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Number one.

I love your show.

I love, you know, the way that you go deep into business and, and.

Then go, you know, on some of.

These other tangents of experiences that as.

Business people we all have. So thank you for putting out such good content because it's, it's impactful.

It is really impactful.

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 empowered investors. This is episode 2286. 2286. We've got a great show for you today. We've got Alex Blackwood, a former Goldman Sachs guy that now went out and opened his own company called Mogul. And I think you'll like what he has to say. He has a lot of interesting insights on the marketplace, the economy, investing. So stay tuned for that. The one message I did want to give you here in our intro today, I just did a live stream with a bunch of real estate experts and I just noticed that the biggest mistake, it's what I talked about, the biggest mistake people make in real estate is not the problems they have. You know, this is definitely not a perfect investment. Nothing's perfect, right? There are bumps in the road, there are problems, you know, you might overpay for something. You might, you know, like a repair or maintenance item or something. You might hire the wrong person to do the job. You might hire the wrong property manager. You should be self managing probably, but whatever, all of those things. The biggest mistake you can make is to not be in the game or if you're in the game, to be in the game only on a very limited basis. Folks. This is the most historically proven asset class in the entire world. It is the most tax favored asset class in all of America. And all of these doomers are the people costing you more money. Than anything else. You cannot lose more money than you can by listening to the wrong person. The doomer who's never right, right? It's like that live stream I did with Peter Schiff recently. And someone types in. Peter Schiff has been wrong since 1982. And of course he hasn't written always been wrong, right? You know, some will say, well look at the YouTube video, Jason, how he predicted the Great Recession. He was predicting doom and gloom for decades before that. And the great recession just came along like the broken clock. That's right, twice a day. That's what happens with all of these guys. And the biggest cost that people have, the biggest mistake they make is the opportunity cost. So for example, if you're watching on video, look at my screen, you've got a bunch of these doomers videos, right? I've invited this guy on the show multiple times. He even accepted once, maybe twice, but he never comes. The interview never actually happens, right? And the doomers get the most views, they get the most fame because the human mind is trained to seek out negativity. That's what kept us alive for eons before this. But we've got this 50,000 year old hardware, our brain, right? With all these biases that don't work anymore. That really stopped working at the start of the industrial age. Because when the industrial age came along, society got much more more settled, law and order became much more of a thing and abundance of stuff became the norm. We all have so much stuff. We do not live in a scarce world anymore. We used to live in a scarce world. Our hardware is programmed for a scarce world and our software, but we've got to update it. We've got to realize that's our bias to fall for negativity. I did these screenshots of this guy's videos, right? And they go back to 2021. He's predicting the end of the world in 20. If you're watching on video, you see this on my screen. The first video says 2021 housing market indicator crashes up to 70%. Did anything go down by 70% in 2021? Or 22? Or 23 or 24? Will it happen in 25? The next one? He predicts a whole bunch of zip codes will lose 50% of their value in 2021. Can you imagine the hundreds of millions of dollars people lost collectively by listening to this guy and the other doomers? The billions of dollars, the hundreds of billions of dollars in wealth, maybe trillions of dollars in wealth that could have been created if people didn't fall for the seductive lie of the doomers. That's what they always do. And you know, when I. When I started really doing YouTube about six years ago, I was always podcasting for the last 20 years. And I always got a lot of feedback. Audience doing live speeches on the podcast, people writing hit and run reviews, you know, these idiots. And the funny thing is they think I don't know who they are. But all I have to do is look at all the other reviews they've written because I can see that and then I can see the connections, right? So, Mr. Tariff Bro, that keeps listening to the show. I know who you are, okay? I love these trolls. They think they're so smart. They're really just so stupid. But anyway, you could have listened to this and you would have just missed out over and over again. What I was saying before is on YouTube, right? I would see all these comments back in 2019 that would say things like, well, this video isn't going to age well.

