1153: Trouble at Amazon & REIanalyst Data with Ryan Minekime

Once we did encounter some challenges because we are part of your network and because I have an investment counselor, I always felt like I had somewhere to go for an answer. I always felt like I had somebody with more experience than me that I could lean on. And if Sarah didn't know the answer, she got the answer.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants, and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to episode 1153. 1153. This is Jason Hartman. I've got Adam here with me for the intro today, but our guest Adam is going to be talking about some real estate. Well, market data, I think that's the way I'd put it. What do you think?

I haven't heard it just yet, so I can't say. But from the sound of it, whenever he's an REI analyst, I would assume that that's what we're going with.

That is what we're going with. Basically we're going to look at pulling out data from different sources and this is a big thing, really. Since Zillow, I guess, came on the, on the scene, access to data has totally opened up. All the realtors are in fear that they're not going to have a job, which is kind of a crazy fear. I remember them all saying that in 1992.

And guess what? It didn't happen.

You always right around the corner.

Yeah, the end of the world is always right around the corner. Especially for Jim Records. Yes. He is a guy that does a lot of publishing out there and he's got a lot of great books and I don't know why, but when you said it's always right around the corner, I just picked him because there's always like this end of the world date and they always have one. And I just saw a thing from Jim Rickards about how on March 16, the world is going to end, the dollar is going to collapse. Something along those lines, right and it's now March 18th as we're recording this. And guess what? We're still using dollars today.

He must have meant 2020. That's what it was.

He must have meant 2020 or 2045, I'm not sure, maybe 2076, who knows? Our tricentennial. But it's just kind of mind boggling to me the way the doom and gloom forecasts are. It's a business, you know, what the people in that industry call it. And hey, I'll tell you, I just had dinner with a rather well connected player in the financial marketing and financial news media industry last week. And this person who will remain nameless to protect the guilty or the innocent, I don't know, you decide. But this person basically said to me, it doesn't matter if anybody we profile is right or wrong, this is financial entertainment.

I thought that was a cavalier attitude, but sadly true nonetheless. I don't agree with it, but I think it is true and I think it is financial entertainment. That's basically what a lot of this stuff is. Oh, absolutely.

Whenever I worked back in Houston, when I lived there, I worked at a financial talk radio station. And it was all, I mean, our CEO would travel to New York to get on camera. And as long as you made one prediction in your life that was accurate or close to accurate, you could ride that forever. And it was all very much a. Hey, we want you to say this so we can get other people saying that and to fight each other. And so it was all, it's all entertainment. I mean, it's all for ratings.

Yeah, yeah, it's, it's really sad that the world has come to that. But there's, there's no question about it. Look at it, look at it like this, folks. It's like pro wrestling. It's just fake. Yeah. Oh, don't say it's fixed. Yeah, it's fixed or fake or whatever you want to call it. And that brings me to another point. Now I am listening to a new audiobook that was recommended to me and this book is called Fantasyland. And I'm just going to go back to it here, it's going to start playing, but it's basically called Fantasy Land. The subtitle is How America went haywire. A 500 year history and Listeners. Before you go and look this book up, I'm actually not recommending this book. Okay, I'm not recommending it, but I mean, I'm not unrecommending it. I'm gonna see if I can get the author on the show. But you know, he talks about how basically America was settled by a bunch of hypsters and snake oil salesmen and you know, all this kind of stuff, right? And you know, he's not wrong. Okay? And America, because it has Hollywood and you know, it really is a world of fantasy. He talks about Disney and Disney as a world of fantasy. And you know, he talks about how Walt Disney developed Disneyland and all of this kind of stuff and gives all these examples. He definitely makes some leaps in logic. I can't wait to interview him. I'll politely pin him down on a few of those if I remember, by the time we get him on the show. But you know, it is an interesting thesis, you know, and that's the financial entertainment industry, right? Yeah, yeah. And folks, I don't want to be part of it. Well, not exactly. I just want to be the legitimate part of the financial.

The news part.

I want to be the news part, the fair and balanced part. Adam, I know you're going.

