1869 FBF: Client Case Study: SFRs to Apartments with Greg Scott & Population Density's Impact on Real Estate Prices

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Oh, well, the first one is scary, but then after that our second one was down in Atlanta, which we actually never saw that property. We owned it for a number of years and then sold it at a pretty nice profit and then Phoenix and then we bought another one in St. Louis through you and then, and then the last one we bought in your network was also back in Indianapolis. And interestingly, the very first property we bought, that one in Indianapolis, we still own it and it actually has the very same tenant in it. We've had the same tenant since 2008.

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. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome listeners from 165 countries worldwide. This is Jason Hartman with episode 11, 841-184. Thank you for joining me today as I am talking to you from Jin Mao Tower at the Grand Hyatt Shanghai, China. And wow, what an amazing view. Actually, the view would probably be a lot more amazing if it were clear. Now the thing in China that I.

Have noticed in my travels here over the past week and a half is.

That you can't really tell what's in the air. Is that fog? Is it pollution? I don't know yet. We haven't been outside yet today because we woke up and enjoyed this incredible.

Spa they have here with hot dips.

And cold dips and steam rooms and.

Saunas and working out.

And what a view from the gym and the spa here. Amazing. Only to be exceeded by the view from our room on the 77th floor. This is an 85. I think it's an 85 story building. @ the top there's an observation.

Deck. Want to get up.

There? Today, looking out onto Shanghai, it is really incredible. This is an amazing city. Last night the light show was just unbelievable. And interestingly the buildings with all of their different light shows on all these buildings, you know, of course this stuff would never have been possible without the advent of LED lighting first of all. But also of course the computer processing power needed to coordinate these light shows that are as tall as a skyscraper and coordinated between many different buildings, at least seemingly is just nothing short of amazing. It is truly an amazing time to be alive. And Shanghai, I don't know yet because we haven't been out because, well.

Hey, I'm going to hear some flack.

About this but my girlfriend's a little slow on getting out into the city.

Today, so hopefully, oh, I see someone about to throw a computer at me, so hopefully we'll get out and I'll actually get to see this city. She's been here a few times.

So nothing new for her, but new for me for sure. And this city is, it's unbelievable. I mean just looking out at it, the views from here are absolutely spectacular. I kind of look at some of the most amazing man made environments on earth. Of course we took the Venture alliance mastermind to Dubai a few years ago on one of our mastermind trips and that is an amazing man made.

Environment. Dubai, you know, just incredible structures, incredible.

Buildings. Shanghai is amazing in a different way. You know, just the architecture in all of these places in Hong Kong where we were yesterday, totally amazing. Shanghai may well be the largest population city on earth at about 24 million people. These cities are just big and I can't believe the density of these places. And so I looked that up and I did some research because when we talk about real estate investing, one of the things we always want to kind of keep in mind is population density. Population density, it's an important factor. We haven't talked about it much because it doesn't matter that much in terms of the markets in which we invest, but it does matter overall, just in your understanding of real estate investing. And I'll give you an example, many, many years ago when I started my traditional real estate career and I remember going south, having grown up in Los Angeles and Long Beach, California, those two places, what about 30 miles apart maybe, and then going even further south into Orange County, California where I spent my, the vast majority of my adult life, built a really big real estate career there in the traditional real estate world, had a real estate company there that was later purchased by Coldwell banker back in 2005. And everybody credited me with incredible timing because that deal.

Closed. Get.

This. You.

Ready? November 11.

2005. Yeah, pretty good timing, I'd say. But that wasn't the point here, was it? Here's what amazed me about population density is coming from Los Angeles where I thought the quality of life was actually much lower, much lesser, not nearly as nice as living in beautiful Orange County, California, which I consider to be a nicer place. The population density is, was lower in Orange county, higher in Los Angeles. The prices in Orange county were lower. I know most people think, well, Orange county is really expensive, but back then, you know, it was sort of considered the suburbs of LA really. You know, the ads for the Irvine company used to say just 40.