Yeah, where's my apology? You know, that's what I said to one of my commenters today. Julius, I know you watch my stuff. You've been telling me I'm wrong forever and I've been right and you've been wrong. Where's my apology, man? Come on, just give me my apology. So all of these things, you see more titles, all these cities that are in correction, everything's a disaster. It's just unbelievable. Come and listen to the real people that know what they're doing, that actually make money investing and doing the things that all of the doomers say you shouldn't do. And the way they make their money is on YouTube ads. Okay? It's just. They're just always wrong. It's amazing to me that these people have the audience they do. It's weird. It's just a weird thing. Okay, Empowered Investor live is coming up. Michael Maloney, he's kind of a doomer, actually, so you might like him. No, he's not really, but he's really brilliant when it comes to educating about monetary history, the Federal Reserve, monetary policy, central banking and what you can do about it. Sharon Lechter, of course, you know her. She's spoken at many of our events. She's wonderful, wonderful lady. She's going to be talking about. Well, I don't want to tell you exactly what she's going to be talking about, but she's going to be talking about how close opportunity is to where you are right now, how you're so close to it. And Tom Wheelwright, of course, Robert Kiyosaki's accountant, the rich dad advisor. He's going to be talking about saving on life's largest expense, taxes. So it's going to be really Great. Empowered Investor, live.com. be there or be square. Don't fall for the boomers. Let's get into our conversation with Alex Blackwood.

It is my pleasure to welcome Alex Blackwood. He is the co founder of an interesting platform called Mogul Club. He's got a background with Goldman Sachs, so he is very steeped in economic research and analyzing deals and analyzing the marketplace. So looking forward to talking with him today about rental trends, demographics, what to expect next in this rather uncertain economy. Alex, welcome. How are you doing?

Great. Thank you so much for having me.

Jason, it's good to have you. Where are you located?

So we're DC based actually.

Okay. Oh, so you're in the belly of the beast there. Yeah. I got to ask you a question. So with Doge and with all the corruption, the disgusting corruption that we are now learning about, we all kind of knew it was there, but maybe we didn't know it was this bad. I certainly didn't. I am hearing mixed rumors about the D.C. housing market. And you know, this is not a market we really play in at all. But are homes going on the market like crazy in D.C. like some say, because people are just getting out of town with all these scrutiny or is that not true?

So, I mean, I would say it's pretty mixed, especially depending on which strike price you're looking at. So if you're looking at kind of that 800k to 1.5 homes are still relatively low on the supply side. Now below that, I think it's getting a little bit higher and more homes are coming on market. With that being said, I do think it'll be a laggard effect that we're going to see into the summer months because especially with some of the layoffs that are happening now, A people are getting contesting it in court. B, a lot of people do have uncertainty because they just found out about this over the last month. Right. It takes a little bit of time to get a house up and ready to be sold. And so a lot of these people, I mean, it is a remarkably short time frame that Doge came in and enacted change. And so a lot of this being contested in the court, we don't fully see the impact on the supply side. Now one thing to note that is pretty remarkable are the mega mansions out in Virginia and Maryland are going on the market and being sold in days with bidding wars. And this is primarily due to the different cabinet positions that are coming in, are billionaires in the private sector that are coming in and really can come in to purchase a home at that size. So previously I think Dan Snyder, owner of the Redskins, was actually having a pretty tough time selling his home. And since then it's, I think it's sold with a little bit of a markup attributed to it. And by the way, Washington commanders, my bad. It's been, it's been a day on the football team side.

Yeah, it really interesting. So I guess there's kind of two layers to the D.C. housing market question, right? One question is just the federal employees that are being laid off, right? That's, that's one component. And you know, they put their house on the market, get out of town, move to another area and look for another job. But then there's the side which I originally addressed, which is the sort of the, you know, everybody who's been kind of leeching off the system and in, in most ways that would be considered at the very least unethical but possibly illegal. They would own the mega mansions, I would think. So the question is, I know they're getting snapped up because there are new buyers, but I wonder if the supply has increased of those even. Even though the demand is there and buyers are buying them with multiple offers, as you said. But is there increased supplier. There are more people putting those mansions on the market.

I think they see the opportunity to sell it, especially in this economy. And so they're definitely going to take a look, or at least a second look to sell one of those mega mansions when maybe prior to that they wouldn't have even considered it. And I do think too on the supply side of the equation with the Republicans obviously taking over and the red wave kind of taking over, a lot of people do move out in that kind of four year cycle when you obviously had Democrats in power previously and now you have Republicans in power. And so when one goes out, the other one comes in. And so we also don't know if this is just natural attribution to the political tide shifting or if it is related directly to Doge. And also a lot of the Doge things that have occurred over the last little bit. Maybe it's not as concentrated in D.C. market because D.C. market as a whole is pretty pricey when it comes to even homes or apartments. And there have been a lot of new builds as it relates to multifamily or even any sort of the residential leases that happen out in what we call the RBC or the Roslyn Ballston corridor, as well as different areas within Virginia.