No, hey, Fox News, they have their entertainment and they have their news division. You just have to be able to discern which one's which.

Hey, you know, coming from a lefty like yourself, that's a very fair assessment. I appreciate that, I really do.

Do you want to talk about your favorite lefty in the whole world?

Oh, who? Jeff Bezos, the modern day slave driver? Yeah. Well, yeah, sure.

So no you don't. But we should.

I am really happy that Amazon is in the news. Even the left wing email newsletter publisher Medium is actually profiling Amazon and exposing some of their the misery they inflict on their workers. I think it's great. I'm surprised. You know, it's liberals in the media. You know, they get a lot of coverage, they get a lot of passes. Whereas if a evil conservative did any of this stuff, they'd be just broiled. But Medium is doing a whole series on what it's like to work at Amazon in different areas of Amazon. And Amazon warehouse workers will walk as much as 15 miles a day at them. They wear motion trackers and when they stop moving, their slave masters admonish them and say, you better get to work. They don't get to take breaks. One of these stories in Medium, actually, not Medium, that was on Newser, which is basically a news aggregator. It talked all about how profiled all these 911 calls from Amazon locations. It's really, you know, the corporatocracy just rolls over people, folks. It really does. You know, and listen, I know what all My libertarian friends are saying, and I want to say I'm one of you, but this is not an example of free market. The way capital formation works and the way Wall street works and the way big tech works is not free market. It is not an example of free market economics. These companies are bigger than many countries. They throw their weight around, they lobby government to get what they want. And by the way, we have to talk about that too, because that's for another episode. They're not existing in a free market. And I know what you're going to say. You're going to say, well, nobody's forcing anybody to work there, right? Not exactly. It's not that simple. When you look at the way the whole thing at the highest level plays out, the way the college industrial debt complex plays out, the way accreditation plays out, it's just really a complicated, tangled web that they weave.

Yeah, I mean, it's kind of one of those things that's. Are you forced to work at Amazon? No, but you need a job. And Amazon is so huge that people are going to end up working there. And I mean, in this article you're talking about, they looked at 46 warehouses and it was essentially each warehouse had about one suicide threat a year in it, which is insane. In all of the workplaces I've ever been in, nobody has ever threatened suicide because of working conditions.

Yeah, yeah. And they certainly didn't call nine if they were thinking about suicide. God forbid they didn't call 911 about it. Right. And this is 46 warehouses in 17 states. And that's only about 25% of the total number of Amazon warehouses. And think about it, a lot of these people probably used to do work for traditional retailers or they would have had an opportunity to have a job there. Right. And now Amazon has pushed everybody out of the business. You know, we see the retail apocalypse. And listen, I'm all for creative destruction, but it's got to be balanced. And all I'm doing here, I'm not making law, I'm just calling them out. That's all I'm doing. I mean, here we have, depending on exactly when you look the richest person on planet Earth who was paying minimum wage and he finally increased the pay scale for his lowest level workers to a whopping 15 bucks an hour, they are still the working poor. It's unconscionable. It really is. This is modern slavery. If you look at what goes on in the prison system, it's like we've got all these ridiculous laws, they imprison people and they turn them into slave labor workers and pay them, you know, 25 cents an hour to work in a prison environment. Basically. This is not far from it.

This took me back to the industrial revolution whenever children were working.

Child labor laws.

Yeah, child labor laws. I mean this is essentially, you know, kids used to get docked pay because they were staring out a window or said a word to a friend. And I mean this is essentially, I mean they were talking about in a 12 hour shift, I think they got a 30 minute lunch and two 15 minute breaks. And many of them said, hey, about half my break was taken just walking across this enormous warehouse to get to where I was gonna could sit down.

