CW 935 - John Burns on Amazon City Picks, Autonomous Cars, Better Demographics & Real Estate Trends

This show is produced by the Hartman Media Company.

For more information and links to all.

Our great podcasts, visit hartmanmedia.com.

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 listeners from around the world and a happy new Year to you all. It's great to have you here. Thank you so much for joining me. From your 164 countries or 165 countries, I don't know, I can't remember now, worldwide. It's great to have you. And I've got to say, our longest distance visitor for, for this Meet the Masters coming up is coming from Central Africa. Wow, that's a long flight. We so appreciate you coming out.

We have had people come from all over the world before, but I don't.

Know, this might be the farthest, this might be a record. We've certainly had people come from Australia, New Zealand, Europe, Southeast Asia, well, Japan. So again, you know many from Europe before.

So it's really just such an honor.

To have you be willing to fly halfway across the world to come to our event. And we really, really look forward to it. And my friend Alexa is here with me and she has a message for everybody listening. It's just a quick message.

You must get your tickets from Meet.

The Masters of Income Property today.

Now, you always want to listen to Alexa, don't you?

She says get your tickets today anyway.

That's@jason hartman.com masters and today one of our keynote speakers will be on the show. So many of you listening are coming to this event that I want to kind of tee up of our speakers. So when you see them live and when you meet them, if you have VIP tickets and you're in the green.

Room and, and you meet them kind.

Of doing the backstage thing or, or you're sharing a meal with them or whatever, you will be more knowledgeable about their philosophies, their content Their thinking, their outlook on the marketplace. And so today we will have a returning guest, and that is Mr. John Burns. He is the founder of John Burns Real Estate Consulting, of course, and we talk a lot about his data and so forth on the show many times the years. And he will be one of our many keynote speakers at Meet the Masters. So we're going to play that interview for you today. Now just know this interview was recorded about two and a half months ago. Of course things change, right? But it's still very, very prescient. It'll give you a good idea for his thinkings and you'll see the follow up to that live at Meet the Masters. And by the way, many of you have asked, will we be selling streaming tickets for Meet the Masters so you watch a live stream? The answer is I don't know yet. We're talking with our audio, visual and production people about doing that again. We did it last year and many of you bought those streaming tickets so you could join us kind of remotely. And again, this is really a second choice thing. You know, the best thing is to come and live and experience the event. We've got almost 250 of you coming so far. So thank you for doing that and getting your tickets. The great benefit you get about being the there live as you just get all the networking now, of course, it's a lot easier to sit in the.

Comfort of your own home or office and, and watch the stream.

You know, depending on the streaming service, you can do playbacks and things like that. So, you know, it's certainly cool.

It's a great technology, that's for sure.

And it is. What time is it? It's an amazing time to be alive.

Right. So this is one of the great things of it.

But if you can make it out live to join us, we'd love to see you. We still have quite a few general admission and some VIP tickets left. EL is totally sold out. So no more of those tickets left. So that is the scoop there. Of course. We had one of our speakers on the last episode, that was Danielle DiMartino Booth. And today we'll have John Burns back as a returning guest. And so I hope you enjoy this interview and I want to just remind all of you about a couple of quick tips. These are sort of unrelated. They're not anything specific or orderly, but just a couple of things. Number one, pet rent. I was talking with one of our property managers recently and you know, I love animals. I, I've always, as a kid, I always loved animals. I Don't know why, it's just, you know, I just think they're awesome, right? I mean they're little humans, you know.

In a way, and they have their own personalities and everything. And of course my favorite animal would be dogs, right? I'm a big dog fan.

I think as people we should all aspire to be like dogs.

And what I mean by that is they're just so good natured, they're forgiving, they don't hold a grudge. Being like a dog is kind of an aspirational goal. I think that would be a pretty decent one for people.

What do you think about that? Is it a crazy idea? Maybe.

I don't know.

Or at least let's all try to live up to be the person our dogs think we are.

How, how's that for an aspirational goal? So either way.

But I have never seen an animal improve the our rental properties now. They certainly improve the lives of our tenants. And I just want to say that it is completely normal in the institutional apartment world for people to charge pet rent, for owners to charge pet rent. Institutional apartment landlords always do this. They all do it.

Okay.

