CW 716 - Real Estate Will Never Be The Same & Be a Pro Investor with REI Software - Michelle & Jason

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Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to episode number 716 and thank you so much for joining me today. This is your host, Jason Hartman and we are, we are getting up there in the numbers, I tell you, 716. Thank you for being with us for so many years. So many listeners have been with us for a long, long time and I hope you're one of them. If you're new to the show, then dig in and feel free to go back and listen to what we call the back catal. There's a lot of very useful information and look, it's just a small assignment. It's only 715 episodes.

So dig in as much as you like. I've got with me Michelle Hawkins back on the show. She was on several episodes ago. She is going to be teaching part of our upcoming event in Phoenix on September 10th and 11th. It's a first time for this event where we're going to be talking about using software to become a better real estate investor in terms of evaluating your investments. That's the first step, right? Knowing what you're getting, standardizing data and then also tracking your investments on an ongoing basis. Software can really make the whole thing so, so, so much easier. It's amazing. Michelle, welcome. How are you?

I'm great, Jason, thanks for having me.

Good. And give our listeners a sense of geography. Where are you located?

I'm in Santa Clara, California, which is the heart of Sil Valley.

Silicon Valley. A famous place where they don't make any silicon anymore, by the way. I don't think I actually, I think intel, intel has, is that a fab that intel has there? You may not know this, I don't know it, but they have an office there of course, in Santa Clara, Silicon Valley is a bit of a misnomer nowadays because that manufacturing is mostly done somewhere else. But it's. It's certainly the high tech capital of the world, isn't it?

It is. Well, it says designed here in this area usually.

Yes, exactly. You know, it's kind of American philosophy of we think and they sweat. In other words, the idea being that we outsource manufacturing offshore to more friendly, more business friendly places that don't have OSHA and the EPA and all of that stuff to deal with. And then you have this whole group of people that actually thinks that, you know, China can be polluted, but we got to have really strict environmental regulations here. As if we don't. As John F. Kennedy said very fittingly, he said we all breathe the same air, you know, as if it doesn't circulate around the world. But lest we go on a tangent. Huh, Michelle?

Right.

Yes, this may be a tangent. A little bit alert. A little bit, Yeah, a little bit. Oh, gosh. Well, hey, before we dive in and talk about the upcoming event, which I am so excited about, since you are a professor, you're probably gonna be. You're just gonna totally out organize me. I just know this.

So this event is probably gonna be very organized and very nicely done folks. If you've been to our events before and you know, you kind of felt that a little bit of it was kind of off the cuff. Well, you're right, it was.

This event will probably be much better organized at the very least for Michelle's part of it, maybe not my part, but for Michelle's part. So we'll dive into that in. And also it's a buying event, so we're going to have several of our teams there, our local market specialist as well. But Michelle, before we jumped on the air today, you mentioned Pittsburgh. Something big is going on there, isn't it?

Well, there's just that new article that came out talking about autonomous vehicles. Yeah, somebody I know likes to talk about those.

Yeah, that would be yours truly. And I tell you folks, this is all coming so much faster than many people think. This announcement that Michelle's mentioning is an LA Times article and of course it's spread all around the media because it's all syndicated. Uber is about to start giving rides in self driving cars. Yes, the robot cars aren't coming. The robot cars are here. The article says a fleet of Fords and Volvos capable of driving themselves is full, fully equipped and ready to hit the streets in Pittsburgh within not months. Not years, not decades, but within weeks, yes, within weeks, these cars will be deployed by Uber, the ride hailing company. Gosh. I guess that's a new way. Oh, that. You know what, Michelle, that's interesting. They use that phrase, the ride hailing company. We used to call this ride sharing. And I guess if there's not a driver in the car, which is eventually where it's going, obviously it's a ride hailing company where you're hailing a machine, you're not sharing a ride with a person. So that's an interesting distinction, a change in vocabulary there. Experimental robot cars already prowl streets and highways, but in this case, Uber customers will be inside.

Wow.

It's an amazing time to be alive, isn't it?