Minutes to Los Angeles, don't try that.

Today because the traffic and the density has increased quite a bit. But that's when I realized at a very young age that one of the huge drivers of real estate prices, they weren't really related to quality of life. It was related to population density. And population density was either a function of or a result of, you know, it's kind of a chicken and egg question, right, in terms of job creation and employment growth and high paying jobs and so forth, for example. And I know many of you listening live in places I talk about and I don't mean to cast aspersions on any particular places, but just for me personally, I'd love to live in New York City for maybe three months just at one point in my life, but I certainly wouldn't want to live there permanently. I don't think places with high population density really offer very good quality of life. I think better quality of life is found in lower population densities. And I know there are some other advantages I remember talking about with my friend Sanjeet who lives in New York City and he, we were having coffee one day in Scottsdale, Arizona when he came out for a visit. You know, we were comparing the two and comparing the real estate prices and comparing the employment and so forth. And he says, Jason, the thing I love about New York City is that you just meet so many very, very smart.

People. Welcome to this week's edition of Flashback Friday. Your opportunity to get some good review by listening to episodes from the past that Jason has hand picked to help you today in the present and propel you into the future.

Enjoy. And you know, I agree with him. You know that that's, that's true in, in higher priced markets, higher population Density markets, mostly. This doesn't track exactly. I'd say that the population, because it's just Darwinism, right? Darwin said survival of the fittest. The Darwin belief system would say that people largely get sorted by prices, right? So it's really expensive to live in New York City. It's pretty darn expensive to live in Los Angeles. And it's pretty darn expensive to live in Orange County, California, and many, many other places around the country and around the world. So the more expensive the real estate market. And virtually everything in life is driven out of real estate prices. Whether or not you can get a table and a chair at the local coffee shop is driven by the price of real estate. For example, in Laguna Beach, I remember Laguna beach is a area in Orange County, California. It's really beautiful, it's really expensive. And when I lived in Newport beach, we would commonly go to Laguna beach and have dinner or lunch or brunch or whatever. That was, you know, common place to go to. It's a really beautiful place. I remember talking to one of the restaurant owners and asking him, you know, why don't you have more tables and more chairs? And he said, every chair. Now, I'm certain that this has changed over the years, so don't quote me on this. It's not a contemporary statement I'm about to make. But he says every time we put a table in, you have to pay the city $6,000. It's 6,000 bucks for an extra table. So he says that's why he didn't have more.

Tables. So anyway, that was many years.

Ago, he told me.

That. So I don't know what the deal is now.

But. But you get the idea that everything is driven, it's a function of the price of real estate. So arguably, in a really expensive real estate market where it's hard to quote, unquote, survive if you will. And I don't mean survival, but I mean economic survival. The population just gets smarter because it weeds people out, right? You got to be more ambitious, you got to be smarter to live in a place like New York City or any really expensive real estate market. But personally, you know, nowadays your associations can be with people all over the world, with our great telecommunications, and of course, we all travel now more than ever, so you're not really as married to any certain geography anymore. As I've said many times, life has become much more portable in the recent decades. And so you still have access to all those really smart people in those high Darwinism affected type of real estate markets. But you don't have to live there and pay the price yourself to associate with them. And so just kind of an interesting thing. So as I'm, as I'm looking at Shanghai here, that thought kind of came to mind. Probably a little bit of a tangent here, so forgive that if you would, but we've got a client case study today. This is a pretty amazing story. Now, I've talked to you many times over the years about how really being a single family home investor the vast majority of my life, I always wanted to kind of graduate, if you will, to bigger deals. And I did do that. I did, I think, successfully graduate to bigger deals. I've got about 280 units, give or take. Now I own some of those in partnership with clients of mine. And, you know, I'm not convinced that bigger deals are better deals by any means, but I am convinced that if you want to do really, really big things, ultimately you've got to figure out how to scale anything in life, right? It's all about leverage and scale. So I graduated years ago where I got into apartments, mobile home parks, and I still believe that the single family home is really the best thing going overall. Now what's interesting is that recently coming out of the Great Recession, so over the past decade or so, the single family home investment has been scaled more than it ever has in history by these big investors and big hedge funds and big private equity groups who have scaled single family homes to the tune of thousands and thousands and thousands of single family homes. And the economics of the single family home, I believe really are the best in so many ways. But for those of you who are interested in apartments or bigger deals of any sort, I think this will be an interesting interview because it is a story of a graduation interview, if you will, from starting with eight single family homes purchased through our network years ago on up to a larger apartment complex. So let's jump in and listen to that case study and I think you will enjoy it and we will talk to you on tomorrow's episode. But here's the case.