Yeah. Now this is bs. Anyone forced to keep moving all the time with a motion tracker on them, walking 5th to 15 miles a day is ridiculous. Getting paid 15 bucks an hour, I mean, you know, by the richest person in the world. This is not free market, okay? It's really, it's just not right. And I'm not saying I have a solution, but you know what all my libertarian friends are saying is, oh, it was killing me. They're saying, well then you shouldn't shop at Amazon. You shouldn't support them. Well, guess what, they've pushed everybody else out. It's very hard to shop anywhere else. It's like my Starbucks story. You know, the 26 grams of sugar in the little 4 ounce cup of yogurt at Starbucks, the poison they're peddling. Right. Well, don't go to Starbucks. You don't have to go there. Well, the next morning I tried not to. And guess what? I went on Google Maps and I found another coffee shop and I drove 15 minutes to get there. Whereas the Starbucks was right on the corner. And this was when I was in Tampa. And then guess what, it was closed. It wasn't even there anymore. It was out of business. That coffee shop, that was still on Google Maps. So, you know, good luck. You think you have choices, you think it's a free market. You're delusional.

Yeah, some of the people on your Facebook thread were saying, oh well, they just need to learn how to do FBA fulfillment by Amazon and do this other stuff. I'm like, where are these people who are making $14 an hour going to get the money to have a business startup like that? I mean, I tried doing FBA and doing retail arbitrage.

When you say fba, what you mean is the fulfilled by Amazon.

Yeah, you buy stuff, you send it into Amazon, they sell it for you and ship it for you and they take a cut of it. I tried to do it. I tried decently hard. I lost money. I mean, this past year, my taxes, I lost. I think it was about $800 to a thousand dollars. I didn't go full bore into it, but it's hard.

Yeah. Well, let me tell you, as you know, my girlfriend is an Amazon seller. We had her on the show, she talked all about it. And you know, my mom, who's retired, was. She just kind of wants something to do and she was going to do it. She thought, hey, that's neat. You know, my mom's very business minded. She really likes doing stuff. And by the way, she'll be at Meet the Masters coming up. I know a lot of you have heard her on the show and want to talk to her about her management experience. Maybe we'll get her on the stage again. Who knows? We'll see. That might be a surprise. Carmen says that Amazon is just ratcheting up the fees from every angle. They charge you storage fees for storing the items that you ship them, and they keep raising those prices. They keep raising the prices of the ads that you need to run on Amazon to get your product noticed. And then as soon as they get a hot selling product, they create their own generic version of it, Amazon Basics, and they put you out of business. Well, you get no notice. You have no idea that it's coming. And they have all the data. All I'm telling you is the world of these big tech platforms, whether it be Facebook, the Google in, you know, the Google sphere, it's so big. I mean, I don't know which product to even point out. Amazon, Airbnb, all the rest of them. Uber Lyft. These companies have all sorts of instances of abuse of the customers, the workers, the providers of products or inventory of Airbnb. It's just everywhere you look at every angle, they're just ratcheting down the screws on people.

And whenever. Not only what you're saying about creating their own brand of it, they'll actually jump on the listing. Amazon will. And they'll go to the manufacturer and they'll get a price that nobody else can get. So they'll come out and be selling something and making a profit at a price that I couldn't even buy the product for.

No, I know. It's, it's. I mean, these companies are.

And that would be too big to fail, essentially.

Look it. It's too big to fail. That's a very good comparison. That would be okay if it was in a free market where your competitor down the street, if that were in a regular retail environment and your competitor, Adam, didn't know what you were paying for your product and didn't know how many of your product you sold because they had to just observe things in the. That would be a normal, competitive free market situation. But here, Amazon has all the data and they have all the resources, and they can put the screws to everybody at every angle to get what they want. They're a bully, okay? Bullying should not be allowed, whether it be in the world of money or physical environment or ripping people off. It's just wrong.

Problem is, I'm not sure what we can do about it at this point.

What we need to do is we need to break these companies up under antitrust laws. This is what the Sherman Antitrust act was all about. They're not exactly monopolies, but they're duopolies. They spend millions and millions of dollars a year lobbying government, and they should not have. They have an outsized influence. They should have a level of influence that, you know, is somewhat equal to the people. Okay. And it's just out of balance. That's the problem. Yeah.

I mean, they could do kind of the Elizabeth Warren thing, which she's been pitching.

I hate to say I'd agree with Elizabeth Warren on anything, but I actually do.