Oh, definitely. I think it's really exciting because actually, one of the things I don't like about Uber is that I don't know who I'm getting in the car with. And if I'm traveling by myself, that's always made me feel uncomfortable. So this actually, I think is fantastic.

Well, just in comparison, though, you know, I always like to ask, compared to what? I mean, compared to some stinky, dirty taxi, As a woman, you didn't feel a little more comfortable in an Uber X or an Uber black car than you did in some dirty, stinky taxi? The old case. I don't know. Maybe, you know, maybe. I mean, look, taxis were marked cars.

Exactly.

So I don't know. You know, that's an interesting question. I, as a guy, I felt safer in an Uber, but tell me what you think about that.

Well, I don't know. The taxi system was just had been around forever and it, you know, who knows how much those folks are vetted. And supposedly Uber's drivers are also vetted. But it just seemed like it was more of a company, you know, it just seemed like it had more structure behind it, whereas almost anybody could be an Uber driver.

Yeah, yeah, fair point, fair point. Yeah, that's interesting. So last night, as I mentioned to you, I went to see Star Trek with Fernando and his family, and he's got two boys ages 12 and 14. You know, one of the things he says that's really a burden as a parent is chauffeuring the kids around to various activities and so forth. And I said, and he didn't know the answer to this. I said, you know, can't you just, you know, one of the younger boy doesn't have a smartphone, the older one does. I said, can't you just have him download the Uber app? And jump in an Uber. I mean, I would have done that as a kid if we had Uber. We didn't obviously, but I went all around on my bike. My mother had no idea where I was most of the time. But that was a different era, you know, five years ago when I was a kid.

Ten years ago, actually, it was 10 years ago, I think. I don't even know if that's legal. Like, would you get arrested? Would your kids be taken away by child protective services if you allowed a 14 and a 12 year old to hail an Uber? I don't know if the Uber driver or the Lyft driver would pick them up. You know, they, they probably have their own requirements, but I'm just kind of wondering, do you're a parent, do you know the rules on that?

You know, I don't know the legal rules. I do know that I know of a specific child, I think he was around 10 years old, who his parents sent him on an Uber to a rehearsal. So I know it's been done. And I know that there are companies that cater specifically to, you know, driving children around.

Oh, really?

But yeah, I didn't know about those. I don't know what they're called. I mean, they're usually, they're attached to a specific program where, you know, if you want your kids to have the after school tutoring, they'll pick them up from school, take them to the tutoring center, and then maybe even take them to your house. I'm not sure.

Interesting.

There's, there, you know, there's always an entrepreneur out there.

Yeah.

Coming up with these ideas. But, but I have two daughters and so as much as I hate to say it, it's, it feels different to have daughters. Fair enough, fair enough. And I would not stick them in a car on their own.

Just how old are your daughters?

They are 7 and 10.

So when they're 16, would that be okay? Or I, you know, I don't know, I'm sort of wondering what's the, what's the rule on that? Parents out there, chime in if you want. Now give us some feedback.

I told the older one, I said, when you turn 16, you are getting your license, end of story. Because I don't want to drive her around anymore.

Right. So. So maybe it's safer to be driven than to drive themselves. That's a strong possibility, you know, because there are other factors with driving themselves. Right. But yeah, yeah, definitely. Interesting. I tell you, if I ever have a daughter, I will lock her up in the house until she's 35, but.

You know, she won't be able to go anywhere. Just kidding. But yeah, it's, this is really amazing. The article goes on to say that Uber is accelerating its plan to replace its 1 million. Wow, that's insane. Talk about, talk about job creation. And then as Joseph Schumpeter, the economist talked about creative destruction, first of all, the creation of 1 million jobs, that's, that's what Uber's created. That's ins. That's incredible. And then, you know, we're not even talking about Lyft and the other ride sharing companies. L yft by the way, which is great. I love Lyft. I absolutely love Lyft and I think the drivers like Lyft better. But lest we get on a tangent.

And customers.

Yeah, and customer. Oh, you do like it better too, right?

And I've heard from my millennial students, they like it better.

