Episode 24 The Coming Crash

Oh, hello, hello. Welcome back to the New and Experienced Investor Podcast. I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

And I'm Joe Homs. I'm the experienced old guy. And by the way, this is episode number 782. I'm just kidding because I was on YouTube earlier and I saw this guy And he said, this is episode 782. And I'm thinking, wow. Yeah, man, that's a, that's a lot of episodes. So I just thought I'd throw that out there.

We have a long way to go.

Yeah, we have a long way to go. Yeah.

This is the podcast where we connect investors of all backgrounds, investors of all walks of life, whether you're new or experienced, you can come here, you can learn something. You can also share your ideas. So jump into the chat, leave a comment, Or question, and we'll pop it up on the screen and, uh, we'll answer it to the best of our ability. I know Joe's got an answer for everything because he's seen it all.

Just about.

Okay, there are some—

I get some surprises every once in a while, but yeah, just about.

Okay, good. Um, today's topic, it's a serious one. Yeah, actually, we have a screen, um, right behind the camera, and it's literally just— it's a red line going like this Down. It's going like this, down. We're watching it real time. Oh boy, I'm scared. And you know what that is? That's the crash.

The crash that's coming?

Yes.

Yeah.

Um, it was actually just clickbait.

Sorry.

Oh, I know, I know.

I thought it was a real crash that was coming that I've been hearing about for the last 10 years.

Yeah, I know. And, um, I hear about all the fun that you had in 2008.

That was awesome.

That was awesome.

That was— I, I wish we were back there.

Yeah. I mean, my family lost their home, but yeah, that's fine.

Well, you bought at the wrong time. Let's just say that.

It was probably an adjustable rate mortgage.

No, honestly, honestly, let's address that.

Okay.

So somebody was buying 2006. They were buying at the top of the market, $500,000 for a 2-bedroom, 1-bath condo. In San Juan Capistrano, 2008, the bubble burst. They were being sold again for about $100,000. Okay. I, you know, I always say you have to learn about all the circumstances before you start feeling bad about something. You're, you're the opposite.

I'll feel bad right away.

You feel bad right away. I know you do. So this was a purchaser who bought the property with No money down. The banks were doing 100% warm body loans. Okay. So when it went back down, they didn't really lose anything because they had no money in it. And plus on top of that, you know, we're trying to recover from this. The banks are trying to recover and he stays in the home rent-free for a year and a half.

Sounds good to me.

So who's a loser in this scenario here?

Uh, the landlord.

No, the bank, the bank, the bank, the bank. Do we, do we really care about the bank?

God, no, no.

It's like, yeah, you guys print money as it is anyway.

So, you know, and they take our money and loan it out 10 times.

Sure. Absolutely. Yeah. It's like, I wasn't crying that the bank was losing money on paper because that's what it was. And then of course the federal government came in and bailed everybody out. Right.

Yeah.

Welcome to America.

That's it. And if you timed it right, you got 10 properties.

Yes, absolutely. Yeah. I mean, having gone through 3 of these cycles up and down, my last cycle, I actually got a little bit more intelligent. And, um, I said, well, wait a second. I've been, I've been at this rodeo 2 times before.

Right.

What happens? It gets down to the bottom and then it starts going back up again. Welcome to California. So I said, what the heck? I'm gonna just start buying everything I can. There you go. That's what I did. Yeah.

Well, that's good.

So, um, can it— can you like will it to happen again?

That's what I'm trying to do. That's what the clickbait— that's what people are doing. Yeah, that's what— that's what was supposed to happen during COVID 2020. The crash was coming, the big crash.

Yeah. But everybody went home. Everybody went home. You couldn't show houses. Then we had this disclosure basically saying, you know, if you sign this and you're going to go see a house and you get COVID, that's on you. That's not on anybody else.

That's right.

Yeah. So it's like, okay, whatever. That didn't change anything because everybody's staying at home. And honestly, they're still staying at home. You know, we went through a, A refinance period. Everybody refinanced their loans to 2.5%, 3%, 4% at the max. Why are they going to give that up for 7% or, or 8% now? Uh, gas— we're in Orange County.

Yeah, it's bad.

Gas is $6.60, I saw.

Yeah, it's almost going to hit $7. It'll hit $7 by summertime.

I think it's $7 in LA. Yeah, it is $7 already in LA. It went up like 20 cents in the last week. Wow.

So broke 100 filling up our tank today.

Broke 100 filling up the tank. Oh, sorry.

All the way.

Sorry, I just charge my car.

Lauren's, Lauren's now the spokesperson for Tesla thanks to you.

Oh, that's good.

Yeah.

Yes.

It's ridiculous.

I, I bought my Tesla in 2007, 27, uh, 2007. Um, and it can't, no. It wasn't that long ago. 7 years ago. What was that? 12, 13? No, I can't even add today. 17. 17.

2017.

2017.

Wow.

It came with free charging for life.

That's cool.

Is that a deal or what?

That's an amazing deal.

I go to the Supercharger, I plug in, wave goodbye, see you later, no charges. I don't pay for charging.

That's— well, that's what they want everyone to do, so they jack up the gas prices so we all have electric cars, and then the grid goes down, then the crash happens. See?

And, and our producer feels really bad. Yeah, that she has to pay that much money to fill up her SUV. Right.

It's hard out there. It is a producer.

It is hard. Yes.

Yeah.

Are you, are you done with the strike and all that stuff? You're, you're getting all that extra pay now?

Yep, things went well.

Oh, you're not?

Oh, thank God.

Producer.

Yeah, that's good.

Yeah, thank God. We— yeah, we don't hire union people. Oh gosh, really? That's— that— we're gonna get in trouble for that.

I know, we'll edit that out. Yeah, no, we're all, um—

this is live.

This is— oh, that's right.

Yeah, you can't edit that.

Okay, well, that's— we're telling jokes here. None of this is real. It's all for entertainment purposes, just like the upcoming crash, but You know, circling back to the crash, we did see a little dip in house prices, didn't we?

