1954: Real Investing, T.I.N.A., Enemy Within, Massive Housing Shortage, Daniel Kwak

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My name is Brandon Cook. This is my fourth Meet the Masters seminar. All these markets that Jason and his network endorses are great markets. We're getting better. Higher rents, prices are going up right now. But with financing terms as good as they are, they're still real great deals and all have been through Jason's network.

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 property 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 1954, 1954 and 3. Thank you so much for joining me.

Today and greetings from beautiful Scottsdale, Arizona. We just wrapped up Empowered Investor Live. What a phenomenal event. Thanks to all 270of you or so who came out for the event and we really just enjoyed seeing you. The networking was phenomenal, the fun was off the charts. People always tell me our conference is the funnest thing they do all year and I gotta tell you, that's an understatement. It's just really a blast. We had a fantastic band. They just kept coming with the hits for over two hours and our air guitar contest was just phenomenal. And by the way, to those of you who dressed up and really got in costume and looked like total rock stars and that was awesome. I just loved it. I didn't even dress up in any costume. I need to get one for the next event. I'm definitely gonna get some garb and look like a rock star. Whatever our theme happens to be. Maybe it'd be disco theme. I think.

Maybe next time. I don't know, who knows?

Anyway, it was just a great event. We had so many great speakers and everyone just raved about it, told me they just learned so much and they were blown away. And I think one of the things that really blew people away especially was the speech I gave yesterday, Sunday afternoon And I know some of you bug.

Out early because you've got flight to catch, but I really recommend that you.

Don'T do that next time. And if you got the recordings, of course you can see it there. And that was the speech I talked about AI, artificial intelligence and how it's changing the world and how we are at a, literally a tectonic shift, an inflection point where this has become consumer oriented and will just change the world forever. So look forward to more on that. And today we've got a returning guest.

It's Daniel Kwok back on the show.

To discuss some important good stuff.

So let's listen into him.

I'm going to keep this intro super short because I have a plane to catch. So anyway, thanks to all of you who came out to Empowered Investor Live. For those who didn't get the recordings, do not miss this event. I mean, you can watch them at your own pace, at your own convenience. There were just so many nuggets of wisdom shared at this event over the weekend. I don't want you to miss it. It'll, it'll just be a fantastic investment for you. Just grab those recordings. We'll probably have them out within about a week. We'll edit them, clean them up a little bit so they're sort of easier to digest and publish them for you. So that's coming.

Anyway, let's get to our guest today, Daniel Kwok, and dive into some more.

Updates on the market, the economy and some other important stuff. This was a great discussion I had with him about maybe two weeks ago. So here it is.

First and foremost, thank you again for being on the show. And I just want to start with, talk to me about, you know, an early real estate experience of yours, a deal where it's like, hey, like, how did Jason Hartman get into this and what did you learn from that experience?

Yeah, so my first property was actually a rental property. I was 20 years old. I was living at home with mom and, and I purchased a rental property from a client of mine. And just to, I know I'm going all over the board chronologically here, but I got my real estate license to basically learn more about investing. I wanted to be an investor, but I was 19 years old, while 18 at the time. I decided to get my license and I just wanted to learn the basics. I thought just by having a real estate license I'll understand like the basic things about real estate and from there I'll become an investor. Right. And so I got my license. I was going to college Part time, Long Beach City College, Long Beach, California. And I started selling real estate part time for century 21 at age 19. And I started selling HUD and VA repos. So I was selling a lot of these to investors and I was selling some to first time home buyers. And there is a lesson here that might be interesting. I think one of the signs of maturity is the ability to delay gratification for a bigger long term goal. And one of the things I noticed about dealing with first time buyers who were renters and wanted to buy a home. Okay, and we'll get to the investing thing in just a moment here, but this is a good life lesson, so I thought I'd share it. Is that always when they were looking to buy a home and move out of the apartment that they're renting, they always had to kind of like take a step back in terms of lifestyle. The, the house they could buy was never as nice as the house they could rent, right, for the same money. But in order to get ahead, meaning becoming a homeowner, they kind of had to take a step back and maybe have a fixer upper, have something that's not as nice, do some work, save some money, make some sacrifices. And the point there is that those who are willing to delay gratification for a bigger, long term, distant goal are the people who turn out to be the winners in life. Where the people in life who won't delay gratification, who got to have everything now, who got to have all the pleasure now, they're a hedonist, you know, gotta live for today, you know, those people never get ahead. And so that's just a lesson I noticed from a lot of these first time buyers I was working with, right at age 19 and 20 years old. Anyway, so I had some investor clients and one of them was a guy named Jim Wohl. Okay. And Jim had purchased several properties through me. These were crappy HUD and VA repos with boards on the windows and you know, they were in terrible condition, a lot of them. And one of the properties that he bought from me, he didn't like it very much. And he said, hey Jason, why don't you take the listing on this, sell it for me and then I'll buy something else from you. And I said, Jim, I don't want to buy this one, I don't want to sell it for you, I want to buy it from you. And I bought it. And that was my first rental property. And I was still living at home with mom, but I owned a rental Property.

