2212: Following the Global Elite's Business Plan | Jason at the Limitless Conference Part 1

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Way, I'm just going to give Jason a shout out. He came on stage at our event. At least at the black card event you talked about. You said inflation's coming. They, they are. Quantity easing is so much. Inflation destroys debt. And you, I, I don't remember. I think we had disclaimers, not financial advice. But I remember you on stage saying it might not be a bad time to get a lot of debt right now. And ta da, we're a couple years out. I don't know, it's been two years, two and a half years later and it's like, wow. The people that follow that counsel have done pretty well so far, which is pretty cool.

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.

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And now here's your host, Jason Hartman with the complete solution for real estate investors.

Thank you for joining me today. I love to save you money whenever possible and this is one of those days. I'm going to save you money so you could spend a lot of money and go to lots of different conferences, some of which where you will hear me speak. So, so today I want to go ahead and share a recent presentation I did just about, oh, two and a half weeks ago, I guess, in Dallas at the Limitless conference. And let's go ahead and dive right into that. Here we go.

We've got an incredible speaker coming up. He's an entrepreneur, investor, lender and developer. He's owned properties in 11 states and has thousands of tenants. He's been involved in over 10,000 real estate transactions, which is absolutely incredible. He also has visited over 97 countries and enjoys adventure and lifelong learning. Please help me welcome to the stage Jason Hartman.

