CW 996 FBF - Jason's Live Investment Counselor Panel

Welcome to this week's edition of Flashback Friday. Your opportunity to get some good review by listening to episodes from the past that Jason has hand picked to help you today in the present and propel you into the future. Enjoy.

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 the Creating wealth show, episode number 801801. I hope you enjoyed episode 800, a landmark with Grant Cardone talking about the 10x rule. Today we are going to have a live clip from an investment counselor panel that I did at one of our live events. We're just talking with them about some of their suggestions, thoughts, client experiences. You know, our team of investment counselors is on the front lines dealing with clients, dealing with local market specialists, dealing with property managers, dealing with repair and rehab people all day long. That is what we do and we learn a lot from it. And we learn a lot from you, our clients. And one of our jobs here is to take that learning that we learn from our clients, our local market specialists, our vendors, our contractors, sort of assimilate that, aggregate it and share it all back with you here on the podcast and at our live events. And speaking of live events, gosh, we got some exciting ones coming up. We got the Venture alliance in Las Vegas that is this weekend. So if you have not already planned to go, then we will not be seeing you. I'm just mentioning it that I'm, I'm real excited about the event. Do get to one of our Venture alliance events eventually. You know we have them on quarterly basis so every three months we're doing something really fun and exciting and we would love to have you come as a guest or a full member to one of those events. Check out venturealliancemastermind.com or Jason Hartman.com in the events section for details. And then one of our public events coming up, not for the Mastermind group, but Just for everybody is our Memphis Creating wealth seminar and. And property tour, and that is coming up at the end of March, so I hope you can join us for that. That is almost sold out, by the way. Tickets have sold very briskly for that. Even though we had some pretty big problems. We switched shopping carts on our website to try and upgrade the user experience, and we didn't like it, so we were switching back. So we had a little. A few. Little stumbling blocks on that one. I tell you, everybody kind of. There's this perception, at least it's my perception, that doing business online is so much simpler than having a physical store. You know, it's really not. It's. It's pretty complicated. All of these different programs that you use have so many little intricacies, and they interact with each other in different ways, and they break and they don't work together. And, you know, it's just all the typical challenges of being in business. But, yeah, it's interesting how people view. The virtual world is so simple and inexpensive and, you know, versus the physical world. And, yeah, that's a bit of a myth, I have to say. It's a bit of a myth. So anyway, the Memphis tour is almost sold out. And that's the Creating wealth seminar. It's my oldest seminar, the one I've been doing for. I got what, over 13 years now, I think, and the first one was in Newport Beach, California, many, many years ago at our office. And I remember it well. You know, I remember doing that seminar and just announcing it to some of the people in my traditional real estate company that I owned at the time that I later sold to Caldwell Banker, and that was in Irvine, California, to some of our clients and so forth. And I remember people, we had these.

You know, glass doors in our commercial.

Office building, the Newport beach office. We had this big room in the front, and we set that up as a seminar room. And I don't know, it must have held comfortably 40, 45 people, maybe, something like that, but uncomfortably. And please don't tell the fire marshal this, because we might have gotten in trouble. You know, maybe 60 people could squeeze in there. And I remember at this one event, we had these double doors, these big glass double doors in the front, and. And people were standing outside of the double doors, and I want to say they were maybe eight people deep with the doors open. And I was trying to talk loud enough for everyone outside to hear me. And. And this is how it was in the. In the crazy heyday. You know, this was. Gosh, I guess it was 2004, wasn't it? And people just couldn't get enough. And at that time, I have to tell you, I'm gonna pat myself on the back here.