And if your tenant has a dog or a cat, you know, you can charge 25 bucks extra per month. Okay. In pet rent. And you can also get an additional deposit. You can, you know, have an additional security deposit. You can make part of that non refundable. There's a lot of stuff you can do. But look, you've got to push your property managers for this idea. Pet rent, it's a reasonable request and it will increase the roi, the return on investment of your properties and it will also pay for and compensate you for that extra wear and tear that the animal might cause. So pet rent should be, I think it should be considered a normal thing. You know, it's 25 bucks a month, it's not a big deal. And you know, if they have multiple pets, you can charge it for each one, potentially. So push this idea with your property managers. A lot of them haven't caught on to this yet. It's funny, all of the institutional apartments do it, but property managers, they're a lot of them are reluctant and I don't know why, it doesn't make sense. So I'm trying to push this movement from the landlord side, okay? And of course if you self manage, you can easily do this. And again, I recommend self management. We've talked a lot about that over the years in the JHU membership on our website at Jason hartman.com we did some conference calls about self management, teaching people how to do it. We also have done many podcasts about it. If you are looking for information on that topic, go to Jason hartman.com and type in self management. You'll find some various podcast episodes and resources there. That's one thing I want to say. The other thing I want to say is really pay attention, at least on a spot check basis. Pay attention to your property managers and the statements they're sending you. I know we all get busy, busy. I'm certainly a busy person. You know, we kind of let things go. But don't forget to question things, to push back a little bit on things, to ask for multiple estimates on things or quotes on things. To take one or two or three minutes. This doesn't take much time. And just look online and do a quick search and verify the cost of something yourself. Okay, if they say your property needs a new garbage disposal or new this or that or this widget or gadget or this thing or that thing, you know, just look it up online and see how much that thing cost. And then after you've done that, send the link back to it in an email to your property manager or the vendor, the contractor who's doing the work and say, hey, this is what I found. You know, what do you think about this? It's a better deal. All that does is it gets them to know that you are an astute customer, you are an astute property manager or manager of your managers and you are paying attention. So you set the tone for things when you do that. So very important. Just, you know, kind of couple of random tips there. Nothing big. The other thing I would say is when you're looking at properties and evaluate them. Of course, I've talked about this a zillion times over the years, but you really need to look at the overall return on investment when you're looking at the projections on the properties and so forth. Cap rate is not a super meaningful metric in our world. It's much more applicable to the commercial real estate world. And why is it more applicable to that world? Well, it's more applicable because those properties are strictly sold based on income they produce. One of the wonderful things about being a residential property investor is you're dealing with a less sophisticated market and you have more options. When you ultimately liquidate your portfolio or sell your properties, you can sell to an illogical home buyer that just wants the right home and they're not going to like agonize and analyze the numbers so there's more room for creativity, just remember one of the Jason Hartman rules of investing. The more perfect the marketplace, the less opportunity is available. So the comparison I'd like to draw here is the stock market. So if you own stocks in Apple or Amazon or, you know, whatever, right? Or hey, Enron, let's talk about some bad stocks, okay? Enron, WorldCom, Global Crossing, or if you invested with Bernie Madoff or any of this, right? If you own stock, it's a very perfect market. And the famous book A Random Walk Down Wall street addressed that issue very heavily, didn't it? So the idea being that, you know, you can't beat the combined knowledge of marketplace. Everybody tries to beat the wisdom of the market, but they can't. And why can't they? Because the market, when it comes to stocks, is a very perfected market. So take this funny example I'm about to share. Say you had a good old fashioned stockbroker that you actually talked to on the phone. I know most people don't have that anymore, they're just doing stuff online. But say you did, and you call up your stockbroker and you say, hey, you know, I've got this stock in XYZ company and I know it's trading at $100 a share, but I'd really like to have you promote it a little more aggressively. And I'd like to fix it up a little bit, do a little bit of work on it, maybe present it really well. And even though it's only trading on the exchange at $100 a share, you know, do you think you can get me 110 or $120 a share? He or she would like, laugh you.

Off the phone, out of the room, whatever, right?

