1628: 30th Anniversary of the Peak of Civilization, Realtor to Investor, Sterling White [Giveaway]

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 1628. And by the time you're listening to this, it might be appropriate to wish you Happy New Year. Even if it's New Year's Eve. Then happy New Year's Eve. So interesting. Guess what I just finished doing now in the comments for this video that I just watched, some people, one person said that this news station has gone off the rails and that is none other than Fox News. A lot of its loyal fan base or previously loyal fan base is very, very upset with Fox News. And guess what they just showed, which I thought was actually quite interesting. I was all in favor of it. They showed the New Year's Eve celebration, the fireworks in Pyongyang, North Korea. Yes. And I have to say it was beautiful. Now I don't know if you've ever seen the North Korean Mass Games. And I just have a morbid fascination with this country. I gotta tell you, as soon as it seems safe to go there, I'm going to go. Or the day it opens up, I will be there. Because there is no place on planet Earth in the human race that you can probably go to that would be so incredibly foreign. And they had, I don't know, thousands, probably a couple hundred thousand people watching the fireworks display. It was huge. They all had their masks on and it was obviously cold out there. Pyongyang is very cold this time of year and their time zone because all these crazy communist countries. Carmen told me Venezuela does it this way too, is actually on the half hour. They have to be different than the capitalist world. They can't do their time zone on the hour. For example, LA is 3 hours difference from New York. Right.

They don't do it that way.

They do it on the half hour. So their new year is on the half hour. And I just thought that was, that's Just funny. But, you know, with all the injustices in North Korea, the fireworks display was pretty awesome. They do those Mass Games, if you're curious about it, as I was many years ago, maybe 12 years ago when I learned about the Mass Games. Look it up.

Sure.

There are videos online where you can see the North Korean Mass Games. And these are these shows where they will have maybe 200,000 people or a quarter of a million people participating, dancing, holding up colored squares to make giant pieces of art. And they do it in perfect synchronization. You know, the one thing you gotta say for communism is that sometimes it is very efficient, but most of the time it's not. Most of the time it's not because it goes against human nature. But if you want to put on a show and everybody putting on that show, cooperating in lockstep, that does become pretty efficient. And everybody wants to be a good communist. So there you go. But yeah, you know, you just wonder when you look at all of these North Korean citizens, the thousands, the tens of thousands, at least maybe hundreds of thousands that we're out there welcoming in the new year on the half hour our time.

You know, you just look at them.

They'Ve all got the mask on. Covid is everywhere. Right. You just wonder what is in their mind. One of the comments was talking about this on the video, and it said.

You know, what would be the.

The New Year's resolution for a North Korean? And this guy was saying, okay, I will not starve to death. I will not end up in a labor camp. I'm not joking about this. That was one of the comments and it was snarky, obviously, but it's valid at the same time. And if you want to watch a movie that gives you a different spin on this, which I am certainly not endorsing, you know, North Korea. Of course not. I'm the furthest thing from a communist. You would know, however, just to get the other side of the story, because it really does deepen our understanding as people. To do what that old saying. Walk in another Indian's moccasins for a mile before passing judgment on him or her. Well, nowadays you probably can't even say that because that would. Some whack job would think that is somehow discriminatory to say that. No, it's a good saying.

And I don't know if it came.

From the Indians, but if it did, I give them credit. It's a great saying and it's great advice. Anyway, that is the old saying. Someone has probably re engineered it by now, I'm sure.

But, you know, this movie, and I.

Didn'T think it was about this when I started watching it years ago, or not movie, but documentary. I think it was on Netflix. It was called Propaganda. And I just thought it was going.

To be about propaganda.

But what I realized is it was, I think, although I don't know for sure, made by North Korea. And it was talking about all of these flaws and weirdnesses we have.

And they were right.