Yeah. Where they would have to. Essentially, Amazon couldn't sell on their own platform.

Right, right. And so it's either a platform where people can put their stuff. I mean, Airbnb is doing the same thing. Airbnb is now making their own apartments, and they've become their own real estate developer, and they're going to do a similar thing to what Amazon's doing to people. Right. So it's like one or the other. You either get to be a platform and say, oh, we're just a platform. People can do what they want. It's a marketplace. Or you get to be a seller and then that's a separate business. Right? Yep, yep, yep. Maybe that's a good point.

Who knew you'd agree with Elizabeth Warren?

I know it's a rare occurrence, but I actually do. All right, so what are we going to do today? We got to get to our guest.

Yeah, we got the REI analyst.

Well, let's talk to him and let's talk about some free market economics.

That's good. Hey, if you want to grab a live stream ticket to meet the masters, go to jasonhartman.com masters and folks, if you're new to the Show, I am not a socialist, I am not a liberal, but I do not think that these things are free market. I'm a free market guy, but it's not free market. That's all I'm saying. Don't misinterpret me.

And if you want to argue with them, go to jasonhartman.com ask, tell them why he's wrong.

You can tell me why I'm right or wrong. Don't just say wrong. You can tell me why I'm right there. Okay, let's get to our guest and let's talk about getting some real estate market data. Here we go.

It's my pleasure to welcome Ryan Mine to the show. He's the founder of REI Analyst. This is a cool software product that can help sort and organize MLS data. It is more of an investor version of a product than say, Zillow, where you've got to go look at properties one at a time. Here you can look at an overview of the market. So I thought we'd introduce this to you and let you hear about it. Ryan, welcome. How are you?

I'm doing great. Thanks for having me.

Yeah, my pleasure. You're coming to us from San Francisco, right?

That's correct.

Good, good stuff. You started as an investor and I guess you, like so many entrepreneurs, were frustrated with available tools and data out there and so you hopefully made something better, right?

Yeah, exactly. So I started as an out of state investor and I was looking for properties in Indianapolis and I was part of a out of state Facebook group and one of my friends posted in the group a picture of what the product is now, which is basically a massive list of real estate listings and included both market estimates and rental estimates. So I was able to use that and quickly filter cash on cash return for basically every house within the market. And it helped me actually purchase my first house. So ever since then, we've been working on building this product out even further.

So, Ryan, yeah, it's interesting to see the data nicely organized like your product does. But when you use the product and try to select the right investment properties, are you strictly going by the numbers? Because it's sort of easy to look at the one that's got the best return, the best rent to value ratio. But does that tell the whole story?

No, it never does. And so what I recommend doing and what I personally did the first time I used it is I basically sort by the numbers. So I sorted, I chose to use cash on cash return, and I sorted by that created sort of a top 15 list and then from there moved over to other tools such as Zillow and Redfin, and went through and looked at pictures, tried to estimate what I thought the rehab might be, and go from there. And so from there I whittled that 15 lists down to about five or 10. And that's what I use to actually make offers on.

Okay, and so you're, you're really doing this yourself. I mean, you're just dealing with like individual sellers and listing agents. Is that, is that what you're doing?

So I then passed those houses off to my broker and then had my broker reach out and make offers on those houses.

Okay.

And again, that's how it started. And then from then we built the company around it to allow other investors to be able to do this as well.

Did you.

Find that, what is it, a weekly MLS report or how often does it come.

Yes, we have three different options. We've actually just made the one time download free, so anyone can go to the site, they can choose any city that's available and get that one time download for free. And then we also have a weekly and a daily version of it, depending on how often you're investing and how many offers you're trying to make, et cetera.

And how many cities do you have reports in?

So right now we have about eight cities on there. We're currently in California, Colorado, Florida, Texas, Missouri, Indiana, and Utah. And then we're constantly adding cities as well.

Right, right. And you said cities, then reference states. So there are just some cities within those states, I'm guessing. Right.

It's actually every city within those states.

