2475 FBF: Key Takeaways & Best Practices from the 'Meet the Masters of Real Estate Investing' Seminar

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Welcome to the Creating Wealth Show. This is your host, Jason Hartman. This is episode number 296. And we are just coming off our big Meet the Masters event in Irvine, California, and wanted to just share a few of the hot tips and learnings from that with you. I think everybody learned a a lot this weekend. And I've got 2 of our investment counselors here with me today, and that is Sara and Steve. How are you doing?

Good, good.

Hey, Jason.

Hey, Sara.

Doing well.

Good. So, you know, as we go down the list and we kind of look at all of the speakers and all of the experts we had at the last Meet the Masters event, and, you know, I'm not sure how many of these I've done over the years, but I think it's probably like 13, I'm guessing. I got to go back and count that up. But we started off the day on Saturday. Well, Friday night we had a dinner and that was just kind of a dinner networking event. Just for fun. But then Saturday morning, we started off with the next 10 Commandments. We've already famously had the 10, but now we have the next 10. So we have 20. And you know, someday maybe we'll be up to 30. You know, Moses did drop a tablet as he was coming down from the mountain there. And so there really were more than 10 always, folks. So that definitely as it applies to investing as well. And we'll kind of go over all of the next 10 Commandments on a future show. But what did you guys— did you have any thoughts about those?

Well, I don't know if anybody accused you of blasphemy, Jason. You know, I really liked the commandment about, you know, holding the tenant's feet to the fire, running your property like a business. There has to be a cut-and-dried lease agreement that you adhere to, period, because everything just gets thrown into question if you adhere to it sometimes, if you don't others. And I think investors, to run this like a business have to follow that commandment.

You are so right about that. And that, by the way, is commandment number 12. It is thou shalt hold thy tenants accountable. And you know, it's amazing to me, and Steve and Sarah, you know, I know you've heard these over the years too, how many real estate investors or investors in general in the stock market people— it's kind of weird how human psychology is that they like to talk about their losses. Like, I remember my grandfather bragging about how he lost $92,000 trading commodities. Why would you want to brag about that. It's like a great story to tell everybody. I guess it's the big fish that got away. But in, in real estate, it's like people want to have a story about being a victim rather than getting the money. You have a tenant who skipped out, didn't pay all the rent, or damaged the property— go get a judgment against them. Those judgments accumulate interest. I believe they last— I don't know if this differs state to state— for 10 years they last, and then you can renew them indefinitely. And I mean, you're eventually— you stand a good likelihood of getting paid on that, even if they don't have money today. Someday, you know, fortunes change. And someday that person's going to want to buy a house or buy a car and get a loan. And that judgment may well be sitting on their credit report. And that lender is going to say, you got to pay off all your judgments before we're going to make you the loan. And they're going to pay you with interest. Sarah, any thoughts there?

Yeah, you know, that's a good point. I mean, the psychology, the investor psychology is was huge for me this weekend and seeing that, you know, you did such a good job at pointing out the big picture of investing. And I think so often investors get caught up on that one bad tenant and forget about, you know, all the benefits and all the things that they've received from that investment. So, you know, that's one of the things I just absolutely love about the event is hearing, you know, some of those stories, but more importantly, hearing how people overcome those problems. And I think that You know, we heard a lot of great positive stories over the weekend as well.

I remember the late Zig Ziglar when I used to listen to his motivational tapes. He used to say, everybody in life has one thing in common. The bum on Skid Row and the happiest, most successful business person, they have one thing in common. They have problems. And the only thing that differs is how they handle their problems, how they meet their problems, how they address their problems. And isn't it amazing how one little bump in road can ruin a whole plan that someone has to create wealth and success and passive income and freedom. Some little bump in the road can ruin the whole thing. And, you know, we've seen it over and over, over the years, haven't we?

Oh, absolutely.

Yeah. So hold thy tenants accountable. Commandment number 13, thou shalt understand the theory of relativity. And by the way, we're gonna— now that we've presented these the first time at Masters, I'm going to kind of refine these a little bit. And I think it's going to be the theory of relativity and the theory of equalization, which we'll talk about in the future. But any other kind of commandments that struck out? Benefiting from Mother Nature, Father Time, and socialism, reality check, investing in quality, embracing fragmentation, using shelters?

Embracing fragmentation. That's a great one to touch on. And I use that So much and just talking to investors. Real estate, I talked to a gal yesterday. She attended the event. She loved the event. She really wanted to come up with a game plan, which we did. We did come up with a good plan, but she wanted it to be very particular and organized. I said, the one thing you're going to have a hard time with is embracing the fragmentation. Ironically, she's in the business of Strategic planning. Strategic planning. My point is, it's so fragmented. You can come up with a great plan today, but 6 months, one change in the financing can change your whole plan. A lot of people ask me about exit strategy, for example. Well, you may have a great plan for exit strategy today, but depending on what the market does or doesn't do can change your whole plan. I would say, make a plan for your next 6 6 to 12 months. Talk with your investment counselor. We can help you do that. And then, you know, reevaluate your properties each year, every 2 years. Find out, you know, where you're seeing appreciation, where you're seeing rent increases. You know, should you 1031 exchange at some point, or, or, you know, should you hang on to them longer? So, you know, we talked a lot about how long should we hold properties, and the magic number, 27.5 years.