I love it. That's awesome.

Yeah. And so I got these tenants to move in, a young couple. And they moved in and they paid me rent for a few months and then they just decided they didn't want to pay rent anymore.

And I looked like such a little kid. They had no respect for me, right? I'd knock on the door, you know, hey, how about the rent? And they're like, yeah, they'd make some excuse and yada, yada. Anyway, turns out I had to evict them. So my first experience at the ripe old age of 20 years old was getting burned by this tenant. I had to evict them. They left the place in terrible condition. There was trash all over. It was a mess. Now the lesson there is I could have easily, like, no one would have blamed me if I just said, hey, this real estate investing thing doesn't work, it's not for me. And if I just gave up, no one would have blamed me, right? Like, everyone would have understood, right? But I didn't give up. Turns out I did end up selling that property. And I made a decent little profit on selling it, even though I had a bad tenant experience, bad cash flow. Then the next property I bought, I basically got a 600% return on investment on that property in about a year. And you can do that with very few things other than real estate, right? Because with real estate, you have a multi dimensional asset class, so you earn your, your return on investment, your ROI in many, many different ways. Whereas in most investments, it's a one dimensional investment. And the whole strategy is buy low, sell high, right? And so if it's precious metals, buy low, sell high cryptocurrencies, buy low, sell high, non dividend paying stocks, buy low, sell high. That's the whole game, whole end of discussion, right? That's it. And if it pays a dividend, buy low, get some dividends or cash flow in between. If it's a stock, sell high, right? More dimensions, two dimensions, right? But with income property, you have so many dimensions, right? You can earn your return in a whole bunch of different ways, and the deal is never final. That's the other beautiful thing about income property. You know, I did a thing on my podcast recently where I talked about weasels, okay? These people that we've all dealt with that don't keep their word. They're, you know, they're people we just don't want to deal with. You know, we won't do business with them because they're unethical, they're weasels. You know, they agree to one thing and then they change the deal. And that's super annoying. None of us like that. Right? But with income property, you can buy the property and you can keep changing the deal as long as you own it. And what I mean by that is this. Look, if you enter into a contract with somebody and you agree to do something like buy a property or sell a property or a business deal or whatever, you know, hopefully you're going to keep your word and do the right thing. Right. Even if it's painful to do it sometimes, because sometimes you realize, hey, I could have done better and you want to back out. Right. But with income property, the deal is never final. We buy the property today and then maybe we want to change the terms of the deal later. We own it, we refinance it. So we're essentially changing the deal or we own it for a couple of years and then we decide, hey, we're going to improve it. And by doing those improvements, we've essentially changed the complexion of the deal. We get a different kind of tenant, we get much higher rents, whatever, right. And so we can constantly, like, renegotiate the deal. One of the few assets where you can buy the property and you can get all of your money back and still own the asset. With most deals, you buy the asset and if you want your money back, you got to sell the asset. With real estate, you can still own the asset after getting all your money back. Right. And so it's so great in so many ways. It's such a unique asset class.