They gave examples of people, they say, here is. And I think they use the Kardashians or Paris Hilton. Here is a person who does this, this and that to get famous. And everybody follows them and watches them. And of course, these people are ridiculous. These celebrities, they're not good role models. They're terrible. The Kardashians, I mean, seriously, give me a break. I watched that show for like 5 minutes 1 time just because I was curious. I couldn't keep watching it. It was ridiculous. But that's the world we live in. And look, this, this new Year, okay, this is the 30th anniversary of the peak of civilization. Why do I say that? Why do I say that? Well, if you've been listening to my work for any, any length of time, you know that I have said that. I believe the peak of civilization was 1990. That was it. It's all been downhill ever since. Now, it's not the peak of technology. That's different. Technology has definitely come a long way in 30 years, no question about it. But the culture has declined a long way. And how do I know that? Because I regularly watch old movies, old TV shows, I read old books, and I listen to old music. And I'll tell you, what really seemed to change in the 1990s was you got this really ugly music that became very popular. And like I've shared with you before this idea, but there's that old Rothschild quote that says something to the effect of, let me control the money supply. Now, Rothschilds, of course, are the famous central banking family, right? You know, numerous conspiracy theories float around the Rothschilds, and probably many of them are accurate. They're certainly one of the richest families ever and may still be a lot of people say their wealth has declined a lot, but who knows? Nobody really knows. These aren't the people you see on the Forbes 400. They're too rich for that. Okay, well, the Forbes 400, I believe, is just Americans, right? So anyway. But there are other indexes of the wealthiest people in the world, and you don't see mega wealthy People. You don't see Vladimir Putin on these lists. You don't see the Rothschilds on these lists. They're just way too rich for the list, okay? It's not the likes of Warren Buffett, Bill Gates and Jeff Bezos and Elon Musk. These people are. They run the world. They don't run companies. They're above and beyond having a couple of companies. They run the world.

So whatever.

Anyway, the Rothschild quote is, let me. Or let me control the money supply, and I care not who makes the laws. The laws don't matter. Because, in other words, I'm explaining it now. The laws don't. This is not the quote. The quote is done.

Okay?

Let me control the money supply, and I care not who makes the laws. Right. Something to that effect. And he's right, because the more powerful thing is the money supply than the laws. You can control so many more things with the money supply when you're pulling those strings than you can with the set of laws.

Right?

But I did the Jason Hartman corollary to that quote, okay? So here is my quote. Let me control the music, and I care not who controls the money supply and I care not who makes the laws, because the music changes the world. Don't believe me? Well, what happened when Elvis Presley came along? You know, the sort of androgynous Elvis Presley, right. You know, that changed the world. His music and his shaking his hips. Okay?

Nobody ever did that before, okay?

That was new, uncharted territory. Elvis Presley. And by the way, many of you listening probably joined us for this, but you went on one of our Memphis property tours. Do you remember the one where we had dinner at Graceland? Yes. Elvis Presley's Graceland. We had dinner there and we had a tour. And I wouldn't say the food was great. Their caterer leaves a lot to be desired. But it was really cool to go through Graceland and see all of that. I'd done it before, but I wanted to. I wanted to take you, our clients, and maybe we'll be doing that again someday when people actually go places and get together and do things again. Boy, I miss those old days. You know, whenever you watch these old movies and TV shows, the one common theme is they all have people in them and they're all engaging with each other and getting together and going places. Imagine that.

We forgot what that's like.

Yeah, we sure did. So, yeah, the music changes everything. So you had Elvis, and then what you have next? Of course, you know what I'm going to say. You had the Beatles. And that really, really, really, really changed everything. The Beatles just changed the entire world. And then, of course, you had many others. You had Led Zeppelin, you had a zillion others. You had Rush. They didn't change the world, but they should have because they were the most talented band in world history. But the music controls the culture. And the music went down the tubes in the 90s and it got really ugly. The music was ugly. It was, you know, let's kill the cops. No wonder there's a movement that wants to defund the police. Look at the music, right? I mean, these idiots, you can't blame them. Maybe they're not that dumb. They're just brainwashed, right? Anybody can be brainwashed. Even Patty Hearst. Remember Patty Hearst? I think Trump just pardoned her, didn't he? Anyway, that's a really old story, but you got to know what went on years ago. You got to have a sense of history, folks. It's really important. Watch old now, tomorrow on New Year's Day, you're gonna have a lot of time to hang out and, you know, relax, watch some old movies and watch some old TV shows. Please do it. Trust me, you need to. From the, even the 80s, not that long ago, the 70s, the 60s, 50s, whatever. Just see how people were. They're so different back then. Control the music, you control the culture. The culture war has been lost. The good people lost. Culture sucks. So 1990 was the peak of civilization. And we are celebrating the 30 year anniversary of the peak of civilization today. So happy New Year. Happy New Year, everybody. It is, you know, 2020.

With all things considered.

I mean, it's, it's obviously been a very weird year. It's been a terrible year for many people, and I'm just grateful that it's been a good year for us financially. It's been a good year and it's been a good year for all of you because I know your real estate has been going very, very well this year. So congratulations and thank you for your business and your support and we just love serving all of you and we really appreciate it and we're just honored and we're looking forward to a great 2021. You know, this market has a couple years of juice left in it. I think 2021 is going to be a fantastic year And I think 2022 will probably be very good as well. Things change. So, you know, we'll be here with you three days a week, not five anymore.