Can you hear the padding? Yeah, that was me patting myself on the back. I was predicting the collapse and I was right and I was right. And I based my prediction mostly on one aspect and that was simply that all of the people that were getting these idiotic, crazy adjustable rate mortgages who could not qualify. I used to show screenshots from my email box of Countrywide home loans. And they were probably the biggest offender, as we all know now looking back. But all lenders were doing it at the time. Crazy loans, these, these ninja loans, you know, no income, no job, no nothing. Day out of prison, day out of bankruptcy, day out of foreclosure. We'll give you a loan. 550 FICO score, 120% financing. Adjustable rate mortgage. And we knew that something would happen. And what was that something? Well, it was called payment shock. Payment shock. That's what happened. And you could just. It was sort of so easy to really figure that out, I thought, because all you had to do is just reverse engineer it. If you look at. And I owned a few mortgage companies over the years and you know, they were in house inside my traditional real estate company. Not, not my investment real estate company now, but my traditional real estate company. And I remember when the refi booms and the financing booms were going on and just this massive onslaught of business and these mortgages that were so careless, it was insane the way these crooks were just giving out these loans. All you had to do is just do a reverse engineering. All you had to do is say, look, so many people, this massive amount of loans came through the pipeline in say 2000 or 2002. And if you just, if you just back that up by, by 2005, all those payments were going to be adjusting because they were the 51 arms or the 31 arms, and those payments would adjust. And when they adjusted, those people could never afford those mortgages. It was absolutely irresponsible what was going on. And so you just knew that the market would, would have a huge, huge problem at that point. And it really happened in November of 2005. And interestingly, not really known to me at the time, but the deal on my, my business, my, the sale of my business to colo Banker closed November 11, 2005. And nobody noticed that that was really the end of the market until probably late February or early March of 2006. Why didn't they notice till then? Well, because in the traditional residential real estate market, comprised of homeowners, of home buyers and home sellers, that doesn't really get very active until the spring. And so really, it was really about March before anybody really noticed that there was this giant problem, this elephant in the room. And then, you know, that was the first part of the Great Recession. We'll call that part the mortgage meltdown. But the second part of it, which I did not predict, I did not know about, I did not know it would be this bad. And pretty much nobody else knew either, unless they were on the inside. And of course, the book and the movie the Big Short by Michael Lewis, profiles that extensively, where there was this whole Wall street game going on behind the scenes and that, you know, I did not understand that, you know, until after the fact. Most of the world did not understand it till after the fact. In fact, the country of Iceland didn't understand it until after the fact because they basically declared bankruptcy and various municipalities had the same problem. So this was a very, very deep, very severe problem that most people just simply did not understand the depth of it. The massive criminal behavior that was going on in Wall street. And, you know, that's probably still going on in a different way, in a different flavor, to a different extent. But, you know, never trust the crooks on Wal street, because they're always up to something, aren't they? Whenever you hear them use terms like financial engineering or financial innovation, run for the hills, because those are the words that should be a warning sign. The other one, this time it's different. This time it's different. Whenever you hear people using that one a lot, be careful and run for the hills. But anyway, hey, without further ado, so let's get to our investment counselor panel here. I hope you enjoy this live clip. It's. It's live. It's pretty raw. So, you know, pardon the little ums and ahs, and hopefully the editor will get some of those out so you won't be totally bored with it. Be sure to go to Jason hartman.com, click on the event section and join us in Memphis that is almost sold out. I don't have the exact headcount on that handy. But that event, I know we're gonna have to close the registrations for it very soon, so grab your tickets. That's the Creating Wealth Seminar and Property Tour in Memphis. And, you know, it's an entire weekend with us, and I think you'll really, really enjoy it. If you haven't come to any of our live events. Be sure you do that. Really do yourself a favor. Even if you're not interested in that particular market, you know the reason you need to come, you need to meet our teams, you need to meet our clients. And that is something that really differentiates us and differentiates the experience and differentiates your life as an investor. Coming to our live events so you can meet our clients. You can talk to people that are actually investing with us. They're always there.

We always have lots of, you know.

Prior clients at our events that are repeats coming back for more. You can hear their experience firsthand. Hey, you know, corner them in the hallway outside of the seminar room where we're doing the conference, will have several meals together. You know, corner them at lunch or dinner or breakfast, and. And say, hey, you know, how's your experience? What's going on? What do you think of. What do you think of these characters? What do you think of this Jason guy? You know, I've been listening to his podcast for years, but I don't know. You know, he's kind of opinionated. Is he all that he says he is? You know, what are the properties like? What are the investments like? What's the experience like? And, hey, it's no bed of roses, folks. The only thing I will say is that it's better than everything else. It's certainly not perfect, but it's better than everything else. You know, you always have to ask yourself in life, compared to what? Compared to what? Is there anything better? You know, compared to what? And income, property, the way we do it. Definitely the most historically proven asset class on Earth. The most historically proven asset class in the entire world.