Yeah, I would, I would double down on that too. Because, you know, one of the things I tell people all the time, especially if you're buying something like a multifamily building or an apartment complexes, there's so much room and flexibility for you to implement ideas, you know, ideas to whether increase the property. Right. Like, I mean, even in my portfolios, I remember I bought this 24 unit complex and we added washers and dryers, and it added like an extra 2,000, $3,000 a month in income. And I was like, wow, like, why don't, why don't everyone do this? You know, I want to, I want to go back and touch on something you said. Right. One of the nuggets you just dropped was most people fail to delay the instant gratification. They fail to play the long game, you know, which, you know, one of the things my mentor told me early on is, you know, Daniel, with real estate, don't look to get rich, look to get wealthy. And do it over a long period of time. Now is that something? Because I want to transition to talking about the real estate market today. Because, you know, that's one of the awesome things that I hear from you whenever I listen to your content is what's happening in the market, what should we do? Why is this happening? And you articulate that very well. So is that something you're seeing right now? Obviously the last two, three years, real estate prices were at record highs. There's inventories, there's, you know, interest rates, there's a lot of moving parts. The last two, three years or so. Is that one of the things you're seeing right now is investors, especially in real estate, failing to see the long game and just wanting that instant gratification?

Yeah, you know that, that's an interesting way you, you kind of set up that question because it's shocking to me how everybody is talking about, well, real estate prices are going to go down, right? Or real estate prices, you know, something's going to go up, right? But a lot of people right at the moment are predicting a downturn or a crash, right? And you know, those people, we have to realize they aren't investors. Here's what I mean by that. They are speculators, they are gamblers. Because investing is not playing a price game. That's speculating, right? You know, oh, I'm a day trader, right? I'm going to trade. This is not a trading game. An investing game is when you create value over time. And investors invest for cash flow and yield. They invest for return on investment, not buying and selling and trading. That's not investing, okay? That's speculating or gambling. Many years ago, I created something I call the ten commandments of successful Investing. And rule number five, Commandment number five is thou shalt not gamble. And so, you know, investing is the legitimate process of creating value over time. And we have to understand that anything that does not produce income is not an investment. It's only a speculation. So if you're buying precious metals, cryptocurrency, non dividend paying stocks, those are always a speculation because your whole strategy is buy low, sell high. That's it. That's the whole game. And that's not investing. Okay? If you buy vacant land, for example, that is not investing. You're speculating that there's going to be a price increase. But with income, property produces income. And so all of these people are wasting so much time thinking about are prices going to go up and down, yet investors are, are just buying properties and Getting yield every year, right? Every month, Every year they're getting a yield on their investment. And you know what? If prices go up, icing on the cake. If they don't, I'm just sitting here collecting my cash flow and my yield. That's good too, right? And all these people, so called keeping their powder dry, we've all heard that term, right? Well, their powder isn't dry because their powder, meaning cash in the bank, is losing money because inflation is eating it alive. There's no keeping your powder dry in an inflationary environment.

Yeah, that's great. So let's say that you got a beginner real estate investor in front of you right now. You know, let's say, hypothetically speaking, they're young, let's say they're 30 years old and they're like, hey, Jason, I want to learn how to invest in real estate like an investor, not like a speculator. You know, what you just described. So in your opinion, in terms of their action items, of things that they should actually be doing, are you saying, hey, you should, no matter what, you know, if prices go down, if prices go up, doesn't matter, you should just focus on the cash flow of the deal and stick to the fundamentals. Would you say that's a pretty good summation of what you just said?