Because it's a crazy question because you can't apply creativity to a very perfect market like that. Now, perfect doesn't mean good. In fact, my point here, my thesis is that perfect means bad. Because perfect diminishes creativity, it diminishes marketing, it diminishes all sorts of other opportunities that you have. But in the real estate market, especially in the residential real estate market, because commercial is more of a perfect market than residential, okay? And that's why I like housing for all the other reasons I always talk about. It's the least perfect real estate market would be the single family home market, right? And when it's less perfect, you can apply more creativity to it. And you know, look, you're all creative. I know you're all brilliant because you regularly listen to my podcast. You know, dumb people don't listen to the show because, hey, they can't keep up. So that's the thing. The less perfect the market, the more creativity can be applied. And you're all creative people, so use your creativity in presenting your properties and so forth. And by the way, another random tip, I want you to make sure that you get get on your computer and you file things and name them so you can find them later. Because trust me, you're gonna need this one when you buy your houses, especially the first time around. Right? Right. When you buy it, get yourself a really good set of photographs of your house. Now it would be great if you could throw in a virtual tour or videos, you know, taken with wide angle lenses and so forth. But hey, at the very least you gotta have some good photos of all your rental properties, okay? And it'll probably never look better than when you buy it when it's just freshly rehabbed or it's maybe even brand new, okay? That'll be the best time to get some good photos. There is a genre of photography called real estate photography, okay? Really? It is? Yeah, I know, I know, I know. Most people think photographers are always taking pictures of beautiful moms, models and, you know, Victoria's Secret or whatever, right? But no, there are actually real estate photographers, right? And they have, you know, nice wide angle lenses so they make the rooms look big. It's worth spending a couple hundred bucks to get some truly good photos of your properties. And you're going to want these later, okay? You are going to want them because someday you will maybe change property managers or you'll be placing your own ad and doing self management and, and you'll be stick checking your property on Craigslist or one of the many rental sites and having those really good photos, you know, have these photos retouched, have, you know, adjust the exposure, make sure the sun is on the right side of the house when the picture is taken so there's not a bunch of shadows. Use a little Photoshop creativity and just have a really good set of photos for your properties. This is an important thing. This is your investment portfolio. It's your retirement portfolio. Get some good photos of all your properties. Okay, that's my other random tip for the day. All right, hey, without further ado because we are going along here as always, Sean Burns. Let's get to him. Get your tickets for Meet the Masters. If you don't have tickets already, grab a VIP upgrade. You know, we had several people upgrade today. Just today, a bunch of people upgraded their tickets. So we're Glad to have you doing that. Get yourself a VIP upgrade again. Elite tickets are totally sold out, but VIP still available. Also, enter the raffle to win a couple couple free tickets too@jason urban.com contest. I know the domain name isn't exactly what it is. It's not a contest. You don't have to do anything. Just go to the page and enter to win. And you might win a couple free tickets too. And those are general admission tickets, by the way. So, hey, we will look forward to seeing you all in La Jolla very soon. Let's get to John Burns and hear what he has to say before Meet the Masters. So you'll get a little background on him in this interview here. You can go.

It's my pleasure to welcome John Burns back to the show.

He is a returning guest.

He is founder and CEO of John.

Burns Real Estate Consulting and his materials often discussed on our show even when he's not here. John, welcome. We absolutely love all the research you do and have talked about it many times on the show. So it's great to to have you here in person.

Thanks, Jason. I always learn a lot from you as well.

Yeah. Well, welcome back.

We're also excited to have you speaking.

At our upcoming Meet the Masters of Income Property event in La Jolla, California in January. So we can't wait to hear what you have to say there. But let's talk about some of the big stuff that's going on out there in the marketplace. One thing that is in the news constantly and unless you have some inside information, I certainly don't. Amazon.com is going to going to set up a second campus. I guess cities around the country are vying for the opportunity to have them.

Right.

It's going to be very interesting to see how many cities submit. I would not be surprised to see a hundred. It looks like there's going to be two bids just from Orange County, California, where I live. And if he could pick a more business unfriendly state than California, I'd be surprised. So I don't think we're going to get it.

They could always move to New York. Right. And that'd be just about as unfriendly as California, Connecticut. Yeah, exactly. Exactly.

My money's on Denver, for what it's worth.

Oh, it is. Okay, good. Yeah. Good to know. Good to know. And you know, off tape, when we were talking before we started the show today, you were talking about some of the great growth markets being kind of in the middle of the country. The business friendly, low regulation Places. Do you want to kind of expand on that idea for the listeners?

The coasts have gotten just way too expensive. Young adults, call them millennials, if you will, are looking for affordable, fun places to live. And they're finding Denver, Austin, Dallas. I think Phoenix is finally making a comeback to Nashville. These are the hot growth markets. I'm sure they're all at the top of Amazon's list if they've got a good example. Airport. That's the other thing is a good airport is critical. A pro growth governor may sound silly, but I think there's an element of truth to it. Legalizing marijuana in Colorado a few years ago, it wasn't just about the marijuana. It was sending a message that, hey, we're accepting of this type of lifestyle. And the young adult growth there has just been unbelievable.