Insignificant. Okay. Yeah, no, it went— actually, it went down, I'd say, 10, 15%.

There you go.

At the most. And then literally it went back up. Yeah. Because there was no inventory. Nobody was selling. I know. So it was— you put, you You put a property on the MLS and if it's in decent shape, it's, it's gone within a few days. Multiple offers. We're still— we're back to that again.

Multiple offers.

Multiple offers.

All cash too. Um, people got— people have millions in cash that they can buy.

I was gonna say, where are they getting all this cash?

Being a dentist, apparently.

A dentist?

Yeah, dentists have a lot of money. Is what I found out.

Maybe it's that 10% the big guy's getting.

That's true. If you're— there's a lot of big guys in Orange County, so if you're getting 10% here and there, yeah, it adds up. You sock that away and then, you know, you're buying properties all cash, so then interest rates don't matter.

No, they don't.

That's pretty cool.

Yeah.

Huh.

Our producer is eating kisses. So we're watching her. She had to get a whole load of them before we started to make sure that she had enough.

We need to get producing.

I'm not embarrassing you, am I? No, no, she— yeah, she is a part of it. She's our producer.

Yeah, yeah.

So, and you're like right in front of us here, so, and you're like eating these chocolate kisses, you know. And now you have like, what, 2 left? You had like 25 you started with.

Yeah.

They're low calorie. Are we getting any—

anything? Yeah, we gotta— we got Matthew in the chat.

Matt's in the chat. What up?

He was commenting that we need to build more.

Build more?

Yeah.

So then there'll be more inventory.

Yes, there you go.

Wow. Let's see. Let's build more in California.

Yeah.

The permitting process is crazy. Well, the whole state is crazy. If you drive out and you want us to build more, and then let's do this. Let's send millions of dollars, multimillion dollars for homeless to build something that's going to cost $400,000, $500,000 per build.

Right.

Does that make sense?

It doesn't matter if it makes sense. Does it sound good?

Oh.

That's California's tagline.

Does it sound good?

Does it sound good? Does it look good in a headline? That's what I'm all about.

Okay.

Yeah. So yes, it does. If you drive out towards Hemet, we found they are building a lot.

They are.

They're, you know, those are just normal builders that are building out there. Right. So maybe that's what he's talking about.

Uh, to build. Yeah, I guess.

New homes, brand new homes, smart homes.

Oh, commented that, uh, California is reforming CEQA and that's going to streamline permitting.

Thank you, Matthew. We have informed viewers.

That's nice.

Matthew's an experienced investor. I appreciate you chiming in on that. That, that's one thing we do need because the permitting process is insane.

You think?

Yeah, I tried to get a mobile home subfloor permitted And that took me 4 months. So—

And what was that process like? What, what, what— I mean, from the minute you got red-tagged, what was that process like? What did you have to do? What hurdles did you have to go through for a mobile home?

For a mobile home subfloor? Well, I found out that there's a governing body of mobile— of the mobile homes in California, the HCD.

There's a governing body for everything.

Yeah. So that's like the DMV. But worse, there's only one office in all of Southern California. There's one in Sacramento and one in Riverside, luckily. So it was somewhat near the property and it was halfway between my house and the property. I had to go in there and then I found out that the title wasn't correctly changed to my name. So that's another mobile home mistake you don't want to have. You want to make sure the land underneath gets transferred. Which it did. But then the actual mobile home, which is like buying a car, you have like the pink slip that has to get transferred, the bill of sale, just like you, you would with a car. And so that never happened. So I had to contact the seller. Luckily she loves me. I went to— I had to go to her house to get basically get the power of attorney from her.

Yeah.

Just to get this, uh, and then I went back probably 4 or 5 times because you go You wait in line.

Is there anybody that doesn't love you? I mean, everybody we've dealt with that you've put under contract—

Oh yeah, one guy. Yeah.

You're like on a first name basis.

Yeah, 2 people didn't like me.

Everybody loves you.

Pretty much.

Even our producer.

That's right. Yep, I proved it. Put a ring on it.

Yeah, and how long did it take? I'm not gonna bring up some subjects here, but how long did it take?

Took a decade and a half.

Oh my God, sounds like my daughter and, and Big Time.

I mean, that makes their—

It took them about 7 years.

Right, that makes them look like a short period of time.

Yeah, no kidding.

Wow.

Wow, he's right.

I, I had to really win her over, folks. I play the long game in life. That's just what I do.

I think somebody's at the front door here. Hello? Hello?

Can she hear? Can she see us?

Oh, no, no, no, no, come in, come in. Yeah. Hey, sorry, you're looking for Big Time? He's in here. We call him Big Time now.

Getting deliveries. Everything gets delivered to Big Time. He never has to leave. It's amazing.

She looks like a notary to me. She is.

See, he's always closing.

Always closing. That's amazing. I like that. Yeah, it's good. Big Time, always closing.

Matthew also commented that he says we submit loans that are backed by cash, but they're actually regular mortgages.

Oh, interesting.

What?

Hold on.

I didn't understand that one.

Matthew, please drop your information into the chat. We need to have you on the podcast.

Oh, that would be great. Yeah, but I didn't understand. Repeat it.

The comment says we submit loans We submit loans that are backed by cash, but they're really regular mortgages.

We submit loans that are backed by cash, but they're really regular mortgages.

So you have cash in a bank account? Is— I don't understand. Maybe you could tell us a little bit more on the chat what you're talking about. I love this. It sounds like you have money in the bank, but then you're really getting a loan. But I guess my question would be, can you use that money in the bank, or is Is it tied up in that loan process?

Yeah.

Interesting.

Maybe it's hard money.

I don't know. I don't know.

I think so.

Yeah. Drop your information.

Yep. Matthew, you're coming on the podcast.

Yeah, you're coming on.

You're gonna talk about the upcoming crash.

Yeah.

Is there any indicators that you can see that something is gonna happen? I've heard 2024 is gonna get wild.