Study.

It's my pleasure to welcome a returning guest back to the show. He was on many years ago and that is an.

Investor. His name is Greg.

Scott. He started his investment career with.

Us back in 2008 and graduated into.

Doing some big stuff stuff in the apartment world. Greg, welcome.

Back. How you.

Doing? I'm doing well, thank you. Jason, it's good to talk with you.

Again. Yeah, it's good to have.

You. And it's funny, you know, we.

Just Reconnected through a real estate forum. It was interesting. I. I didn't remember. And then you said, hey, you.

Know, I've been on your show.

Before. I was a client many years ago. And. And then you told me what you were doing now, and you started with single family and, you know, just kept buying and buying and investing and investing. And now you're up to. You're a big multifamily investor.

Right? Yeah. We just closed on a 272 unit apartment in.

Indianapolis. Well, congratulations. And your first single family home investment property was through our network in Indianapolis as well back in 2008.

Right? Yeah, there's a little bit of a story about that that I can tell, but that was our first purposeful investment into real.

Estate. Awesome. That's great. That's great. Good stuff. You started with single family homes. You got up to, I think, like you said, 14 single families. Was that about.

Right? Yep. You got.

It. Yeah. Okay. And how many, over how many years did you accumulate the single families? And then what was the transition to.

Apartments? What ended up happening with us is my, my wife and I both work for automotive companies in Detroit, which is where we're from. And we were looking for passive income outside of the ups and downs of the automotive space. And through a bad flip, we actually turned into accidental landlords in Detroit. And that's when we realized that being a landlord wasn't that hard. And then we decided, well, we need to buy more property. But we didn't want to buy it in Detroit because it was subject to the ups and downs of automotive. And that's when we discovered your network. And in 2008, we bought our first property in Indianapolis. And after a year we realized, well, it wasn't as hard, as scary as we thought. And we subsequently went on to buy six more properties through your network and eventually through other places and get up to 14 single family.

Homes.

Yeah. That's awesome. Good to.

Hear. When you.

Lived. Well, you still live. You lived in the Detroit metro area. And that property in Indianapolis, you know, that was out of town for you. Right. So, you know, we have investors doing it from much farther than that, but after it's out of driving range, it might as well be as far as it needs to be. Right. So that was. That was a scary thing to buy that first property far away.

Huh? Oh, well, the first one is scary. But then after that, our second one was down in Atlanta, which we actually never saw that property. We owned it for a number of years and then sold it at a pretty Nice profit. And then Phoenix, and then we bought another one in St. Louis through you. And then. And then the last one we bought in your network was also back in Indianapolis. And interestingly, the very first property we bought, that one in Indianapolis, we still own it and it actually has the very same tenant in it. We've had the same tenant since.

2008. Wow. Isn't that.

Amazing? So have you increased the rents on that property in the last 11.

Years? Yeah, we have a little bit every year. That area hasn't appreciated hugely in rent, but it's done very.

Well. And so do you think you.

Just kind of got lucky getting a.

Tenant that stays for 11 years, or was it something you did or any. Anything you want to share? Because this is what people don't realize a lot of.

Times. You know, some of these tenants stay for a long time. And, you know, you probably heard it on the.

Show. My mother still has that same tenant that we profiled on, on the podcast years ago that's been in one of her properties since, get this, 1989.

