens on homes. But what happens to the value of the US dollar goes down, it declines. Here's a, here's a way to illustrate how much it has declined. Back in the early 1900s and late 1800s, they used to mint a $20 gold piece is a single ounce of gold is about 0.98 something percent pure because they had to add some other alloys to make it durable. But that 20 gold piece, you can walk into a department store, get a Hat. Because hats were a big deal back then. Right? You can get the hat, you can get a suit, you get a shirt, a tie, a belt, a pair of shoes and a pair of socks for that 20 gold piece. You can't walk into a department store, sport a department store and spend 20 bucks for a pair of socks. These days it's more expensive than that. Right? Especially decent socks. My socks cost 40 bucks. Right. Because they're, they're a wool. So because that we know that the dollar is completely eroded significantly. But where's what's interesting? You can still get all the things I just said with an ounce of gold. Why? Because an ounce of gold is worth over $2,000. It's not that the gold has gone up in value. It's not that the clothes have gone up in value. If that the instrument we're exchanging for them has eroded so much in value. So where this is a benefit to everybody listening here is when you lock in a loan and an interest rate, you get all caught up in what's. What are rates doing? Think about what the rate of inflation is doing. Inflation's much higher than what they're claiming. They're claiming to be between 4 and 5%. It's closer to about probably 11 to 12 of when you really start factoring things in because they're talking to us. What the rate of inflation is, is in, in the CPI or Consumer Price Index. It's an index. It's not everything. It's a few things that they monitor. Not everything that we spend our money on. When you start looking at the real rate of inflation, it's very, very high and it's extremely high compared to what we're paying in interest. Our interest that we're paying is still single digits. Because of that single digit interest just you get to see that as you're paying it back, you actually give them less and less every single month. If you're just at a flat 8% inflation, which we've been above that since the 90s, actually since the 80s. When you look at the real rate of inflation, a flat 8% means that your dollar is losing 0.666% of its buying power every single month. So as you're paying somebody back, you'll start to see in today's interest rates you'll actually pay less than what you borrowed. In this scenario you pay at 160, was 160,000 do in principle, but in principal and interest it's be about $402,000 over the life of the loan. That's where everybody's like, oh, I want to pay this off early or I'm going to refinance and try and get this rate down because that's all this interest. But what you don't realize is that the long you take to pay, the less you actually pay. Because that dollar is worth less and less and less. You come to find out you're paid about 152,000 in actual dollar value value. So keep your extra cash flow, don't pay it off any faster and don't get caught up in the freaking refis. Let me ask you this, who does it benefit when you refinance? The bank and benefits the banks? It doesn't benefit you. Everybody thinks it benefits you. Now if you're pulling cash out to buy more investments, yes, that benefits you using somebody else's money to expand your holdings. And did you invest any. When you take pull cash out of a house, you take all that money and put it in other investments. And let's say you buy three houses with what you got on the loan for one. Did you put any money up?

No.

You put a single dollar. Every bit, every single cent of return is an infinite return because there's no way to calculate it. There's none of your money. That's how rich people get rich. It's all leverage. Now when you start looking at the benefits for the bank of refinance, everybody's like, how could that benefit the bank? I just dropped my interest rate by 1%. Well, I had a client of mine came to me, had $120,000 mortgage. When he bought this house, he came to refinance it 48 months later. It's the 47th month. And we did the math on. It's like, dude, you pa almost $37,000 in principal and interest on this over the last 47 months. His new payment was coming due, he was making that payment. So 48 months have gone by. He's paid over $37,000 but only dropped the balance by like $6,500. Look at all that. That went to interest. Tons of money went to interest. I tried to talk him out of the refinance but he wouldn't, wouldn't listen to me. When he refinanced that. Where is this cost usually go? They go back into the loan, Right? Right. So we added back into loan because he didn't want to come into the money to the table with any money. It took his balance to within $106 of the original balance. It was 119,000 and change. So he literally reset himself where he was 48 months before, but still paid out over $30,000, like $31,000 in interest and started that over again. People are being conditioned to refinance every four to five years. It's been common within our industry. Why? Because you keep people in financial. That's why there's so much front loaded interest up front. Because that's when people are programmed to come in and do that refinance. Again, we've heard it being said, if it drops at least this much or you get to this point, you should always refinance. That was always being perpetuated by the bank. Right. The same. Same way De Beers convinced everybody to spend at least a month's salary on a freaking ring to get married. So it's all marketing. You've been conditioned. And if you keep doing that same pattern as this guy guy, he would have paid over $180,000 in 20 years, but never moved the needle on his mortgage. Never where somebody else could have paid the original payment for the entire 20 years and had it two thirds paid off.