The marijuana thing is really quite fascinating. If you want your employees to be, be lazy and stoned, come to a marijuana legal state. Right?

Yeah, that's, that's exactly right. I'm sure there are good jobs or testing for that.

Yeah, yeah, it's interesting, but I guess it makes people a little more creative, so we'll give them that for sure. The more creative class type people. You know, all of those cities that you mentioned, you know, are cities that we have done business in at one point and they all kind of got a little too expensive for us to recommend to investors just as yield, you know, cash flow oriented investors. And we've talked about this before, John, but we generally classify things into kind of three types of markets. The, the linear markets, the hybrid markets, and the cyclical markets. Of course. You live in Orange county still. I used to live there for many years and I call that a cyclical market. You know, any of the expensive markets are cyclical and, and then the, the hybrid and the linear type markets. And I would call all of those markets that you mentioned, hybrid markets. And you know, where they're, they're kind of in between the two. They're not crazy cyclical like South Florida, for example, Totally cyclical. Kind of in between the two. Do you classify things that way at all? And next I want to go to demographics because you, I think, do a better job classifying the cohorts than the millennial baby Boomer or Gen X concept.

Yeah, we've got five classifications we use. I don't remember them all off the top of my head, but maybe let me expand a little bit. What you're calling cyclical is the expensive markets that they're so supply constrained that they have a couple years of surging demand, they can't meet it and prices go through the roof. And the minute we have a recession, prices crater. There's another type of cycle I look at though, which is the markets that can really ramp up in supply. And I would put the Texas markets there. Historically, they don't cycle because they get too expensive. They cycle because there's so much supply being built and then there's a recession, they get crushed. I like to break the cyclical markets up into two pieces. One that cycle based on price and the other cycle based on brand new construction, if you will.

Right. And so in other words, what you're.

Saying there is the ability to make.

Meet the supply demands quickly. In other words, where there's a very pro growth attitude, limited zoning. Houston is probably the poster child for this. Remember back in the old days, the billboard, well, the last person to leave Houston, please turn out the lights during the, you know, when it was a very oil based economy. It's more diversified now, fortunately. But the markets that are cyclical can't meet the supply demand when there's an upsurge.

Right, right. Yeah, right. And that's why prices go through the roof.

Yeah, right.

And interestingly, a lot of people aren't aware of this. Houston went through a oversupply cycle earlier this year. The apartment market got completely overbuilt. They were giving away two months of free rent and then the hurricane came along and wiped out all the units and they all got occupied.

Yeah, right.

So I mean, we've had a very recent example of even a market like Houston getting overbuilt now.

Very interesting, interesting. Very interesting. Okay. Hopefully we'll have time to talk about apartments and millennia. Well, finish your, your thought on the.

Different types of markets, if you would.

Sorry about that.

That's okay. So, and then the linear markets, I'm guessing you're the ones that you're considering just steady yetI never get overheated, never really crash. And that's most of the country. And that's, that's some of the markets you were describing to me earlier that you've been looking at Memphis and Oklahoma City in Indianapolis and Little Rock. Those are linear markets. Then I think your definition of hybrid is a good one for some of the markets I mentioned, like Austin and Denver and Dallas historically. Well, at least Austin and Denver historically don't get oversupplied or get too expensive. But in this cycle they have because there was so much job growth that even the market being relatively easy to supply new construction, there's been More than enough demand for all of it. Austin is approaching an all time high of home prices in relation to income. There's a lot of markets that are getting up there with payments in relation to income, but price in relation to income, that's pretty rare in a 4 interest rate environment. So I would agree with you that Austin has best days are behind it from a price appreciation standpoint, I think.

Yeah, yeah, interesting. So you talked about Houston and how the, the apartments got overbuilt. I remember, you know, just a, what, five, six years ago, it seemed like there were cranes everywhere building apartments, just every city I'd visit and I'm constantly traveling around the country. Have we overbuilt apartments yet or are, is the demand still there?