The guy could have bought the house, paid it off. Yeah. I mean, it's.

Crazy.

Yeah. But he's still.

Renting. Yeah. I don't think we've done anything, anything really special. Just every now and then you get a property where tenant stays a long time. We've had plenty of properties where we've had, you know, tenant change out, seems like every year and sometimes give attendance fees for two or three or five. You just never really know. But it is kind of odd to have somebody in there for over 10 years.

Right? Yeah, that's something else. Share with the listeners. You know, why you like real estate, if you would, and, you know, kind of what your outlook is on it in the future and whatever you.

Want to share like that you talk about all the time, Jason. But the returns are really, really strong because there's so many ways you can make money in real estate, but it's also just incredibly tax favored. Just an anecdotal story, but I still work and was talking to my taxes this year and almost all of the folks who just have a W2 job ended up paying much higher taxes because they weren't getting as much taken out last year after the Trump tax changes. We ended up selling two single family properties last year and we had one apartment that we'd invested in that sold. So we had a huge amount of capital gains and we actually didn't have to pay anything other than our withholdings that we already had, even though we had about $200,000 in capital gains because of all of the deferred depreciation that we had had in prior years. So it just gives you a sense for the power of inefficiency of the tax with real estate. So we just love.

It. Yeah, that's fantastic. You know, it's such a great.

Asset. And what would you say to.

People? It kind of relates to what you're talking about, about the tax.

Benefits. But see, a lot of people.

Greg, they think they're just treading water or they even think they're losing in the real estate game when they're really.

Winning because they don't really look at.

The multi dimensional stuff, stuff the tax benefits, etc. You know, I always say a lot of people think they're losing, but they're really winning, but they just don't know how to keep score properly because they don't know how to analyze the numbers. Right. What would you say to.

That? I completely agree with you. People forget that their mortgage is slowly being paid down. If you pay attention to it, it's usually about, you know, in a typical single family, maybe $1,000 a year that you're getting, but nobody really pays attention to that. You're generally getting some appreciation. And because of your leverage, if you look at the return on your total cash invested, it's usually pretty strong. And then you're getting the cash flow and then you add on top of that the tax benefits and it's pretty amazing what you can, the returns you can get from single family real estate and multi family real estate for that.

Matter. Yeah, right, right. Yeah, it really is. Any best practices you want to share on being a.

Landlord? You said it was easier than.

You thought and I love hearing that, you know, some, some people have a hard time and some of that is just luck of the draw, you know, some of it is not paying attention properly, you know, so it depends for different reasons that it goes poorly and badly. Sometimes you get lucky and it's just good luck, sometimes bad luck, you know. But any best practices you can share with our.

Listeners? I would say the one thing that we've become pretty good at is very simple concept is trust but.

Verify. Ronald Reagan. Thank you. That's.

Good. I love that it works. We trust our property managers, but we read the reports and we stay on top of them. If we hire somebody to, you know, I've had some roofs go bad with hailstorms and I've gone out, hired a roofer and then, you know, make sure they take lots of Pictures and then have the property manager come by and just check that it's done all right and check with the tenant that there's no leaks. And just doing that, constantly trying to just check up and make sure everything's working right has done very well by us. We haven't had to have any, you know, major changes in our life other than just keep doing.

That. That's great. Trust but.

Verify. Did you.

Ever. Well, you probably have by now, I'm guessing, but maybe in the beginning days. Did you ever self manage any of your properties or did you always have.

Managers? We did not. Not only the ones through your network. We have a 24 unit apartment only about 20 minutes from our house and there were a few months we, we self managed that not necessarily by choice. We ended up having to get rid of a property management company that was running it because they stopped collecting the rent one month and managed it ourselves for about three months until we could find somebody else to come in and take it over. So we have experienced that. It was a good experience. Learned a lot of things just having done that in apartments courts, you're getting a little bit lower level of tenant than you do in the single family houses. So you get a lot of excuses and interesting stories and reasons why the rent isn't paid. But you work through it and you can make it.

Work.