Remember, you're listening to Flashback Friday. Our new episodes are published every Monday and Wednesday.

Check it out. Come to our live event, Jason hartman.com. click on events. And let's get to our investment counselor panel.

What we are doing now, everybody, is. We are having a little investment counselor panel. Well, you're. I think everybody's got their cookie in their hand pretty much, so we'll go ahead and actually start. First of all, why don't you just introduce yourself and tell them a little bit about. Well, we'll go into what you do, all that stuff, but Mike.

So I'm Sarah. I've been working with Jason as an investment counselor since 2007. And she came right after.

Right during the crash.

I started.

Perfect timing.

Yeah, perfect timing. So when I met Jason, I didn't have a real estate background. He said, well, if you want to, you know, work with me, you gotta come see what I do. You gotta come to one of my seminars. So I went to the Newport beach office that he mentioned earlier, and he went to his Creating wealth seminar. And, you know, all I had at that time was my primary residence. And, you know, the market was going crazy. We had a ton of equity in our house. And the light bulb went on, right, because I realized I could extract some of that equity and purchase properties in other markets that were much less expensive and produce cash flow.

And so you live in. In La Mirada, California, we should say that Southern California.

Nobody knows where Lamar is.

Okay, whatever. It's like the edge of Orange County. Nobody knows where Orange county is either.

So my husband and I had, you know, we had an interest in real estate and, you know, we had this idea of like, fixing and flipping, but we didn't have any money. We didn't have any experience. All he had was experience being hands on. He's in the construction industry. So we had this idea, but we could never make it work. We were in our 20s at the time, no capital. So not only did I join Jason's team as the rental coordinator at the time, I worked on getting my real estate license. And I took the plunge and purchased my first out of state rental property at age 24. And I did all that with pretty much zero capital. I did it with our home equity. You know, over the years, we've slowly acquired more properties and we've finally, we're in acquisition mode again. And I've got three more under contract now in Memphis and just working on, you know, growing our passive income. And I help many, many clients do the same thing. I've worked with clients that have started, like me, with very little income, very little capital, purchasing, you know, maybe one property year all the way to, you know, big investors that, you know, they're of retirement age, they've got a chunk of money that is not producing a good. And, you know, they want. They want more. So I've helped them to purchase bigger portfolios of properties. So good stuff. Love what I do and love working with Jason and our team.

All right, thanks, Carrie. So Kerry is an investment counselor, but she also does another very important job that is onboarding new local market specialists. And so she screens them and, you know, figures out sometimes which markets we should be in. As I've said many times on the podcast, there are markets we would like to be in, but we cannot find a good team in that market. And we unfortunately, over the years have had to fire a lot of local market specialists. Or we just sort of do the phone tag fade out. Have you heard that one? You know, when you're dating someone and you just kind of leave a phone message for them and then you don't call back right away and you just like the fade out. Phone tag fade out, they call that. Yeah, so we do that with our local market specialists sometimes, too.

With Voxer.

Yeah. Oh, yeah, yeah, yeah. You can't do it with Voxer, my favorite app besides property tracker and property shopper and property evaluator. But she does a really important job with that. And Carrie, I mean, you can talk from either angle, investment counseling or local market specialists onboarding them. But just, you know, introduce yourself.

Sure. So my name is Carrie. I am an investment counselor and area coordinator. I've been working with Jason for about two and a half years now. So what I do part of the area coordinating. We're looking for markets, you know, we're not only just looking for the market, but the team behind that market. You know, whose boots on the ground, who's going to answer to you guys and us, and who's going to make the transactions smoother, especially the property management. That's one of the key things that we look for is their communication, you know, their agreements, you know, how well are they going to attend to you. And I think Sarah said it one time, we do like an evaluation test or a personality test. Okay, you're going to match up with property manager because your, you know, this type of an investor. So we do a lot of that. I probably talk to, I mean, probably 10 different potential local market specialists a week and maybe one gets to the next round. So there's a lot of vetting out. You know, whether there's the economic growth, what kind of rents are there, what's their fees. It's just all across the board that we're just vetting them to make sure we get, you know, the three that we have in the back right now. So there's a lot of background work to do it. Yes, Giovanni.