Wow.

And then could have pulled a ton of equity and bought five houses. Right. So that's the other thing people don't realize you're being put into financial servitude when you get caught up in the refinance gain.

Yes, that is mind blowing. And again, something that nobody talks about. Y you always hear from even your mortgage professionals, for the most part, with the exception of you, Aaron, are talking about refinancing. And correct me if I'm wrong, but they're getting paid to refinance you as well. Yes, 100%.

That's why they're talking about it. That is your career, their career path. So what? Very, very recently, there's a lot of people in the mortgage industry. They're saying, well, why don't you just take an ARM loan because you get a lower interest rate and then refinance when the rate go down. Well, what I'm explaining to everybody because I had a big run for about a year there after, well, probably about six months. Everybody's saying, can you guys do an arm? Everybody says I should do an arm. So why do you think they're saying that? They said because I can refinance in five years. Well one, you're just setting yourself up to be their future business. And that's exactly what all the leaders in the industry are saying. Sell the arms. So you have future business. Right. Keep track of those clients and market to them in a few Years. So that's their future business model and business plan. Secondly, who says the rates are going down?

That's right, yeah.

You guys know the name Charlie Munger?

Yes, sure do.

So he was on I think a CNBC or msnbc, I can't remember which one I think is Christie Quick. That she was. He was being interviewed by. And in that interview, it was earlier this year, he said that we saw 40 years of declining interest rates. They anticipate to see 40 years of increasing interest rates. I had a clip of that on YouTube. I go to that clip now and it's taken down, down. You can't access that clip anymore. I have spent about six hours of going through every edited version of that, that interview and it's no longer in there. What's also interesting, I downloaded the interview, what I believe is the interview and it's been redacted from the transcripts. I can't find it. Why do you think they can't find it? Because they don't want people to know that we could be on a 40 year increase of interest rates. So you don't lock it in now. You wait till the next thing now there's so many people sitting here waiting. Well, I'm just gonna wait till the rates go down because say the rates go down, down there. Well, okay, let's say they do. What do you think house prices are going to do?

They're going to still go up.

Yep. Can they keep going up?

Jump right.

Y.

We went. I. It's amazing how many realtors I talk to or I've heard from like you, banks and the damn rates and they're at us like it's us, right. Say, well, what about you damned realtors that would tell your, your, your client when they want to buy a house that you better come to the table 30 to 50,000 over list just to get in the game. Nobody bitched about raising prices 30 to 50,000 because interest rates were two and a half percent. You gave benefit of the interest rate in the price of the house.

Yeah.

So now we're at an equilibrium where the price of housing is kind of semi stagnated. They really have an 8.9 increase. But there's some areas that actually have come down a little bit. I'm telling people you better lock in the price now because if you're right, let's say Aaron Chapman's wrong and the interest rates do go down, you better have locked it in now because you're going to get screwed hard. What's really interesting is even though the rates are going up. The cost of housing is not going down. Why is it not going down down? What are the hedge funds doing? They're buying the hell out of it. You got, you got blackrock, you've got Vanguard and State street are anticipated. This is anticipation. I don't have all the statistics on this. This is anticipation for them to control 60 plus percent of the available single family housing by 2030 to 2020 35. If they do that, they will have accomplished turning us into a subscription based economy for the next few generations. Our generation will make it through. But what about our grandkids? I've got a grandkid here in my house today. I've been watching her most of the morning. She's not going to have a shot at this if we don't do something. Now you want to talk about freedom family investments. The freedom for the family should be buying investment real estate now because it's not going to be available later. I just closed on two houses in Missouri because I have two kids moving out there, both five bedroom homes for a couple hundred thousand. We, the, our family trust paid cash. I put liens on it. I'm going to refinance, pull the cash back out of it, put it back my, in my accounts to keep expanding our holdings. But that's the only way they got a shot at this is to rent from the trust and then the trust is going to keep growing it and keep growing it for the future generations because if we don't do that, they're going to be taken advantage of. And it's my opinion, again my opinion because I know the future. If we're not doing this now, we're going to end up being the ones paying the subscriptions, not offering the subscriptions.