Yeah, Lyft is kind of a friendlier company I think in a, it's just a different culture. So I try to take Lyft whenever I can because as much as I love Uber and the innovation, I want Uber to have a competitor. So it, the market has competition and Uber is obviously much, much bigger than Lyft, so that's important. But you know, they're, they're accelerating, it's accelerating its plan to replace 1 million Uber human drivers with robots as quickly as possible. Uber chief executive Travis Kalanick, I think that's how you say that. Said in a blog post Thursday, he also announced a partnership with Volvo to work on driverless car development and the acquisition of Auto that's Otto, a driverless truck technology company. I was just reading an article about them the other day. What they do is they retrofit big trucks like semi trucks, big giant trucks and make them driverless or self driving. And they said they are going to be close to the point pretty quickly where the truck, I'll say in quotes, driver can be sleeping in the cab, just taking a nap as the truck, a semi truck drives itself. And they said there's never been any mishaps with their system. So it really is obviously very amazing. It's why I purchased, purchased a Tesla last December. There has been one fatal Tesla accident that their technology I believe was at fault for. And that's, that's when a tractor trailer pulled in front of the car and the car didn't recognize it because the, the four, the three or four feet below the trailer was open. But it, you know, the sensor didn't sense that. Hey, you know, there's. The whole car's got to clear the space here, obviously. And the driver was just, I'm sure, decapitated. It's pretty terrible. But he was watching a Harry Potter movie, so he probably shouldn't have been doing that either. But, yeah, while he was driving. So why are we talking about this, folks? Because it has a huge impact on real estate. As I've said before, the three primary rules of real estate have always been, always, throughout history, back to the cave days when we were living in caves, have always been location, location, location, and driverless technology. Autonomous vehicles make location less meaningful than it's ever been in human history. And there's another huge factor, obviously, because we just talked about 1 million Uber drivers being replaced by robots. There is the whole question of employment or unemployment and what AI, robotic technology, all of these incredible technologies that make it an amazing time to be alive. What do they mean for jobs? Will your tenants have jobs? I just did an interview for a. A new podcast that I was actually hired to host called For Capitalism Dot Com. It's my friend Ryan Moran's kind of passion for Project to Save Capitalism for Generation Y. He's a generation Wire, and. And he believes that they're leaning towards socialism. I did a show for them recently that was about the destruction of capitalism through artificial intelligence. And I, you know, I don't know how this is all going to play out. It's. It's pretty weird. But a huge industry globally is transportation. As so many of our listeners have pointed out, if we're going to have rental properties, our tenants probably need to have jobs. Well, you know, if you're renting to Section 8 tenants, a lot of them don't have jobs. They're just on, quote, disability, unquote. It's amazing how many young people are disabled nowadays because the government pays them to be disabled. But, you know, that's a. What gets rewarded gets repeated, right?

Definitely.

Yeah.

Have you noticed I'm doing all the talking here?

Yes, but you're really good at it, Jason.

Sorry, Michelle here. I ask you to come on the show with me, and then I don't shut up. Huh? That's fine.

I would say we're more than leaning towards socialism.

We're galloping toward it. Yeah.

With full speed ahead.

As Howard Ruff says, we're galloping toward it. And I love what you said to me when we first met. You know, of course, you're a podcast, listener to the podcast and a client of ours, and then you've gotten involved with Our real estate tools company. And you're doing some great work with real estate tools and that's why you're teaching part of the course coming up in Phoenix in September. But the greatest line ever was what you said to me. Do you remember? Do you know what I'm going to say, Michelle, about.

I do. It's lonely being a libertarian in San Francisco.

It really is.

It's lonely being a libertarian in San Francisco. How many of them are there? Is your husband a libertarian?

Yes, I would say so.

So there's two.

At least there's two that I know of. I have met in the Bay Area. I know one other actually. Actually? Well, I. I do actually belong to a very tiny book club. There's four of us in there, four ladies objectivists.

So Ayn Rand fans.

Yes.

So. So we get together and we talk about books and novels and politics and blah, blah, blah. So there's at least five that I know of.