You know, I say every investor should have a 27.5-year business plan. And, and folks, if you're ready listener, you know, we're kind of joking there about the depreciation schedule. Generally speaking, just buy and hold these properties. The people who flip have spending money, the people who buy and hold create real wealth.

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 handpicked to help you today in the present and propel you into the future. Enjoy.

One of the things I really want to touch on is commandment number 16, thou shalt invest in quality. There's so many promoters out there promoting just junk properties. And Steve, you introduced— you kind of clarified it for people by introducing the, the Tier 1, 2, and 3 properties, which I thought was great. And we, we hear so many horror stories of investors investing in Tier 5 properties. I, I didn't even say Tier 4. I skipped Tier 4 and went down to Tier 5 because these are the low-end crappy properties that just have very low-quality tenants. And on paper, they can make the pitch that they look great, but they just don't. It's like the person who's, who's chasing the, the ultimate get-rich-quick schemes. You know, it's the penny stock investor in the stock market world. These penny stock people think just because a stock is cheap, because it's under $5 and it's been delisted, it's not on— it's on the pink sheets or whatever they call it— it's a good deal. No, a lot of those companies go bankrupt. They never succeed. Investing in quality will always serve you well. Now, that doesn't And that doesn't mean investing in high-end luxury. It just means good quality, sensible properties that work.

Yeah, yeah, that's definitely right. That's definitely right. And we're focusing on that on 2 levels. Obviously, the properties themselves and on the market. Our local market specialists, we do the best that we can to ensure that they're quality. If somebody's a good operator and knows how to rehab and rent out properties, that certainly goes a long way towards alleviating any bumps in the road. And, you know, like you said, Tier 5 properties, some of the online search engines that people use, like Zillow and Trulia. Those Tier 5 properties are professionals at fooling those search services and making the properties look like they're actually worth something when you couldn't give me any money to take those kinds of properties.

Yeah. Or they use eBay. That's another one where you get a lot of junk. So yeah, folks, just, you got to invest in decent, reasonable quality properties. Okay. And you know, Sarah, you alluded to it a few minutes ago when we were talking about it. But commandment number 20 is Thou shalt look at the big picture, and we talked about that, and we talked about rational decision-making processes, and all kinds of stuff. So you know I don't want to talk about the next ten commandments too much. We'll obviously address that over over future episodes. But what about some of the other speakers? The great thing about the Masters event is you get so many different people with different ideas. It's really a mastermind group, and and our first speaker after I opened it on Saturday was Mike from Atlanta. And Sarah, I know you had kind of a. A takeaway. It's probably not going to surprise people too much, but I think it's very valid. What was your takeaway from the Atlanta presentation?

Well, my takeaway from the Atlanta presentation was that prices are definitely on the rise. I was looking at some of the properties presented and, you know, just looking at them compared to last year's numbers, you know, the prices have gone up. But what's nice is that the rates have remained low. You know, everything is relevant. The cash flow is still great. So, you know, there's still some, definitely some great deals to be had in Atlanta. But I think we're looking at a little window of opportunity here to get in.

Yeah, and I would definitely agree. You know, folks, we are constantly frustrated by investors wanting the deal they could have gotten 2 years ago, or even a year ago, or even 6 months ago. And it just ain't happening, folks. You got to adjust your expectations. Prices have come up. Inventories are very low. Last year was the best home selling year since 2007. Times they are a changing, as Bob Dylan said. Don't be the person who waits too long and really misses out on the opportunity. You know, I guarantee you this will happen, by the way. The market always goes in a cycle, and and the thing people have a real problem differentiating is the concept of real and nominal dollars when it comes to real estate, because real estate markets operate in in hype, and, and then they get frothy, and, and they get this sort of speculative frenzy every time. It happens every time, okay? In every cycle you look throughout history, it's tulip bulb mania like it was hundreds of years ago. It's the same idea. And I, I bet you we will be the busiest. We will have the most people wanting to buy properties from us. Now, we have a lot now, certainly, but we will have the most when we reach the peak of the next cycle. It's, it's like every— all the little guys always get in when it's too late because they don't have the confidence to do things when the news is really negative. They, they get in too late and then they sell too early, or they don't buy an investment that makes sense the day they buy it. Commandment number 5, where they, they don't buy a sustainable investment where it has Good cash flow, so they always have to sell too soon. And it's the mistakes that the masses make, and our listeners are more educated than that. So everybody listening, if you're new to the show, don't make those same mistakes that the masses make because the masses don't end up successful. They don't end up wealthy. They don't end up with passive income. They end up working with their nose to the grindstone the rest of their life, and you don't want to be one. We're here to talk about financial freedom. And help you actually achieve that with our complete solution for real estate investors. Don't you agree that that's how the cycle just always works?

Yeah, you know, that just reminded me of a story.