That's right. That's right. Wow, that's so powerful. And to, to tie back into Charlie Munger. I just want for the, everybody in the audience that does not know who Charlie Munger Munger is, it's Warren Buffett's partner. And that's something that I, I learned like you know, a few years ago somebody I was on the phone with talking about similar things as you are talking about today. Aaron, I was like, have you been following Charlie Munger? If you, if you're not following him, you need to write his name down and start listening to what he has to say. So gosh, that is so powerful.

And another thing, just speaking of Charlie and Warren, Warren said you can Google this. He said that the 30 year fix is the greatest financial instrument in history. Because it's a one way bet debt, right? If you're wrong, if I'm. Let's say the rates go down, you just refinance. Who gives a. If you want to refinance, I don't think you should. But if you want to, you can. But if you're right and they keep going up, and if I'm right and if Charlie's right, you just protect yourself from some heavy financial devastation. I was listening. I've got a guy on my team's named Scotty Barrett. He helps people on the interest rates and figures out what's the best one for you in the available market. And he had CNBC in the background and they were talking and there was a comment that was made, it was interesting that that housing inventory is very, very, very low and very lean. But they anticipate when some of these arms come due, the five years and 10 years and arms, that we're going to see a flood of inventory because people aren't going to be able to make their payments because the rates are going to jump that high. It was a quick little blurb and only somebody like myself would catch it. But that's what they're talking about. So if you think they're coming down, think again. The other thing that a person needs to have is the numbers I gave you earlier about what's happening with the $$. You don't have to try and figure that on your own. You can go to your app store right now and search for the qjo Investment tool. That's my app. And that app will actually show you and run those numbers for you the time value of money. You're not going to know how to use it. So you shoot me a text and I'm just gonna give you guys my number. Just text me 602-291-3357 again at 602-291-3357. Say send me the you can schedule appointment with me. I'll have my assistant Bri go use text me. I'll have her set up and ask, ask for the videos on how to use the app. And it's called again the QJo investment tool, which stands for the Quit Jerking Off Investment Duel. Because that's what you're doing when you're trying to hunt for the rates. You're trying to wait for the market to get better. You're just wasting time on something of zero value. Bam.

I love that. Okay, so you are listening to the Freedom show with Flip and Danny and our guest is Aaron Chapman. We Are going to be right back after this short commercial break.

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All right, and welcome back to the Freedom show with Flip and Danny. Our guest is Aaron Chapman. We are going to do one of our favorite parts of the show. This is Real Quick with Flip. But before we get into that, Aaron, I just want to say thank you. The power that you come and the value that you provided in this episode of why people should not be sitting on their hands right now and why they should be connecting with people like you who can teach and educate them on the importance of the investments, things that, that you're sharing that they're not hearing from anybody else. It just blows me away. And I am so glad that you're part of our network. I'm so glad that you help our clients. And I hope everybody downloads that app and we're going to put it in our show notes and I hope that you text Aaron because he is a vault of information that again, Flip and I invited into our company to tell all of our, you know, team, and lo and behold, our team already had connectors there. So super, super excited. And before we get, we're going to recap some of that again. So you guys know how to get in touch with Aaron, but Flip, you ready to jump into this Real Quick with Flip?

You know, you know, we've been doing this for a number of episodes now. I don't think this has been more anticlimactic for me to jump in and do this segment. Yeah, I feel like I should have like, a clown hat on and a little, you know, a little noise maker. Yeah. Okay, so now we're going to get to something completely useless. All right. All right. So this, we call this Real Quick with Flip, but again, I told you before we started recording. So it's gonna be like this, that, or the other. I'm gonna give you two options. You could choose one of them, but if you don't like either one of them, then you can choose another. And so. So are you ready?

All right, Wait. I don't know how quick I'm gonna be because usually my quickness is on other things. So we'll see what happens. Yeah, yeah.

You know, we call this real quick with. It's not quick at all.

Just have fun.

Yeah, yeah. All right, so the first one I'm gonna. I'm gonna lob set you up with a nice lobby here. Country music or rock and roll?

Let's go with rock. But there is a lot of country that is. And it's a lot of my history, man. You don't cattle ranch about listen that kind of stuff. So there's a lot of good memories to that. But it's always going to be rock.

Nice. All right, we can't see it in the. In your screen here, but messy desk or clean desk.