Yeah, very interesting. Well, I didn't mean to get too far off track on that, but I just had to ask you because you said D.C. and I know you were before located in San Francisco area and so forth. So I didn't know all of that. Anyway, let's talk about your thoughts on the rental market. You are now in the business as a co founder of helping investors invest in rental properties through a sort of a different kind of a crowdfunding platform. And we can talk about that. But what are your thoughts on the housing market, the housing shortage? You know, it seems like most opinions on the housing shortage number for purchases settle around the 4 million mark as a housing shortage number. And then there's a question of the rental market and how under supplied is that? If you think it is, what are your thoughts?

Yes, I mean, just broadly speaking, it's obviously hard to attribute the global trends in the real estate market without looking at the micro locations that you're looking at it. Because obviously some markets are going to prosper through this time. Some markets are definitely going to get hit during this time. And so it's really just analyzing the inventory that is online. So the supply that's online versus the demand that's coming into the market. And so if you think about the supply that's coming online during the period of low to no interest rates back in the day, developers were incentivized by this almost free capital, so to speak, where they'd come in and they would develop as much as they could as quickly as they could. But a lot of people did think that interest rates would stay lower for longer. And so a lot of developers would develop during this timeframe. But then all of a sudden when the interest rates began to skyrocket at the tail end of the development cycle, a lot of people and a lot of demand started to dry up. And so a lot of these developers that were looking to just kind of develop it and then sell it afterwards and have it fully leased up were left with a ton of inventory on their hands. And so as a result of that, they would buy or sell a lot of the assets to any individual that would come in and purchase it, because even then they'd cut into their margin a little bit. But at the same time they would get it off their books entirely because the carrying costs on the go forward would continue to be exorbitant as interest rates continue to rise. And so if you think about the supply within the markets, we like to target the Houston markets, the Dallas markets in very small pockets. The Austin market I would say as a whole, definitely Austin is one of.

The toughest markets right now. That's been pretty hard as we all know.

I would say there are certain pockets that you've got to look at especially as it comes to the micro location. We always call it as the path of growth. And so by the path of growth I mean the supply is relatively constrained. But you have demand levers that are being really hit in the next few years as more jobs and more employment comes into it from pre pandemic era, even post pandemic era initiatives by these large corporations. And so if you think of the Dallas's of the world, Dallas has what we refer to commonly as the Golden U. And so in the Golden U supply is relatively constrained because obviously there's a minor portion of land in the entire Dallas area now a lot of corporations are starting to move jobs into that area. And so the supply constraints really point to higher prices because that demand is coming in. I mean Goldman is moving out and HQ2 out there. JP Morgan has a large presence and a lot of these different financial institutions are starting to add to their presence. And so really yes there is a question about. All right, there is a supply shortage, but also there are a tremendous amount of demand that are still coming into different pockets within the area. And the supply shortage really points to a few different things. Number one being obviously the developments have kind of halted because obviously as we had mentioned earlier in our talks prior to this, tariffs are going to increase the cost to actually build things. But on top of that too, the golden handcuffs really aren't going away because interest rates are going to stay higher for longer. So people that are in place really don't want to move.

And since, and you're referring to the mortgage lock in effect when you say golden handcuffs and you know we've talked about that a lot, I mean you know 25% of the country has a mortgage add or below 3%, 65% of the country has a mortgage ADD or below 4%. About 80 some odd percent of the country has a mortgage adder below 5%. And the Delta, if those people were to move and buy another house, the Delta between the current rate and the rate they have, they just can't make it work. Right? They're just, they're just too spoiled with these cheap mortgages from the COVID era. So they, that's what you Mean, when you say golden handcuffs, I just wanted to make sure listeners caught that.

Yeah, entirely. Right. And so those golden handcuffs are keeping people in place for longer. Which is kind of crazy when you consider the fact that mortgage rates being in kind of that 6% range right now actually is towards the average for the past 30 some odd years. Right. And even then it's kind of in the middle of it. And so.