And you probably contemplate the question, the somewhat rhetorical question, who is John Galt in your club? Right? Yeah.

Where is he?

Where? Yeah. The question nowadays is where is John Galt? We certainly need some John Galt's in the world, don't we? But very interesting stuff. Tell us about the event coming up and tell us some of the stuff you're going to be covering. You have. See, you actually know how to educate people, unlike me who just rambles on and on. You have some great ideas for how to present this information. I love some of the stuff we talked about a few days ago when I was in Jackson Hole. Jackson, Hollywood, Wyoming. Share some of that with the listeners.

Well, I'm going to be doing two different presentations. The first one will be on our iOS apps. The most relevant one to your listeners is probably the Evaluator app. And what we're going to do is we're going to take an actual proforma that you might get from any provider. Maybe if you're out shopping on your own and you get a proforma and it tells you certain information, but a lot of times it doesn't tell you the whole story. It doesn't answer every question that you, you might have.

And so imagine that they left something out. Can you imagine? Can you believe it?

So we'll go through the exercise of actually plugging in the numbers and filling in those gaps.

And along the way just explaining why certain things are important to know and what types of things you can be thinking about and evaluating as an investor. And then we can also take a look at that and also some of the variables, we can play around with them and do conservative or more optimistic scenarios. So that you can ask yourself, even if it's under a worst case scenario, is this still a good deal for me? And if the answer is yes, then why wouldn't you go for it?

Absolutely. That's great. Michelle. When I got into this business back in 2000 and 22,004, and what I mean is not the real estate business, of course I was in, back in that, in like I don't know, 1911 or something, it was a long time ago. But into the nationwide investing business.

Two of the, the decisions that I, I think I, I was very fortunate to, to make and make good decisions on this right away were number one, I knew who my customer was. It was the investor, not the provider of the properties, not the seller. And number two, standardizing data, Data standardization, a critical, critical thing as an investor because as I was shopping around trying to do this myself and basically I got into this business and created these companies that do this to become my own customer. Because it was so difficult to buy properties nationwide. The level of.

Absolute incompetence out there was mind boggling. And the kind of junk that you would get from these different sellers of property in all of these different formats. It's like you had to be a detective every time to just analyze a property to underwrite a deal. And the amount of questions back and forth and the emails back and forth and the, the detective work, it was beyond the beyond. I just couldn't believe it. And so that back in 2004, that's really one of the first things I did, data standardization. So you standardize your data and you're a lot less likely to make mistakes when you're choosing a property. And so you have this great idea which is to take some different performas from some different companies out there and then put them into our software and standardize them and see if they even had the complete info there for you to standardize in the first place. Right, right.

Well, a lot of them, they leave out maintenance or they leave out vacancy and they just have a little note at the bottom saying, oh, you should take that into account as well.

Yeah, right. You might to want, want to think about those extra costs that change the whole dynamics of the deal and maybe it's not as good as it looks.

Exactly.

Yeah, yeah. Amazing, amazing. Okay, good, good stuff. What else are you going to be talking about?

Well, the other presentation for me is on the online software, which is property tracker. And that software is designed for really managing your portfolio once you've purchased it. You can also evaluate the purchase beforehand through that software, but then afterwards it helps you to manage them on an ongoing basis. And so we get a lot of questions just around, you know, how do I input all of the information? How do I, you know, input the data as it's coming in, you know, on a monthly basis? So we're just going to walk the participants through that step by step and show them how to do it.

Now, what about Home Flippers? We're not really into flipping as a philosophy. We're into the buy and hold stuff. Are we going to talk about our other app, Property Flipper, if we do have time.

Yeah.

Property Fixer, actually, he changed the name of it. Yeah, right, right, yeah, yes.

If there's time, sure. We can definitely take a look at that app as well.