It's clean for the stuff needs to be worked on. But I do have stuff stacked over here, so it's actually cleaner than normal.

There you go. So are you a morning person or a night owl?

I'm a morning. I'm 4:30am every single day.

Yep, us too. Well, our bulldogs are the reason I don't set an alarm. Okay, so what would you rather have, a time machine or a magic wand?

Probably a time machine. I would imagine the wand would probably act as time machine, so maybe the one. But I would say a time machine because there's a lot of things in history I want to say see, and I want to see for myself because I think people have really. They have messed with it and changed it and we don't know the reality. I would like to know what the reality was.

The truth with a capital T. Yep.

All right. Comedy movie or scary movie?

You know, neither. I don't comedy anymore is stupid and scary. They're. They get too close to the spiritual. I want to mess with that crap. Right. You know, I've been to a few of those. Sometimes scary movies are funny, though, because if you're in the theater with the right people, you just start watching them and it's awesome. Sometime biggest, meanest looking. Some bitches just crawling out of there and they want out. Especially these, these devil style ones, these satanic ones. I hate those things. But me, I'm more of an action movie guy. That's it. And I'll laugh my head off at action movies. Have somebody get their head chopped off enough. And I'm laughing.

Yeah, Yeah. I think we're. We're both the same. I think the last comedy we saw was the Ricky Bobby.

If you're not.

Yeah. All right.

Football or baseball ball Again, I'm in either on that one. I haven't watched either. It's so stinking long. Last time I sat through a full football game other than Power Room, we did the, The Raiders was Super Bowl 23, you know, and I just don't attend any. Any games because, like, it's so much time wasted. It's like, it's crazy to think that when a person goes to a game or they got to sit up and watch it, it's like there's. It's gone. And what do you have? Either frustrated or happy, but for what? You didn't do a damn thing. Right. So what are you frustrated for, and what are you happy for? You did nothing. And it's amazing how many people fight somebody's freaking logo on their shirt. Why are these guys fine? Who gives a damn, right? So it's, It's a, It's a very interesting dynamic to me to watch all that kind of stuff. I just don't get it.

And, and for those of you that are listening for quick reference, he said Super Bowl 23. I think right now we're in Super Bowl 50 something. So just give you an idea of how long it's been, how many years ago it was.

Yeah, yeah. If I'm playing him, though, I'd rather play football. I loved playing football. It was a blast. I played defense. It was. I was ahead. I just, I was a headhunter of quarterbacks, man. I was a defensive end. I love, loved it.

I love it.

Okay, so would you rather live in 1969 or 2069?

Probably 1969, because I have a 1967 GTO sitting out here, and that was the era for cars, man. That was just those late 60s. There was no better time in the world for being a gearhead than in the late 60s, in my opinion.

Yep. I met somebody the other day who's got a 1972 Chevy Nova.

Just.

Yeah, love it. Love it. That's a car.

Just.

Yeah, yeah.

Okay.

Yeah.

All right. Pineapple pizza or candy corn pizza all day long.

I'll do the pineapple with pepperoni on that thing. Candy corn, to me, is one of the nastiest things the world has ever produced.

And again, I'm sorry, Tiffany, no one has yet to pick candy corn.

It's zero for guests.

Yeah.

I'm glad people eat that crap because they're the ones that leave my pineapple pizza alone. Maybe knows.

Yeah, yeah, yeah. There you go.

Yeah, yeah. I, I, I put this one in here because I thought this would be. Would be fun. Do you rather shop online or shop.

In store online person? Because it Just. I don't have the time for store. I would like to be in the store. I'd like to see it and see what I'm getting and make sure I'm getting what I want. But it's. It's a time thing anymore. I'm so engaged with something else that I can click a button much faster. I can drive and deal with whatever. What also sucks is when home improvement stuff, right? How many times you got to go back and forth to. To. To the Home Depot or Lowe's or where Ace Hardware for. To do the same project because you keep getting missing crap. It's. It's amazing. I hate. I just hate shopping altogether. How about that? Just ship should just.

That'd be a nun.

I am with you.

Got it, Got it. All right, well, you just mentioned the 1967 GTO outside. So last question. Speeding ticket or parking ticket?