Yeah, you can say that, Alex, but housing prices were a lot lower. You know, I mean, it's so funny. Everybody loves to say, you know, when I bought a house, the mortgage was 14%. Yeah. But the house was 60,000 DOL dollars. It's a different, it's obviously different. Right. So do you want to elaborate on that?

Yeah, I mean it's different, but at the same time, obviously salaries have gone up and hopefully they've met or beat inflation. But I will say there is a kind of inelasticity about real estate that points to real estate prices continuing to go up even in the event of interest rates being around this kind of 6%. Right. Demand is always going to be there. People always need a place to live. And so it will continuously push the price up. And if we do have a shortage of inventory, that's exactly what we were talking about earlier. It's the prices are going to continue to skyrocket and the people that hold real estate will be on a different side of the wealth gap than if we were to bring a lot more inventory online. And so I can.

Yeah, yeah. And when you say it's inelastic, I mean it's very hard to create new housing stock. It's a long process. Obviously the inputs would be massively affected by tariffs potentially, and we can talk about that. But there are so many elements. Well, already there were a whole bunch of elements and now with the new Trump administration, there are even more. You know, it's just a lot of question marks. But just looking at demographics for a moment, you know, most of us are familiar with the movie Failure to Launch, right. Which is that comedy about, you know, the 40 year old that won't move out of their parents house. And you know, we've got millions of people, millions of young adults that are living at home. And I call that shadow, shadow demand. During the Great Recession they talked a lot about shadow supply or shadow inventory. You know, the houses that didn't yet hit the market because the banks were holding them back in terms of their foreclosure process. But now we've got massive shadow demand that has not presented itself to the marketplace yet. And it will. I mean, these people will launch and they will form households. You know, they will marry eventually. They're slower than any other generation to do it, but they're going to do it. I mean, we've got 650,000 homes for sale in the country. It's just an incredibly low number. What are your thoughts on that?

Yeah, I mean, I think the shadow demand is going to continue to go up. I mean, when people first time home buyer, right. It's around 37 now, or 35 to 30.

I know it's old. These first time buyers are old. Yeah.

And it's, it's kind of ridiculous. And it exactly points to that shadow demand effect that you're talking about because it was once thought of as obviously the American dream is to purchase a home that's a symbol that you've made it. Right. And so the idea that it takes longer to achieve that American dream is definitely a sad impact. But at the same time, it's really going to come to a head if we don't help out with the supply side of the equation. Because even as more people and more younger people stay at home, it's adding a cumulative impact to that shadow demand. And ultimately it will pop at some point to the point where real estate prices will be completely run away and people will never be able to afford a home. And so that's actually why we started mogul, so people could invest in real estate even when that happens, and take advantage of the stable income, but also the equity upside appreciation in this.

Yeah, yeah. And by the way, I just verified that the average age of the first time buyer right now is 38 years old.

That's incredible. I mean, I remember just not too long ago when I was in my 20s, people were buying houses, my friends, you know, I mean, I had a girlfriend, she bought her first condo at 26 years old. Irvine, California. You couldn't even touch that nowadays. I mean, it's just so out of reach, you know. What do you say to the people? They kind of look at the trend line of say, housing affordability, Alex, and they say, well, housing was this affordable and it has to revert to the mean. Right. It has to go back to being just as affordable. And I think that's just a flaw in human thinking. Things can remain unaffordable indefinitely. They can remain less affordable for a very long time. Just because something was affordable doesn't mean it has to be that way again. Your thoughts?

Yeah, I mean, that just plays into the kind of Perfect market theory, which obviously right now there is kind of an irrational exuberance when it comes to purchasing homes. Right. People want a home so badly that they're willing to bid it up and increase the price so much so that it's inaffordable to the remainder of the population. And so it really comes down to the fact that a lot of people, when they purchase homes, it's almost an irrational purchase. It's less so about the financial decision to purchase a home and more so about creating it from a house into a home. Right. Is kind of the joke there. And so I do think that it is flawed in the sense that it won't necessarily revert to the mean. Prices won't automatically just drop off. We're going to have to adapt to a new normal. I do think that wages have to increase to match that in order for anyone to afford a home. But at the same point, I do think that real estate prices at one day or another will kind of run away. Are you familiar with kind of the Georgist real estate catastrophe that Peter Thiel recently started bringing up? A lot more.