Hey everybody. Good afternoon. So is everybody awake? It's been a long day, hasn't it? Well, welcome. Glad you're here. I want to talk to you Today about protecting your wealth from inflation, growing your wealth in an inflationary environment, and how you can game the system and basically beat the Federal Reserve and the government. Bad governmental policy, fiscal policy, that's terrible. Monetary policy, that's terrible. And how you can beat the system. How many people are interested in that? Yes, let's beat the system. Right. You know, there are definitely two classes of people in the world. We've got these massively powerful global elites, multi. Multi billionaires that are really, really shaping the environment. And what I'm going to help you do today is basically follow their business plan, essentially so that you can win, just like they are winning many years ago. I discovered how to do this and how to game the system. So that's what we're going to go into today. But first, let's just kind of take a look at the marketplace and see what's going on in the real estate market. How many of you think a real estate correction or crash is coming up? A few people. Okay. You know, certainly we could have thought that when Covid started, right, that looked like the world was going to end. Well, we just discovered really, that was just a bad case of the flu, and there were a lot of lies about it and a lot of censorship, and now it's all coming out, which is great news. Yeah. You know, you definitely could have thought Covid would have been a giant correction. Right. And a real economic collapse. And maybe we got close to it. But what a lot of people didn't anticipate is the reaction of the central planners, the Federal Reserve, governments around the world, how they would react to that, which made the game completely opposite of what so many people thought. So, you know, now we went through Covid. Prices went through the roof, rents went through the roof, and there is definitely an affordability crisis. Right. How many of you think housing is very unaffordable right now? Yeah, most people would agree with that, and I would mostly agree, but I'm going to challenge that because it's not quite as expensive as you might think. And I'll tell you why. You know, as humans, and Mark Moss kind of alluded to this, some of my stuff when he was talking today, as humans, the only way we really know anything by comparing it to something else. Think of this in every area of your life and always ask yourself what I've been talking about for many, many years on my podcast, something I call life's most important question. And my listeners have even dubbed it the Jason Hartman question. Unfortunately, I can't claim credit for this One, I would be happy to if I could, but it's been said before, and that question is, compared to what? That's the only way we really know if something is cheap or expensive. It's the only way, you know, in everything. It's the only way if we know, you know, they were talking about employees up here a moment ago on the other panel. It's the only way we know if an employee is good or bad by comparing them to other employees. When we go out into the dating and mating market, we compare, right? We, we know this last person I dated is better or worse than the next person I might date, right? And we ask ourselves, compared to what that is, how we know everything. So affordability, when we look at that. Now, to really analyze this on a more analytical level, a few years back, I created an index. You know, you've heard of the Case Shiller Index. There's all kinds of housing indexes. There's the Consumer Price Index, which is a very inaccurate gauge of inflation. But I created an index for housing, and I call it the HCI or the Hartman Comparison Index. And what this does is it answers the question, compared to what? Now, a few years ago, when everybody was talking about a housing crash and, you know, interest rates had basically tripled, the cost of money went through the roof, and housing prices were already very high, everyone was saying there was going to be a crash. And I'll tell you why they all got it wrong. I'll get to that in a moment. But when I looked at the HCI and did the comparison by taking real estate, by taking housing and comparing it to 42 other things, I could know if it was cheap or expensive. I can't go through a lot of HCI stuff because there's just not enough time where. So gold. Gold is money. I am not a gold bug. But many people are gold bugs. Why are they gold bugs? Well, because the price of gold is very stable. The thing that's unstable are the currencies that people keep denominating gold in. Those are moving targets. And the dollar is just one of many currencies. So if I take out my wallet right now, I don't have it handy. I'm not prepared for that, so I won't. But if I hold up a dollar and I ask you, what is this? Your answer is going to be, what? It's a dollar. No, you're going to say it's a dollar, right? What's it called? A dollar. Okay, so if I held up a dollar in 1980 and said, what's this? What would you say? It's a dollar, right? But the value of it has dramatically changed since 1980. It's worth much less than it used to be. So when we compare things, if you look at gold and why people are such gold bugs, right, they think it's the safe asset, it's the crisis asset class, because gold forever, people have considered it to be money. They say that, what, 2,000 years ago, one ounce of gold would buy you a toga and a pair of sandals. Today it'll buy you a man's suit and a pair of shoes. Same thing, right? The value is very consistent. If you denominated that in any currency, it wouldn't be that way. Well, what if we compare gold to housing? Now, in 1971, on August 15th, Richard Nixon closed the last tether the dollar had to gold. So this chart goes back to 1970 in the index. But it wouldn't be fair to look at the price of Gold in 1970 and use that as a comparison because it was controlled. But then when the free market got a hold of it, there was a lot of inflation in the 70s. And then by 1980, the median house price was just over $63,000. I'm looking at line two, by the way, on this chart. And gold was $653 an ounce. And housing got a lot cheaper in 10 years, priced in gold. But if you look at the first line, priced in dollars, housing was $23,000. So it tripled, right? And everybody probably thought, oh, it's expensive. No, it's not expensive. It got cheaper. If you denominated your wealth in gold, 653 ounces of gold to buy a single family home in 1980. Sorry, 97 ounces now, right now, as of July, it's 190 ounces of gold to buy the median price house at $422,000. But look, throughout the decades. In 2000, it took five hundred and twenty ounces of gold to buy a house. Now, most people think in the last 24 years housing got a lot more expensive. But did it really? I mean, think about it. You have the choice every time you earn money or currency. I should say dollars are currency, they're not money, right? Every time you earn dollars, you can take those excess dollars that you have left over at the end of the month and you can put them in a savings account and denominate them in dollars. Or you can buy gold and denominate them in gold. Now, I'm not a gold bug and I Don't mean to talk to you a lot about gold, but it's a measuring stick. That's all it is. And it's a more reliable measuring stick than the dollar. Well, let's just answer one question. Compared to what, is it cheap or expensive, priced in gold? Well, it depends what time frame you compare it to. But let's look at another commodity, and arguably this might be the most important commodity in the world. The next one. Anybody have an idea what I might be talking about? Oil. You know what I'm going to say, don't you? Yeah. Okay. All right. Oil, yeah. So let's look at oil, Right? And this one's interesting, too, because this one wasn't controlled in 1970. There was no Richard Nixon and they, you know, taking it off the, the gold standard or anything like that. So in 1970, oil was only $4 a barrel, and a median house was about $23,000. If you wanted to buy the median price house, it would take 6,400 barrels of oil. But now it only takes 5,700 barrels of oil to buy a house. And you might be thinking, well, last time I bought a house, I didn't rent a big oil truck and drive up with multiple trucks and barrels of oil. Of course you didn't. But while you were saving money to buy that house, you could have invested in oil and stored your wealth that way and then just converted it at the last minute, the day before closing to dollars. And it would have looked cheaper to you. So it just depends how you compare it and what you denominate it in. So priced in oil, cheap or expensive? Well, you know, depends when you look. Right. Just think about it this way, though. Don't just use the dollar as your comparison. Use a lot of other things. And that's what the index does, uses 42 things. Okay, so I could show you a zillion headlines like this. You know, low inventory creates challenging market conditions. North Carolina, Tri State housing shortage. Right. Costs the economy money because there's not enough housing. Okay. Hire for longer renting. People can't afford a house. They're complaining about that now. Let me just tell you something about the complainers for a minute, okay? How many of you in the room are millennials? Okay. I'm a Gen Xer. So, you know, millennials, they're kind of known for complaining. Do you agree that you complain? Right. And here's what you do. Here's what. Yeah, disagree. Right, Good one. Here's what you do millennials do, right? Millennials say, you know, it's not fair because I'm 30 years old, and when my baby boomer parents were 30 years old, they could afford a house and I can't. It's not fair. Well, maybe. Let's really look at that. Millennials are on the slow life plan, and so are Gen zers right behind them. They're on the slow life plan, and so they're traveling around the world, becoming digital nomads, hanging out in Europe, doing all this cool stuff that their baby boomer parents really just didn't do or didn't get to do or couldn't afford to do. And they're getting married later, they're forming households later, they're having children later. They're doing everything later. And how much later are they doing it? About six years. So everything a baby boomer did, millennials are doing it about six years later. The proper compared to what? Answer is a 36 year old millennial and a 30 year old baby boomer? When you look at it