Let's see, we have an election year. Um, I think we all kind of know who's going to be running, at least so far. I, I, I don't know why I've got so much politics in this podcast, but if you saw the debate last night—

Because you watched the debate last night. Don't do that.

You kind of know. Um, Normally, normally, uh, in the last 43 years that I've been doing this, you're going to go into an election year. The Fed's going to say, oh, let's start lowering interest rates to make our candidate look better. Uh, that's usually what happens. I honestly don't know what the Fed's going to do. That's like crazy town.

They froze the rates.

Well, they didn't raise the rate. They kept it where it was. Oh, bold. Yes. Um, the economy is bad, but then jobs are good, if that makes any sense.

Yeah.

'Cause it really doesn't. People are tightening up. I mean, unless the world falls apart, uh, the stock market falls apart, uh, we have massive job losses. I don't see another crash coming. I just don't see it.

I know.

I know. I mean, I've got the same crystal ball that probably everybody has.

Yeah.

But this is what I see in it.

Right.

Somebody could see something else.

Well, you know, if you want clicks on YouTube, well, yeah.

Then, then you say, oh my God, it's gonna come. Get your cash ready. The big one. Because the big one's coming.

Yeah.

Get your finances in order. Get those lenders in place. Get ready because here it comes, the big one's coming.

Yep. And then it never comes, and then you never bought anything because you're waiting for the big one to come.

Oh yeah, that's, that's true. That's, that's true. I mean, I get calls from people. Hey Joe, we talked about 5 years ago. Oh yeah, no, I remember, I remember. Uh, yeah, I should have listened to you. I should have bought something. Yeah. I could have like, actually have something now. What do you think? Should I buy?

If you bought in 2018, that's like buying Apple stock.

Yes. It's like, really? I go, you're asking me the same question. I'm going to tell you the same thing. If you need a house, you're, you know, you have a family, you need someplace to live. You don't want to, you know, pay rent, buy something. You know, I don't see a crash coming, but again, That's my crystal ball. Please look at yours. Yeah. And in 5 years, come back and, you know, if the place you were looking at today's $500,000 and, and it's $1 million by the time you come back, then you have your answer there.

Yeah. You win. Well, and what's gonna happen is if they drop the rates at all, it's gonna go bonkers again. So thank you. Then what did they, Accomplish? I don't know.

Um, make it more affordable for lower income, lower FICO. You know, we go into that song and dance again like we did before. Banks are in the business of loaning money. If they're not loaning money, they're not making money. So like right now, there's very few loans out there. Very Very few properties being sold. So yes, to stir that part of the economy, they have to come up with creative ways. We'll lend you money and we'll lower the FICO score from 650 down to 600. Wow. I mean, you know, if you know anything about FICO, that's pretty bad when you're down at 600.

Yeah.

You get it, you get into 500s and that's super bad. But, uh, again, they have to make it easier for people to borrow money and yes, Lowering interest rates is one of those as well.

Yeah.

So, but if everybody can get a loan with a low FICO score and interest rates are down, you're correct. What is everybody going to do? They're going to buy. What happens? Supply and demand, prices go up. So the guy that called me 5 years ago wants to buy $500,000 today. It's going to be a million in 5 years.

Yeah.

I'm, I'm actually, I'm, I'm hoping that, uh, Elon Musk is on listening to this because I really, really want to go to Mars.

No, no, no, no, no.

I do. I want to go to Mars. I want him to say, you know, I'm just going to pick some random citizen out there. And you wouldn't— oh, you're too young. That's why you just got married. You know, I wouldn't let you go. Oh no, I want to go. No, I want to go. And I know if you go to Mars, it's like, it's a one-way trip. You're not coming back.

Oh my God.

And I'm fine with that. Really? I'm fine with that. It's like, Elon, if you're out there, I want to go to Mars. Pick me.

You gotta— I'm sure there's a long list ahead of you.

No, but there's not.

Maybe he'll do—

I've purchased 4 Teslas for me and my family, so I think I've earned it. And I'm waiting for the Cybertruck too. Maybe here we are off topic again.

He'll do a random drawing of Cybertruck winners and then you get to go to Mars. You open the glove box, it's a ticket to Mars.

That's good marketing. Yeah, producer, write that down. That's good marketing.

A red ticket to Mars.

A red ticket.

Yeah. Um, because you've seen it all and you're ready to depart? Is that what— no, no, no, not gonna happen.

I just think, see, I'm, uh, again, we're diverting. I'm a, like, a Trekkie, so I grew up with Star Trek and You know, my dad always used to tell me all that stuff is fake. So, I mean, what do we have today? We have the communicator. That's Star Trek, right? Right here. You know, we have a lot of things that are on Star Trek. The only thing I can't do is teleport myself from one place to the other.

That's big.

But who knows?

Well, and the other thing is the holodeck. They're not going to have the holodeck when you need to go and like experience— you think it's going to be like close to that, a cruise ship?

I mean, you have that ear and then the eye thing.

Um, yeah.

That you can like see things in there.

That's true.

That's kind of like a holodeck, you know. Obviously it's, it's not without that device, but, um, I see people on TV, you know, swinging a bat and, you know, bat, you know, whatever.

Yeah.

You know, with those things on. There's actually some really funny commercials with that. Yeah, really. We're off track. Let's get back.

Well, okay. My last point is, you know how you, you mentioned You, you can't go somewhere like to a beach and sit on the beach.

No, yeah, you're right.

Okay, so imagine that. Imagine sitting on the beach for 20 years. That's what it's gonna be, but you're looking out at space and it's just black.

No.

Yeah.

No.

How long is it gonna take?

The adventure is getting there.

Yeah.

Um, I don't think it's gonna take 20 years. There's no way.

At least 10.

10, I'd be gone by then.

Well, then you'd just be in a pod the whole time. I don't know. I don't know if I'm sold on that.

He's building this giant ship.

Okay.

I'm assuming it's like going on a cruise.