You know, I actually did report on that before, and I love Peter Thiel. The guy's brilliant. You know, I love his book, Zero to One, I think it's called. And that was a fascinating book, but I can't remember that George's thing. I reported on that too. What did he say about that? Remind me.

So high, high, high level. It just points to the inelasticity of real estate and it points to exactly the point in time that we are at right now. And so Henry George back in the day was a social philosophical economist. And so he came up with a theory that because there's a finite amount of homes, if we don't lower regulation to add more inventory online, then demand remaining constant will continue to push home prices up. And there will be a point in time where it's almost runaway home prices. And the idea being that even if demand remains constant, let's say a 1% increase in demand will lead to a 50% gain in a real estate price. Now, wages, I remember, increase at maximum in line with inflation or slightly above that. And so it will become a point where those that hold homes will be on a different end of a wealth gap than those that don't hold a home.

And so landowners, and we've already seen that. I mean, the last five or six decades have taught us that, or the last five for sure. Because when Nixon cut the final vestige to the gold standard in 71 that was when the inflation really became a problem. The government spending really got just insane. Right. So, yeah, you're absolutely right. So that math equation of the georgist idea is a small increase in demand because supply is so inelastic, creates a massive increase in price. And I mean, would you agree that we've already seen that? I think we have. Right. There's a huge wealth gap between renters.

And homeowners, I think somewhat right now. I think it was also exacerbated by the fact that a lot of people could suddenly afford a home overnight when interest rates were entirely low. And so I do think it locked up a lot more supply than would have traditionally been locked up over those different markets. And so while I'm not sure if the exact point that was theorized in the economic catastrophe is hit yet, I do think it became incredibly accelerated over the previous few years as more and more people purchased homes with free money, so to speak.

Right. And those people now have a mortgage that is not a liability, it's actually an asset because it's. It's much cheaper and it's irreplaceable. You can't get a mortgage that cheap anymore. And so they are just going to constantly just keep zooming ahead of the people who didn't get that deal for probably decades to come. As long as they keep their homes and their cheap mortgages, you know, they'll probably turn a lot of those properties into rental properties too, and just not sell them because that mortgage is such a big asset. But talk to us a little bit about the rental market. I mean, you're obviously very bullish that prices are going to increase a lot. I am too. I agree with you. I think right up until the mid-2040s, we've got a really good trend. And that's a long ways out, but I think it's going to last for a while. What about rents, though?

Yeah, I mean, I think A, consumer preferences will continue to put rents up and then B, the fact that we have no other alternative but to rent. Right. And so consumer preferences, when I talk about that, it's really the idea that a lot of consumers like the freedom that came after the hybrid remote work environment of the pandemic. And so a lot of people are moving around in a lot quicker of a clip and moving from city to city. I mean, I'm exactly an example of that. I've been in New York. I technically was based out of San Francisco, even though I was in New York and then I was in Dallas for A stint. And Now I'm in D.C. it really comes with a lack of need to plant yourself because you don't have a property. And so consumer preference will continue to push the narrative that rents will continue to go up because demand will increase not only from locals in the area, but from people coming in, even if for a brief stay. Now the second one really comes down to the fact that there is no other alternative. You can't go out and purchase an asset because you've been priced out of the market. And it's gotten to a point now where not only what does it mean when people are priced out of the market, it's when a lender truly will not give a loan to you because your salary does not meet the certain debt to income ratio necessary to purchase a home in X, Y and Z strike price range. And so really those two things I do think are going to contribute, contribute even more to increases in rents over the near to midterm, if not long term. But I do completely agree with you in the sense that rents are going to continue and they're going to continue to go up. I do think some of the markets we saw a slight dip coming out of 2020, 2021 as interest rates increase because of the development issues that flooded the market. Some markets with supply, but right now we're starting to see it back on an upward trajectory as they got hit in the period of 8% plus interest rates.

I'm really glad you brought that up because we had last year an absolute mega record number of apartment deliveries hitting the market. And you know, even though those aren't single family homes, given the right price, of course, everybody would prefer a single family home. Usually they'll take an apartment because the deal is just too good to resist. And these institutional apartment owners have been cutting deals left and right. And finally we're just now starting to see that supply getting absorbed. And I think the rental market is going to take quite a quick turn. You know, a lot of investors right now are complaining, you know, the cost of everything's going up, namely insurance. And you're going to be able to pass that through to your tenant very soon. So just sit tight. I know the rents have been, you know, kind of boring lately as prices have, you know, they're going up, but it's just a very modest amount. And I think that you're going to see that rent equation, in that sales price equation turn very quickly. Especially, I mean, we're now in eight straight weeks, I think, of mortgage declines in mortgage rate declines and if those mortgages hit into the mid fives, the market is going to explode. I mean, barring some external massive recession or something, you know, but that's a strike price that people aren't going to be able to resist at five and a half percent mortgages, you know. Do you think we'll get there?