Yeah. So we've got a little app that makes it really easy. And I know we're not talking to most of our audience here, but there are a few of you out there who are in the flipping thing. We've got a little app for your iOS device, iPad or iPhone that helps you analyze flips really quickly and see if they make sense and see how much money you might make on that deal. So we can do a little short demo on that one, hopefully, too. So good stuff. And then we're going to have our providers there from three or four of our markets that will be talking about the different properties they have. And. And Michelle, you had a good idea for that, too. Take some of those properties and kind of analyze them in some different ways, right? Yes.

Well, we thought we could take some of the properties that they're gonna have for sale and put that into Property Tracker and take a look at it, try different scenarios and.

See if it's a deal.

Be critical of them, right? Be critical of them. Yeah, yeah, that's great. It's so nice to have the freedom of not being attached to any one property or any one market to be able to be property agnostic and area agnostic, because we have this variety of inventory that people can buy. So it doesn't have to be in any specific market or it doesn't have to be any specific local market specialist or type of property or anything like that, right? Yes.

Well, can I tell you, Jason, one of the things that I really appreciate about you and your company is actually the level of transaction transparency that you have, that you can go on your website and you can really see the inventory that your company has gathered, but you're very honest that it's not perfect, it's just better than anything else. So as the investor, you know, you're not just being sold this really rosy picture. You know, that you have to do your due diligence, you have to do your own evaluation.

And I just really appreciate that.

Yeah, thank you. I appreciate that. And no, you can't tell anybody that. So you just did.

Yeah, no, I appreciate that, Michelle, and thank you. You know, we're just here. Our big goal is help people move their money away from the modern version of organized crime known as Wall Street. The modern mind mafia that does a great job separating people from their money. We want to help people become direct investors so they can be in control. And since my head is getting really fat right now and I can barely fit through the door, can I read two nice testimonials we got this week?

Of course.

Real quick. These were on itunes and they were reviews for the podcast. And I sort of much appreciate any of you listening. Please go write a review for the podcast. We really appreciate that. We try to read them on the air as much as we can, but there were two nice ones this week. One from Mark Krupa. Thank you, Mark. Appreciate that. It says, great insights. It's a five star review from a man who practices everything he preaches. Well, just so you know, that's not really true, but thank you. I don't practice everything I preach. Sometime I my own worst enemy. But thank you for saying that. From a man who practices everything he preaches. Very interesting and informative. Talk about real estate investing and beyond. Keep producing these helpful podcasts, Jason. They are valuable. Thank you, Mark. I appreciate it. And then the next one was great. Straightforward advice, information and knowledge. This one it's not. They don't really say the name, so I don't. I think it's Eben, but it's. It might be a typo there, I'm not exactly sure, but it's a five star review and it says Jason has grown and evolved over the years and his podcast mirrors this. Jason, I love your podcast. If you want to learn about real estate, politics and life, listen to this podcast. Jason is a knowledgeable fellow, a funny dude.

And if you can get beyond his rants, which I particularly get a positive kick out of, then you have to listen to this podcast. Thanks again, Jason. So thank you for that. I appreciate it. We will keep churning them out until we get to episode 3562. That's when we're going to quit. I think.

3562. Do you think that's a good number to quit on, Michelle? No. Okay.

All right.

All right. Hey, in other news here, real quickly, just I want to actually give some credit. Yes, credit. I want to commend and pat on the back our president, Mr. Obama, who I don't usually give any cred to, but I think he's done like four good things in office, and this is one of them. And it is. And this is a Business Insider article, but I saw it in a bunch of places in the media. It says the debate over private prisons is masking the real problems with America's prison industry. So you can debate that all you want, but the Obama administration has said that they are going to move away from privatized prisons in terms of the federal government. And I hope states will follow. Because as much as I love capitalism, I don't think capitalism works in areas where incentivize people to take away people's freedom or to kill them. And what I mean by killing them, I mean the war machine, the military industrial complex. These are areas where capitalism, it doesn't work so well.