But you know what?

You know me, I have a lot to share. I have A lot to say. And I'm going to be doing some bonus episodes and filling in those blanks on Tuesdays and Thursdays when we don't have a show from time to time. So don't worry about that.

And we're going to be doing a.

Lot more on YouTube. Of course, all of you have certainly gone and subscribed to the YouTube channel by now, right?

Say yes. Say yes.

You have. And you know, we're going to be doing more courses and webinars and stuff like that. So we had to scale the Creating wealth show back to three days a week again.

So we'll be with you three days.

A week, every Monday, Wednesday and Friday in the new year. And today we have a replay. Well, it's. No, it's not a replay. You've never heard this one before on the Creating wealth show. But we're going to play an interview I did. And this was. I don't know how long ago this one was. I can't remember. But it was maybe six, eight months ago. I want to say maybe longer. Maybe it was before the plandemic. Maybe it was before COVID 1984. I'm not sure. Anyway, you'll like this interview. I thought it was an interesting one, so. Oh, one more thing. I always have one more thing. I forget, don't I? Be sure to enter our contest where you have insanely good odds of winning. They're not as good as they were yesterday because many of you entered, but they're really good. Two people will win 500 bucks cash.

Yeah.

Just go to jasonhartman.com contest jasonhartman.com contest it's super easy. It takes like two seconds. Go now to jasonhartman.com Contest and enter to win 500 bucks. That is our stimulus check for you. And two of you are going to win 500 bucks. 500 bucks each. Thousand bucks total. We're giving away. We will be announcing that here in, I don't know what, about 10 days or so. So go and enter the contest because the contest closes next week.

So don't forget, go do that right.

Now while you're listening to this interview with Sterling.

I've got Jason Hartman, who was on here, who is just an all around phenomenal guy. Just I can see that from our interactions. And he's done just over 10,000 deals. I would say he's been most likely doing deals when I was in my diapers. But so he's an investor and operator and so welcome to the show, Jason.

Hey, thanks, Sterling. Just want to Clarify. It's slightly under 10,000 deals, and I don't know the exact number because I wasn't counting when I started, when I was 19 years old in this business. Okay. But, yeah, it's a lot of deals. There's no question about that. I've been doing this a while, and it's just been a great career. I love investing, and I love helping other people invest, too. So that's kind of the scoop. That's what we do.

Awesome. Awesome. So I really just want to give the audience just a background about yourself. And could you go into the really pivotal moments that you've experienced, your 5 or 10% that has gotten you to where you are or how you got first started?

Sure, absolutely. You know, when I was 16 years old, growing up poor in Los Angeles, California, I didn't like being poor very much. And I saw an infomercial, and it was a real estate guru. And I went and got his book the next day. I read three chapters in the book, and I put it down. My mom picked it up, got interested in the subject and read the whole thing, and she started going to seminars, reading more books. And when I was 18, she said, Jason, you got me interested in real estate investing. There's a seminar this weekend in Anaheim by Disneyland, and why don't you go? So I rounded up a bunch of my friends from high school, went to the weekend conference. It was one of those Friday night, all day Saturday, Sunday. And by the end of the conference on Sunday, I was the only one left. All my friends went to the beach, and I just got really interested.

So I thought.

I just wanted to learn the basics, Sterling. And I remember Earl Nightingale is one of your mentors. He's one of mine, too. I discovered about a year before this, my four great mentors, Dennis Waitley, Zig Ziglar, Earl Nightingale, and Jim Rohn. And they changed my life completely. And later, I had a few more mentors, but they were the first four.

It's just out of curiosity, Jason, who was the book that you first read at the beginning?