So, yeah, so I love it. And then from area coordinator, I turned into an investment counselor and that's where we're at today.

Good stuff, good stuff. Thank you, Oliver.

Hey, everyone, my name is Oliver. You've heard me on the podcast a couple of times. I've been on recently. It's been a ton of fun. I recently started. Well, recently I started listening to Jason's podcast almost eight years ago now. And from that point is when I started picking up properties. A year and a half ago, I started as investment counselor, and that's been a terrific, really fun ride. I was really happy to see so many of you here today coming to events over and over again and really helping you with the whole process from getting into investment, being really interested with real estate, and now just purchasing 1234 and essentially seeing how smooth and how you guys really Progress from your first purchase to your 9th, 10th, and onwards. It's a very, very cool transition to see, and so glad to see you here again today.

Good stuff. So think about what questions you have for our investment counselor panel. You know, are there any things you want to ask them? You know, maybe kind of the stuff. Some of the things you might ask are just, you know, you're all dealing with one of them. Or maybe Fernando, in terms of having them be your investment counselor and, you know, maybe you want to ask some of the questions you asked when you originally got connected with them just for the benefit of the room for the audience or any specific questions you have right now. So if you have any questions, just raise your hand and we'll get them. Coco is very enthusiastic with questions. She's got something going on here. I don't know. Yeah, see, she's got questions. And you got to get this picture, Fernando, by the way, of the dog up here. See, this is even better. Yeah, yeah. Okay, so I'll take one of those microphones and over here. See you.

So what is the most common area or challenge where you're helping your clients? Where do you find more often having to help in the same way over and over again? That's a great question. Typically, I would say it's on the property management side in the transitionary phase, from the time that you close to the time you actually acquire the property, a lot of questions are going to come up where they'd be, hey, I thought that this was initially covered in the. In the rehab of the property. And then it just takes a simple phone call or if not emailed to the provider, and then sometimes they just need to be reminded, oh, yeah, you know, sorry, we charge you for that.

Or so what you mean there is that a client purchased. I mean, tell me if this is correct. A client purchased a property, they've owned it for maybe six months, and then something goes wrong mechanically with the property. Is that item a property management item that they need to pay for having fixed, or is it something that should have been done in the original rehab or under warranty? Under the rehab warranty.

Right.

That the provider is the LMS is providing. Is that what you're talking about?

That's exactly what I'm talking about. Usually it's caught much sooner than the six month period though. Usually it's caught within the first maybe month or two or three. We normally get that cleared up fairly quickly. But also it's just in terms of the communication to ensure that everyone's aligned because a lot tends to get just lost. Exactly. In emails and just ensuring that the communication that you guys understand exactly what's going on there and on the property management sides and, and sort of liaising all of that and helping you with the process.

Comments carries here. Any other comments on that?

Yeah, I would say. Well, I used to spend a lot of time with maintenance issues just clients that, you know, were getting maybe nickel and dime from the property manager and having to.

Property managers never nickel and dime people. Come on.

Really.

But, but now I spend more of my time setting expectations with clients up front and I felt found that I spent a lot less time dealing with maintenance concerns because a lot of this is mindset. You know, people hear the word turnkey and they're like, okay, I've got this turnkey property and I'm not gonna have any problems. And there are a lot of companies that will sell you on that. But at the end of the day, you guys are investors and if your house needs a new roof, you're gonna put that new roof on, you know, so just making sure that you have your inspections done up front. And again, they call me the investment therapist because, you know, I. Every once in a while I know I'm going to get this call and I'm going to kick my feet up on the couch and give some real good investment therapy.

So it happens.

Definitely.

This thing lives and dies on property management. It really does. That's.

Yeah.

It's not that difficult to buy the property.

Right.

You know, you can see because you're into standardizing your data and that's what we're talking about this weekend with Michelle's presentation with mine. You know, you're gonna, you're gonna use the website and see the standardized data. Hopefully you'll take that to the next step and you'll actually use the product and use it live. And by the way, Sarah, you just sent out an email to everybody who's here. By the way, if you haven't checked your email in a few minutes, you've got a free trial. For how long?