that way, they're just about even in terms of what they can afford. So quit complaining, Millennials. It's not as bad as you think. And you're going to live six years longer than your baby boomer parents, probably, right? Okay, so, you know, look at this. It takes $110,000 a year to buy the median price. House. Expensive, right? Well, depends. Okay, here's why everybody got it wrong about the market. Look, about just over two years ago, interest rates went through the roof. We had the fastest interest rate hikes in history. The cost of money. Because money is a commodity, just like gold or oil or rice or soybeans or pork bellies or tobacco or anything else, okay? It's just a commodity and it has a price. So the cost of money went through the roof. It more than tripled mortgage rates. You could get mortgage rates in the low twos. Some people got incredibly lucky with that. And that cost of money went way up. So here's what all the experts said, and here's why they were so wrong. And I was right. Okay? And I was right. Hey, look, if you don't believe me and you think I'm making this up, all you have to do is just go watch my old YouTube videos and listen to my old podcast episodes. They're all timestamped. And you'll hear my predictions and what I was saying back then. And here's what happened. All the experts thought, okay, housing prices have already run way up, and now the cost of money went way up, and nobody can afford a house. They're right. But here's the problem. They were standing in a museum looking at a painting, and they were four inches away looking at the brush strokes. They should have backed up and looked at the big picture, because here's the big picture. They were only looking at new people coming into the market and saying it's unaffordable for them. But guess what? In the best year of real estate sales, about 6, just under 6 million homes will sell in the country. And when prices went up and the cost of money went way up, sales volume went way down. And we were selling about what we are now under 4 million homes a year. So every realtor you know is complaining like crazy, even if they're not a millennial. Okay? So they are complaining like crazy. And what you see here is that they couldn't afford to buy new people couldn't afford to buy. But that was only a small number of people. It's only 4 million a year. What really mattered was the people that already owned, because the people that already owned controlled the inventory. And that was 140 million people. So since the rates went up, job just over 8 million homes have traded. That's all 132 million homes look much different. These people have very comfortable situations. Before I go into that in detail, I want you to think of your kitchen sink for a minute because this is a really kind of a decent way to look at the real estate market. Okay, so think of your kitchen sink and the faucet is the new listings coming onto the market. The basin of the sink is the existing inventory on the market. And the drain is how many buyers are buying. Okay, that's the demand or the absorption rate as they call it. Right. How many buyers are buying? So right now, what do we have? We have a faucet that's trickling out water. Not much water is coming out, meaning not much new inventory is coming onto the market. Why? Because 132 million people have super cheap mortgages that they don't want to give up. For the first time ever, and I've been saying this for years, people have discovered that the mortgage is an asset not always considered a liability. It's a huge asset. Okay, then we have the basin of the sink. It's about half full, or depending on how you look at it, if you're a doomer, half empty. Okay, whatever. So. So that's the existing inventory compared to what? Well, if it was a normal market, the sink would be full. If it was a bad market where prices were dropping and it was considered A buyer's market, the sink would be overflowing with inventory. Now, the drain. What about the drain? Well, sales volume is way down, so the drain is plugged up a little bit. Why? Because prices are high and so are interest rates. Right? So the drain is about 20%, maybe 30% clogged right now. That's the market we're in. So let's take a look at this in real numbers. We have just over 700,000 homes for sale in the country out of a housing stock overall of 140 million homes. So less than half a percent, or just about half a percent of the entire housing stock is for sale. That is a very, very low number. What's the normal number? Compared to What? It's about 1%. Okay, we have about half what we should have to be considered a normal market. What is the lowest number we've had? It was during the COVID era. It was 240,000 homes for sale. Very, very low inventory. And you all remember what was going on back then. Bidding wars, prices going through the roof. You know, someone opens an open house and, you know, 85 cars. I'm sure you all saw these videos, circulate on social media. Okay? 85 people show up to buy the house, and there's, you know, dozens of offers right away. We're not like that. But our inventory is still way below normal, and it's probably going to stay that way for a while. Now, look at this. We've all been talking and thinking about what they call a Fed pivot. Now, the Fed, the Federal Reserve, our central bank, does not directly control mortgage rates, but they certainly influence them. So the Fed is pivoting, and Jerome Powell has made that very clear. And probably at the September meeting, we're going to see some pretty significant rate cuts. Well, if we use a baseline, and I know rates are a little lower than this now, but just use a baseline of 7%, right? And think about what happens when housing becomes, and I kid you not, more affordable. Okay, more affordable. We go down a half a percent, another 2.8 million people can afford to buy. We go down a percentage point. 5.4 million new buyers can afford to buy. We get down to five and a half percent, which, by the way, is what Fannie Mae is predicting. They're the biggest mortgage player on planet Earth. 7.7 million new people can afford to buy. What happens when maybe just a third of these people enter the market? Just because they can afford to buy doesn't mean they will, right? Of course not. Some will just Continue to rent. But what happens when these people, maybe, you know, a million people or 2 million people or 3 million people, enter the housing market where you only have 700,000 homes for sale? Supply and demand, it's the most basic law of economics. We all just intuitively understand it. So that's what's going to happen. Now, remember that chart we went, we were on this one right here, okay? This is why everybody was wrong and Jason was right, okay? And I was like the lone voice, okay? Because you can look at my YouTube videos and look at the nasty comments I got two years ago. Oh, he's just talking his book and he's just self interested because his company sells real estate. You know, all of this kind of crap, right? But I was right, because what I was looking at is the people that control the inventory. And here they are. This is the chart of the people that control the inventory, whether something's going to come up for sale or not. The existing homeowners, 25% of them almost have a mortgage at or below 3%. 65% of them have a mortgage at or below 4%. They are extremely comfortable. They could qualify for the mortgage they already have with unemployment insurance. They don't even need a job based on their debt to income ratio. Another thing I say all the time, compared to what is a big thing I say, but there's another one, and it's kind of similar to. Compared to what the saying is you can't hear the dogs that don't bark. And it came out of a Sherlock Holmes episode where Sherlock Holmes, the brilliant detective, caught the murderer because the dog didn't bark, because the dog knew the killer. Okay, so what is the dog that's not barking on this chart? Whenever someone presents something to you, information, data of any kind, always say, okay, that's what they're telling me. But what aren't they telling me? That's maybe the most important thing is what is unseen or unsaid, what's not said in this chart. People that don't have any mortgage at all, and that's 40% of the housing stock has their home free and clear, no mortgage. These people are comfortable. They're not in distress. Okay, here is one thing you absolutely, positively must have if you want to have a real estate market crash. It is the one ingredient you cannot do without. One ingredient. You must have tens of millions of distressed homeowners who become millions of distressed home sellers. We have the complete opposite of that right now. Here's a couple quick charts, and I got to Move fast. This is borrowers based on credit score. The mortgage is out there. Now. These people have very high credit score scores. This is based on loan to value ratio. In other words, how much equity do they have? They have tons of equity. The United States of America has literally right now the highest amount of tappable equity in their homes ever. People have never had this much equity in their homes. So there's a lot of margin for prices to drop without anybody becoming distressed. Okay. 69% or over 69% of borrowers have LTV's loan to value ratios under 60%. This is nothing like 2007 or 2008 that people keep making these crazy comparisons. It's just nothing like it. Compared to what? Well, here's one more for you. Okay. During the Great Recession or the global financial crisis, you know, back in 2007. 2008. Right. One of the things they talked a lot about was underwater homes. Underwater. Right. Okay. Well that means you have negative equity if you're underwater. Right. Right now we have just 2% of the 140 million homes that are underwater. And the amount they're underwater by is minuscule. If you're underwater, you're likely to walk away and let it go into foreclosure. What did we have then? What's the compared to what in 2000? 2007 we had 26% 13x what we have now. Okay. It's a completely different situation. This is the mortgage debt service compared to income. And you can see that people have some of the most comfortable mortgages in history. This chart goes Back to what, 1980? Look at it closely. Here it is blown up for you. I mean, it got it was a little better during COVID but people are super comfortable and they're not selling. And we'll be back with a lot more on this topic with this guest on our next episode. The following is a blog post found on jasonhartman.com blog.