Oh, the three chapters that was in Nothing down by Robert Allen. Yeah, got it. That was one of his books. What was I saying about Earl Nightingale? Earl Nightingale? Oh, yeah. He said he used the example, and he wasn't talking about real estate, but he used real estate just as an example. It was just a coincidence. And he said, what we need to do in life is we need to humble ourselves to kind of learn the basics. And you did that, Sterling, with your mentor. And it's A great story you told when you were on my podcast. And so Earl Mengele said, you know, if you want to get rich in real estate, just go learn the business first. You know, start with the basics. And, you know, I realized that what I should do if I want to learn the business and be a great investor, I should just go get my real estate license and learn about, you know, I remember one of the speakers at that conference, he was talking about points, and I didn't know what points were. And so, you know, I had to learn the basics. I was only 18 years old, okay? And by the time I was 19, I got my license in my hand. I was in my first year of college at Long Beach City College. And, you know, I started selling real estate part time for Century 21. And, you know, I did pretty good just selling it to other people. And I started working with investors, selling HUD and VA repos in really crappy areas of San Bernardino and Riverside and sometimes LA and Orange county, but not as much there. And one of my clients, about six months into my career, his name was Jim Woll, I had sold him a couple of properties. And one of them that I sold him, he didn't like it. And he said, jason, you know this one bedroom condo you sold me, I don't think it's that good. Why don't you take the listing and sell it for me and I'll buy something else from you. And I said, jim, I don't want to sell it for you. You, I want to buy it from you. And so that was my first investment property when I was 20 years old. It's just been a great ride since then. But Sterling, I'll tell you, one of the things that could have happened to me so easily, looking back, is that that first property, I had kind of a bad experience. You know, I didn't know anything. The tenants didn't respect me. I had this young couple in there, but I was way younger than them.

So were you managing the property at that or.

Yeah, I was managing it myself. I didn't know, you know, I didn't even occur to me that you'd hire a property manager. So I was managing the property and they paid rent for like a couple of months and they stopped paying. And I went over and knocked on the door and said, you know, you got to pay me. I got to make the mortgage payments. And they didn't care. They just lied and made excuses, so I had to evict them. And that was my bad experience. And, you know, over the Years as I've been helping investors, you know, sometimes they'll have a bad experience right out of the gate. And it would have been so easy to just give up. I would have had every reason, every excuse, every rationalization to say this real estate investing thing doesn't work. And had I done that, I would have missed out on millions and millions of dollars. You know, gotcha. So what the message there for your listeners is, you know, you may have some bad experiences. This is not perfect, but keep going. You know, the world belongs to the people that persist and are willing to take the lumps, learn the lessons and keep on going.

Awesome. And that goes right into. That's a mindset, and that's something that we were just talking about off camera of how vitally important to have that foundationally. Yes, it's good to have the tools, the how to do something, but if you don't have those mindset and the beliefs of ultimately having an abundance, mindset versus scarcity, then having all those tools really don't matter as much. So I'm curious on you mentioned about Jim Rohn, Zig Ziglar, Earl Nightingale, which is by far my favorite. We become what we think about. My favorite quote. What has been your biggest takeaways from the self improvement side?

Well, like you were mentioning a minute ago, I think nowadays we're sort of missing out. You know, a lot of people like to learn and that's awesome, but they're not learning. And there aren't really as many teachers out there that seem to be teaching like the philosophy of success. And that's what those old guys did. Right. And I had Dennis Whateley on my show. The other three have passed away now, but Dennis Waitley was on my podcast and, you know, they taught the mindset, the philosophy, and I guess Sterling, I'd say it's the difference between two concepts, right? There's the content of one's life, okay. And the content would be the how to do it, how to find a deal, how to evaluate a deal. You know, when to buy it, not to buy it. You know, how to screen your tenants, how to, you know how to decide when to sell or refinance or do a 1031 exchange. Right? Those are all like the how to. Okay, that's like the content, but the mindset and the attitude and the philosophy of success, that's the context. It's a bigger picture. Okay? It's a bigger picture. And you know, you, you can put the right content, the opportunities that show up in all of our lives, from time to time. But if the context, our belief system, our mindset is wrong, you know, we'll let it slip away. The opportunity will just slip away. So, like, you use the example of abundance versus scarcity, okay? If we have a scarcity mindset, which really is the way humans are programmed, we all have a scarcity mindse. We'll all do a lot more to protect what we have than to look at the opportunity to earn more.

Right.

Or gain more. And that's just the way we're programmed. Because through millions of years of evolution, we were in a scarce environment, okay? And that scarce environment is that scarcity mentality is what kept us alive and what helped us survive. We wouldn't be here if we didn't have that mindset. But in the modern world, the world has changed, but our old brain hasn't changed.

Okay?

Yeah. Is it the amygdala?

The amygdala? Yeah, they talk about the amygdala, the reticular activating system. This is all fascinating stuff, right? And I love that you brought that up. But the point is, our old brain is programmed for scarcity, and the world we live in is abundant with opportunity, okay? So we gotta focus. We gotta. We gotta overcome ourselves a lot of times, right? And look at opportunity and seek opportunity because opportunity has an unlimited upside. Scarcity. Yeah, you could save some money, you know, or not get burned on a deal by not taking a risk. Sure, that's true. But Sterling, as you and I both know, nobody ever got rich saving money.