Just a link. Yep, yep.

Six months.

Okay, so you've got Property tracker for for free for six months. Okay. So that's in your email now.

It should be there.

And you can follow along as Michelle comes up and demonstrates more of that by creating your own account, logging in. How many of you are already members of property tracker? Maybe 20% of the room.

If you're already a member. I think there's something Fernando has to do on the back end to extend that for six months, correct?

Yeah.

So it should be pretty simple for that link is good for new members.

So the next thing, beyond standardizing data in a static fashion, is doing it dynamically to where you change assumptions and everything else changes, as we talked about. Okay. And then we will talk about self management and property management with a manager either way. So managing your manager or self management. Okay. Other questions for the investment counselors.

Yes.

Up here and then back there, maybe.

Hey, so for some of you who were around during the early days, like Sarah actually said, early days when the. The recession was at its peak and stuff, what were some of the challenges that you faced with helping clients, and what were the solutions you were able to help them with and get through those hard times?

That's a good question.

Well, one of the things that people got into a lot of trouble doing was over leveraging. Back in the day, you can.

You could put nothing down.

Nothing down. I think when I started, it was like 10% down. Or if you could borrow against your primary residence like I did, you could put nothing down.

So effectively nothing down, but not nothing down on the property itself directly.

Right?

Yeah, right.

So that I would see. I mean, there were people that would come to our seminars, and they were like, I'm gonna put this property on my credit card. I'm gonna get a line of credit, and, you know, it's gonna be like 10% interest. And, you know, you can tell people not to do that all day long. And some people are just gonna do whatever they want to do. So during the. The recession, you know, it was counseling people. Again, it goes back to mindset. And, you know, look, you purchased that property with little money down. You essentially deferred your down payment. So, you know, it's. It's more about now having staying power. You either stay or you short sale or you modify your loans. There were different options. And, you know, Jason, multimillionaire, He got like 20 loan modifications. I got zero. And I. I deserved one more than Jason.

It's so unfair.

I know. Life isn't fair.

And I called every single month for like nine months, and I even, you know, got scammed and, you know, paid a guy to modify my loan and then, you know, two months later, his office was closed down.

There were a lot of loan modification scams out there in the day.

So, yeah, just encouraging people to hang on to the deals that make sense, short sell the ones that didn't, and not to give up on real estate because, you know, also during that recession, there were people that were just getting started, you know, like the David Porters of our company. And, you know, he bought all these properties in Indy, and even though we told him to finance them, he paid cash. But, you know, his portfolio has done tremendous.

He's killed it. Yeah.

Yeah.

In Indianapolis. By the way, one of the things that's interesting and it's counterintuitive is, you know, I always like to quote that great little book, the Greatest Management Principle in the world by Michael LeBeau or Buff or. I don't know how you say it, but. And his whole thing is what gets rewarded gets repeated. What gets rewarded gets repeated. And if you think about every aspect of life, whether it be government welfare and entitlements or whatever it is, that it's interesting. And so what Sarah was mentioning with the loan modifications is how that's totally unfair. And so I'll share with you an example of our broker, Dave, who was also a client, and he was buying up a bunch of properties years ago, and during the Great Recession, he got a whole bunch of loan modifications, as I recall. You know, he should be here to tell his own story, but. But he couldn't get a loan mod on his house, his personal residence in Irvine. And I said, why'd they turn you down? And he goes, just what you say, Jason? I have too much equity. Too much equity. See, the lender never has any concern or much concern that they're ever going to take that property back if there's a bunch of equity.

Right?

So the really highly leveraged people got all great loan modifications, but the people who kind of did the right thing. It's totally bass ackwards, okay. In like, philosophically. I'm just saying it's the way it is, right? So align your interests not with your own philosophy, but with the way things really are. Okay.

With reality.