Right. Okay, so on that note, do.

You like, like in the single family home world? I mean it applies in the multi family world too, of course. But do you prefer the class A, B or C type properties? I mean you talked about those interesting excuses you get from the, especially the lower end tenants if you have a preference like each investor has sort of a, what they like better and worse. You know, some, some like section eight, some hate it. You know, it just depends, right. Temperaments.

Vary. I like working class housing and different people have different definitions of A, B and C. So I always have trouble when you, if you have a different definition. We may be talking about different things but working class housing is something that people get. I like it because it's hard to make new working class housing. Usually they're older properties, which means you have a negative supply, they tear them down, they don't build new.

Ones.

Right. But the amount of people, the amount of people that need that is growing. And so when we, you know, eventually we're going to hit a recession here and the higher price properties, you know, in the apartment space, the places to get 2,000, $3,000 a month rent and a two bedroom, those are going to Be the ones that get hit the hardest because those people are going to want to downsize to maybe a 1500 or $1000 a month. But if you're playing in 8 or $900 a month space, there's always people that will rent.

That. So if it's a single family home, eight or nine hundred a month.

Or for a multifamily, I'm talking more multi on like a two bedroom. But if I was in the single family properties, we rent probably thousand to thirteen, fifteen hundred somewhere in that.

Range. Okay, so still bread and.

Butter.

Yeah, very, very much.

So. But, but that can.

Be. Definitely be B class housing that'll rent for 1300amonth. Even, you know, even lower end of the A range, depending on the.

Market. They're very solid neighborhoods. I mean, they're neighborhoods that you might. They're certainly not war zones. They're certainly not. They're certainly areas you'd feel comfortable walking down the street at night, but they're not million dollar.

Houses.

Mm. All.

Right. Any other best practices you want to share with people or any technology that you've used or, you know, anything that's helped you just kind of be a better investor. Any side of the.

Business. This. I don't know if this is a best practice, but one thing I will say because I talk to a lot of my friends who seem very interested in the returns we're getting, but they never get going. I think the most important thing is getting going, started getting out there doing.

Something. I love it that you said that. That is so darn true. You know, you just. The journey of a thousand miles begins with a single step, as the saying goes, and just do.

Something. You know, there's so many people.

That. And maybe these are like your friends.

Right. They want to learn more about.

It, they agonize about it. They want to figure it all out in.

Advance. And you just never can. You don't know what's going to.

Happen once you do it. You know, you've got to just.

Figure it out while you do.

It. Right. It's the iterative process.

You. You learn on the.

Job. It's on the job training as an investor.

Right? Yep. I can't tell you how many times I've had friends tell me all the ways that it won't work, but it does. And I could refute every single one of their arguments, but they always want to try to find more arguments why they shouldn't do.

It. Yeah.

Absolutely. Well, the proof that it does.

Work is, you know, your success in building A little real estate empire for yourself and your wife. And you just retired your wife, didn't.

You? Yeah, we did. Last Friday was her last day. We're very excited about that. She's going to dedicate her time, full time, to turning around this project that we just bought. And we're very excited about.

That. That's fantastic. Yeah, yeah. Good for.

You. Is the project you bought really like.

A. A rehab? Are you re tenanting that property or what are you doing with.

It? Well, it is. Actually has high occupancy right now. We bought it at 92% occupancy. Looking forward to bay. We're actually going to be up in the 98%, so it's. We're in a good shape from that perspective. But that said, we're bringing about $3 million to rehab it and upgrade it. It's got a lot of deferred maintenance, so we've got roofs that need replacing, water heaters, H VAC systems. So there's a lot going on there. But then we're also going to start completely redoing the interiors. And as we redo the interiors, as the tenants just naturally turn over, we're expecting to, of course, bump up the prices to reflect the. The brand new interiors. And we will ensure, over time, change the profile of the tenants a little bit. But we like the area. It's a solid area, just like the kinds I mentioned before. And we just think there's a ton of opportunity.