Exactly. And that's all. That's a whole nother topic in itself also.

Well, but they got rich. They got rich seeking out opportunities, taking risk and investing money. And with that, you're gonna have some losses, you're gonna have some failures, you're gonna have some hardship, and you gotta just learn to overcome it and move forward.

And speaking on that, what has been one in the most recent five years, one, the two limiting beliefs that you would say you've had, that you've shed it with new, more empowering ones.

Oh, gosh, I don't know. You know, let me think about that. You know, I've had some real estate deals that I've looked at that I probably should have done in the rearview mirror. Well, not probably. I definitely should have done them. Okay. But you know, the seller I thought was being too greedy and I didn't want to pay, and so I didn't get the deal and someone else did.

Was that ego is what you're saying.

Or I don't Know that it's. I mean, you know, listen, I certainly have an ego. I'm human, okay? Every. Everybody's got an ego. And the ego can really serve us in a lot of ways, but it can also hurt us, you know, and so that's another thing we have to manage is scarcity, mentality, ego, things like that. They can definitely serve us, but they can also hurt us. You know, there's a balance and everything there. I would say it's just a matter of, you know, being afraid to overpay because, you know, you might get the short end of the stick, right? And in real estate, almost. And not every deal, but almost every deal ever, almost every real estate deal ever is a great deal in the rear view mirror, okay? It's almost always a great deal in the rearview mirror. You know, we host live conferences and of course, on my podcast. Podcast, I've talked about this too. But there's this great poem, and it was written by a guy named Donald Weil, a real estate broker in New York City, years ago. And it's called the Reluctant Investor's Lament. And Sterling, the amazing thing about this poem is that he's talking about how he should have bought this deal. He should have bought that deal, but he overthought it. He wasn't sure the deal was good enough, and he missed out. And others got those deals and now they're rich. And, you know, he missed out. I'm sure he got a few of his own deals too, but, you know, he should have bought more, right? And the amazing lesson is this, when I share that poem with people, is that it was written sterling in 1977.

Wow.

And in 1977, he thought everything was overpriced. Okay, you know, what are you going to think looking back on 2020, and granted, there are cycles, we're certainly going to have a recession at some point. Nobody knows exactly when. Maybe it's around the corner, maybe it's.

A few years away.

I don't know.

Nobody knows. Nobody knows. Nobody really knows. And there will be a time when the market declines. But overall, if you play the long game and you're willing to delay gratification, every deal is going to be a great deal at some point. Looking in the rear view mirror of the car, okay? They always are. Name a deal that's not a good deal. Looking the rear view mirror, it doesn't exist.

One is inflation. And then also, what's. Gosh, what was I going to mention? Quite a bit of people that I know who have sold deals that were. They were still able to get a great deal on their side, they look back and say, I should have never sold that.

Right?

Yeah, yeah.

No, I know. There's a lot of sellers remorse. There's very little buyer's remorse.

And so still speaking on beliefs, in a way, is what habits would you say that you have formed, such as either reading a book a day, meditation in the morning. What does that look like for you?

Oh, man, if I could read a book a day, that would be phenomenal.

Well, I don't read a book a day.

Yeah.

Wow. That's incredible. I wish I could do that. You know, I get through about 100 books a year, though, as a blend of audio and printed or Kindle, and I get through a lot of podcast and things like that. So I love education. You know, as Ray Kroc, the founder of the McDonald's franchise system. Not McDonald's, but the franchise system, real estate.

Heavily involved in that.

Very much a real estate guy. That was the key that really made that company what it was, is that, you know, McDonald's realized it was a real estate company. Not as much of a franchise company. Franchise company was just to pay the bills. The real estate company was to get rich. Okay. And that's how you should look at your job. Your job is to pay the bills. Your real estate is what will make you rich. And so he had this great quote. He said, as long as you're green, you're growing. As soon as you're ripe, you start to rot. So we got to always be learning, okay? Always be learning. So I've always just been a very curious person, and I'm always learning. I'm always seeking out new knowledge, interviewing people like you on my show, just interviewing so many great people is a big source of it. But also getting through a lot of books and articles. Very, very important. And no, I don't meditate every day or anything like that.

Okay.

And so did have that.

I do like yoga. Yoga is good for you. Yes.

Do you do hot yoga or just regular yoga?

You know, I love hot yoga. I have not found a place near where I live now in Florida to do it. Florida's kind of hot at night. Outside, but. Yeah, I was gonna say outside, but hot yoga is awesome. But any yoga is great. Yeah.

