CW 864 - Airpod Raffle Winner Reveal & JHU Live with Jason and Investment Counselors

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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 multi millionaire 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 the Creating Wealth Show. This is episode number 864. And this is your host, Jason Hartman coming to you again from Tallinn, Estonia. And you know, a funny thing happened to me this morning here in Tallinn, Estonia. Estonia is of course up in the Baltic States. It's the highest country and it's just a beautiful place. I've been here before and the significant thing that happened this morning is that I went to the exact same coffee shop that I did another podcast from about nine years ago when I was here before, that is back in the early days of my podcasting. I don't know what episode number that was. I'll probably go to jasonhartman.com and search around a little bit and see if I can figure it out for myself. Because I found the exact same coffee shop. See what little things make me excited. I even took a picture of it and I thought, you know, I did a podcast from that coffee shop when I was here last time. So that was really, really kind of cool. Anyway, hey, we've got a few things to do today. One of them is to announce the winner of the AirPods contest. And a big congratulation goes out to client Jordan Callaway. You are the winner of the Apple AirPods. So contact your investment counselor, that is Oliver, of course, and give him your information so we can ship those AirPods out to you. And congratulations on winning those. And then of course, many of you have already entered our newest contest. By the way, we love these contests because we get so much great feedback from you and so many great questions for you. And we had two investors inventive new questions that we asked for the Amazon Echo Contest and you can enter@hartmaneducation.com contest. That's hartmaneducation.com contest where you can enter that and answer those two little questions. I think they're pretty creative. I hope you like them. We ask you, what is your favorite aspect of my investing philosophy? Assuming you have one, I hope you do. And then we also ask you to look back almost 10 years to 2008 and say, what would you tell your 2008 self about investing? Looking back, you know, what would you do? What would you say to yourself back then? And we picked 2008 very specifically, by the way. We didn't go 10 years back. You notice we didn't say 2007 because we wanted to sort of time that with the Great Recession and the financial crisis. So that was very specifically picked by yours truly to say 2008. So what would you tell your 2008 self about investing? You can answer these questions in one sentence if you want. We don't mean for this to be any big burden to you to answer those questions, but we really would love to share those on the air, so. So please go and do that. And of course, enter the contest@hartmaneducation.com contest. And I do need to make a distinction for you. This is not a contest. Yes, I know we should say raffle because that's what it really is. It is a random raffle. We picked Jordan using random.org and that's how we pick it. It's not a contest. A contest is where you have to actually perform and do something. So we are not judging anybody on how good or bad their answers are. It's just a raffle. But we love your answers and we love your comments and your questions. And as you know, I've been answering those on the show and I will continue to do that on future episodes. But today I want to share with you a live clip from one of our events. I think you'll find it valuable. It was an event we did in the note too distant past, but it was a time when we had more inventory of properties than we do today. And we just were. We just had our monthly team call with our team a few minutes ago. I was here on Skype talking with everybody. It's an amazing time to be alive. You can communicate around the world. Just it's. What was that commercial? It's just like being there. Wasn't there a commercial with something like that maybe for AT&T or something like that? Yes, I think so. Or it's the next best thing to being there. Something like that. And so anyway, we did our team call? And a funny thing happened when we were talking about inventory. We were talking about.