Yeah, you know, just stick to the fundamentals. Now, you know, you have to understand, of course, that with income property you have leverage, right? So you can get into the investment where you're only, for example, putting up 20% of the money and you're telling the bank, the lender, to come up with the other 80%. So that affects your cash flow. Cash flow does not mean positive cash flow, okay? Every property is positive cash flow. Just put 100% down like you do with stocks, precious metals and cryptocurrency with real estate, since you can leverage it somehow. People have this weird idea that, hey, I'm only going to pay for 20% of it, but I still expect it to be positive cash flow. Well, a lot of times it is, and that's great, but not always, right? Especially in this market where we've had prices come up, we have interest rates come up a lot, and the rents have yet to catch up. The rents always lag the prices by about two to three years. Okay? And think about that for a moment. Why is that true? Okay? And I have seen this play out so many decades now in doing this, right? Why that's true is because most properties are on a one year lease, and so they only Get a rent increase one time per year. Yet when you're in an increasing market where properties are selling at a reasonable pace and each comp sets a new high watermark in the price, you could have properties selling in a neighborhood several times a month. So the prices always go up much faster than the rents do. And the rents always lag the prices always, always, always that way, okay? And what happens is, in this kind of market, people get into this trap where they think, oh, my God, you know, why would I ever buy anything? Because I can't put 20% down anymore and make the bank pay for 80% of it and still get, you know, massive positive cash flow. You're right. You can't do that anymore. It's going to be very rare that that's going to happen nowadays. But, you know, why don't you try putting 100% down like you do on that mutual fund you're going to buy, you know, like what? And I'm not advocating that because I don't think that's a good deal. I think you should use leverage. But I'm just saying get your head on straight, right? Like most people, their brain gets all mushy and clouded up with, like, nonsensical ideas. Look, the way you can always fix this, the way we have to fix our mind is by asking what my listeners have called. I'm not calling it my question. I didn't make up the question. You know what I'm going to say, Daniel? Right, by asking what my listeners have dubbed the Jason Hartman question. Because I say it all the time or ask it all the time. It's a rhetorical question. The question is, compared to what? Compared to what? All you need to ask yourself is, what else are you going to do? And as you've heard me say on my show, there's this acronym that investors use all the time. It's a woman's name. It's Tina T I N A. It stands for there is no alternative. And what that really means is that investors try to choose the one alternative that is the best. And compared to that. Compared to what? There is no alternative. Okay? Because you have to do something with your money, right? There's always a decision. And like that great song by that great band, the greatest band of all time, Rush, they have a song called Free Will, and it says if you choose not to decide, you still have made a choice.

And so if you don't decide and your money sits and rots in the bank, well, then you've made a choice and you're going to have your money devalued by inflation anywhere from 7 to 18% annually, depending on what you believe. Right. So if you have a million dollars. Dry powder. Right. There's that word again. Dry powder or that phrase, you know, you're losing 70 to $180,000 per year in the bank because the currency is going down in value. Yeah.

And I think it ties in beautifully with what the first lesson you said on this podcast, which is that instant gratification where I think, I mean, just based on just my observation, so many investors are, I mean, they're, they're afraid, you know, they're, they're afraid to, you know, follow the principles that you just kind of just outlined. Right. Which is, hey, compared to what, what alternatives do you really have? Because they're waiting, they're waiting for that home run, right. That grand slam investment that's going to 10 x 15 x 20 x their money. And, and obviously it doesn't help that, you know, we just had this whole crypto thing where, you know, people made a lot of money and then they lost rich. Yeah, yeah. Then they, they, they.

Correct. Right. I think you, you said it on your show. The other. Are moving back to their, to their mom's basement or something like that.

I think one of them delivered a pizza to me the other night that's.

Hey, that's fantastic, man. I'm sure that pizza tasted much better than the ones you've had recently. But I think it ties in beautifully with what you said earlier because most investors like keeping their powder dry, quote, unquote, because they fail to see that they're pursuing the instant gratification. They're pursuing the. Well, I just want 2008 to happen again where I could be buy real estate at, you know, 10, 20 or 30 cents on the dollar, you know, and do that. But, you know, how many people really did that in 2008? I don't, you know, I don't, I don't know if that was the case. So I'm curious to ask you and I think for me, the nat. The next natural question that I would love to ask is what, what are the indicators for you that you're paying the most attention to? Because, you know, I do agree that, hey, at the end of the day, real estate's local. Follow the fundamentals, invest for yield, investor cash flow. But on the other hand, I do believe it is wise to pay attention to what's happening on a 30,000 foot view scale. And you're one to articulate that. Well, in your opinion, what are some indicators that you pay attention to that you would advise others to?