What failure have you experienced that has later set you up for success?

Well, I would go back to the other one of the deals I had but didn't buy because I was too conservative. And I've had a lot of those. I don't know that I can think of a specific one. But I can definitely tell you this. When I was helping clients buy properties in 2009-2010-2011-2012, 13, 14, 15, man, I should have bought them all. I shouldn't have sold any of those properties to clients. I should have bought every one of them. I wouldn't have had the ability to buy every one myself, obviously. Obviously. But I could have raised money. I could have done other stuff. I don't know. I would look at that as a failure, not seeing the opportunity when it's there. This is a problem. A bad psychology of investors is the idea of trying to time the market. It just doesn't work. I don't like stocks. I think Wall Street's a scam. I call it the modern version of organized crime. But the stock market people do say, don't try to time the market. They'll tell you that. And part of that's certainly self serving. However, look, let's just think back to the Great Recession in the darkest years of 2008, 2009. I was in this business then and I remember people were scared. We thought the world was going to end. We saw Iceland, a country go bankrupt, essentially. We saw cities like Vallejo, California go bankrupt, okay? We saw millions of people just do strategic defaults and walk away from houses, okay? We learned a lot of new acronyms about collateralized debt obligations, CDOs and all these new things we learned in the Great Recession. And it looked really bad, okay? And the problem is now looking back, we know when the bottom was right, but when you're in it, you never know you're there, okay? And when you're at the top, you never know you're there either. So the only thing we can really do is mere mortals, okay? And think about this. If timing the market were possible, then the, the biggest powers that be that have way more information and way more power than any of us do, okay, those would be the Federal Reserve, okay? All the central banks around the world, the government in general, the giant financial companies like Goldman Sachs. Oh wait, Goldman Sachs, all those Wall street crooks, right? They can't time the market either. Okay, look, they got into big trouble too, right? So you know, if they can't figure it out with way more money collapsed. Yeah, Lehman is gone, right? Yeah, absolutely. If they can't figure it out with all their power and all their resources, what makes you think you can time the market? Okay, seriously, I mean, you know, and I'm speaking to everybody listening, so you can't time the market. So just buy properties that make sense the day you buy them, okay? And that will make you a sustainable investor, okay? And that's actually commandment number five in my ten commandments of successful investing. And it says thou shalt not gamble, okay? Thou shalt not gamble. And by gambling in the real estate game, gambling consists of buying a property that doesn't make sense from a cash flow perspective and waiting for something great to happen, namely appreciation.

You got it. You got it.

So if that appreciation doesn't happen and you have a property with giant negative cash flow, that's an alligator. They call it an alligator right around your neck and it's getting ready to eat you alive, you're going to lose it, okay? At some point you're a speculator, you're a gambler. And the way I define an investment, Sterling is an investment has income, period. That's the definition of an investment. Things that are not an investment do not produce income. So let's take some examples. Non dividend paying stocks are not an investment, they're a speculation. Because the only strategy is buy low, sell high. That's the end of the strategy. That's it. Very simplistic. Precious metals, gold, silver. Buy low, sell high, no income, right?

Okay.

Vacant land, buy low, sell high, no income, okay?

Would you say flipping? Same way.

Flipping is not really an investment, it's a business, okay? And flipping is not really the same thing. And I'll tell you why. Flipping would be equivalent to having a business where you buy inventory, you buy widgets, you know, if, look at, if you're Walmart and you buy, you know, towels and you sell towels in your store, right? You buy low and sell higher, right? That's a business. And that's okay. It's okay to be a flipper. It's just understand that as a flipper, you're not an investor, you're a flipper. You're in a business of buying inventory at wholesale and adding value and selling it at retail. That's what a flipper does, okay?

And just hoping to not get caught with if you have quite a bit of properties that the market just falls underneath you.

If you get caught, if you get caught and the market changes or you don't estimate it correctly during that flip cycle, then you're going to get burned. And that's why, you know, you need to flip quickly.

Okay?

It needs to be a quick game, right? And, and you know, I've flips many times. I'm not a flipper, I'm a buy and hold guy. I just, you know, after getting a little older and more conservative, I just want to buy properties and keep them and get a return on investment. That's what I like the best.

Yeah.

So shifting to the investing side is how are you finding deals today? What channels are you using?

Yeah, well, I pretty much use my own business to do that.

Okay.