And apartment dwellers, there's about 12 cities and really in the city itself where all the construction seems to have been going on. And almost, almost all of those markets, I was going to say except Seattle, although Seattle is starting to roll over a little bit right now too, got overbuilt. And it's not just overbuilt in terms of numbers. By the time they came to market with the construction cost increases they've seen, they were really pushing rents and targeting just a very few affluent folks. Those submarkets are overbuilt and they were driven by pension fund capital whose said, you know, I'm not going to get fired by building in Seattle or San Francisco or Dallas. I see the world shifting right now more towards suburban apartments being driven by more local money instead of big institutional money. And there's plenty of demand for those. So that I don't think the apartment market is overbuilt nationally very much. But those certain submarkets, they are right, right.

Okay, now what about the housing market? And before you answer, it all depends on the type of homes builders are building. Now this is just an anecdotal observation. Correct me if I'm wrong, but it feels like builders haven't been building on this side of the cycle. I mean before the Great Recession it seemed like there were a lot of entry level homes. And the reason I know this is because investors bought a lot of them. Our clients bought a lot of them. We used to sell properties for dealers, Horton and Pulte and all the big builders like crazy. And this time around it seems like they're just not building as much in the entry level category.

Is that true?

Is that like factually or is that just my perception?

That's very true. It's starting to shift though. So what has changed is that first of all their costs have gone through the roof. And it's more at the local level than anything else. But if they could build a $300,000 home in California or a $200,000 home in Vegas, where you live, they would. And sell it profitably. They would. They just can't. So that's been problem number one. The second thing is the demographics for the last 10 years have been a huge growth of the number of people in the country aged in their 20s who are also delaying marriage and childbirth. So we saw, I think it was 5 million more people from 2005 to 2015 in that demographic. And, hey, you want to live close to work, you want to live close to fun stuff to do. The affordable housing is in the outlying areas. But what is shifting now is that demographic growth, which there was very little growth of people in their 30s, is now changing. And we're seeing those millennials who are going urban now, starting families and having kids and starting to commute. And the builders have responded to that by starting to move to the exer and building more affordable homes than they're building closer in. But it's really difficult to bring it at the price points that they'd like to. So they may be. They're charged with 250 grand and when the heart of the market should be 200.

Yeah, very interesting. You just reminded me. I gave a talk to a group of developers recently, and I actually quoted you because I quoted your word Serban. Guess you made that one up. And it's a great word. Tell us what Serban means.

Yeah, so we did trademark it, even, but anyone's welcome to use it. The governments in big cities have put so much money into redeveloping their urban areas the last 20 or 30 years that that was one of the reasons why urban is really revitalized. And the suburbs have now said, hey, we'd like some of that in our city. So when I got into this business, suburbs were saying, give me as few homes as possible on a big a lot as possible. And now the cities are saying the exact opposite. I want a lot of density close to my urban core. I want to redevelop our old downtown. And that's, believe it or not, that's where a lot of people want to go. If you're a young couple, you're close to stuff to do, and you're in a good school district, and it's more affordable than an urban area. So it's bringing the best of urban to the suburbs. The other thing we've Noticed is a lot of empty nesters. Homeowners are actually selling their homes and choosing to rent for a while. And that's very popular with them too. Hey, let's go rent in the new apartment complex near downtown. And we've been doing a lot of feasibility on that for the last seven or eight years.

Very interesting. So I want to ask you to kind of correct, correct the perceptions and clarify them on the generational cohorts, because your book divides them based on the decade they're born, which is more exacting than these kind of. We all throw around millennial, you know, Gen Y, baby boomers, Gen X. I'm a Gen Xer. Tell us about the demographics and then I want to ask you how they're acting and who's most impactful on the housing market.

Yeah. So there are times when you can make a generalization about millennials, but you have to remember that mark Zuckerberg, who's 33 years old, is a millennial and my daughter Kelsey, who's a senior in high school, is a millennial. So if you're going to be talking about housing, they're in kind of different stages of their lives.

Certainly with the.

Money they have and definitely with the money. So we broke the generations down by decade born because everybody relates to their decade. They relate to their high school class. And you're comparing nice 10 year periods. That was some of this other problems as you're comparing Gen X to millennials. And one 17 years long and the other is 19. In fact, people don't even agree on how long they are. Everybody knows how long a decade is. Plus 13% of the country was born in another country. And a lot of that discussion is about American born folks. But you're leaving out 1/6 of the population when you do that. That we're looking at the country, when were you born and when we did that. One of the biggest findings is each decade from the 1950s through now is 40 to 44 million in size. There's really not much of a boom in a Boston and Echo boom anymore because immigration filled in that gap of people that are now aged in their 30s and 40s.