Oh, okay. So it's a lot of coverage. Tell us about the formulas. Like you've got these various columns of data. It's organized just like a spreadsheet. And in fact, that's exactly what it is. It's a Google sheet. The report comes in. But how do you arrive at some of the numbers? You know, for example, it has list price of the property, and then it has what you guys think it's worth. I know some of that may be proprietary, but, you know, give us some hints.

Yeah, so that is proprietary. What we've done is we've used sort of triangulation of other public tools out there. And so things like Zillow and Redfin and Rantometer, we've been able to use those to sort of triangulate on a price for both the market estimate as well as what we think the property will actually rent for.

Okay.

And then put in some other formulas in there to make the calculations easier. So we have rent divided by market estimate. We have rent divided by listing price. So you can sort of filter for your 1% or 2% rule that you're looking for.

Okay. Okay, good. And tell us about the experience of kind of going by the data. And, you know, how you agreed with me at the start that the data never gives you the full picture. There's more to it than that. But drill down on that a little bit for our listeners, if you would.

Yeah, so I think the biggest thing is it really just cuts down on time. So when I started, I was sort of flipping through Zillow or flipping through the mls, and a lot of it is the same data as far as the houses you're seeing. I was just typing it all into a spreadsheet myself, and it was very time consuming. This allows you to, like I said, come up with your top 15 or maybe your top 20 pretty quickly. And then you can constantly be filtering that down. And so at the end of the day, you're not starting with the entire MLS, you're starting with sort of a refined list of 15. And then you can also filter your other criteria that you're looking for. So if you're only looking for three bedroom, two bath or higher, if you're looking for square footage of a certain type or houses only above 50,000, you can also do all that filtering yourself as well.

You got to be a little careful. I'm sort of surprised that you allow people to change the cells. Like, you know, I. I clicked on the bedroom, one of the houses, you know, the number of bedrooms, and I could just change it. Is that because you want investors to be able to change that data in case they find that the listing description is inaccurate or something or.

Well, oftentimes it is. So we often see things that are listed on the MLS as zero bedrooms. And maybe, maybe that's a studio, maybe that's just incorrect. But what you're editing is just your own data, and so it doesn't affect any of the other users. But that's typically what we see is people just changing for things that they know about already.

Right. Okay, good. So, days for sale. So the days on market number. This is the problem with Zillow. There's just no policing of Zillow. And the data just, you know, it's all over the board. There's properties on there that have sold a long time ago and so forth. But that's the world we live in, right? Asking price, market estimate. Now, I notice on a Couple of these that you don't have a market estimate, but those are land. They're. They're vacant lots. You mentioned before that you're kind of like triangulating which numbers. The Zillow's estimate, I know is one. And what else?

We're using a couple of things. So Redfin gets in there and then also we use Rentometer to try and come up with the rental estimates. So we use a combination of different things for each of those numbers.

Okay. But for the market value or the market estimate number, you're using like Redfin and Zillow, Right?

Correct.

Okay. And then the rent, is that straight Rentometer data or are using, you know, rent range 2 or any other sources.

So there we're using essentially a combination of Rentometer and Zillow.

Okay. Okay, good. What else do you want us to know about investing or using your tool to invest?

Really the biggest thing and the reason I love it is because I used it personally and I just think it really cuts down on so much time. I was able to narrow my list of offers down to 10 within about 25 minutes. And from there I made offers on three of them and got two of them accepted, ended moving forward with one. And so the whole process from a research and offer standpoint was drastically cut down from what it was taking me before. So I think that's really the biggest value. And also I feel like real estate investors typically are more data driven than typical investors. And so being able to see the data in this format, where every house is just laid out on a different line of a spreadsheet, allows you to much more easily visualize the data and be able to filter for whatever you want without clicking through individual MLS listings.

Yeah, I agree. So you don't get your emotions attached to it because it's just numbers at first. And if it's a pretty house, it's not going to influence you, at least not right away. Until you start looking at the listing.

Exactly. You're looking at the numbers. You're not looking at how much rehab it takes at first. You're not looking at the beautiful front door, whatever the case may be. You're just looking at the numbers. And then from there you can go in and start making judgment calls.