One of the difficult local market specialists that we work with and how they started working with a competitor of ours. And we thought, bless them, let them go and work with our competitor, please. Because we know that every client who buys from them will probably have a difficult time. Certainly our competitor doesn't do nearly as much business as we do. And you know, it's kind of sometimes if you've been a business owner or maybe you've been a married person and then you got a divorce and you thought, you know, that employee that's just not very good, send them to your competitor, that's great. And maybe that spouse that hasn't been a very good spouse, send them over to the next person. So, yeah, that's. That's kind of what we were thinking. Not exactly the best thinking, but anyway, true nonetheless. Okay, so we have got this little live clip I want to play for you and it's about 15, 16 minutes long. But I have another big announcement. Meet the Masters 2018. Yes, it's a few months away for sure, but this will be in January and it will be in San Diego. And we will announce the venue very shortly. But we are going to make that available for you to sign up very soon here@jasonhartman.com in the events section. And we've got an early bird price and this year it is going to be a bigger event. We might even have two stages where we'll do breakouts. We haven't decided yet because we're just looking at the speaker lineup. We're going to have some celebrity speakers that we are budgeting in for this event. We've got a very good sized speaker budget this year. We've never done that before. We've never had big, expensive paid speakers. But we're going to have some celebrity speakers and it will be a three day event. Yes, three days, not two as usual because there's just too much stuff. So it'll be a Friday, Saturday and Sunday event. And there will be some nice variety in this event too. We've got two new inventory lines that we want to talk about and one of them that we've really been doing for a while now. Some people are under the belief, and I want to make sure I correct this perception for you, that we have only turnkey properties. That is not correct. We do have a small amount of non turnkey inventory and it is priced accordingly. And there are some investors who actually prefer that. Most of our Investors, I would say, are the turnkey type people that want the turnkey properties. They want that simplicity and they are not concerned, concerned about shaving a little bit off the price, you know, to have that simplicity of the turnkey type property. So with that in mind, I just want to let you know that not everything we have is turnkey. Okay? So make sure you talk to your investment counselor about that. Of course it will be priced in accordingly and that will all be available to you so you have the widest degree of choice. Okay, so the, the early early bird special for Meet the Masters without speakers being announced, without the exact venue being announced, just that it's in San Diego in January without the exact date because there's still a few little minor details we're negotiating on the hotel contract. But we've got a beautiful venue and it should be our best one ever. And that early bird price is available until August 20th, until August 20th. 8:20. And that will be 497. And there's a little bit of a kicker, a little bit of a special coupon deal also. And that is if you have closed on a property with us this year, contact your investment counselor for a nice coupon deal where it'll even be a little bit less expensive than that. So 497 is the early bird. And if you've closed on a property this year in 2017, talk to your investment counselor and ask them for the promo code that will give you an even better, better deal. All right, I just wanted to grab one quick question before we go into the live segment here. And this comes from our listener, James. James. James, thank you for the question. And he says if someone has a foreclosure in the past, is it possible for them to repair credit so they can buy investment property? Do you recommend having a partner on your business or investments? And what do you think are the best up and coming markets to have exposure to for the coming decades? Okay, so a bunch of questions there. Let me just grab them kind of quickly. Yes, good news on the foreclosure. You can definitely repair your credit. Well, I don't want to say definitely, but you can definitely hire services or read the books that teach you how to do it yourself. To repair credit, that is certainly possible, not guaranteed. I shouldn't have said that. Nothing's guaranteed except what, death and taxes, Right? Those are the two guarantees in life, death and taxes. But yeah, many people have done this and there are a lot of shysters out there that do this kind of credit repair stuff. But There are some companies that actually can make it happen. I would say be careful of anyone who wants to charge you big upfront fees. Run for the hills on those. The ones that make big promises and charge big fat upfront fees. You want to hire a service like this that charges you low monthly fee because this is a process and that is the recommendation I would have. Feel free to ask our investment counselors for referrals. We do have a couple of them that some of our clients have had good luck with. And many, many people, millions and millions of people, chose out of free choice, not out of desperation to let properties go during the financial crisis. And. And they call that strategic default. We've done many, many shows on that where we've talked about it. And in some cases it was a very good decision. Not always a good decision, certainly it's what I call the nuclear option. Right. It's the last decision you want to make. But sometimes it can be a good decision because remember, that's the deal you enter into with a lender. The deal says exactly this. It says, either I will pay you the payments with interest or I will give you the collateral. That's the deal. And so you may choose to just give them the collateral at times. Okay. So that is certainly an option out there. Okay. Do you recommend having a partner? Well, partners can be good or bad. My late grandmother used to say to me years ago, the hardest ship to sail is a partnership. The hardest ship to sail is a partnership. And that is true. But partners can also be a great asset. You can have some great partners. And I would have to say that in business, I have had some bad partnerships over the years, but business is much more complicated than a real estate deal. In a real estate deal, I've had some great partners. I've only really had one bad partner. In a real estate deal. Well, it's complicated. I talked about it before, but I did have one bad real estate partnership. All my other real estate partnerships have really been pretty good. I really do like my partners and they have brought a lot to the table. So in a real estate deal deal, as long as nobody lives in the property, and it's an arm's length deal for both of you, the partnerships are pretty good and they, they can be pretty good. I've detailed in past episodes how to sort of structure those partnerships so that you can stay out of trouble. And as long as it's an arm's length transaction, it can go pretty well. In real estate. When it's a business, though, and there's so much more complication. The partnerships can get more sticky for sure. Okay, and then what are the best up and coming markets to have exposure to for the coming decades? Well, easy. Jasonhartman.com properties and there they are. They're all the markets we recommend. And I take you back to that Meredith Whitney episode that I did a couple of years years ago. We really should have her back on the show where she, she wrote that book called the State of the States and really outlined the states that have the best futures and the ones that have the worst futures. And we have in many ways followed those guidelines in picking the markets that we recommend to our clients. So you can see those all on our website@jason hartman.com and your comment was? I find that Jason Jason has great advice and guests that resonate with me. Many other podcasts are about Internet marketing information, products, coaching, etc. Etc. But the Creating wealth podcast covers real techniques and advice that is tried and true. Thank you, James. I appreciate that comment and I appreciate the questions. And folks, please go write a review for us on whatever podcast platform you're listening on on probably itunes. But if it's Stitcher Radio or whatever, we would very much appreciate your rating and reviewing the show, especially with all these nice comments you've made. So thank you for that. Okay, remember hartmaneducation.com contest for the new contest for the Echo. And by the way, I have to say, I absolutely love my Amazon Echo. I have have three of them in my house and I have one that's on my smartphone because there's an app for that, right? And it's great. It can order your Uber. I don't think it orders Lyft and I like Lyft a lot. But when I'm at home, I just say call me an Uber. And by golly, my chauffeur shows right up at the house. It's pretty great. And you know, if you want to ask it to look something up on the Internet for you, if you want to ask at what's playing at the movies, just a zillion other things. It's a very handy tool. It can order stuff from Amazon for you. It's just great. So go enter the contest to win that. Remember, your odds are great when you enter our little contest@hartmenteducation.com contest. It's there for you. And congratulations to our winner of the AirPods. Be sure to talk to Oliver and give your information, Jordan, so we can send you those Apple AirPods. And let's go to that Live segment. Here it is.