I agree with you. Doing it by decade, you're born, it's much easier.

And I mean, are they going to.

Act a lot differently? Like you gave the example of your daughter, who's a senior in High School versus a 33 year old? They're both millennials. Great point. How much different will they act or how much different will their housing choices be?

This really helped Me figure out the answer to that question, because what happens to you when you're a young kid and a teenager, and what happens to you when you graduate from school and get your first job really impacts your behavior later in life. We documented this going all the way back to the group born in the 1930s. So Warren Buffett's generation, born in the 1930s, was born into the Great Depression and had food rationing during World War II. As kids, they did not borrow a lot of money. They were savers. They got to an 80% homeownership rate. Fast forward to kids born in the 90s and 2000s. They saw what happened when you have too much debt to their parents and their friends parents. And they're using debit cards today, not credit cards. They're afraid of debt. And there's plenty of similarities I can draw here. But looking at what happens to you early in your life, I definitely think impacts your attitude moving forward, I would.

Totally agree with you. When it comes to what everybody calls the millennials who are now in the older end of the millennial millennial spectrum who were teenagers, it's arguably the most impressionable point in their life when they saw their parents get burned in the housing market. I mean, to me, that says these people aren't like, running out to buy a house. Of course, there's a ton of other factors. They have giant student loan debt. They have a mortgage that they didn't get a house with, and that's their student loan. As I always say, the best thing you can have on a, on a.

Resume for jobs is mobility.

You.

I think their whole view of life.

Is like a much more portable world.

Everything is smaller and more compact and more portable.

Look at the computers in all of our pockets. They're in the, like, the Sharing Economy era. You know, they ride Share. A lot of them don't care about having a car anymore. You know, they use Airbnb.

They just have a much more portable view of life, don't they?

We nicknamed those born in the 1980s the sharers because they're the ones who invented the Sharing Economy. All these disruptors and all these unicorns seem to be the kids born in the 1980s. And they were the ones who were told, go get a college degree and you're going to be fine. They got their college degree and then they ended up with a retail job for six years because the economy was terrible. So, of course, they got started later in life. But I actually think that group is extremely resilient. They're starting a Lot of companies, they're disrupting a lot of businesses. There's been a lot of badmouthing of them for living with their parents. But if you do the consumer research we're doing, both they and their parents are saying, hey, this is financially smart to live with mom and dad. It's not so much that they're a deadbeat. And I should say that the GDP growth during their lifetimes is half of what it was for those born during the 1930s and 1940s. How are you going to blame that on them?

You can't.

They're just being smart.

Yeah, very, very interesting. Okay, good, good stuff. John, are there any questions I haven't asked you any, any things that you'd like to share with our listeners before we wrap it up?

I'll handle one more decade if you don't mind because I think this may resonate. So you talked about the foreclosure distress. So those born in the 1970s who are now 38 to 47 years old are supposed to be in their peak spending years in the heart of our economy.

So what was happening to them in the early 2000s? They were in their 20s and they were having kids and they were starting families and mortgage credit was really easy. So at their 10 year high school reunion, they had the highest homeownership rate ever of any group. At their 10 year high school reunion. At their 20 year high school reunion, they are 10% behind prior generations. That's the group that just got crushed during the Great Recession. And that's one of the reasons why I don't think the economy is coming back as strong is because that group, who should be our big spenders, got crushed.

And I agree with that. I think the wild card is, is maybe the inheritance issue, right? I mean, eventually they're going to inherit some money from their, their folks. I mean, is that almost impossible to calculate or equate? I don't know.

I think it's true. But when do your parents pass away? In their 80s? Yeah, but you'll get it in your late 50s or early 60s. So maybe there is a cushion there at some point, but they don't have the money to spend today.

Yeah, right, right. You know, interesting, interesting stuff. Well, good stuff.

You know, I really enjoyed the report.

That you did on the self driving cars and, or otherwise known as autonomous vehicles.

I think that's a pretty big game.

Changer for real estate values. I don't know if you agree, but it seems to me like the three primary value drivers that have been with Us since the beginning of time. Even from cave days. Right. Location, location, location. If transportation becomes easier and cheaper, at least in time, if not money, is that going to put downward pressure on the most well located properties and maybe some upward demand on the properties that aren't as well located.

I mean the three blocks around your.