Here. Yeah. Yeah. That's awesome. What is your outlook on the renter market? You know, back in. When did you start listening to our podcast? Like, I know you bought your first property through our network back in 2008, so that was 11 years ago. But when did you start listening? Were you. You must have been before that.

Obviously. But how long before I started listening to your podcast? When you were on, I think, episode 35, something like that. Wow. A long time.

Ago. I don't know when that was.

Exactly, but I'm going to guess that was about 2006 or 7.

Right? It was around that time.

Yeah.

Yeah. And then.

2008. I mean, you bought that first.

Property right at the beginning of the Great Recession. How did that.

Go? Well, the first one has been, I mean, Indianapolis was. You talk about linear markets. That's about as linear as you can get. Indianapolis just really hasn't changed. But what was fascinating to me and really helped me understand the benefits of geographic diversification is around the same time we bought a property through your network in Atlanta and one in Phoenix. And Atlanta was a judicial force closer state. So the foreclosures took a lot longer to drag out. Phoenix was a non judicial foreclosure and they cleared them out really fast. And so the price of that Phoenix property quickly doubled. It was amazing. I just got lucky and bought at the right time. And we ended up selling that property after a couple years so we could buy more. And then the one in Atlanta, actually its value went to about half of what we bought it at, but it didn't matter because of cash flow. Cash flow, great. So we just hung into that one for another three or four years and then the price was. Came back up once all.

The. When did you buy the Atlanta property? I'm surprised. That sounds pretty substantial. I mean, like, what year would you buy that.

One? It would have been about 2000, late 2008, early 2009. Somewhere in.

There.

Yeah. Everything in the news was like doom and gloom. The end of the world. Lehman Brothers failed, you know, the whole global financial.

System. Iceland files for.

Bankruptcy. Weren't you.

Worried? I think back in the days before I started investing in real estate, I would have been terrified. Because your 401k goes up and down. I know. My 401k turned into the.

201K. The.

201K.

Yeah.

Once we started investing in real estate. And the cash flow doesn't change on your property because Lehman Brothers goes out of.

Business. Right. And because the value goes down, it doesn't really change either.

Huh. And that's why you want a cash flowing property, because you can hang on to it through the ups and.

Downs.

Yeah. And you know, in real estate, there's more ups than there are downs, for sure. But just that one Atlanta property is an example. We didn't have to sell it because it cash flowed. The cash flow covered any pairs that we had that came up throughout the years. But we just held it four years longer than the Phoenix property. When we sold it, we made a nice profit. So it was great. No.

Problem. Yeah. Yeah. That's amazing. So you were talking about the Atlanta property. I kind of interrupted. Interrupted you there. Sorry. You were talking about the Atlanta.

Property. And you know, even in a.

Time with depressed values, it was fine.

Right? Yeah. The main reason the values were depressed is because there were more properties that were coming through the foreclosure process. So there was a flood of inventory on the market. So yeah, if I had to sell it, which I didn't, the property value was depressed. But I. My plan was just to keep it. It cash flowed. And so we just waited until that wave of foreclosures went through and then it was.

Fine.

Yeah. Isn't that.

Interesting? See, that's the.

Thing. I think people that watch the values get themselves into trouble.

Psychologically. What you need to watch is the cash.

Flow.

Yeah. Operations and the cash.

Flow. Yeah, yeah. Very, very good. Very.

Good. How have you found your managers.

To be on the larger multi family properties? It's obviously just my experience, but I was under the, I think, mistaken.

Belief that when I started really getting into the bigger leagues and dealing with.

Larger multifamily properties as I've done, I've had two big complexes now. I've still got one of them and I sold the other one 10, did a.

1031. You know, I thought the quality of the managers would be just a.

Lot better and I haven't really found that to be true, sadly. What do you.

Think? In the multifamily space, there's a real division between small and large properties, small being under 100 units basically. And on the smaller properties it is harder to find property management because usually you're having to have people share time between properties and so you'll pay a lot for transportation. And we don't know where Bob the maintenance guy is, so he's got to be put on somebody's payroll. So get charged to the.