All right. You, you work on opening new areas for us.

Right.

And dealing with these local market specialists. And there are some that we accept and decide to do business with, and there are others we reject and don't do business with, and we kind of don't hear too much about those. So, you know, I wanted to maybe give you an opportunity to just talk about that a little bit and give the, give everybody a sense of, you know, what it's like opening new markets and, you know, just any thoughts you have on it in general. This is very informal, obviously.

Well, first off, we define the market. A lot of people ask, you know, why aren't we in Philly, why aren't we in North Dakota?

That's where you used to live.

That's where I used to live.

And we, and when we were looking at doing business in the oil sands areas and a lot of this stuff in North Dakota that's going on, I asked Kerry about that quite a bit. I'm glad. Now we didn't do that because that's just like overpriced real estate and that's sort of this secondary thing, right. You have the oil boom and then in response to that, there's a real estate boom and it's just one horse town type stuff.

Right. So there's a lot to take into consideration, you know. Well, like what Brian was saying, you know, the economic growth, the population growth, you know, what's going to drive your renters to live there and stay there. So we take a lot of that into consideration when we're looking and researching for markets and providers. Once we find the market, then we have to match it up with the provider and their properties and their inventory. And, you know, is it going to give us enough inventory of single family homes? You know, what's the cash flow? It has to be within our price range. And all that's taken into consideration before we actually contact them, reach out to them. And then I go through questionnaire and kind of screen them out, talk with Sarah.

And try to work together to see if even their property management team is going to work with us if they have one. So a lot of things will take into consideration as to why we're not in markets and why we're in markets.

And one of the things I'd like to say about that, and I'm sure you can speak to this, is what I've said before on the podcast. We would rather have an A team and a B market than a B team in an A market because it's just there, it's. We are so dependent when you're doing long distance investing, or even if you're not, I mean, you're still dependent on the team. You have that local market specialist, that property manager, and whether they're going to take care of business or not. Because it's mind boggling the number of people who are number one fly by night. And there are large fly by night companies too that still act like fly by nighters. And just this stream of broken promises just everywhere you look. And it's throughout our society. It's not just in the real estate business, it's everywhere. But, you know, any thoughts on any of that?

No. So, and then, I mean, just bringing them on board and then presenting them to you, you know, we want to do our background checks and make sure and then bring them, introduce them on the podcast and before things are actually out in the open and just kind of test the waters to see what your guys feedback is as well, you know, and how well the market's going to work with our investors and their inventory.