I—

well, actually, 2 clients that I talked to yesterday, had a, you know, first initial consult with 2 retired schoolteachers. And my mom's a schoolteacher, so I could totally relate. But, you know, 2 retired schoolteachers who just bought a property here and there over the years, they've now got 9 properties. They're still building. They've got a great retirement plan. And they just kept plugging away at it. And they did. They had that one negative story. They had that one bad property that, you know, they don't love. And we talked a little bit about that. And, and, and basically the reason we talked about that is to avoid buying another property like that. So, you know, again, they're just plugging away. And, you know, here they are retired with a great plan.

Yeah, just, it's really simple, folks. Just, just start the plan, acquire the properties, Don't freak out when there's a little bump in the road, and just stick to your plan. You got to be very stubborn to be successful in life because there's always the detractors. There's there are always the armchair quarterbacks who are always out there saying, "Oh, it can't be done." There's always a problem you're going to face, and at times you'll really lose heart and lose confidence. And that's the time you need to become a very, very stubborn person and just have that tunnel vision. I'm sure all of our listeners have either been to or seen a horse. Race, a professional horse race. And if you notice those racehorses, they have blinders on because they— the, the jockey wants to restrict the horse's vision so they only focus on running forward the fastest race they can, not worrying about what all the other horses are doing. They want to just go forward. They want to follow their plan. And you know, there's a famous quote, to follow without halt One aim, that is the secret to success. And you know, that's so true with investors. So Atlanta, definitely that market has been appreciating, and all the markets have, all the markets that we've recommended. So get in before it's too late. The, the next segment after the morning break was where all of the investment counselors came up in front and just talked a little bit about the process and how clients can engage with our company And how you can help them make this plan work. Steve, did you have any thoughts on that?

Well, yeah, I think it was beneficial for people to hear what we do as investment counselors. You know, we had a lot of new people at the event that were there for the first time. And yeah, we really laid it out for them as to how we help you evaluate kind of what your risk tolerance is, what markets you should be in, over what time span you should invest, so that we're not getting our wires crossed, which I'm sure we'll talk about that in a minute. And just helping people understand that we're here all along the way to assist you because it really doesn't matter to Sara and I what market you invest in. We don't care. Obviously, that's assuming it's a good market with good cash flow for you. But, you know, it doesn't make any difference to us, and that's how we're able to, you know, really guide you through this and, and help you understand, yeah, this is normal, or watch out here. So people value that, that third-party opinion when it comes to buying property.

Right. And what I want to say on that, just to clarify what, what you're trying to get across, is one of the first 10 Commandments is thou shalt be area agnostic. And the investment counselors are area agnostic. And that's one of the great things about dealing with our company. We represent many, many different markets around the country, okay? And we're not attached to any one market. We have no physical presence in any one market. We don't open an office in a market and put a staff in that office. We like to say we're disloyal to markets. We only recommend that you investors invest where properties make sense. Now, we have many markets that do make a lot of sense and offer great opportunities. So then the question becomes— the second layer of that— the question becomes, well, if I want to start out and I want to buy 3 properties now, and then I want to get 3 more properties 6 months down the road, where do I buy the first 3? And then where do I buy the second three? And then where do I buy the third three six months after that? And that's just an example. Some people come and they buy dozens of properties at one time, and then they buy more later. Some buy one property at a time. So every investor is different. Everybody has a different amount of money to invest in a different situation, and that's what we help you do. Our investment counselors—that's what they're they're here for. So Sarah, I mean. You know, how do you direct someone? Maybe share a little bit on that, dovetail on Steve's thought as to where to invest. I mean, at any given time, we've, we've pretty much got about 10 markets that we seem to, we seem to like and have good vendors in at any one time. And just one thing before you, you address that, I want to remind people, it's not just about the market. There are markets that we are not recommending that we actually like in terms of a city. We might think a certain city is good, but the reason we're not recommending those markets is because we haven't found a good vendor, a good partner, a good local market specialist in those markets. So I wanted to point that out again. But Sarah, you know, when someone comes to you and they say, okay, I have $200,000 that I want to deploy, And I want to invest this in— you sort of work the math out with them, and they're a leveraged buyer where they can finance properties. Maybe that says that they can buy 7 or 8 properties. How do you direct them as to where to do that?

Well, Jason, it depends. I mean, timing is everything. So like you said, it depends where our relationships are in each market and where the numbers are and how the rental market is doing. Are clients seeing their properties lease up very quickly? Things like that. So we monitor all those things. We know where the numbers are working best. We know where we're going to get the best communication from our property managers. And so at any given time, we may have 10 markets, but maybe 5 are our favorite. And, you know, also depends on the inventory. A lot of times inventory dries up. So my recommendation in getting started Okay. Is twofold. One, deciding on location, and 2, deciding on type of property. So if you're a seasoned investor, you've been doing this for a while, it's just a matter of maybe narrowing it down to 2 or 3 markets and, you know, looking at some different properties, finding out what the risk tolerance is. You know, are you open with maybe older rehab deals that may be in need of maintenance down the line? You know, maybe they produce excellent cash flow numbers to start with, but they're likely to have maintenance. Or are Are they brand new to this? Maybe they keep a busy schedule. They're not going to have time to deal with little maintenance issues here and there. They want something brand new that's going to be real passive. Again, it depends on the investor. It depends on what their lifestyle is like. It depends on how the inventory is. It depends on what the market's doing. It's really actually complicated, but we take all that guesswork out of it for the investor because we really know what's going on in each market.