Probably speeding ticket because you're opening up that gto, right? And I did get pulled over for speeding in that one time. I did something crazy. Just boiled smoke out of things, was hauling ass, and I had to pull in my parking lot at work and up pulls a cop, and he blocked me in. And I had my boss's son with me, and he comes over and wraps on my window. I'm like, crap. He rolls down the window, goes, dude. He goes, I'm gonna have one question for you. He goes, why are you driving like that? I'm like, it's a 67 GTO, bro. How would you drive it? And he handed me back my thing goes. I'd slow it down. He goes, but I like the answer. And he left. You can get away with stuff. It's amazing how much you can get away with when you have the car to do it. If I was in a Honda Civic, he would have probably cuffed me.

I would have cuffed you.

I love it. So, Aaron, give one quick recap on why people should be buying real estate today. In today's market, despite inflation and interest rate. Just one or two sentences for those people who listen to this podcast and went, wow, that was a bunch of amazing, valuable information. Can Aaron sum that up for me so they get off their hands and give you a call?

The two things you just mentioned, our inflation and interest rates, is the reason why you should be buying investment real estate right now. Because inflation will continue to keep going up and interest rates are going to continue to go up. That's just the way it is. And if they go down, you have another play. You can always refinance. But I don't know that we're going to have that option, but we do know housing is going to keep going up. There's a massive shortage in inventory. Anybody who says, well, we could go through the 2008 Again, no, we're not. That was an enormous amount of inventory and not enough demand. We have the exact inverse. People are not getting. Their. People are not able to get into housing, period. And if you don't start doing it now, your grandchildren will not have a shot at it. You are the hope of your future. You want to leave a legacy? Quit thinking it's money. It's education and it's assets. Those two things. Educate your family. Get the damn assets and educate them on how to use the assets. And you need to look at the infinite banking strategy. You need to look at how to. How to utilize family trusts to put their whole engagement aid your whole family in the process. And if you need to understand how to do that, you freaking call me and I told you. 602-291-3357. Just text me or go to Aaron Chapman.com, but get it. Get us connected up. You will get on my calendar. Bray will sync us up, and I'll explain it all. You can't. You're not going at this alone. That's the other thing. Never, ever think you have to do this by yourself, because you do, you're going to lose. This is not a. This is not a solo sport. This is a team sport. And you got to be careful with people you're putting on a team. There's a lot of predators out there. My industry is full of them. I don' a damn where you go. Most of them don't understand investment real estate. Most of them don't do investment real estate. And nobody gives a damn what investment real estate you're buying. They just want to close the deal and they'll back into a corner financially if they can.

Yes.

Yes.

Bam. You did it. So, everyone, this is why we're bringing our network onto the show. Because of value like Aaron Chapman just brought. So give him a call, download his app, utilize this resource. He is here for you. We are so excited that we had you on the show today. Aaron, thank you so much for your time. I know we went long, but it was freaking worth it. So thank you so much. And everybody, everybody else, we are going to see you next Wednesday.

Bye. Wow. Okay, so I am horrible at math in my head. That's all I have to say.

That was fun.

Yeah, yeah, yeah. I was thinking, is it basic Addition? No. Then I need a calculator. Somebody help me, please.

And the funny thing is, is that, like, we've seen him on stage go through this exercise. We've seen him with our team go through this exercise and we didn't think to bring a calculator up to the podcast room because I didn't realize he was going to do this on the podcast too. And Bo, oh boy. So, man, that was just a powerful episode. There's a reason why he's in our network. There's a reason why on these podcast episodes we are introducing you to our network. For those of you who have been sitting on your hands because of the high inflationary environment, because of high interest rates, because of materials and all the other things that are happening in the real estate world and in the economy these days, he just gave you all of the reasons to get off your freaking hands and call him because of how real estate is such a powerful wealth builder and how right now is still a great time to buy real estate. I saw something on social media the other day and I sent it to the team and I said, hey, you need to fact check this and then send it out to our audience because it was literally somebody who went back and said, hey, the last time we were at this interest rate was X like, and it was like the eights or something like that. We were at this. And for all the people at that point in time that were waiting for interest rate to go down, they would have waited like 14 years in which to time the, the housing prices quadrupled in 14 years. But people were scared. If they were scared of eight and they were waiting to get back down to seven, six, five, four, whatever it was, then they just sat on their hands and meanwhile everybody else that jumped in was actually building wealth just simply through appreciation, but maybe through cash flow too. So there is so many ways to build wealth through real estate. Cash flow is not the only thing. And that's why, Aaron, going into don't look at cash on cash, yes, it is a way to like view the properties. And for some of you, that's going to be a metric to at. But right now, in this environment, as rise as interest rates are rising, that is not the only metric to be looking for. And we in Ohio like to say don't count on appreciation. You're always going to look at cash flow. We still say that. We still try our very best to get to the 1% rule. It is not always possible and it doesn't matter. You don't have to have 1% rule in order to buy a property. Because there was something that we were really surprised about. You were comping a property on a street. Go ahead and tell that story.