So, you know, I'm in the business of teaching people how to invest in real estate and then providing a referral network of properties that they can actually buy versus, you know, those gurus out there that just teach and don't have, you know, and tell them to go out, find their own deals. Right. We actually source the deals, turnkey properties through local market specialists that we, we do referral agreements with. So we run a referral network. Okay. And then occasionally like a bigger deal like an apartment or a mobile home park or something like that that I might find outside of my own network.

Okay.

So those are sort of what I'll call non conforming deals. And occasionally I'll do those too. But that's what we do. That's the business we're in. And then we offer ongoing support and software to help evaluate deals and then track and manage those deals after you've purchased them.

You were alluding to the ongoing education side. Were you brought up to where at the end of high, high school, or even college, that's when education stops? Because that's how it was for me.

Yeah, well, that's the system we have. And that system is bad.

Okay. It's.

Our education system is very out of date and very flawed. No question about it. No, I was always a learner. I was always curious and I always wanted to learn more because I always felt like I had a disadvantage. I didn't have a lot of things growing up that other people did. And I just thought, why live in this scarcity? This is America. We can do whatever we want here. Right. And we can make our own opportunity. But Sterling, the fact that you asked that question, I want to mention one more thing. Let's look at college, for example. Okay. Now, I did two years of college and at some point I remember sitting in, I think I was in my biology class in college. And you know, I had a good teacher. I actually liked that class quite a bit. But I remember sitting there thinking, here I am learning from someone who's probably making, you know, $50,000 a year at the time, maybe the professor. I'm sure they make more than that now. And you know, I'm making a ton of Money in real estate. And you know, basically this is like a government employee I'm learning from, you.

Know, about a subject. Where did you enjoy biology?

I kind of did. I kind of did. You know, I thought I had a little bit of an aptitude for that. I always like science. Okay, So I did like it. But even then it's like, I'm not going to use this in my life. I'm a business person. You know, I just think it's kind of a, you know, people look at the cost of college, which is outrageous. It's absolutely outrageous. If you have kids, think about, I.

Believe there's going to be a bus. They talk about that's going to be a bus here soon.

On that.

Yeah, yeah, we're. College is in a bus bubble and the universities are afraid. They've been screwing people for decades and it's a scam. Okay? I mean, listen, college is not a scam. If you want to major in a stem, a science or technical oriented field, doctor, attorney, engineer, you need college. Okay? If it were cheap enough, it's just become outrageously overpriced. And not just that, you lose a lot of time. You lose four or five years of your life going to school. School, okay, Going to college. Now think about it. I did this for a friend of mine and she, she just sent her son to college and you know, she was saying, well, he's not a very good student and you know, he doesn't know what he wants to do, which is sort of typical of people that age. Right? And I said, I said, look, you know, if you could line this up, you could save all the money you're spending for college, which is going to be over $100,000 in this case. And, and you could literally line him up in four years. I did the math with, I think it was 36. Six week internships.

Wow.

Okay. Yeah, 36 of them. Even, even if you, you know, he could just go work for free like you did Sterling, with your mentor.

Okay.

Or even if you had to pay people to let him be their intern and Fetch them coffee six weeks in 36 different businesses, you would learn way more than you could learn in four or five years of college.

Maybe just six, six weeks you could learn entirely all that. Yeah, yeah.

But in four or five years you could do that like 36 times. So yeah, it's incredible. I hope my math's right on that. I can't remember what I said. I'd have to actually do the division on that to remember. Remember, I only got Two years of college, so pardon my stupidity.

Well, I was in my fifth year on a four year degree. I actually took chemistry one and two a total of five times and ended up dropping out my fifth year to focus full time on real estate because I was in the same boat making more, making more money. And it just made sense.

It really is amazing. You can do a lot, you know, it's the opportunity cost is not just the money you spend for college, it's the time you spend for college. Okay, yeah.

So now we're going to shift to our rapid fire sharing questions. That's the little bell that goes on. So what is one unusual habit or random thing that you love doing or that you just love in general?

Oh, gosh, I don't know. You know, I like music. I'm a big fan of music. I guess that's not that unusual.

Probably everybody likes music, depending on what kind of music.

Yeah, yeah, I like a lot of kinds of music. I'm really versatile that way. But I absolutely just love music. That's one thing that I've really realized in life is, you know, maybe that'll be my next career or something. I don't have any talent though. That's the problem. Oh, well.

What is a common myth in real estate that you can debunk?