Property. Yeah.

Yeah. And you know, technology is, is going to get pretty good at solving that problem pretty soon. It's on the way. And you know what I'm talking about like the, the apps that the contractors are starting to use that tracks their geolocation. It tags the photos with geolocation. You can't cheat this stuff. I don't want to say it's impossible, but it's pretty hard. Clocks them in and out based.

On location, you know, like really, that's getting better, which is beautiful. Beautiful.

Thing. Yeah. With our large property management company on the bigger property, we've been quite please. Once you get over 100 units, you can usually afford both a leasing agent and a maintenance person. So in our property we actually have six staff and we hired a very professional property management firm and they. We actually did a lot of due diligence on property management before we selected them. But they really have the processes and procedures ironed out. They've done a really nice job taking over the property and getting it stabilized, although we still follow trust to verify. So they tell us what they're going to do and then we just verify that they're doing it and staying on top of.

Things.

Yeah. What's your outlook for the.

Future? I kind of alluded to that earlier, but I just wanted to get that as we wrap up. I think that would be a good thing to talk.

About.

Oh. Because what I was going to say is, you know, back in 2008 when you started with us, I was talking shortly after that about the demographics coming at the rental market over the next decade being phenomenal. And I keep kind of pushing that.

Back. I still think we got another.

Really good decade of demographics in terms of high rental.

Demand. What do you.

Think? Well, I keep waiting for this recession that's supposed to be coming and it hasn't happened, but eventually it's going to happen. But I still think if you're buying good workforce housing and ranges that people can afford and you've got cash flow, you got nothing to worry about because yeah, you'll have a recession, then you have, then you come out and you have a period of growth. So as long as you're not putting yourself at risk by taking on speculative investments or negative cash flow investments, you should be fine through this little bit of a downturn. But if you're looking at kind of macro trends, we still have this echo boom generation Gen Xers that are huge population, many of them are delayed in buying into their first single family houses. They're actually delayed in buying cars, a lot of them too, which we pay attention to. So I expect that'll be a huge rental pool for a long period of time. Like I said, they're not. There's not too many places out there that are building affordable brand new housing, particularly in the apartment space, but even in single family. And most of the new stuff that's getting built, as you know I've heard on your show, tends to be higher end.

Stuff.

Yeah. And so that means your, your supply is constrained in that area. So you got more people coming in and a constrained supply, it bodes well for those of us who are.

Owners. Yeah, it definitely.

Does. It definitely.

Does. Do you like my talks about packaged commodities investing? Because you're really a commodities investor, you know, you own all those raw materials and it's a lot more expensive to buy them new and assemble that property again today, isn't.

It? Yeah, absolutely. And that's certainly part of it. I know that from what I've read I may get this figure wrong, but there was a study done that said that versus 20 or 30 years ago, about $20,000 of a new house goes to cover regulatory costs. And so there's another reason why it's Hard to build entry level housing and a great reason to own.

It. Yeah, all those barriers to entry are. They really bode well for the people that already own the properties. So congratulations, investors. I know most of you listening are taking advantage of what Greg and I have taken advantage of. And if you haven't, you know, like Greg said, get started. Okay. Don't be the coulda, shoulda, woulda person. It's an amazing asset class and it's. It's really not that scary. You know, it's been done for thousands of years, this concept. You know, we're here to help you do it. And Greg, I just really appreciate you coming on the show again and sharing your story. It's always great to hear these case studies. Our listeners love them. So thank you.

Again. Well, Jason, thank you for having me on. It was good talking to you again and again. I don't think we would have taken that first step if it wasn't for your network. So thank you for getting us into it and for all the education you have been providing throughout the years on your podcast, because that's what gave us the courage to take that first.

Step. Well, the pleasure is all mine. These are the stories I live for. I love to hear them. It's great that your wife is retired and it's just.

Awesome. So keep up with the good.

Work. Greg, thanks again for sharing your story and happy.

Investing. Thank you.

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