That's what I'm saying. That's what you're picturing.

They're not going to have like a buffet. It's like going on a cruise. So they have the buffet, they have, uh, you know, balconies that you really can't open the door, obviously in space, but you can see out and stuff. You don't want, You don't want necessarily an inside room with, you know, nothing on it.

Yeah.

And then a bunch of other people there are the same as you, you know, enjoying what's there.

Yeah. I don't know.

I don't—

I bet when you really walk on it, you're gonna be like, oh, this is it. Okay, that's fine. And then you'd get off at the last second.

I can tell you're not a Trekkie.

No, I, I am a Trekkie.

No, you're not a Trekkie.

Well, no, I like it, but like, it's not gonna— they're not gonna have that.

It's not gonna be— I mean, when Captain Kirk went to another planet—

Yes.

Okay, all the women flocked around him.

This is the real reason right here.

They did. They just— I mean, he got more— I gotta be careful what I say— pretty, pretty actresses.

Oh, okay.

kissing him on a weekly basis than anybody else. I mean, Spock, can you imagine having that role? My name is Spock. Live long and prosper. And I have no emotions, which means that I can't be with you. Okay. Live long. That was— I love Spock.

Yeah, Spock's good.

But that was a boring role. He didn't get any— oh, actually there was one episode. Yeah. That he got these pods and it made him into a normal human being. And so He did find a girlfriend on one of those pods, one of those shows.

Even Spock finds love.

Okay. So the crash, the crash is coming. But listen, the crash is coming. Okay. Be ready. I am positive that it's coming.

2050.

When? I can't tell you, but it's coming. It has to come because who can afford to buy a home today at the prices? Here in California.

If you get one subject to, you can.

What's that?

Creative financing. Oh, you take over someone's loan who already has a loan in place.

You can do things like that?

And it's not illegal.

Really?

Yes.

Did I ever tell you the first property I ever bought, which I still own today, I took that basically subject to? Yes.

That's crazy.

That was not unusual back then at all. We were back— Jimmy Carter was the president. Interest rates, wow, they were even higher than today. Mortgage rates were higher than today.

Houses cost $1,000 back then though.

I'm not that old.

Okay, okay.

But we had to do creative financing as real estate agents to sell homes. You know, people need to sell their homes. Um, and we, we came up with this creative financing way to do that. And that's how people sold their homes back then. And that's what we look for every day, right?

Yes.

But the agents today have lost their way. They don't study that stuff.

No. No, we have to get them back to that level playing field that, uh, they, they have a fiduciary responsibility. Oh, big word. They have a fiduciary responsibility to their client to present all offers.

Yes.

And if they don't know what the offer entails, then they need to educate themselves So that at least the seller has an option available to them. I mean, I think I heard you talking the other day, you were offering subject-to financing. There wasn't a lot of equity. And the agent's saying, oh, we would just rather either do a short sale or just let it go back to the bank. Wow. Is that what was said?

That's what she said.

And I was like, how does that make sense?

You would rather that happen? She's like, I don't want that to happen, but That's not going to work around here. They got attitude these days. They got real big attitudes. I did talk to the lady in San Antonio. Here's here's what they here's kind of like in this this encapsulates their mentality. So I get her on the horn. This is the one I told you earlier. Her broker said we don't like subject to. So I called her up. I was like, hey, just wanted to see what's going on. And she's like, yeah, well, I am gonna present it to them. So she was— she said that, I am gonna present it, but my broker just said, you know, I brought it to him and I'm like, is this even a thing? And she's been an agent for 18 years and he said, well, yeah, it is a thing, but you just have to be careful of who you're dealing with. Which I thought was okay.

Is that how she sounded too?

Yeah. She's like, it was a thing. Well, out here in Texas.

Oh, that's right.

Yeah.

I got it.

So he's in San Antonio. So then she said, well, I have to tell you because my first couple years I actually sold a house to cartel. So we're one of the biggest cities up from Mexico, and, um, you know, it was a cartel. And I was like, how'd you know? She said, because the DEA called me and said, this is the cartel, um, we need to know, we need to see all the paperwork and get his EMD back. Because it's dirty money. So she said, so you know, you never know who you're dealing with, so I gotta just double-check, but I will present it to them.

And did you tell them you were cartel?

No, no, I, I made myself sound even more white. Oh, just so she felt more comfortable. Okay, but so she didn't think I was cartel.

Um, got it.

But she then she said, well, I mean, like, do you go through like a legitimate title company?

Good question.

And I said, yeah, because I want to make sure my butt's covered, you know. I want to get—

Yeah, why would we want to buy something if we didn't go through a title company and get clear title? What's the purpose of that?

That's what I said. So I'm gonna send her some HUDs of the subject showing subject to So she sees it's a real thing and they put it on there and everybody knows about it.

Let's see, we should put a video together like I was telling you earlier, just like a real 4 or 5, 10-minute long video on what subject-to, how it works, just for agents. Yeah, just for agents. I mean, yes, it's, it's difficult enough to convince a seller To do it, but you have to get by that agent hurdle before you even get to the seller.

Exactly.

Yeah. And I, you know, and you're not trying to go around the agent. You're not trying to cut them out of their commission or anything. You're just trying to put a deal together in not a normal way.

Yeah.

But a legal way. Yeah.

And I told her, I was like, you know, it's not the best option for some people, But it is an option. So I just want you to have that just in case. And so these people bought directly from the builder less than a year ago. So they have no, no, no, no equity.

Oh my gosh. Wow.

Yeah. And then now they're getting divorced.

Oh.

So it's, it's a lot of that.

We're going downhill in this conversation.

Yeah.

So that's like, yeah, I mean, She's right, then, you know, do a short sale, which it's not gonna—

Oh, what, they have to do a short sale?

You know, don't— they don't have to.

Oh, okay.

But if— I mean, if you wanted to step in, do your subject to, um, you know, and take over the, the loan, the responsibility of the loan.

Yeah, that's, that's what I want to do. Can I do that?