So before I answer that, and I'm happy to go there, I just want to finish up on this topic for a second, okay?

Yeah, yeah, please.

Because, look, as investors, really, the most important battle we wage is the battle of our own mind and our own self talk, okay? That's our biggest enemy is us. We've met the enemy, and it is us, as the famous saying goes, right? And it is managing our own thoughts and managing our own emotions. That's what we've really got to do. And look, we all want something for nothing. We all want something. We all want to win the lottery. We all want our ship to come in or whatever. I get it. Of course we do. But, you know, deep down inside, you know, and, you know, we look at this, like, big crypto phase that just happened, right? And listen, I'm not criticizing, like, crypto people, okay? I'm just saying, you know, the whole idea, like, all these people that invested with SBF and, you know, that criminal that he was, you know, they had to know that that offer was too good to be true, right? Like, if you think of it, what counterparty on the other side of that equation would pay you the kind of rates they were promising? And of course, it blew up because it was a Ponzi scheme, okay? Wanting something for nothing is. It's just dishonest, okay? You know, that's not a legitimate way to make money, right? You know, buying some funny coin that nobody ever heard of and having it go from a penny to $80,000, and you bought a whole bunch of them and you made a bazillion dollars and you're suddenly rich. That is not honest money, okay? That is just massive luck. And it means that essentially someone else left was left holding the bag in essentially a pyramid scheme, okay? Because the coin has no real value. And obviously now the market is corrected for that, and we see that it's true, okay? That is not honest. What is honest is buying assets, managing them and creating value over time. That's an honest business, okay? And the best one you can pick for that is income, property. There's just no better asset. I mean, maybe there is one, okay? And that is if you're a corporate raider and a tycoon, okay, and you buy companies based on an lbo, a leveraged buyout. That was very common. We all learned about that starting back in, like, the 80s when all those tycoons like Carl Icahn T. Boone pickens and so on. Got famous. Right. And you know, essentially with rental property, that's what we're doing. We're doing an LBO because we're using the bank's leverage to buy the property and then we're using the tenant's income, the rental income, to pay the debt off so we don't have to pay it. We outsource our debt responsibility to somebody else. And that's a really awesome equation. And then there are a whole bunch of other great equations that happen behind the scenes as well. Right. Okay. So to answer your question, and I just wanted to tie that up for a moment.

Yeah, that was great.

You know, look, one of the biggest things. And I'll just share my screen and show you a mind blowing chart. This is a mind blowing chart. Everybody who's talking about this real estate crash that they think is going to happen, and I don't think it's going to happen, is missing the idea that the whole country basically refinanced their mortgages over the last couple of years and they got the lowest interest rates in 5,000 years.

Literally.

Read a book by the late David Graeber. It's an awesome book. It's called the first 5,000 years. That's actually a true statement that I just made. 5000 year low interest rates. That's what we had, the COVID Era. Too many people that are thinking the market is so bad or it's going to get so bad are comparing the COVID era, thinking it's some sort of benchmark. It's not a benchmark, it's a total anomaly. If you want a benchmark, go pick 2019 or 2018 or 2017 or 2016. Those were like normal markets. Okay? But the COVID era was not a normal market by any stretch of the imagination. That was a once in a lifetime, maybe once in multiple lifetimes, total anomaly that will probably never happen again. Okay? So don't compare. Like when I see these people on the news, oh, they say, look, you know, the average mortgage payment is up 30% from the low or 60% from the low. Well, the low is, is like no statistician would use that as a comparison. You would throw that out. You wouldn't use the COVID era as a benchmark. And too many people are doing that. And it's creating a lot of blind spots for people. We've got to look at normality. But let's get to the mortgages, okay? Because what we're moving into is a very interesting time right now that I don't know that we've ever seen before. I don't think I've ever seen it in my career. At least it's never been this pronounced. And that is a market where you've got all of these resale homes, these existing homes that have this ultra cheap debt and they have 28 to 29 years left on that ultra cheap debt. And there is so little chance that those people with that ultra cheap debt will ever become distressed owners because the debt is so cheap that they've got that they're just not going to be motivated to sell those properties. They're going to find a way to keep them. Even if times get really bad, they're going to beg, borrow and steal to keep those properties. They're going to take on roommates, they're going to do whatever to protect that asset. And what's interesting about this is that if you look at this chart, okay, basically 25% of the properties in the country have a mortgage at 3% or lower. And 65% of the properties in the country have a mortgage of 4% or lower. Okay. These people are very unlikely to ever be distressed sellers. If you want to have a real estate crash, you need a lot of distressed sellers to fuel it. Now the dichotomy we're moving into that has probably never been seen before. I don't know, I can't think of a time is where resale homes are just going to be locked up, where these people are just not going to sell their properties. And we've seen that so far. I mean, even though rates have gone up massively, literally, their properties have become more valuable to them.