And that's what we talk about with aligning with governments and the Federal Reserve in terms of inflation and so forth. Using leverage is a great tool, and it's a powerful tool. And the old saying, I remember when I was very new in the business and I would run around my REMAX office in Irvine when I was 21 years old. And the old timers used to tell me, you know, I would talk about how I bought this property and got all this leverage. And, you know, maybe I was 22 or 3 even by then. I remember Bob in the office, he would tell me, you know, Jason, leverage cuts both ways. It's a two edged sword. You better be careful. And I thought that was true back then, but I really don't think that's true anymore. Because, you know, there's that old saying, he who has the gold makes the rules. Well, the gold meaning the money, right? Once you borrow the money, the borrower is in control of that transaction, not the lender. And so if you look at what happens during bad times, whether it be in the mid-90s like I described to you about Orange county and the Orange county bankruptcy and so forth, I was doing short sales for all of these clients in traditional real estate. And then this last time around, all the loan modifications, all the short sales, and during Hurricane Katrina, the same thing happened. All the people that got relief were the people that had high loan balances. After Katrina, big lenders put a six month moratorium on mortgage payments. Said you just don't have to make a payment for six months. You know, And I remember reading about that in the paper and I thought, what if you owned your house free and clear, what did you get?

Nothing. Nothing.

They couldn't say, don't make a payment because you already own it. Oh, well, we know you have 100% equity, so we'll pay you. No, doesn't work that way. You know, it's just the way the world is. So align your interests with the way things are. Okay. Not the way they should be because they should be different. I'm not saying it's right. I'm just saying it is that way. Okay. We had another question back here. Yeah. Yeah. Could you talk about the strategy for mortgage sequencing? Yeah, good question. And you asked about that before lunch, so anybody want to take that? I can talk about that. Kerry, you got something to say over there?

So essentially, I mean, definitely speak with Aaron afterwards, but as most of you are probably aware, right now your first four mortgages are only 20% down. You're 50 or 10th, you're putting down 25%. That's assuming.

Yeah. Grab the mic. Just let her go down up to six.

For sure.

Six, Aaron, is that.

Is it.

It's four right now. They thought it changed, but it actually went back.

Let Aaron clarify. And then it went back.

For a long time. They decided to make sure an odd agency. They were keeping very much business. They said, hey, let's go play. They changed theirs to six, and then they got a lot more than they were ready for.

We're going to take a step back.

We're not going to do a lot of investment.

We're going to do a lot of investment financing for right now till we get a feel for what we've got. So now we're back to following Fanny until Freddie eases up a little bit and they start getting comfortable again.

Just a reminder, you're listening to Flashback Friday. Our new episodes are published every Monday and every Wednesday.

Okay, so what?

So that's just in the last couple of months.

So what they're talking about, just, you know, so everybody understands, not just a few people, is that Fannie Mae and Freddie Mac are the two large secondary markets for mortgages.

Right.

And they have all these guidelines, Right. They're these government sponsored entities and they should really go away philosophically. That's what I think. But practically, I love them.

Okay.

So, you know, don't. Don't be in love with your philosophy. Be in love with reality.

Right.

So what Oliver was saying is that the first four mortgages you can put as little as 20% down. Now this is for investment properties, not financing your house. You know, the standards are more liberal for financing your own home and then the next six, because you can get a maximum of 10 per person. So if you're married and both spouses qualify, you could get 20 of these loans. Right. And they're called agency loans because these are the government insured mortgages or well, it's not exactly insurance, but whatever. Anyway, so it's the Fannie Mae, Freddie Mac loans. Okay. Then the debate was that you could get six with 20% down and then the remaining four, but I guess that went away.

So it hasn't. Everybody, they're just getting a good handle of what they got their hands on.

Okay.

They're taking a look at it, said, hey, kind of slow down a little bit, let's look at it. So we just follow the Fanny stuff for now until they ease up.

So just tentatively on hold, I guess.

Yeah, for the moment.

Yeah.

Yeah. It's probably a short window of time.

Okay. Okay.

And for those of you that just are wondering about multiplexes, it's an extra 5%. So anything, a duplex, fourplex, whatnot, you're going to be looking at 25% for your first four in this scenario and then 30% for number five to 10.