Yeah, absolutely you can.

That's what I'm gonna do.

You know, but again, you have to get by the Agent hurdle there. Yeah, and that's where you look a good idea.

You let them know you're going to make your commission. I'm going to pay your commission. I'm going to put some money into the seller's pocket sometimes when maybe they had to cover the table.

Those those are hard deals to put together because they are divorce situations, and you know they don't want to be tied to each other in any way. No, and not only that, but she's mad at him. He's mad at her. I'm not gonna sign. I'm not gonna do anything that you have agreed to with your agent. You know, I'm gonna get my agent and I'm gonna get my opinion.

Do they do double agents sometimes? Each one has their own job?

Oh yeah. Oh, absolutely. Yes.

Oh yeah. How do commissions go with that? They have to split the—

Yeah, they split the commission in half. Yes.

Yeah.

I mean, that sounds like half is better than nothing, right?

Yeah. But then the agent comes in like the lawyer and he's like, wait a second, wait a second. You're gonna get the stove. I'm gonna make sure you get that stove because you love that stove. And he's like, I love that stove.

Yeah.

And then that's where the whole thing blows up over the stove.

And who makes the money when that happens?

No one. The lawyers.

The lawyers.

Well, not— Absolutely, you missed that one. The lawyer makes the money. The more controversy they can create, right, the The more money they're gonna make, right?

Yes.

Yeah, it's like, let's argue over the stove.

We got anybody chiming in?

Yeah, Matthew came back.

Yes.

For your answer about that, uh, cash-backed loan.

Here we go.

So he says, the loan backed by cash is done by our fund. Upon approval, 3% of the sales contract is required to be put into an escrow account to be held by the fund until closing.

Nice.

When they close the loan post-escrow, 2% is refunded back to the buyer. If they can't close the loan, we'll do a leaseback until they can close and they don't get any of the 3% back.

Whoa.

Matthew, you need to come on because I am still confused.

Let's do it.

That's one thing I don't do is loans and never have.

I like it.

Never really want to.

Math wizard.

Because there's a lot of creative, a lot of creative ways. To do loans and lenders and stuff like that. Um, yeah, I'm still not figuring out the whole concept there.

I love it. We have a whiteboard here in the office too, so we can break it down. Boom, get some leads for you.

Beautiful Mind.

Full Beautiful Mind. Uh, did he drop his info?

Drop it, man. Drop it. Or we want to reach out, follow us, um, and we'll link up. If you're in Hawaii, I'm happy to come there and talk to you there.

We can go there.

We, yeah, we can take this podcast on the road. So yeah, if you're in Hawaii—

oh yeah, I forgot—

we will definitely come to you.

Yeah, maybe he's not local. I didn't think of that.

Why didn't you think about that?

I don't know.

I mean, it could be anybody. Yeah, we're on the World Wide Web.

Yeah, exciting times.

Yeah. Um, if anybody's going to the BiggerPockets event next month, I'm going. So please reach out through BiggerPockets, especially if you're from California. I'd like to see everybody from California there and Maybe we can set up a meetup there or something.

Do that.

That'd be awesome.

That'd be really cool. Yeah, I heard they're renting out a theme park.

They are.

Wow.

Yeah, that's like my favorite thing to do.

You can go get a nice snack at a theme park. I don't know.

Yeah, that's kind of like retiring.

Going to the theme park?

Yeah, it's like retiring. It's like, okay, I'm retired. I'm going to go down to the beach.

Yeah.

I'm going to lay there.

Perfect.

For hours, 10 or 15 minutes. And then my mind's going to start to wander and say, well, what do I do next?

You just keep laying there.

Well, that's boring.

Oh, you watch the clouds go by.

And then I get sunburned. That's too boring. I can't do that. I, I have, I have to be doing something.

Bring a Kindle with you and read through your favorite BiggerPockets book.

No, no, no.

Huh?

Try surfing.

Try surfing.

Oh, did you want me to go into my surfing story?

Yes.

Do you have one? I've never heard this one.

Well, it's not really surfing. Oh, in high school Yeah, I grew up here in Orange County. Oh, do you, do you want to introduce yourself on live podcast? Come on over here. Right here. Right here. You're a notary, correct?

Yes, I'm a notary public loan signing agent. I deal with mainly loan docs.

You're a notary public loan signing agent. You deal with loan docs. Introduce yourself. Let our viewers know how they can get ahold of you. If they need a notary. Okay.

My name is Karla Medrano. I am a notary public loan signing agent/notary. I basically deal with all loan documents. Been in the business for about 20 years. I'm bilingual, Spanish and English, and I go to your clients and make sure that the transaction closes because without my stamp, you can't close.

Nice. And that's just another piece in the process of real estate to make sure that everybody's on the up and up, right?

Correct.

Yeah, so you like literally come to the office here and notarize Big Time's signature, and you get his ID, right?

Yes, and his height.

Do you get his phone number? Do you get his phone number?

No, I get his address but not his phone number.

No? Okay. Yes, he's married. He's my son-in-law. Okay, just to let you know. And my wife, she speaks Spanish too. She's fluent, so you can't say—

She's Latin?

She is. She can't say Spanish things because she'll understand.

Oh, okay. And you can't?

Oh, of course I can.

Of course you can.

Who do you think taught her? Yeah, it was a school, not me. Okay, no, I speak fluent Spanish as well. Well, thank you for introducing us and coming in during our podcast and stuff. You did not, uh, interrupt anything. Just wanted to let you know, but I thought I'd give you a little bit of credit. There's got to be somebody out there That needs your services. So now they know you.

Yes, thank you.

Okay, and you're bilingual.

Correct. How can they get a hold of you?

Oh, my phone number is 562-331-0975. My email is kbmnotary@gmail.com.

Okay, you heard it.

Thank you.

Blow her up.

Thank you.

And we take 10%, just like the big guy does.

All right, thank you guys.

Bye. We back?

That's fun.

That was fun.

We should have more pop-in guests like that.