One of the things I will say is that we really like to have them on the podcast because we get a lot of the stuff they say, the promises they make, we get it on tape. Okay. And it's not like the Nixon tapes where eight minutes just mysteriously disappear, but you get to hear that and it's like it's on the record. And we've had many local market specialists over the years who just turned out to be flops, frankly. And so we really just like to get a lot of that stuff sort of on the record, if you will, and really learn about their relationship. And then one of the things that Sarah does, and maybe you can speak to this actually. But wait, wait, wait. Did you have anything more to say? I didn't want to just end it with that necessarily, but if that's the end, then that's the end.

The end.

Okay. The end. Okay, very good. So one of the things that Sarah really does is.

We try to kind of design and engineer a little bit the way we work with different vendors or local market specialists, because there are vendors and you know, based on your feedback, we monitor it really, really closely, but especially in the beginning. Okay. You know, there's that old saying, you only get one chance to make a good first impression. Right. And if that local market specialist doesn't communicate, if you know, we've got to chase them down all the time for details, then, you know, it's just not someone we're going to Ever have a long term, not long distance, of course it's long distance, but a long term relationship with. So Sarah, you know, maybe you want to speak to any of that or any of the challenges that you're just dealing with on a daily basis.

Well, you know, Kerry does a great job vetting through potential LMSs and you know, every week she presents a few to me and we look through the list together and pros and cons and a lot of these people kind of weed themselves out because they don't return calls quickly or we give them a simple task of uploading a property and there's just no follow up. So we may be talking and I think Mac is a good example. I think we were talking to them for a good six months or even longer before we really got going with them and learned their system and them learning our systems and how to upload properties. And that's part of the vetting process is to make sure that if they're not communicating with us very well, they're not going to communicate with you guys. That's really a big part in vetting them.

It's amazing to me how this is a fragmented business and I always say it, embrace the fragmentation because you just got to do it. That's what keeps the big institutional investors out of our business, is that it is fragmented. And by and large, I know there's Blackstone and there's a couple exceptions, I get it. But largely Goldman Sachs is not in our business. Okay. Thankfully. Okay. But the reason they're not is because it's just too hard to deal with. It's just too hard to manage. This is just not worth it for them to deal with this small stuff. And that's what keeps the opportunity for us for the middle class investor. Right. And it's a great thing. But it's amazing to me how short sighted some of these local market specialists are. You know, local market specialists over the years, I mean, many of them I'm sure have made well over a million dollars a year off of our relationship with them. And you know, they'll do like one deal and blow up. Are they idiots? I mean, it's just crazy that they don't see that vision. But maybe it's just us, we did a bad job on selling them on the vision. So I don't know, you know. You have something to say?

No, I was wondering what you meant by one deal blog. Are you talking about several deals with them and then we had one bad apple deal?

No, no, no. We give them one Deal. And they can't even handle one, one referral.

We've had some of those.

Yeah, certainly have.

And that's why we encourage you guys to do your own due diligence. And we want you guys to be smart investors because if you happen to be one of those first people working with a market specialist and you've been to these events and you've listened to Jason's podcast, you know the questions so ask, you know what the red flags are, you can bring those to our attention. Because sometimes you start out, you know, when I start out with a market specialist, I like to start with conference calls. So I'll three way with. With the clients until.

So in other words, the client's on the phone, the local market specialist is on the phone, Sarah's on the phone.

Right.

We love three way calling. Okay. So that communication. So more than one person heard what they said, you know?

Right. And, yeah. And, and so, you know, and sometimes our newer investors maybe don't know all the questions to ask. And so we do a couple of those calls and then they get better at interviewing the market specialists and the property managers. And so anyways, I forgot where, where was I going?

Well, you know, it's, it's really back to the ten commandments of successful investing. Right. Commandment number one is what thou shalt become educated. We want you to become educated so you can be your own best advisor so that you're not relying heavily on us. We think the educated client is just a much easier client to work with. It's just a much better quality client. And that's why, quite literally, and I think you can all speak to this. And Oliver, we were just talking about this maybe last week. We pretty much don't work with people who don't listen to the podcast.