I think we might. I think it will have to do less so about the Fed fund rates going down and more so about consumer speculation as it relates to the ten year. But I do think we might get there. I think analysts right now are projecting it out for end of 2026 is when we'll achieve kind of that 5 to 5.5 range. Now I don't think anyone foresaw anything that was going to happen with the Trump administration. And so I'd be very curious to look back at those analysts analyst estimates now because obviously if we do have runaway inflation, it obviously creates less of a narrative for the Fed to cut the interest rate. But at the same time, if people continue to push that 10 year down, it's going to come to a point that it might tip that way even without the Fed adopting a different measure. And so it'll be an interesting one to pursue. And I like what you had said earlier too about the institutional investment into multifamily and it really was a strong couple of years there for multifamily and the residential sector space. Because if you think about all the other commercial asset classes, classes that were out there when free money came in, overabundance, they started dumping into whatever bucket made a ton of sense. Not to mention they were under deployment horizons that were fixed of about a year. And so if you think about the.

Asset classes, what does that mean under deployment horizons? What does that mean?

Yeah, so with a kind of fund Horizon, right, a five to seven year fund horizon, you've got to deploy over a 12 to 18 month interval. Right. So you've got to deploy out of it and you've got to find deals that are naturally with it or else those funds are just kind of sitting right and it's not hitting those IRRs that are necessary to return capital back to investors. And so when you think about a lot of the institutional investment, the landscape had changed entirely, especially during the pandemic. Industrial went up obviously and offices got absolutely slaughtered. So there was lack of office investment, retail was questionable and it actually started to make a little bit of a bump up. Hospitality was hit with record prices as price per key. Which is kind of a way to gauge it. Yeah, exactly. And so, so when institutional investors were looking at somewhat stable outlooks for asset classes and ways to deploy into them without having to gauge a true investment thesis around it, industrial and multifamily in the residential sector really stood out. That's why you saw Blackstone buy tricon Residential. That's why you saw a lot of these institutional investors investing heavily in the industrial warehouse space. Those two areas really stood out as incredible areas of opportunity in the next little bit. So that's kind of the idea there. And that's why I do think there's been a flood of supply in the residential space.

Yeah. And that's for sure. You know, you saw a lot of build to rent initiatives with people building, you know, single family homes, the investors, invitation homes and, you know, all the others, they would just go to a big builder like Dr. Horton and they'd say, build me 250 houses here, give me another 347 houses there. And that added to the supply. But I gotta tell you, those institutional investors are good for you mom and pop investors. And the reason is, is that they are much better at raising rents than you are. Okay. Because they are really using yield management software and they just crank those rents and that will set higher rent comps for you mom and pop landlords that get kind of lazy about raising your rent. Okay. You know, the typical mom and pop investor has this rationalization, ah, they're a good tenant, they don't bother me, I'm not going to raise the rent. And your rents are going up at like 5, 6% or even more. Sometimes you gotta raise the rents. Right. To keep up with the market. And the institutional investors are gonna be much better at that. They're already much better at it than typical mom and pop landlords. So that's going to be beneficial to you. But initially, yes, more supply, a lot more supply of apartments because the money was free three years ago when they started those projects. And so lots of apartments came online. Going back to something you were saying a moment ago, Alex, you talked about people, you know, being able to move to where opportunities are. And during the Great Recession, I said that a lot. I said the best thing as a young person you can have on a resume is mobility, being able to move to where the jobs are, where the opportunities are. And Mogul gives people the chance to do that. I think it's kind of ideal for young investors that don't have a lot of capital and they don't necessarily want to buy their own house. Right. Because then they're stuck, you Know, they can be a real estate investor with 250 bucks.