We should. Yeah, we should.

We need that third chair. We're working on it. Yeah, we're working on it.

Yeah, we're trying to get the, uh, establishment here to buy a nice third chair, but yeah, they're being very resistant.

Hey, put all your money into real estate, it's like you got nothing left for a chair.

They're, you know, big time, and his wife are out on a boat. Not a boat, a yacht. I'm sorry, a yacht.

So beyond.

Yeah, they're going to— I heard through the grapevine that they're going to a fancy dinner.

They're going to a gala.

A gala.

Beyond the fancy. Yeah, these are— it's a whole new vocabulary when you're in the big time. Yeah, it's like you got to learn all this stuff.

How we doing on the kisses? You have 2 left. Okay. Well, we're, we're just about there. Yeah.

You're not a chocolate fan.

I'm not. I don't, I don't like chocolate. Were we talking about something and then I stopped? Uh, oh, the surfing thing.

Yes. Surfing story.

Oh yes. Yes. So in high school, I was, uh, graduated from Mission Viejo High School my senior year. I went down to the beach, Laguna Beach.

Everyone was there.

Everybody did. And I'm, I was body surfing out there and I got caught in a riptide. And I honestly, I thought I was going to die. I mean, I'm like this. And then the last— I go, this is it. I can't do anymore. I'm like completely tired, dead. I just— I said, I'm just going to push my feet and hopefully there's ground beneath me and see what happens.

I did.

And I came up waist high. I walked onto the beach and crashed on the beach.

Oh my God.

And I said, yeah, surfing's not good for me. And I don't skateboard either because I can't really balance myself. So surfing's out.

Okay.

And the ocean is out except On a cruise ship. Yes, on a cruise ship I'm good.

Okay.

But again, like sitting there, you know, getting a suntan, 10 or 15 minutes go by.

That's amazing.

It's like I'm, I'm done.

Okay. So what do you do in Hawaii when you're there? Walk around and—

Yeah, walk around, go to luaus. Oh cool. Um, you know, go on, um, You know, they got midnight cruises and stuff.

Yeah.

You know, dinner cruises.

Nice.

We do that stuff.

Okay.

Yeah, laying at the beach? No. No. No. No. What?

Snorkeling?

Snorkeling. Yeah, we like snorkeling. Oh. I love snorkeling. I went to—what do they call it? Hanama Bay or Hanauma Bay or something like that. Hanama Bay. Nama Bay. And it used to be where you could actually feed the fish. So they give you corn. And I think they stopped that for a while. I don't know if they still do that or not. They stopped it. I heard they stopped it and they started it.

Oh, okay.

But maybe, I don't know. But anyways, so we're snorkeling, wife and I are snorkeling around and I've got the corn and I see these fish coming my way and they're big fish. And so I take the corn and I throw them at her. And so the fish are coming obviously over to her and she thinks the fish are attacking her. So she comes over and grabs grabs me by the arm. Yeah. And she lifts her head up, she goes, I'm done, I'm done. I, I don't want— I don't want to stay here anymore. I'm done, I'm done.

Yeah, that's every girl snorkeling. They think the fish are eating them.

Yeah. Did you have that experience, producer?

No, I got to swim with a giant turtle.

Yeah, that was cool.

You're, you're like the— you're like the perfect look for an Orange County gal. You know, blonde, you know, and, and, you know, not to surprise anybody, but they do live right next to the beach.

Yeah.

Yeah.

Pretty obvious.

So I can understand. You surf?

Yeah.

You do?

Yeah.

Do you surf?

Oh yeah.

Really?

Lauren's better than me, like most things.

I was on high school—

See, I learned something about you guys every day. That's awesome. Yeah.

Well, now that I'm older, I only surf in Hawaii.

Oh, she doesn't do wetsuits anymore. You have to have a wetsuit.

You know, you would look good in a red Tesla. You would look— I mean, you know, in a red bikini. No, I wouldn't say that about your wife. One of these days you're gonna have to explain to me all these tattoos that you have.

Okay. Yeah, we'll do one.

There's different tattoos on there.

Yeah.

So yeah, we're gonna have to sit down and go, okay, I got this during World War II. I wish it was that. I got pissed too during the Huntington Beach riots. Do you remember? Were you around with the Huntington Beach riots?

'80s?

Yeah.

Yeah, I was too small.

Yeah.

I know about it.

I was. Yeah, we did the—

yeah, the US Open. Weezer was playing.

Oh yeah. Yeah.

Yeah.

You were there?

Well, we were up the street.

You weren't there?

Yeah.

You weren't there?

Why weren't you there?

I wasn't rioting.

No, I didn't say you were rioting. I mean, you were there. You can be there but not being rioting. You weren't there.

We heard about it. You know, then they, they got rid of the— they blamed the bands, per usual. Jimmy World got too crazy. Really? People threw like stuff through the electric bike store. Wow. Yeah, that's Huntington Beach riding. Okay, but okay, we're, we're digressing again.

Okay, anywho, the crash. Back to the big crash.

Big crash.

Big crash. 2024. Um, what, what are the signs that you see that we're coming to a crash?

Um, a lot of YouTube videos. That's pretty much how I base my whole life off of. When I see a lot of YouTube videos piling up in my playlist, then I know it's the truth.

So you've cut the cable?

Yeah.

You just watch streaming?

I just watch YouTube videos.

Just YouTube?

Same ones over and over again. Yeah. I bring myself into a frenzy and I come in here and I'm like, there's a crash coming!

Wow. Do you ever watch our videos after we record them?

Yeah.

You do?

Yeah.

What do you need to find out how many kisses she ate or something? You lost track? You lost count?

I try to improve on them each time, so you gotta watch them back and improve.

I want to say Alex did a video, uh, for me the other day We headed to LA to look at a triplex that an investor called me about that I had met with a year or 2 earlier that was going down the tubes quick. If you get a chance, jump on my YouTube channel here. He just put it out. It was just an amazing, amazing video. I'm sure the producer had a lot to do with it. But, uh, yep, there, there was, there was nothing left on the cutting floor on that video.