We just don't want them. You know, there's another real estate guru guy who has been bugging me and he says, well, hey, you know, I have this huge email list and I started a podcast and I have a lot of listeners. Why don't I just email your offer to them and we'll work out an affiliate deal. This is a common practice in the Internet marketing world. Or just pay me to send stuff to my list. And I'm like, I just don't really want those low quality clients. They just don't get it if they don't listen to the podcast and they're not educated or they've been listening to some other screwy guy that's like a salesman type that's just not going to work in our system. We want people that really just get it and understand the system and know how to be their own best advisors. So I think the three way calls go light years in that direction.

Right. And eventually you guys get good at doing your own calls and you might not need me to be on a three way call. But you know, especially when we're opening up a new market, it's a good way for me to kind of quiz them a few times and make sure that they're practicing what they preach.

So we've got to wrap up. But any other thoughts?

Do you have any?

Maybe we'll take a few questions. Any questions for our odd panel? We got investment counselors and Justin just threw them in because you don't look like an investment counselor. No. Okay.

Okay. So bam back there. So if you have a local market specialist that's having problems, I mean, I don't know what kind of problem, I guess.

Yeah, usually it would be related to property management. In which case, if we don't already have a secondary property manager in the market, we would probably start looking for one as soon as there was a sign that, you know, the fact of the matter is some of these property managers grow too fast and the customer service goes down or they're not marketing the properties and you'll start to see like a little lag time in, you know, how quickly properties are getting released and things like that. So.

We rely on your feedback and you bringing these things to our attention. That's why we encourage that. But if I'm working with a client and they haven't identified a property yet, in fact, I think it was Ryan. We were talking at the break and he was asking me about a few markets. I said, well, he asked me about one in particular and I said it's a good market but we're seeing some bumps with the property manager. So they have a good front operation, front end operation, they rehab the properties well. But maybe interview these other two property managers and consider using a third party property management company. So some of these like turnkey providers, like Mac's really good. They've got a very strong management team in place on the back end. But some of them are smaller and they're, you know, they're still learning and it requires third party. It was, it's one of our. We have two Birmingham providers and so some of you guys might have some properties in Birmingham and we've switched some of our clients over to a different management company. And a lot of our clients that are working with that property manager love them, they stay with them. So at the end of the day, it's up to the investor to also interview each one and make their own decision.

Yeah, and one of the things that's sort of funny about this is like the personality component or the expectation component.

I mean this is not some empirical thing that says yes, that's good and that's, no, that's bad. Right. You know, some people like a certain manager and others don't. And you know, we're human too and we have those prejudices just like our clients do.

I mean, there have been weeks, days even, where I'll get two calls from an investor and one is ranting and raving about how great a property manager is and another client talking about the same manager, you know, that oh, I have this vacancy. And so it's varies per each individual experience and property and you know, somebody that hates one property manager and you've got another one that loves the same one.

So it's very fragmented.

Yeah, this is not a, this is not an exactly perfect thing. Okay, there was another question over here. Yes.

It doesn't work in every market and that's correct. And because it does have to do with price point and where the comps are, where I can buy at what the value of the home is.

So yeah, it doesn't work in every area. But just as an example, this is what.

Turned me onto them, is when I got in a snowmobile accident years ago and I was in bed for about six weeks, couldn't get out, and I have a wife and kids and I'm thinking, you know, if something, if I would have passed away at that time, would my wife know how to step into my shoes and take over the business at that point? And my answer was no, there was no way. And I started evaluating my business in great detail. And when I looked at just the difference between rentals and land contracts, at least in my shoes, the land contracts were basically self performing and was creating a higher return as far as cash flow goes. Now again, we'll get into the pros and cons in detail tomorrow, but it made a lot more sense as far as a more hands off investment. And.

Again, from a cash flow perspective, my cash flow was higher from a dollar to dollar investment around West Michigan.

So I say overall, the returns on the land contracts or any paper type investment, generally they're a little lower. They're not as good as the properties themselves. I'd rather have the physical asset. But if you want simplicity and scalability, they're simpler, for sure. Okay, so we'll debate that tomorrow a little bit during his presentation because he's going to talk for a half hour on this. So we'll get into that deep tomorrow. Okay. Okay. Maybe one last question. We got to wrap up.

No last questions. They want to go. Okay. So thank you very much, you guys.

Appreciate it.

Thank you very much. Day one is in the books. We'll see you tomorrow. Okay. Appreciate it.

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