Yeah, we do. And, you know, I just wanted to add to what you said. We may have 10 markets where we're working in actively at any given time, but we have contracts with, with suppliers, with local market specialists in many other markets that we're not even talking to you about. We've done business in, I think now, 46 different markets, and we have lots of agreements with, with vendors in many, many markets that you don't even hear us talk about because it just doesn't work for us and it doesn't work for you. At that time, so yeah, good point. So after the investment counselor session, we had Doug talk about the end of the world part one, and you know he really pointed out some great points about just the complete mess our economy is in, how the recovery isn't what you think it is, and how the the scenario of a devaluing currency is likely to unfold, and an ever more hungry government is likely to unfold. And we talk about. that a lot on many shows, so I'm not going to go into it in too much detail here. It's just too complicated. But then we had our lunch break, and then Sarah and Steve, we had a person from my CPA's office, one of the, one of the CPAs there, speak and talk about real estate professional status and tax benefits and how to maximize those. Did you have any quick thoughts on that one?

Become a real estate professional if you have any way of doing so. Yeah.

Yeah, and that doesn't mean getting a real estate license per se. It just means qualifying under IRS guidelines, which we've talked about on other episodes. And then we had our market specialist from St. Louis, and this is a market that we've gone gangbusters in, but we've really overburdened that market, and, and we stopped recommending it for a while because it was just— the pipeline was too full. Sarah, you could probably speak to that better than anybody. Did you want to talk about any takeaways from St. Louis or past experience?

Well, you know, St. Louis is a good market. The properties cash flow really well. The downside is, or was, that, you know, they did get a little behind in construction and in their renovations. And part of that, the takeaway from that, is they do a really good rehab job. It's very thorough. It's not just paint and carpet. So, you know, what I want the investors— maybe some are caught up, you know, in contract on some of these and they've gone a little longer than expected. Just know that, you know, that there's a benefit to that, and the benefit is they're doing a thorough job. You're not just getting some, you know, junky—

Well, well, there's actually, there's actually another benefit to that, you know, and it depends how anxious you are to get your real estate investments in service, if you will. In service is like an IRS term, and that, that really talks about starting the clock, getting the income, starting the ROI. But the one benefit of The benefit of the vendor being a little bit slow is that you really, in essence, have an option on the property. And you've put down a deposit, a very small deposit, and the property is potentially increasing in value, and the rental market may be increasing in rental rates while you sit and have very little money in the deal. So that can actually benefit you quite a bit. In fact, there's a whole school of thought of people that like to buy new construction, and they really like the developer to build it very slowly just so they can benefit from this exact thing. It's kind of like having an option, and in an appreciating market, it's a pretty awesome deal. So just keep that in mind too, okay folks? It's not— it's not all what it seems. You got to look at every aspect of it. Let me take a brief pause. We'll be back in just a minute.

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And then we had the Memphis presentation, and I got to tell you, and I think you guys are gonna agree with me that I was very impressed with the Memphis presentation. Your thoughts?

Yeah, I agree. Very, very good team that we brought out from Memphis, and what I found most useful about it is they brought their property manager with them. So, it was a very, very good thing for all the attendees to be able to ask the property manager the, you know, the day-to-day questions about leasing qualifications and, you know, how do you handle this, how do you handle that. And to get somebody's opinion on it who is deep into property management every day of their life was very useful.

One thing that did come up in regards to property management is pretty much every property management agreement has an amount allowed for discretionary repair items and maintenance items. And I want to suggest that you tighten the reins on your property manager's vote. And property managers are going to hate me for saying this because this makes their job a little harder, but nowadays, if you're a plugged-in person, if your life is anywhere near close to the way my life works, I've got my iPhone with me all the time. I mean, it literally is with me all the time, and I can respond to emails, text messages, phone calls anywhere on planet Earth, soon to be anywhere in the solar system. And I, I respond almost instantly to anything. So folks, I don't think you need to have any more than $100 or $200 in discretionary repair allowances per month for your property manager. Now of course, if there's an emergency, they have discretion where they can fix things like water leaks and things like that, God forbid if they ever happen. But for other discretionary items, Call me a micromanager, if you will, but I think it's easy to— this is not micromanagement that's difficult. It's just easy to approve these items yourself if they're over $100 a month. So, Sarah, you're probably not gonna like that either, right? Because you're gonna say it, it mucks up the system. Yeah, go ahead.

I would like to be the first person to officially call you a micromanager.

Oh, okay.

But you do a great job at it, and I'm sure you save lots of money doing so. So if you are able to be a micromanager More power to you. Yeah, I'm sort of a micromanager too, actually.