Right, exactly right. And so the idea came about really because at Goldman we were seeing returns north of 17, 18% plus and we thought there's got to be an easier way to invest in that real estate. And so really it came down to let's take the expertise and the training that we had gotten during our time at Goldman and provide it to a platform style business. And so provide those level of underwriting, that level of diligence to the end investor. And so then an Investor can invest $250 minimums into a property, receive rental income the second Tuesday or month, appreciation, real time, and tax benefits at year end. So a 10% yield could stay 10% and might be a passive loss for income reporting purposes. And I mean, we like to joke here, the IRS wrote the tax code to incentivize two things, procreation and homeownership. We can't help with the first, but we sure as heck can help with that second.

Right. So really the first one is down, by the way. People got to start having babies.

Yeah. And so the idea is Mogul is the purest way for anyone to invest in real estate. It also affords exactly the flexibility that you had said. A lot of these markets that these young professionals are working in are break even cities, whether it be the New York, San Francisco's, the Las of the world.

Yeah, they don't work.

So to invest in a city with high price to rent dislocation and high equity upside like a Houston or a Dallas is going to take a lot to actually go out there and diligence and vet the market. And so rather than that, you can just invest from a computer, from wherever you are for the $250 minimum.

Yeah, well, I think the big key is the minimum. I mean, look, my company vets deals and you know, we do that, but our investors need to have, you know, at least $30,000. Okay. To get into a deal. That's pretty much the way that looks. I want to ask you before you go about the crazy political environment we've got. I mean, listen, I think Trump is doing really good things. You know, feel free to disagree with me, but I think it's going to be very positive for the country. But it's not going to be without some bumps in the road. You can' deport millions of people, you can't take them out of the economy. You know, you can't lay off millions of government workers and have that not have some impact. Right. And you can't put a bunch of tariffs on input costs for home builders and not see prices go way up. What do you think is going to be the net effect of some of these policies?

Yeah, so obviously I like to look at it even from a non political way. It's just the way it's going to shape the economy. And so a lot of his ideology is in a vacuum, shape the economy quite negatively, but when combined, it actually shapes the economy quite positively. And by that I mean obviously going out to market and raising tariffs and forcing that on another country. And also, let's see if that actually happens. He obviously backs off of it, puts the pedal down on it quite frequently. Changing and pretty flippant when it comes to that. But the idea that he has of charging another country a tariff for importing goods here. Yes, that would directly impact the consumer and hurt the consumer, which obviously in a vacuum does not make a ton of sense. But if you zoom out to another part of his economic plan, he wants to reduce the federal income tax to zero. He wants to get.

Wait, wait, wait, wait. But I got it. But before we leave the tariff topic. Well, maybe you're getting to that because you're saying external revenue.

Right, Exactly. So it's in combination. Yeah.

But before we even get there, we have to talk about the point of tariffs always is to protect the country's workers and create jobs and capital investment within the country. And Trump has already done that like a genius. I mean, Apple was going to spend a half a trillion dollars in Mexico and now they're spending it in the U.S. you know, all of these companies, you know, TSMC investing in the U.S. you know, SoftBank, et cetera, et cetera, that capital that FDI is coming into the country or staying in the country because they're afraid of the tariffs. Apple over the next four years is going to employ 20,000 new American workers and those people are going to be highly paid. This is what tariffs are designed to do. So, yes, it makes prices higher for the consumer. I get it. Right. But it also makes incomes higher. Right?

Well, it does when it comes down to also cutting down the federal income tax. So it's 25% tariff, 25% reduction in taxes paid from income. That obviously marries up pretty well and fits in a great space.

And higher pay at the job, not just lower taxes.

But I will say some of the specialties, it's going to be very tough to hire for. And what we've seen out of Phoenix, especially TSMC devoted a billion dollars to Build a semiconductor plant. No one in the US Knows how to make the semiconductors at that plant. And so now they're flying in workers to actually teach other people how to make it at the plant, which, obviously, in the long run, I'm in favor.

Of those type of guest workers. Yeah, they'll have a tax nexus in the U.S. some of them might buy the $5 million gold card. Okay. For, you know, the CEOs and so forth. Right. The C Suite people. And they might just stay. And that's more capital. That's more brain power in the U.S. right. But go ahead.