Yeah.

Than they are to a buyer. Now that's, that's an interesting point. Okay. Do you know you can have an asset that is more valuable to you than it is to somebody else? Do you agree? Of course you agree with that, right? You own something of sentimental value that is more valuable to you than it is to anybody else. Maybe a deceased relative's watch or item or an antique. Right. Like you could put it on the market and sell it, but that person won't value it as much as you will. Right. You place a higher value on the item than they will, so you're not going to sell it. And all of these people with these cheap mortgages, their houses are of a higher value to them in keeping them than it is to a new buyer that would buy them because the new buyer doesn't get the same debt stack when they buy the house. They got to pay a much higher interest rate than the existing owner. But the dichotomy is this. New home builders don't have that luxury.

They don't have long term debt on their properties. They don't have 28 or 29 years left at 3 or 4% interest rate locked up. They need to sell their properties because they don't produce income for them. So the new home builders, we have noticed and we sell a lot of new home properties to our clients. They are negotiating and they are being more flexible. They are coming down on their prices. Right. But the resale owners, that market is like tight as a drum. They're just not selling. And that's why inventory is so low. Chairman Powell and the Federal Reserve has put a poison pill into the real estate market that has 29 years left on it. It's a long pill, okay? And that pill is these artificially low interest rates that existed during the COVID era are going to cause people to just keep those properties. They're just not going to part with them in any big numbers. And that is going to constrict supply for decades to come. And that's going to put upward pressure on housing prices. Now, the other interesting part of this is the home builders, okay, they have now curtailed their building. For a while they were like trying to build anything they could because, God, there's just no supply and there's so much demand. Right. But now builder confidence has flipped and they're getting more nervous. So they're slowing down their building at a time when, at least in the entry level housing market, there's still a massive shortage of entry level homes, starter homes, Basically nobody's building them and they haven't for 14 years. And we got the biggest demographic cohort in American history, probably your generation, the millennial generation. I'm a Gen Xer. Okay. Moving into their prime household formation years.

This is a huge housing shortage problem.

Yeah.

So show me how we're going to have a real estate crash, please. I would believe somebody if they could explain it to me. They just can't.

Yeah. I think there's a lot of YouTubers and finance influencers that have gotten a lot of views off of their opinion that they believe the market's going to crash and they believe that inventory is going to skyrocket. And, you know, I arrived pretty much at a very similar conclusion that you did, possibly in a different way, you know, because when I think about how people justify financial decisions, and you've probably seen this throughout decades. Right. But when you see how the masses justify Financial decisions. I'm very much along the lines of what you said of like, hey, we've got this amazing interest rate that we're going to be able to have for the next 25, 26, 27 years. Why on earth would I sell this thing? Yeah, you know, like, and sure, maybe I paid a little bit more for the house, but you know, I mean, at the end of the day, you know, the rate's super low and. Right. And this is happening, that's happening. So, I mean, I'm, I'm in agreeance. I absolutely think so. So my natural question then is, with inventory continuing to be low and there being such a shortage of affordable starter homes, do you think those same individuals are going to move towards multifamily housing or do you think there's going to be some alternative for them?