House, that matters for sure because that's the walkable portion. But I don't know if you have a 45 minute commute versus a 60 minute commute, does it matter that much if you're not doing the driving?

So that's what I initially thought till we started doing a lot of research and thinking about it. So you're absolutely right that a 45 minute commute will be a lot easier. However, the other big change here is that we're not going to need all these parking lots and they're in great locations.

That I agree with. Yeah.

And Amazon is totally disrupting retail. So we're not going to see a lot of. I think we're going to see a lot fewer retail centers too.

Yep.

So what I think is going to happen is we're going to see a lot more opportunities to live close in that will still be more expensive than living in an outlying area. But I'm willing to bet that there's going to be more demand to live closer in and what you say will come true, but just not right away. It'll take a little bit longer.

Yeah, that's an interesting point. In fact I remember reading, and I've talked about that, that before, that like the typical city has 40% of its land covered by parking spaces. Right. And I don't know what the real number is. That's the number I just remember. Maybe you have a real number. But you know, if the cars are truly on demand and not owned cars, if they're all sharing, you know, ride share, well not even ride share but you know, self driving, car pick share pick picks you up and the cars never have to really stop moving and they never have to park, they can just run 24, seven pretty much. Boy, you know, everybody's garage and driveway in the suburbs becomes an extra room, maybe a den or something. The cities, the parking lots, the parking spaces, the streets get wider. I don't know. There's a lot of implications, aren't there?

Well be able to use the driveways for other things. There's a lot of implications here. I was just in San Antonio and somebody with the city told ME More than 50% of downtown San Antonio was parking. So there's a stat Proving you're right.

Yeah, that's, that's super. I mean, it takes a long time.

To make those changes though.

Things move surprisingly slowly when it comes to rezoning things and entitlements and, but, but you know, these big box retail centers, I mean, wow, that's a lot of, lot of real estate there that.

Could be reused for something else.

Right, right. And there's a lot of people looking at that right now. And I think that those ratio retail centers are the ones that cities are going to want to be redeveloped into suburban housing. So I think the Serbian term is really going to take off.

Yeah. Yeah, I think so, too. Good stuff, John.

Give out your website, realestate consulting.com and.

Where can people get the book?

Of course, the, the name of the book and you know where they should get it.

The name of the book is Big Shifts Ahead and it's available on all the Internet sites. Amazon would be the most obvious one.

Excellent, Excellent. Good stuff.

Well, John Burns.

John Burns, Real Estate Consulting. Thank you so much for joining us today.

You're welcome, Jason.

Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out the show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that guest opinions are their own and if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to itunes or Stitcher radio or whatever platform you're using and write.

A review for the show.

We would very much appreciate that and be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

Welcome to meet the Masters of Income Property Investing. I'm your host, Jason Hartman.

Join us in Beautiful La Jolla, California on January 12th through 15th. This is your chance to to meet the masters of income property investing. Learn from an amazing collection of experts all in one room. You'll meet a ton of local market specialists, mortgage lenders, tax professionals and investment specialists such as Jeff Myers of Myers Research and John Burns, real estate consultant. Learn from Robert Kiyosaki's Rich dad advisors, Ken McElroy, his real estate investor expert, and Garrett Sutton, his attorney who specializes in asset protection. Find out what leading economists are predicting for 2018, including Danielle DiMartino Booth, founder of Money Strong LLC, and Andrew Zapman from Moneyball Economics. Hear from leading entrepreneurs how to maximize your income streams. You'll learn unique financial strategies from Patrick Donahoe of Paradigm Real Life and how to give birth to a brand from Brian Smith, founder of Ugg Australia Brand this year also features a very special guest, Dr. Ron Paul, former Congressman, presidential candidate and staunch advocate of liberty. Right now you can upgrade your ticket to include VIP access and a dinner with Dr. Paul. Enjoy a fine dining experience and fascinating conversation. Seats are limited, so upgrade your ticket today, ask questions and learn why real estate is the most historically proven asset class. Armed with new information, you'll have the confidence to take massive action. As the saying goes, don't wait to buy real estate. Buy real estate and wait. Surround yourself with like minded people and build friendships that will last a lifetime. Share strategies and tips with other investors and hear about their successes and struggles. Make 2018 the year you decide to achieve your dreams. Real estate is a proven way to create true wealth within your lifetime and achieve long term financial independence. Don't wait. Join us in La Joll.

Reserve your seat today.