So, I mean, yeah, exactly. In isolation, a lot of these things are radical in nature and will come with a bunch of bumps, but when in combination of one another, they're not as crazy. We can model out whatever we want to do, but ultimately, when it comes down to the actual action taken versus just bluster about some deal being struck, that's when we're going to truly know the outcome of, obviously, all these different initiatives. And, I mean, what we're seeing with Doge in particular, obviously that comes with some pretty high tension, especially living in dc, you can't mention Doge without multiple hairs on people's necks, because everybody in.

D.C. is on the take.

When you think about Doge and think about the way they're going about it, he's going about it in the way that a private sector would work, in the sense of, like, let's cut it, see if it doesn't work, and if. If we need to repair it, if.

The world will hire some more people again or throw some money.

Exactly. So, like cutting, for instance, the people. What was it working on? Our actual nuclear arsenal.

Right.

Firing them because they didn't know what they were doing, and they're like, oh, they must not be doing anything important. Then they'd be like, oh, wait, actually, come back, come back. You're actually doing something pretty important.

You know, I know there's going to be some problems like that. Of course, you know, you can't.

But that's what I'm saying is I think Doge. It's going about it in a. In a good way, in the sense that they're cutting it really rapidly and moving very quickly. You've never seen this level of pace from the government. And so they're going about it in a very brutal way. It just will obviously make a lot of people tense because it will impact them directly. But at the same time, as long as they realize a mistake and fix it, which is a lot of What Elon does at all his different companies, then it's a net positive for the economy, it's a net positive for America. It's a net positive for everything. So I think looking at it in isolation and looking at it, and you can always point to things that are negative about either side of the aisle, regardless of that, if it betters the US Economy in the long run and betters it even past the next four years, that's going to be an impact that impacts everyone for years to come. And so, yes, it will be a year of turmoil and a year of guessing what's going to happen next year. But at the same time, if we're in for a change, we might as well do it pretty rapidly and not think about it the way that a company thinks about the next quarter. Let's think about the next 20 years past this year.

I couldn't agree with you more. And you know, there's one other softer point about the Doge cuts when it comes to cutting the workers. Right. You know, everybody would have to admit that the vast majority of people in a government job have lost their edge. Right. They're not competing in the marketplace. They can't get fired. I mean, well, until now, but, you know, there's just no chance of being fired from your stupid government job. Right. Most of the time. And so those people going into the marketplace, they're going to get better. They're going to bring their edge back and they're going to be better people. They're going to be better workers. And, you know, I think they're going to start taking more pride in themselves and they're going to start working on themselves and they're just going to become more qualified people because they're going to be forced to. Right. Because the companies will not tolerate the mentality the government will tolerate. You know, they just won't have the security. And that'll just make them better. They'll just get better.

I do think competition obviously makes everyone better. And all tides rise, the ships, whatever that that saying is.

Yeah, the rising tide floats all ships.

Yeah, exactly. But I do think there obviously are very skilled workers in government. It's just going to make a majority of the people that. That were kind of clinging onto it. Like, for instance, I didn't realize that there is a mine out in Pennsylvania. And this is not a conspiracy theory. I looked into it a lot because I wrote about it in a newsletter that we wrote because I said we.

Entertain a few conspiracy theories.

Exactly. So there's actual. A literal mine out in Pennsylvania that government workers, when they retire, it's a manual paperwork process.

Oh, I know, I saw that.

Yeah, exactly. It's crazy. So things like that, the fact that they just processed for the first time on a computer a retirement account in under a day, like that's major progress. Yeah, yeah, yeah.

It's. It's really great. It's a whole new level of transparency and it's really interesting. And yeah, there's. There's a lot of interesting things going on, for sure, but it is. It is chaotic. You know, what else do you want to tell people? You know, any other thoughts about what's to come or what people should do or expect or whatever?

Regardless of ideals, we're very positive on the. The real estate market on the go forward. And especially starting to deploy now, even if it is a Minor amount of $250 or 5k, 10k, whatever it might be. And so starting to build that wealth in a stable, reliable way, that's going to be real estate in the long run. These fluctuations that happen in the stock market don't happen nearly as strongly in the real estate market historically. And so going to App Mogul Club to check out our offerings is a way for you to reliably grow through the turmoil that ensues. And so that's just kind of high level there, but nothing else that I can think of. I really appreciate, obviously, the time that you've set out here today, Jason, and really appreciate the time.

Yeah. Thanks, Alex. It was great talking to you. Really interesting conversation and we appreciate having you on.

Appreciate it. Thank you.

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