Navigating the Maze. The most distressing rehab purchase issues for the buyers the lure of rehabilitation properties in the investment domain of real estate is undisputed. The prospect of transforming a neglected substandard house into something that generates income is certainly attractive to many investors. Indeed, the way to living the dream is often marred by the difficulties it poses and the challenging path. In this piece, we are going to deal with the frustrating details of buyers in search of rehab properties and potential remedies to address them. One Finding the right property Limited inventory Market scarcity of rehab ready homes can trigger tremendous bidding wars among potential purchasers. Property. Picking rehabilitation properties that match up with the budget and profit targets can be a difficult task. Finding a balance between the potential for benefits and locations demand and resale price is a very important issue, but also a very complicated one. 2. Assessing the true cost of rehabilitation Underestimating renovation expenses this category of future homeowners may fail to account for a reasonable percentage of funds meant for repairs or renovations of the property. It is also possible that they may not allocate much fund to the unforeseen future challenges or needs. Hiring reliable contractors while identifying reputable contractors who can accomplish high quality work within allocated budget and due dates is a hard nut to crack. Obtaining accurate estimates Insufficiency of knowledge about appraising renovation needs may cause underestimating of costs, which consequently leads to budget overruns. 3. Navigating legal and regulatory zoning and permitting conformity to local zoning sustainability regulations may be painstaking and complex homes in historic districts might be under the state jurisdiction and may not allow a significant facade alteration. To add to the complexity and cost of these environmental hazards like asbestos mold and lead paint, remoulding alone is entailed.