At least that's my opinion. You know, when I first heard of privatized prisons in the 90s, I thought they were a good idea. I thought, yeah, let's outsource this private industry. They'll do a much better job than the government. You know, they'll be more efficient, it'll be less expensive. But unfortunately, as that great book I've talked about in the past, the Greatest Management Principle in the World, probably written back in the 80s by Michael LeBeau or Michael LeBoouf, and the thesis of the book is what gets rewarded gets repeated. And the prison population has skyrocketed and laws have become more draconian, they become stricter because there's this whole industry that is incentivized by finding reasons for people to break the law so they can be imprisoned. There's a whole other industry, the military industrial complex, that finds reasons to go to war because it's very profitable. And that's the central bankers, of course, are in on that deal. They have been for a long time. So, yeah, I don't want to see prisons privatized. I want to let that one go back to the government. Am I crazy? Michelle, what do you think?

No, I don't think so. I mean, even as a libertarian, we recognize that there are certain areas where we do need government. It's not a no government philosophy. It's just limited. But there are certain functions that are the primary responsibility of government. And I would definitely say, you know, law enforcement and incarceration would be some of those things.

Yeah, yeah. And like Ayn Rand says, the government has to maintain the monopoly on the ability to inflict violence because occasionally you need to. And that needs to be only the government that does that. And in a way, privatized prisons are inflicting, in a sense, violence. You know, the government needs to maintain the court system. And these are things that even Ayn Rand and says, you know, the government needs to do. So. I, I agree. And, you know, infrastructure in general needs to be the government's responsibility, but please, get the hell out of everything else in our lives.

That would be great. I mean, talking about the prison population exploding, you really have to talk about our drug laws. And I know that's a tangent and a whole can of worms, but it's just really a national travesty. I think with the. What's going on.

It is. It really is. You know, drug addiction needs to be treated as a social and a medical problem, if you ask me. Yeah, we got to stop incarcerating people for that. So, you know, I'm going to give Obama some credit. He's pardoned a lot of nonviolent drug offenders. Now. I haven't looked at individual cases. I hope I'm not sorry for saying this. This move by the DOJ away from privatized prisons I think is a good one. And, you know, it's. We'll put it up there with, you know, the five good things Obama's done in eight years.

I'm not exactly a fan, in case you haven't noticed, but I'll give him credit where it's due.

I'll. I'll never forgive him for Obamacare.

What a disaster. That's already falling apart. So it's just an epic disaster. Yeah, yeah, we can talk about that on another show, but I know we got to wrap it up, so. Michelle, thank you for joining me.

Well, thanks for having me.

Yeah. Couple. Another quick announcement, folks. We've got a great event coming up just in about, I guess. What is that? About 10 days away in Seattle, our Venture alliance weekend. That's on Labor Day weekend. And if you'd like to join us for that, check out venture alliancemastermind.com for the software and buying event, which is the next the following weekend, September 10th and 11th. Go to jasonhartman.com, click on the event section and join us for that. There's still the second tier of early bird pricing for that event. And I know some of you missed out on the first early bird tier and you were kind of bummed about that, but the room is filling up. You gotta register ASAP. Jason hartman.com events and we look forward to seeing you there. Michelle, thanks again for joining me.

I've never really thought of Jason as subversive, but I just found out that's what Wall street considers him to be.

Really? Now how is that possible at all?

Simple. Wall street believes that real estate investors are dangerous to their schemes because the dirty truth about income property is that it actually works in real life.

I know. I mean, how many people do you know, not including insiders who created wealth with stocks, bonds and mutual funds? Those options are for people who only want to pretend they're getting ahead.

Stocks and other non direct traded assets are a losing game for most people. The typical scenario is you make a little, you lose a little and spin your wheels for decades.

That's because the corporate crooks running the stock and bond investing game will always see to it that they win. This means unless you're one of them, you will not win.

And unluckily for Wall Street, Jason has a unique ability to make the everyday person understand investing the way it should be. He shows them a world where anything less than a 26% annual return is disappointing.

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This show is produced by the Hartman Media Company. All rights reserved. For distribution or publication rights and media interviews, please visit www.hartmanmedia.com or email mediaartmanmedia.com Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate or business professional for individualized advice. Opinions of guests are their own and the host is acting on behalf of Platinum Properties Investor Network Inc. Exclusively.