So here's the thing. Though on the mortgage sequencing, if you can, and you can't always do this. Look, none of this stuff is perfect, but in an ideal world, buy more expensive properties first because that's where you get the best financing and the best leverage. And so if you can buy a 4 Plex for $400,000 and you want to have plexus in your portfolio, which is a good question in and of itself, do even want to have plexus? And you feel free you guys to disagree with me on this, but I believe that if you have an A plex, meaning duplex, triplex, fourplex, right. You're going to have usually a B tenant. Your tenant downgrades a notch in a plex, Whereas if you have an A single family home, you'll probably get an A tenant. Not always, but that's the gist of it. Okay. With an A fourplex, you'll get a B tenant, and with a B fourplex, you know, a ratier property, a little bit rattier, you'll get a C tenant. You always get a slight downgrade in tenant quality with plexus. Okay. But you do get more leverage. How do you weigh this out? Is there an app for that? No, there's not. You know, these are judgment calls. Right? So that's one thing about mortgage sequencing. Okay, yeah. Anything else on that?

Touch on the multiplexes? If you're starting out, if you're brand new, I'll just say that I personally found that it's much easier to go the single family route. I started out with my first house, it was a fourplex, and it's really like buying like four houses, essentially. You're essentially buying like four tenants. You have four different units you have to now take care of. So if you're starting out, you want to go do something that's a little bit easier, start with your single family houses. That's my personal recommendation recommendation there.

Oliver thinks these duplexes and fourplexes, because he's Canadian, he thinks they're a movie theater, It's a multiplex. Okay.

So I was just gonna say, you know, it's kind of a catch 22. Right? Because, you know, here on one hand, Jason's saying, we'll do your first, you know, four loans where you only have to put 20 down. Do those on the bigger multi family deals if you can. And then you have Oliver over here saying, well, if you're new to investing, harder to manage, he's right, Might not be a fit. And I agree with Oliver because you might talk yourself out of Becoming an investor. If you start with a four plex and it's just not what you thought it was going to be. Years ago we had like some new construction duplexes and I thought those were okay because you got A area type properties and B tenants and those were fine, but those are hard to find. A lot of the two to four unit deals we're seeing today are going to be in your mostly like B2C neighborhoods. So you know, I wouldn't. If you're brand new to this, I don't think you should go all in with multi family. Maybe, maybe you could do one and see how you like it. But the single family stuff, and especially the, the stuff that's renting for a thousand dollars a month or more in most of these markets, you know, that wouldn't be true for Texas. Texas is more expensive. But like in a Memphis or an Indy, if you're getting about a 900 to a thousand a month or higher, you're probably going to be in a beer better area and the local market specialist can speak to that. But yeah, if you're getting your feet wet with your first couple of deals, I don't know if I would recommend a C area multifamily deal.

Pass it to Carrie. Any thoughts on that?

Well, I'd agree. I mean at least do your first one or two single family, test the waters, see what it's like. What if you don't even like that market and here you're stuck with a four plex. And then to note on the loans that fourplex is one loan.

Right.

So keep that in mind too. Then if you want to maybe save it for number five or six, you're going to have the lower down payment. Then once you, you know, so keep that in mind. So you know you have four plex, that's one of your ten loans. So instead of four single family.

Right.

So you get more leverage with it. But generally speaking. Well, not generally speaking, definitely speaking, the single family home is the proven thing. Okay. The Plexus apartment complex. Look at, I own apartment complexes. One of our clients I'm partnered with on 136 unit building. Okay. And let me tell you, the tenant quality just, just plummets in apartments and plexus, it's not as good. The single family home appreciates really well when you resell it. You don't have to resell it to an investor because just a home buyer can buy from you and home buyers aren't very logical and that's good. Use that to your advantage.

Right.

Because they're not going to go run a Performa on the property and say.

You know, they're not going to open.

Up Property Tracker and say, well, gee, should we buy this home in the nice school district with a nice curb appeal? Well, what's the cap rate? I don't know. You know, they're never going to think of that. They're never going to have that conversation. They're just going to buy because they like it. Right? So that's your resale buyer and they're not going to be that logical. So that can work to your advantage for sure. Single family homes are just, you know, if you're a more conservative investor and especially like they all said, I think if you're new to it, single family is really the better thing, I think.

Okay.

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