Well, I mean, look, everybody would prefer a single family home if they, if they're given the choice. Almost everybody. I mean, you know, by and large, and multifamily is overbuilt right now. You know, there's been a huge apartment construction boom. Anybody who's looked driven around any American city has seen, you know, a whole bunch of four and five star apartment buildings being built like crazy over the last several years and now it's overbuilt. I mean, it'll eventually, you know, sort of get into equilibrium again. But at the moment, apartments are overbuilt. Okay? So when you see these rent surveys, they're basically almost completely apartment surveys. Because look, I've owned a ton of single family homes in my career, so have you, I'm sure. And, and you know, nobody ever calls you to survey what your vacancy rate is, whether you're lowering your rents or raising your rents, if you have to take lower quality tenants or you can really demand the highest quality tenant with the greatest credit score. Right. Nobody ever surveys single family homeowners because they're all, you know, it's all very fragmented. Okay. But they do survey institutional owners of apartment complexes. There are research firms that survey them all the time. And so when you see these surveys about rents softening or decelerating, you know, that's all true, but just know that that's not for single family homes. Okay? No one is surveying single family homes. The surveys are almost exclusively apartments. Okay? So that's the first thing to understand. But yeah, I mean, people, if they can afford it, they're going to gravitate towards single family homes whenever possible.

No kidding. So you think that rents in single family homes, their rates are going to Continue to go up, if not.

Oh, yeah, absolutely.

Yeah, yeah.

I mean, I mean, look, what I do is I, I do macro forecasting. Okay? I don't care what happens like in a month or in three months. You know, things go up and down, they move along the way. Nothing is ever even right. But overall, the trend is up, up. Okay? Rents are going up, prices are going up. Of entry level housing that is in short supply. Okay. I'm not talking about, you know, the other problem is when you look at the real estate statistics and so forth, you know, most people are looking at the whole market. They're not segmenting by price or geography or anything. Right? They're looking at the whole market. So look, there is a glut of new construction homes that are $700,000. There's too many of them, but there's not too many new construction homes that are $250,000. There's way too few of those. Okay. You know, so you just have to segment by a lot of things, certainly by price.

I would absolutely agree. I mean, one of the, one of the key advices that I got from my mentor early on was, you know, Daniel, real estate is local. And I, you know, I, I see it all the time as a real estate coach, myself, as somebody who loves talking about my journey on how I got started in this is, is, you know, so many people ask me, there's like, you know, Daniel, what do you think is going to happen to the, to the economy? What do you think is going to happen with this and that? And I, I tell them, like, look, if, if you're wanting like a duplex or a three unit or four unit and you just want to make a 10 return, you're managing it yourself and you know, you're at some place where you can park your money, then I wouldn't worry too much about what's happening on a federal level. Find a great market, something that's stable, get a good deal, make sure your cash flows really well. And look at it from a 5, 10, 15 year point of view. I mean, that's, that's honestly the only advice that I find myself giving to people, at least right now. Is that something that you would agree with? I mean, do you think there's more to it than that or. I mean, in my opinion, is it really just that simple?

Buy good properties. Know that every human being on earth needs three basic things. Food, clothing and shelter. Let them rent the shelter from you. You're just not going to lose with that equation. There's just no losing if you wait long enough, okay? Stop worrying about what's going to happen in six months or one year or next month or whatever and just buy some houses and rent them to people. It's a pretty simple thing. People try and over analyze it and think they're going to outsmart the market. And look, the economy is a very complex thing. There is no way anyone can figure out how billions of actors in the system are going to act and what's going to happen. But. But we do know a few things for sure. We know that a whole bunch of people have really cheap mortgages and they're not selling. We know that there is a shortage of entry level housing. And we know that people need a place to live. And we know that for the moment, the population is increasing. Now in 30 years, that picture really does start to shift and change. But you don't have to worry about that today. Okay? So, you know, look, I just published episode number 1940 of my creating wealth podcast today, okay? That went up today, 1940. So when I'm on episode 50, 3000, 622 in the year 2050, okay, I will be singing a different tune because then we are going to see population decline. And let me tell you something, none of what I'm saying works with population decline. Everything then contracts and goes backwards. So this is, you know, in 30 years, there's got to be a new strategy. Okay? But for, for the next couple of decades, you're in good shape.

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