Yeah, good. What is your plan for the software? I mean, this is a very new product, right. About two months old. And like, what's your vision for the future of this?

Yeah, so it's two months old. Myself and the co founder, we've been working through a lot of just getting it up and running right now. I think our next steps are to add more markets first of all. So we'll add, we're starting with sort of the top investor markets. From there we'll move on and just start adding all states and all cities. And then we're looking to do a few more things where sort of an individual tool rather than getting the full market. You can type in an address and get the analysis of that address if you want, if you've already narrowed it down to a specific house. And then I think the other big piece that we're looking at would be trended data. So you can click on your city and you can see trended rental estimates, you can see trended market estimates and see where your state or your city is moving. Try to figure out what is the right time to buy.

You've got a 49 million dollar house on here. Wow, that's in, I'm looking at Florida right now and boy, there's a lot of, lot of money in Florida. I tell you, it's amazing.

What's the market estimate on a 49 million dollar house?

Well, that's a very good question. You guys say that house is only worth 18 million. So hey, if you got it for 18 million, it might be a great deal, right?

Yeah, exactly.

Yeah. That's fantastic. Don't you wish there was better rental data available on single family homes? I mean, it's just, it's just too bad. It's as if the whole market in the single family home world was designed for homeowners and investors are such an afterthought. Whether you be looking on Zillow or the MLS or any platform, realtor.com, whatever, it's all designed for homeowners, you know, and investors have to do these add ons to get data. But even with, you know, some of the rental estimating tools that, you know, you pull in at least one of them, I know, to your sheet, the data is still pretty wild because investors don't report their rents, you know, so unless the property ended up in the MLS and you know, it was leased by an agent that reported to the mls, you know, you're going off sort of, I don't know, wild data to say the least. It's, it's pretty fragmented, right?

Yeah, it is. And I think that's always going to be sort of a something holding back. I've even noticed I'm personally listing a house for rent in Indianapolis and I've noticed that I listed it higher and it actually brought this estimate up over the course of like two or three days. And so it's all based on what is being listed out there. And not as much as, like, when houses are sold, when houses are actually leased. It's not factoring as much into the data. So I think it's always going to be sort of a soft point in the analysis that everyone's doing, which is why we sort of recommend this as an initial tool. But you're still going to have to go do all your own due diligence after narrowing your list down. But I think that always be sort of a soft spot.

Yeah, good point. You know, I always say to investors, embrace the fragmentation. The fragmentation on its face seems frustrating, but it also by and large keeps institutional investors out of our world and leaves the opportunity for mom and pop investors, which is great. But we have seen the last 10 years coming out of the Great Recession, more institutional money at play than ever with Invitation Homes and Blackstone and all the rest. It's pretty amazing. We'll see how this changes the market over the next decade or so. You know, it's pretty interesting, but talk to us a little bit more about the due diligence you have to do when you come off of the software, when you're off of REI analyst.

So I think there's a couple main pieces. I think one is the rehab. And so depending on what condition your house may be in, thinking about how much that rehab might be, and if you're in state, that might be driving to the property and maybe doing a walk through, if you're out of state, might be having your contractor or someone else do that for you. I think that's probably the single biggest thing. And then beyond that, it's probably looking at some comps within the area, seeing what those sold for, and then also seeing if you can dig into the rent a little bit deeper, whether that's using other tools that you prefer or whether that's just looking for other rents in the area that are active at the time. So I think it's sort of just verifying those three numbers.

Sure, sure. The nice thing about the rent is, you know, once you get to know a market, the rent becomes pretty easy to understand, just kind of in your head. So you don't need to be super analytical about it once you, once you get the hang of it. But, you know, initially, yeah, you definitely got to do your, do your research and kind of understand what's going on there. Good stuff. Well, is there anything else you want people to know?

I think that's about it. I think the biggest thing is we are offering the one time download for free so anyone can go onto the website and check this out for free themselves. And then if you have any feedback you can definitely email us.

Excellent. Well Ryan, thanks again for joining us.

Absolutely. Thank you for having me.

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