Well, but oddly, I don't know though, because maybe I'm a micromanager because I just don't like giving property managers too much rein. You know, I've been burnt a couple of times. I mean, not badly burnt, just annoyingly burnt. I'll put it that way. It's like an annoyance. It's a small amount of money, but it's still an annoyance nonetheless. But I mean, in business though, I don't micromanage too much, do I?

No, no, I think I think what we're—

Sarah, come on, be honest. You have so much autonomy.

I think what we're getting at here is the leash that you're talking about. I watched a TV show the other day, kind of a history show, and it was about an old railroad contractor when they were first putting in railroads in the Old West. And he would— this guy was getting paid by the mile by the government to put this in, and the engineer's showing him the map And it's going straight across the country.

And that's no good. Let's, let's have it turn a few times.

Yeah, he's like, what are you doing? I get paid by the mile and you're building it straight, you know. And the property managers, you know, a lot of times they, they could make a markup on repair fees and, and things like that. So if they have that discretion, you know, there's always going to be something wrong to the tune of $199 every month potentially if you have a dirtbag manager.

If it's a $200 discretion. So I just think the discretion needs to be there, but it needs to be smaller. I just— I want you to negotiate with your property managers and make that discretion smaller. Okay.

I've got a quick, quick little story for you. I was talking to another gal yesterday, and she told me she has 3 properties, and she was a past client that, you know, bought when I wasn't here, actually. And so she's telling me about these 3 properties and how one of them, she's just been paying Like, you know, hundreds of dollars every month on maintenance items. And I'm thinking, you know, all the mean— meanwhile, I'm thinking she bought all 3 through our network. And about halfway through the call, I find out that one property is the one of the 3 that she didn't buy with us, thank God. But she's like super happy with our management teams that, you know, we've put in place, and those have been really good. So property management is very important if you're going to hire a property manager. But long story short, you know, we had this long discussion about that same thing— the property manager nickel-and-diming. And, you know, how convenient that there's been repairs every single month. It's, you know, just been draining her.

No matter what happens, folks, with this— these little annoyances from property managers and such, it's a lot better than you investing in some Wall Street crooked company. And, you know, I'm talking about legally crooked, not even illegal. Where the CEO makes $100 million a year and the board of directors each get $20 million a year, and you're getting some measly crappy return on your investment if it's even positive at all and not negative. So again, you feel the bumps when you're doing this. You're doing it yourself. These other investments, these pooled money investments that you invest in, someone's ripping you off and you don't even know it. When it's your own investment and you have your property manager, etc., you see it, you feel the bumps, you just got to tighten the reins a little bit. That's all.

Yeah. And the big managed funds, you know, yeah, you, you don't feel the bumps unless you consider hemorrhaging money a bump.

Yeah. Yeah. And you just, you don't see it. And then they print it in these sterilized annual reports that nobody reads. And all your money's already been stolen from you. You just don't even know it. Okay, half the time. The returns on these income properties are so high compared to any type of Wall Street investment or any type of pooled money investment or any type of fund that you might invest in. It's just so much better. All you got to do is get your thinking straight and you're just going to do so much better. It's not even a contest. So after the Memphis presentation, which was very impressive, I really like our team there. We had a financial planning presentation where you know, again, like I was talking about before, there were some illustrations shared about the cycles of the market and how the little investor always seems to get in too late and sell too early. And that was just very well illustrated, I thought, by that little graph. By the way, the author whose graph was presented will be on the podcast here. I've already interviewed him for that show, and he wrote a great little book. You'll hear about it in the next few episodes here. So that's coming up. I look forward to that. But what I thought was just really valuable, we just had a ton of Q&A on this next segment, and I think we went for about an hour and a half on mortgages and how to qualify for loans, how to structure loans, and all about financing. We had a panel of 3 mortgage experts who are not just the mortgage people that you might know at the local bank where you bank, or the person that did your mortgage when you bought or refinanced your house. These are mortgage people that specialize in working with investors. I would venture to say that our mortgage team works with investors only, if not 95% investors. And it really is a different thing. It's a specialty, folks, to have a mortgage lender who, who is investor-focused rather than just your typical mortgage lender that you can find at any Bank of America, Wells Fargo, or Chase branch. These are people that work with investors. That's their specialty. And they specialize in financing investment properties. Steve, any thoughts from the mortgage panel?

Yeah, well, everybody, of course, had lots of questions. You know, it was lots and lots of questions. Yeah, it was one collective, what is going on to the mortgage people, you know. But I think what was very valuable to learn there is that when you're getting mortgages, the right hand has to know what the left is doing. So if you're buying a couple properties in one market, and then you're buying another one in another market with a different lender, you got to make sure these 2 know about each other because they will find out about each other eventually. And a lot of times that's going to cause some issues because it, it throws off your debt-to-income ratio, your— and a few other things that these lenders are looking at. So when possible, it's great to go with just one lender that knows everything that's going on, that can loan in as many states as possible. But, you know, in some markets there's a specialty lender that you have to use. But that— and so that's not always there. But talk to your lenders, make sure they know what's going on so you don't end up shooting yourself in the foot a few months down the line.