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Limited financing Traditional institutions might avoid lending on rehab properties due to their perceived higher risk high interest rates. However, financing through alternative lenders and hard money lenders is usually a costly option that leads to higher interest rates ultimately affecting revenue. Demonstrating property potential. Lenders often find it difficult to buy into the idea of a property's value after rehabilitation without prior successful endeavors or a detailed business plan as basis. 5. Managing time constraints Project delays Some of the unexpected events like adverse weather, material shortages, or contractor issues can be the contributing factors to the increase of the renovation time. Balancing Multiple Projects Managing multiple rehabilitation projects is a hard task that demands effective time management and an optimal use of the resources. Opportunity Costs Each time a property is vacant or being repaired, they miss out on the chance of generating revenue, so the urgency to expedite the process becomes more and more real.

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Mitigating risk and Uncertainty Changes in the market value of property may determine that an investment's resale potential is hampered, thus introducing uncertainty into the investment decisions made. If the changes are not controlled. Surprises like unpredictable problems with the structure or hidden damage may come up during renovation and and no matter how well you have planned, you may deal with these One must put into consideration the exit strategy that would be viable, whether through resale, rentals, income or other means. This is a key factor in mitigating risks and ensuring maximum returns. Solving the expeditious process of buying and rehabilitating properties, there are numerous difficulties, but if patient investors target the strategies of making tons of money and development, then they will be able to achieve that. By identifying and solving the main issues buyers encounter during the search for rehab properties, investors will be able to go beyond with the process and better the chances for success in such a competitive market. 1. As the buying process relates to seeking the best rehab property, what are the most common problems potential buyers face? 2. How does financing opportunity create pitfall stages for rehab projects plus other alternative options for the funding source? 3. Which tactics can buyers use to reduce risks and associated uncertainties that rehab is probable to accompany any and every step of the process?

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