Oh yeah.

You used everything.

Oh yeah. Well, I did cut some stuff out.

You did?

But I left the, the good stuff. It was a lot of good stuff because you're walking through a lot. It's kind of like a masterclass in, in flipping because you get, you're pointing it out to the guy, what he's doing, how to deal with contractors. We find out he's auto-paid the contractor, a bunch of mistakes. Happened. But at the same time, they were very close to finishing, and so you gave him a little extra push, and I think he felt better after you left. Plus, you gave him referrals.

I did.

Of guys that you use.

Yeah, my guys. I, I had them go out there and start finishing up his project because, uh, look at the YouTube, okay? He's like really close to finishing. He just— I guess you're right, he just needed that extra push. Yeah. And hopefully I helped him in that fashion and giving him Uh, the contractors that I used as well. So hopefully he'll get over the hump and finish this. And it's been sitting there for a year, 2 years, 2 years. So it's been there for 2 years.

I see why they were kind of freaking out.

He started during COVID I remember now, started during COVID and then that slowed him down. Yeah. And then he's just been sitting there paying his contractor on autopay. How would you Why would you do that?

I don't know. You seem like everything— like today, it's like everything needs to be automated. You don't think about it, you just do it, and then just don't think about it ever again. So you automate that, but then it's just dinging your— Wow.

Yeah. That's a little crazy.

That is a little crazy. But anyway, when you guys go to Joe's YouTube, subscribe to that, please. We're going to be doing a lot more of those in-depth sort of camera, you know, production value videos because I'm getting new gear, so it's a write-off and I need it. But it's also, um, it's good for everybody.

I think you and Lauren are looking for a good CPA— a creative, let's say, not good, a creative, possibly creative from the Eastern Bloc. Creative CPA. What can I write off? And Not get in trouble like certain people.

Biden, is he even in trouble? I don't know.

Oh yeah. Oh yeah. See, that's what happens when you only watch YouTube.

I know.

You don't, you know, watch the right stuff. Yeah. Yeah. I don't know. Yeah, they they finally charged him. Okay. You know, with I think the gun charge and tax evasion, but. The statute of limitations. Oh, here we go again. Oh, it had passed. So yeah, 2014, 2015. That's when he's at the door.

So you can get away with it and then you can statute of limitations.

Yeah, yeah.

Boom. Yeah, that maybe that's the way to go.

Me, I would be like living on pins and needles. Like, God, is that the IRS at the door?

Yeah, yeah.

Like, no, I don't want them at the door. Lauren.

Lauren.

Yeah, Lauren had a friend from high school. She knocked on the door too hard and her dad was like, Lauren, you can't knock on the door like that. I always think it's the IRS. And she like never knew what that meant until like today. So really, she's like, why would you be worried about the IRS? Yeah. And then obviously you got a creative CPA or something.

Okay, so, so anywho, I want you to look back at this video in 2014. Where we predict that the market is going to take a big downturn. Yeah. You know what's nice about 2024, right? 2024. Okay. This market is going to take a big downturn. And you know what's nice about predicting something like that? We've got a 50/50 chance of being right, right?

Yeah. It's like the people that say the world's going to end.

Yeah. I mean, eventually 2024, the market goes down and we're heroes. Yeah. You know, if it doesn't go down, oh, I guess we were wrong. No, then you say I blame Alex.

No, then you say well there was one thing that changed it, so it's actually going to be 2026. But this is real. Oh, push it out. Yeah, I see. It's like with the Mayan calendar.

I thought you were going to let's just blame the producer.

No, you keep pushing it out. You want the clickbait. You want to. I see. Got it. Exactly. Okay. But if you guys are in the Orange County area, we have a monthly meetup that we do. The last one was a lot of fun. We did Shark Tank style, which I think we should. Do maybe like more regularly. That was fun. People came up with their deals, we broke them down, analyzed them. Uh, Big Time didn't buy any.

No.

But they just weren't juicy enough.

No.

Gotta bring those juicy deals.

But there was a lot of creative going on.

Yeah, yeah, a lot of creative stuff. But, um, the next one, we're still hashing out who we're gonna have there, so we'll keep you posted on that. Um, you can find Joe at all the regular socials— Instagram, YouTube. Joe Holmes. I'm at This Is Alex Barnett. Um, so, you know, join us, um, every Thursday at this podcast. We're gonna bring in really cool guests. Hopefully we got Matthew's information. Is he local? He's in OC. Okay, we're gonna find you. You're coming on the show. But we have some, we have some good guests lined up, so I'll keep you guys posted on all that. Anything to add?

2024 is going to be a big downturn. You can quote me today. 2024. That's right, it's coming. Be prepared.

Yeah. Oh, I think you get— you have to go, um, it'll be February 4th.

No, that's 24/24. That's if I'm predicting the end of the world. All right, it's more fun. I just leave it at 2024. You know, again, we're going to get into politics here. You know, global warming, we're all going to burn up in two years and stuff. Yeah. Okay, whatever.

Twenty four. Well, two four six, two four six, six six. It's usually I don't know when they predict numbers. There's always sixes involved. So that'll be the that'll be the crash. Okay. Okay, anywho, 2024 big crash. Big crash. We said it here. Big crash. Hold on to your hats, folks. Subscribe. Subscribe and share this with your friends far and wide. We're just having a good time here. New and how many iced teas did you guys have today? We had a lot. We had a lot of.

I normally have three, and I just had two this time.

Yes, but.

You had 2. You normally just have one, but they saw me go up and get a refill. And so Alex had another one and Big Time, believe it or not, had a drink because he only drinks water. He's, you know, one of these healthy guys out there.

Yeah. As we can all aspire to be.

And we went to a place in Irvine called Burger Lounge. So if you're a millennial and you want to spend $22 for a hamburger, To know that it was— And an iced tea.

Taken care of.

To know that it was grass-fed.