Yeah. Somebody was asking me about a property and I'm like, oh, I know that street. Well, we bought a property on there just a couple of years ago. And I thought it was two years ago, it was five years ago. And. And so then I went, wow, let me look into this property. And. And I was like, holy smokes. The values on the street are really high. And I'm like, I don't. We didn't sell it to them for that high. What did we sell it for? And I had to look back at the data and. And I think we sold it to him for 79 and it was now worth like close to 140 or over 140. We don't sell by appreciation, but man, that sure is sweet.

Yeah, yeah, yeah. I was like, would somebody call that owner and just tell them their house double?

Yeah, yeah, their house almost double in value.

We tell them, don't count on appreciation. Oh, by the way, but your house just doubled. So there is appreciation in Ohio, folks. But we just say don't count on it. Right?

What's that? Slow and steady wins the race. That's the appreciation in Ohio.

Yeah, that's right. But we still don't have the swing. So that incredible, incredible, like, example of appreciation. We don't have the swings of Arizona, of California, sometimes Florida, not as much so. But so we love the Dayton and Cincinnati market because of that. And so Aaron was really, really hitting home today to start looking at the right numbers. Like, like shift your mindset. Because I can't tell you how many people that we have talked to that are predicting that interest rates will not go down at all for years to come. Like, this is the. And this is not that scary. We've been in this environment before. We've had high interest rates like this before. We all just got spoiled. So I really want to encourage you. Real estate is one of the biggest wealth builders that there is. So if you have questions about this, if you're still unsure about this, Aaron gave you his phone number. Dial that phone number, text that phone number, get on the phone with him, because he will individually talk to you about your situation and help you understand the ways in which you can achieve wealth through real estate, even in today's market. And he'll show you what numbers actually matter. So again, that was a powerful member of our network brought to you Guys, that's why we're doing the Freedom Show. I just loved those episodes and I'm super excited. When we do like these long ones and we get to split it in two. It just, it's a little bit more fun for me. I don't even know why it's like this anticipation of the second half and that they were so good that we sat here and talked for an hour.

Yes.

So one thing that I want to hit right before we go is Master Notes. So we're getting close to the end of the year. Last episode I talked to you about Cottonwood Syndication, about tax benefits and how powerful those are at the point of this episode releasing, I am guessing we have probably closed that, that particular syndication down. We have taken the tax benefits ourselves if it didn't get backfilled. So because we're recording this early, feel free to call and ask just in case I'm wrong, but I want to talk about masternotes. It is. We fully intend on keeping it open through the end of the year. So even by the time this one airs, you will be able to take part in. The masternote program is one of our most popular programs. It's for non accredited investors and accredited investors. You're going to get anywhere from 10 to 12% interest. It's a five year auto renewable note, so it'll automatically renew if you don't want. If you don't tell us, hey, hey, hey, flipping Danny, C.J. and Ben, we'd like to take our money out. You can do that any, any point in time and you can cash out at any year. So in the note it's going to tell you, hey, give us notice by this time so that depending on where your funds are being used, we can make sure we can pull it back out and get those funds over to you. So feel free to to call CJ and Ben, go to chatwithfreedom.com Ask them about the masternote program. Ask them about any other opportunities we do have available. There's a lot we have launching in 2024. I almost said 2023. As we close out 2023, we're super excited about everything that we have going on in 2024. We're glad that you're a part of our world and we're super excited to be able to share new things with you. Anything else, Flip?

I know. I think that wraps it up for the year.

All right. So happy 2023. I'm not even sure exactly when this is going, but this might have been the last episode before 2024 if it is. Happy New Year. Hope you had a great Christmas. Christmas, whatever. Holidays are happening right now. Hope it was awesome and we're going to see you next Wednesday.

Bye. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on the show are not guaranteed. All investment strategies have the potential for profit or loss.