Right, right. And Sarah, I know you wanted to address that one too, but maybe something else also, if you have anything else you wanted to share.

Keep your main thing the main thing. Stay focused. If your intention is to buy a property and close on that property in the next 30 to 60 days, you know, do what the lender tells you. Turn in your documentation in a timely fashion. Don't go out and make a big purchase or buy a car, you know, transfer $50,000 from account to account. Keep it simple for yourself, simple for the lender, and it will be a much more peaceful transaction.

Just remember, if you're using 2 different lenders in different cities, you could actually blow it. And, and you might not be able to purchase any of those properties. So be careful That's what our investment counseling team is here to help you with. So just, just be careful. Next, we had a, we had a dinner break where we had kind of a longer dinner, and then we reconvened the meeting and we went till 9 PM, which we, you know, a 12-hour day. People were all there and very attentive, even though it was a long day. You know, the information must have been valuable enough to keep everybody focused. But the next panel discussion was with all of our local market specialists. And again, just a plethora of great questions and great participation from the audience. Any takeaways from that that you wanted to share?

Well, yeah, it certainly tied it all together. The Local Market Specialists along with ourselves, the Investment Counselors, were up there, and people really wanted to see how a deal comes together from A to Z and all the different moving parts, all the way from, you know, how are these purchased, you know, how do we buy them, how are they rehabbed, how is the management handled.

Should we do home warranties? Should we extend our home warranties? Yeah, a whole bunch of questions.

Yeah, is a home warranty worth it? Tell me about lease-up fees and how the manager assesses those. And so it was good to walk through that on kind of a case-by-case basis and explain how and when these things can vary.

Yeah, I think so too. Sarah?

Yeah, I concur.

Okay, so you're going to be agreeable on that one. Okay.

Well, what I found from, from the investor feedback was that they just really enjoyed these panels because it was just an open, candid discussion. You know, people could kind of open up a can of worms, so to speak, and everybody could just address it in their own fashion and, you know, compare. And sometimes by hearing different areas, different speakers from different areas present, it kind of helps you narrow down the decision, you know, and where to buy depending on who you gel with or what their process is or how hands-on it's gonna be. So yeah, I got a ton of great feedback from, from all of the panels that we did.

What you're saying there, Sarah, makes a lot of sense because Because it kind of goes to the point I made earlier, which it's not just about the city, it's about the provider. So you may think it's a coin toss between 2 or 3 or 4 different cities where you want to invest, but you're more impressed or you relate more to one local market specialist over another. And that's fine. I mean, that's absolutely fine. You're going to be working with these people. You're going to be working with that property management team, probably. I mean, of course, your property manager is your choice, but we do recommend, and you can use whoever you want, but that's who you're going to be working with. So you want to work with who, whom you feel comfortable. So very good thing. The next morning, we opened the morning. I just had a short part in the morning on a couple of items, but then we had Mark Kohler speak and talk about asset protection and tax planning. Sarah, any big thoughts on that one?

Mark Kohler, enough said.

He's a funny guy.

One of his videos and you'll get a taste. But no, he's very knowledgeable. He's, he's got some interesting ways to, you know, put everything together, put all the planning together, and really brings the tax world and the legal world together to come up with a big master plan. So I like that.

Yeah, and those, those worlds really do need to be united if you're taking this on at a bigger level. Every investor listens at a different level. But if you're starting to get to the point where you feel you want to set up entities and so forth, and don't rush into that, you know, I just want to say that again. So many people put the cart before the horse. The best asset protection you can have is insurance. It's really simple. It's not that expensive. And by the way, we talked a lot about insurance over the weekend and our national insurance provider. But if you're, if you're a more advanced investor and you want to go to the next level and you're starting to set up entities, it can get a little complex. And, you know, there's just a lot of opportunities there. But you need to have the right brain and the left brain united in the sense that you have the tax and the legal as part of one big, broad strategy. So they need to— your CPA needs to be talking to your attorney and have that united. Steve, any thoughts?

Yep. Agreed. Agreed. Those two affect each other a lot. And if you get down one road too far without consulting or taking into account the other side of A lot of times you end up with a big entangled mess. Mark is very good at bringing those 2 worlds together and making it, funny enough, very fun.

Yeah, he does make a seemingly pretty boring subject pretty fun. And it just happened to me this morning because my CPA actually will make S elections, Subchapter S elections for LLCs for me. me. And I was on an email thread about one of my LLCs, and the CPA asked, did you already do the S election for this? And then my attorney replies back, no, we don't want the S election on this one. We want to treat it as a disregarded entity. And that made a lot of difference. So there are issues. You got to have these two talking to each other. So there's a good example of it right there. And our next presentation was on St. Robert, just that under-the-radar market. That we've done so well in and our clients have done so well in for so many years. And Sarah, before the St. Robert presentation at the break, I remember you said something to me I'll probably never forget.

Uh-oh.