Yep, lived a good life.

They would not go to Carl's Jr. with me. I don't know why. You get a double patty, french fries, and a drink for $10.

That's a good deal.

I used to say $5, but now we're up to $10.

Yeah, it is a good deal.

It is a good deal, and it's a good burger. I grew up with Carl's. Yeah, Carl says— Carl's not with us anymore, but he was a really, really generous person. He really was.

He was?

Oh yeah, absolutely.

Started like libraries and stuff, uh, for the, for the youth?

No, uh, kind of close, but, uh, he donated a lot of money to local, you know, children and charities in Orange County. It's a— why go spoil it by saying that? We all know it's a tax write-off, but he was doing the right— he had a heart. He was doing the right thing. He was a big supporter of the Angels as well. Oh yeah, I bet you didn't know that.

I didn't know that.

Yeah, he was a very big supporter.

Yeah, okay, good on you, Carl.

Okay, real quick before we wrap up, Joe, you said this before in one of your meetups.

What are like the 3 signs you look So let me repeat it because no one could hear her. Lauren, our producer, asked, what are the 3 signs for a market downturn? She's keeping us on track.

Really?

Yeah.

All the way at the end and now you ask the question? Wrap it up.

3 signs. If there is going to be a crash, what are the 3 signs we're looking for?

Loss of employment. It's a big one.

Unemployment.

Yeah. Um, then I would say interest rates, which we're there. Check that box. So we have that one stool there. We don't really have loss of employment. There's lots of jobs available still out there. I think if we continue to bring the 7 million people They're going to fill those jobs eventually. But the other thing is, like I was talking earlier, would be the banks. They're in the business to loan money to make money. So when they start to get creative, okay, that's when we're going to have a problem.

Risky loans.

Risky loans. If those 3 things happen at once, Then 2024, like I predicted, stool of doom, we're going down 2024. We're definitely going down. And it's possible because it is an election year and to buy votes, you're going to tell, you know, the banks that, hey, you should like lower, you know, your qualifications to get a loan for everyday Americans.

Yep. American people.

Everyday Americans. The middle class.

The American people.

Is it— is there a middle class anymore?

Uh, it's shrinking day by day.

We're like, again, we're going off tangent here, but did that answer your question? The, the 3 things, the 3 chairs of the stool of doom. 3 chairs. Yeah. And oh, by the way, if you're a buyer and you're looking for property in Long Beach, Orange County, Lauren just got her license. And she was hired by the greatest company in the world. That would be mine, right?

Yeah.

Okay. She needs buyers. Okay. So get on there and put your name down. She will be able to help you with anything because she's very creative. She does those creative type of deals and then she just does those normal deals as well.

Okay. A little something for everyone.

Yeah. During the downturn, my daughter said we were riding in the car and I was going to a listing appointment and she was talking to my wife and she says, oh yeah, I'm with my dad. Oh, where are you guys going? I'm going to a listing appointment. Oh, okay. Well, you know that I only list the good-looking houses. He takes care of all the rest. There you go, Lauren. She's not like that. She takes care of everything. Yeah, that's good. So reach out, reach out, reach out.

You check us if you guys have any questions, and we'll see you on the next podcast.

Oh, we just got a question right at the very end. Okay. From Alex. Alex Corazzo. Yeah, what's happening in China with Evergrande make an impact on the US markets?

China. Are we still on?

We're still rolling. She didn't cut it. Alex Corazzo, our East Coast friend. Oh wow.

Yeah, you know, honestly, I don't think anybody in the US knows about China, um, or that company. They're tanking.

They're, yeah, no, no, they're, they're having a crash.

They're having a crash. Yeah. Will it affect us? But the, the, I guess the idea that they had was to build as much as they could and investors were investing in these places, but for some cultural reason they didn't move anybody in. Right.

They're all vacant.

It's like, what was the purpose there? I guess just to park your money and hope that the, Property values went up because you didn't want to put anybody in there because they would destroy the place. So, I mean, I saw that coming a long time ago. I saw, you know, how can you buy something and, you know, not, not put anybody into it? It's—

Yeah.

It's like crazy. I remember, uh, Big Time bought a property in Orange where the people had not been living there for 10 years. It was vacant. Wow. And finally somebody woke up one day and decided to sell it. Yeah. The neighbors came over. That's where you learn everything. The neighbors, neighbors came over and said, hey, you know, that place has been vacant for 10 years. Really? 10 years? No, we just bought it yesterday.

Wow.

Yeah. It's crazy. So anyways, uh, to answer your question, if it's going to affect us, look in the crystal ball. I don't think it's going to affect us. It's in China. You know, I, I'd be more worried about, uh, TikTok.

Yeah, yeah, exactly. Um, endangering the mind of our kids.

Yeah, proprietary theft. Yeah. Um, than whether that's going to affect us or not.

I guess if you have any investments over there.

They're really our lenders, you know, they, they buy up all our T-bills and everything like that. So it's— I don't think it's not going to affect us. You know, we're kind of playing with funny money today anyways.

They'll just make more.

Yeah, they'll print it.

Simple. You're good. Print it. Put it all on black.

Before we go, shall we vote to see if, uh, closing down the government's a good thing or not?

Okay, I don't know enough about it, but I'm gonna go with it's probably good.

It's good. Okay. It's like, yeah, let's shut down the government. And what about—

does that mean the schools, they don't have to go to school?

No.

Oh no.

I remember they did that. Social Security may not get paid, which is not good, right? It's furloughed. Yeah, every— everybody else gets furloughed. So I mean, there are certain jobs that They have to stay even if they're not getting paid, you know, like air traffic controllers and stuff. God, we're really off the subject here.

You keep bringing it back because you watch the—

Are we done with questions this time? Okay. Yes.

Let's, let's say—

Producer, sign us off. We're out.

Cut us off. Hurry. All right. Thank you guys.

We'll see you next week. Thank you. If you want some more advice on real estate investing, reach out to us one-on-one.