Common myth is that debt is bad and debt is not bad in real estate. Debt is an asset. The mortgage. Mortgage is a huge asset. So long as it's a good low interest rate like we have now, it's a fixed rate and the property attached to it makes sense. The mortgage is really one of the biggest assets of the deal. And I teach a strategy Sterling, called inflation induced debt destruction where I take a deep dive in this. People want to learn about it. They can just go listen to my podcast, just type Jason Hartman on any itunes or whatever podcast platform. And I've done deep dives into this subject because basically what happens is you get paid to borrow the money. It's truly incredible. And then you also get your return on your real estate investment in other ways too. But getting paid to borrow is pretty darn awesome. So there's good debt and bad debt. And debt on your properties can be very, very good debt.

What do you believe about owning a house and having that as debt? Would you consider that bad debt or.

Good debt or a liability? It's technically bad debt, but it's not that bad. Okay, don't have any consumer debt. Credit cards. God, after what I just said, I hope you don't have any student loans. Don't have bad debt, but have good debt attached to good assets. That's the important thing. Owning your house is not that great a deal.

Okay.

I think it's highly overrated, especially if you own a high end property. If you can rent a high end property for yourself. One of the things we teach a lot is the rent to value ratio. The rent to value ratio gets way more in favor of the tenant on a high end property. I remember years ago when I left the Socialist Republic of California and I moved to Arizona. I rented probably a $1.5 million penthouse in the tallest all residential building in the state of Arizona. It was brand new, $3,600 a month. That was a great deal. Now think about that. I could buy 15 $100,000 houses that I'd find@JasonHartman.com okay? And I could buy 15 of those and I could get 15 grand a month in rent because on the lower price properties, the rent to value ratio is much more favorable.

Gotcha.

Okay.

Driving. And those of you have heard that you may want to take. Well, I would take note of that. Dropping absolute bombs. The next one is what is one common reason you see most people that fail or just ultimately give up?

Well, I think they just give up when the first problem happens. One of the things we got to realize as real estate investors, Sterling, is that we are direct investors. And when you are a direct investor and you're buying a property, you're going to feel all of the bumps in the road. You're going to feel all the problems. When you do the silly thing of writing a check to that guy at Merrill lynch and they put your money in the stock market, you don't feel the bumps so much. Yeah, you see if it goes up or down. But you know, if the company you invested in, if they get sued for infringing on someone's patent and have to fight an ugly lawsuit if their competitor is attacking them, you know, you don't feel that direct like you do with a property. You feel the problems, you know, directly. And so you got to realize you're going to feel the bumps in the road. And you've got to manage your emotions so that you don't do what I could have done on that first property where I had to evict those tenants. I could have just given up. I would have lost millions of dollars. I could have easily made the decision. Real estate doesn't work, you know. Agreed.

Yeah, and that's a great story that you share on that. Because my first deal, I was in a similar boat to where there, the residents, the tenants that were living there actually started subleasing it without even, without even letting me know as I was managing the property too. But that was an absolute disaster because I had to end up evicting the people who weren't even supposed to be in there, so. But still ended up taking that. Hey, I know it's more of a long term play and just not going to let this be detrimental.

So.

And what are bad recommendations that you hear in this profession?

Oh, there's lots of bad recommendations out there. There's lots of people that are just scamming people because for many reasons they have a property performa, okay. And they don't have a vacancy rate, they don't have any maintenance cost in them. You know, they understate all the expenses on the property. You know, they tell people, pay off your mortgage, buy your property with cash. They don't understand how to use debt to make money.

Or all debt is bad debt.

Yeah. Or all debt is bad debt. That's just dumb. These people are just not. Not telling the whole story. There's many others I can't think of, but there's a few.

Gotcha. And last is, why do you believe we're. We're all here on earth?

Oh, wow. That's a deep philosophical question. You know, I believe. I mean, look, you know, I sold a real estate company, a traditional real estate company I had years ago to call to a banker and I had other assets at the time. I could have easily just retired, okay? I could retire now. I don't need to work, okay? I haven't needed to work for many, many years. But the reason we're here is to add value to the world, to, to provide service to other people, to be engaged in life, okay? The idea of retiring and sitting on a beach, to me is just completely silly. I mean, look, if someone listening wants, you know, it's been proven, Sterling, that idle time is the devil's workshop, okay? And you know, if you're laying on a beach, you know, you're probably going to be drinking, you're probably going to be just being. Having no purpose. People don't live very long with no purpose. Okay? So I work, you know, five days a week at least, probably every day to some extent. And I think you got to be engaged and have a project and a purpose. And I think those are the people that really contribute the most and live the longest. Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out the show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that guest appears, opinions are their own, and if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you're using and write a review for the show. We would very much appreciate that, and be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.