And, oh no, I really, I was really pleased to hear it. And it was that out of all the clients that have purchased in St. Robert, all of your clients, you said nobody has ever complained. There's never been a complaint. Wow. Wow, that's pretty awesome.

I sure hope I don't get flooded with calls after this podcast.

Yeah, by the way, you know, we didn't mention this, Sarah, but 2 years ago we had this and that, and, you know, we're complaining. No, I don't think you're going to, but, but yeah, that's pretty good feedback for St. Robert, huh?

It is. Zach's a really great, great guy to, you know, work with, and, you know, he's, he's one of those people that's very detail-oriented. We were kind of making some cracks Some of our investors were making some cracks to that tune because— or was it Steve that asked how many toilets there were in all the units just because he's so detail-oriented?

Oh, that was hilarious. Yeah. He has better demographics information than the Census Bureau by a long shot.

Absolutely.

Yeah. That's true. So, and then they asked, are those commercial toilets or residential-type toilets? Which style? Low-flow or— it's pretty funny.

He's still looking that information up. Yeah, he can't resist.

He's a, he's a bit of a wonky egghead guy. But, but yeah, he's great. He really— it's amazing how well he understands finance and what a good opportunity that market has really been. It's a market I own. It's a market that's totally under the radar. You're never going to hear about it. Probably not anywhere else. But yeah, no, it's, it's very good. Steve, any thoughts on St. Robert?

Well, just that it's not going to be around forever. Yeah. He set his end dates as to when he's going to stop building. And so, you know, those cash-on-cash returns on, on new duplexes, new fourplexes in St. Robert, we can't get those anywhere else. That's the highest. So if you're interested in something like that, the clock is definitely ticking because Zach doesn't want to overbuild.

Yeah. So, so the deal there is that the projection is unless something changes dramatically, is that we will be out of St. Robert completely in first quarter 2014. So there you go. Okay, and then Steve, you actually did the Indianapolis presentation. You used to live in Indianapolis, and that's actually where I, where I met you, in Indianapolis. So what, what were your thoughts and feedback about that market?

Well, Indy continues to be a great market. We've been there for quite a while, long before You know, anybody else was talking about Indy, our clients were buying great properties there, making great cash flow. It's a steady market. You know, it's always tracking within a couple of points of inflation on its appreciation level, but it's probably got some of the highest cash-on-cash returns right now. There's a few other markets that do really well too, but especially when you're looking at newer properties, the Tier 1 type stuff, I think Indy would be your top choice right now for that. And It's kind of at an earlier stage than Atlanta. You know, Atlanta has seen a lot of private equity going there, bidding up properties, and Indy is just starting to see that now. So I think for that reason, it's a really opportune time to get in there before a lot of the private capital arrives.

Sarah, any thoughts? I mean, you've done a ton of business in Indianapolis over the years. And I, and of course, I own there as well. Any thoughts that you had on that?

No, Indy's been a pretty steady market and, you know, it's one of the markets where we get a variety of inventory. We have a few different providers there. So, no matter what your risk tolerance is, I think we can find you a good fit there.

After lunch, we talked about the San Marcos market and that's a newer market for us just outside of Austin, Texas, but seems to be going quite well. One of our investment counselors actually moved to San Marcos and she lives there and likes What did the two of you have to say about San Marcos?

Yeah, well, San Marcos is, is part of the Austin, Texas metro area and gets a lot of the benefit from it. I mean, it's only a half hour south of downtown Austin. So it's really right there in that metro area. A lot of good economic things happening in San Marcos. And we have brand new construction homes there that, you know, almost 9 times out of 10 are leased before you even close on them. And, you know, a lot of what we talked about in San Marcos was whether our pro forma was right, because we, on newer properties, we account for a 3% maintenance percentage. But a lot of the clients in the audience who have purchased new properties with us have said, I haven't had 3%, I haven't had to put a penny into my new property for quite a while. And so that's why we think the return is going to be actually even better in San Marcos, but we want to, you know, do the responsible thing and put that into the pro forma. So, we think, you know, this is a rare instance where in the Austin metro you can get cash flow in that kind of an appreciating growth market. In markets that are growing like that, it's rare to get cash flow anymore because it's, you know, it's not 2010 anymore.

And that's going to get a lot worse. I'm just going to tell you folks in terms of cash flow. So, There is your urgency statement. Sara?

Well, the good news about San Marcos is we have inventory there now. I know inventory has been, you know, short in some of the markets, and I imagine after this podcast we may be— we may get a couple calls. But brand new construction, already built, you don't have to wait, you know, 120 days for your deal to be built. So in terms of getting your mortgages aligned, this would be a great fit for someone who's looking to close in 30 to 60 days. So great opportunities there. I don't know how long we'll have already built inventory. I guess it just depends on the demand.

So, and then our next speaker, we talked about self-directed IRAs and 401s and various retirement planning vehicles, which is always a great topic. People always have a lot of questions. And I think the government is coming for your retirement plan, just like they did in Argentina. It's a low-hanging fruit. It's a place where there's a lot of money. Call me paranoid. I've talked about it on prior episodes, but either a crisis will just happen or they will engineer a crisis, which in the world of warfare is called a false flag, and that will give the people in government the right to step in because we need to be protected, us little people. We can't do it without big government. And, you know, that's how the Patriot Act went through after 9/11, etc. And, you know, and that's not all bad, but a lot of it is. And one of the, one of the things you can do, I say, to protect yourself is get your plan self-directed so that, that, that those assets become very fragmented and they're not easy for an overreaching government to get at. If you have a brokerage account in your retirement plan, That's a paper transaction. Just turn it over to us. It's in the name of the government, and we'll have a new program that's kind of like Social Security. And hey, that's all worked out so well, that Ponzi scheme, it's basically broke. We'll put you into that plan, and you don't have to manage your own retirement plan. We're gonna, we're gonna bring that in the public sector now.

Oh, they'll bring it in. The first rule, if you don't want your car broken into, is not to leave your iPad and a stack of cash.

Right.

And, you know, and the same thing with your IRA. When it's denominated into hard assets that you've taken title to, that's a lot harder to get— for the government to theoretically get its hands on than if you had it all just stacked up in a brokerage account waiting to be taken. Because as you've said before, you know, click a few computer keys and that stuff is gone.

Right, exactly, exactly. It's, uh, it's all just fiat money. It's an electronic transaction. Hard assets, much harder to value, much harder to find, much harder to transfer the title of, etc., etc. Sara, any thoughts on self-directed IRAs?

Self-directed IRAs, great way to invest in real estate. The one misconception, and I don't know if it's a misconception, if there are any lenders out there that are listening that can finance deals within the IRA, you know, we need a non-recourse lender, let us know. But I haven't had a lot of luck at getting financing in the IRA. So, you know, you're looking at mostly cash deals.

Yeah. And I just want to clarify what you're saying. There are companies that say they do it. The problem is when push comes to shove, it seems like they really just don't want to make the loan. So that's the dichotomy there. Okay.

Yeah, they just give a lot of hoops to jump through. And you end up having to choose a market that, you know, quite frankly, doesn't make sense to invest in because they don't like that zip code or They want more money down in this zip code, or, you know, whatever it'd be.

Yeah, they'll just find any reason not to make the loan. So that's, that's one of the problems. Well, I spoke a little bit more, and I talked about some of my stuff that I'm always talking about on the show. But I always try at Masters to give some new stuff, like the, the second 10 Commandments, the next 10 Commandments, which we did. And then we have had Doug finish up on his, his end of the world topic. And everybody was totally depressed. No, I'm just kidding. Because really what we do is we talk about how to win, how that will hurt the country. It will hurt most people, but people following our plan actually benefit from these disasters. And if you're not so pessimistic, if you think things are going to be okay, if you don't think the dollar is under attack, that it may lose reserve currency status, that you don't see that the government is broke with $16 trillion in debt, and, you know, another, uh, $60 to $120 trillion in entitlements it can't possibly pay for. If you think all of this is okay and you think we're just being too paranoid, well, if none of this stuff happens, guess what? Our plan still works. So, so, so that's the great thing about it. And then I just wrapped up on some general investor principles, which I think were well received, and some Q&A and some people sharing Their thoughts and questions from the weekend, and all in all, I just think it was a fantastic Meet the Masters event. And thanks to you for participating. Thanks to the audience, all of the listeners who came out to that event, and our speakers, of course. Just a great event, and we look forward to the next event, which will probably be a property tour. We're working on that right now. So look for more details on that. We're thinking it might be in Memphis. in March. So stay tuned. We'll let you know more about that, folks, and keep looking at JasonHartman.com under the events section and listening to the podcast where we'll announce it. Anything else you'd like to say in closing? We should wrap up here.

No, I mean, that's about it. It's, it's been great to, you know, put some faces with names, and I hope to see some of you guys at our next tour.

Yep. Looking forward to meeting more of you at the next tour and doing some more events this year where you get to shake hands and meet other investors. And learn about the practical side of this business and how it can help you out.

Oh, hey, speaking of events, I wanted to mention that I will be speaking, and I know Steve, you're coming with me next week in Orlando, Florida at the World Money Show. I'm one of the speakers there. So if you happen to be in the Orlando area, feel free to come by and say hello. And we're always talking about our own events, but I speak at other people's events too. And I'm speaking at the Survivalist Conference in Nashville, Tennessee in mid-March. March as well. So a lot more speaking engagements that I don't talk about that are not our events. I'll be in San Jose, I think that's in mid-February, I can't remember the date. But you know, if you're in any of these other areas and want to meet us, feel free to reach out and we'll, we'll fill you in on exact dates and so forth. Okay, Steve and Sarah, thanks so much for joining me today. And folks, we will talk to you on the next episode of the Creating Wealth Show. We've got a great episode 297 that has already been recorded about a lot of current events And then we've got a whole bunch of great guest interviews that are already in the can recorded. We've got Steve Forbes coming up. That's going to be a real highlight. And we will talk to you on the next episode. Thanks for listening.

Thanks, Jason.

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