Is The Deal Dead? SoCal Investors React To 2026's Biggest Threats

What's up everybody? Welcome back to the podcast, The New and Experienced Investor Podcast. I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

Joe Holmes, the experienced guy.

Oh yeah. Oh yeah. Today we're talking about some dicey stuff. 2026. Is your deal already dead? It might be.

Could be.

If you're not looking out for these things, we're gonna jump right into it. Um, we got something here. Labor shortages and price hikes because of possible ice stings. It's, uh, kind of crazy.

I don't know.

Sting.

Yeah, yeah, stings, you know. They come into the work site, you're just putting on a roof, all of a sudden a guy in a vest comes and just snatches you and takes you back somewhere. We don't know. We don't know where. Interesting, interesting to think about.

In a van.

They're thrown in a van, but then where do they go after that? Nobody knows.

I do think there's some other things coming up, so Brian, what's, what's something that someone may not have thought of that they need to be cognizant of in 2026? You know, one of the things that we've seen just overall is some of the movement with some of the deportation efforts, and that affects some of the labor market. So we have certainly seen it in my state where some of the labor is not available, and that's going to increase prices. That's going to slow projects. So that's going to have a ripple effect through the market and pricing as well. So these are things that affect mainstream investors and investors that pretty much thrive on rehabbing to be profitable, where we're able to work in a way where that, that is going to have some impact, but we know how to steer through that and not be negatively impacted much because we, back to what I mentioned earlier, we buy right. And when you buy right, you have more options. You can get great results and not be stuck because you just have too thin a margin to work with. I do think there's some other things coming up. So, uh, Brian, what's, what's something that someone may not have thought of that they need to be cognizant of?

So, I mean, he's got a good point.

Good point.

Work it into your numbers. I think, I mean, I mean, we see it all the time where, you know, guys are buying pretty much in the hopes that nothing goes wrong, and something always does.

Yeah.

And then they come crying to Joe.

Yeah, you should, you should always plan for buying something at the correct price. And you should always plan for 3, 4 months down the road as well. So it's like, you know, what happens if this happens? So it's like today they said that we have a deal with Iran. Who knows? They've been talking about that for 2 months. Like, hello. But the stock market took it as a good omen and stocks went up today. Oil prices went down. What I have noticed with the labor market since this all started was that you— I can't— I couldn't get people out to a project to do the work because they were afraid that ICE would show up.

Oh, you were seeing that?

Yeah, I was actually seeing that. But, you know, not so much because we use We use people that are here legally.

Right.

But sometimes, you know, maybe our contractor is going to hire somebody that is not here legally. That doesn't concern me too much because that's on them, not me.

Right.

I hire the contractors who's here legally with a contract and move forward with that. But that's mostly what I saw.

Right.

Is, you know, getting individuals out to work because they were afraid.

Yeah.

Of what was going on.

No, absolutely.

I mean, but we're here in California. ICE is mostly gone from here. I don't see them anymore. In fact, I was at Home Depot and there was like 20 guys sitting out there waiting for jobs where, you know, maybe 6 months ago there was nobody out there because ICE was literally around picking them up. But that's kind of changed now.

That's kind of changed.

Yeah.

Well, I mean—

I would say the bottom line is make sure your deal's gonna work. No matter what.

No, absolutely.

No matter what happens.

Absolutely.

Make sure your deal's gonna work.

Make sure your deal's gonna work. And I mean, a lot of people may have been in the middle of a project. Like, um, we got this article from Fortune where, um, it looks like, uh, Robbie Robertson warned his $20 million Oh, don't make me buy anything. Recreation center project in Mobile, Alabama was going to be delayed for 3 weeks, and that's costing him $4,000 daily in liquidation damages. So those longer ones, obviously ground-up commercial, maybe they're going to feel an impact because he was saying pretty much nobody showed up on certain days.

Yeah.

And maybe it's different in different states. Like, that's a red state.

Yeah.

So we're a little bit more lenient here. So maybe they came and they went. I don't know. But at the end of the day, if you don't want to get caught in these random political things, then you just got to buy right. I mean, that's really what it comes down to.

And you have to plan for it.

You got to plan for it.

Yeah. It's like, you know, if you don't know, yeah, then that's, you know, on you. You should know all this stuff.

Right. Well, and apparently there was already, I don't know, workforce crisis. That's what they say. So there's no jobs, but at the same time—

We had what, 15 million people come into this country?

Yeah.

You know, it's like no way we got $15 million out. There's no way.

No, no, no, I don't think so. Drop in the bucket.

Yeah, I don't think so.

But what's funny is, you know, I mean, they're, they're saying there's no jobs, but at the same time there's no workers for these other jobs. I mean, maybe it's just construction because like in here this is constructionowners.com and they're basically saying without 100,000 new workers in construction industry—

I would think it's the economy the way it is right now. The interest rates are so high that, you know, there's not a lot of big contractors, uh, you know, putting together big jobs and stuff.

Yeah, no, absolutely.

You know, but I mean, the little guy's still working.

Yeah, little guy, little flipper, you and me.

Yeah, we're still working.

Still working. My guys are still showing up.

Thank God.

Thank God. But I mean, I know with LA, um, there's a lot of developers that have just kind of Said we're not bringing any more projects out of the ground because it's too hard.

Yeah, but that, that had— that just a little bit has to do with labor, you know.

Oh no, that's not labor, that's more permitting and—

yeah, a lot of red tape.

LA, unfortunately, that's not going to change, it looks like.

Oh God, did you see that? Yeah, we're not going to get into politics, are we? It's like, this is depressing. It really is depressing.

I was telling Lauren, I'm like, I'm disillusioned again because Yeah, it's just— they just take it.

It's crazy.

They just take it.

So crazy.

Yeah, unfortunately we didn't get what we wanted. But, uh, so LA is pretty much done. So that's too bad.

Toast.

Yeah. So yeah, that's an interesting thing to think about. I mean, these political policies having an effect on your projects.

But, and you have to think about it. Yeah. I mean, how many projects do we do in LA? None.

Yeah.

We're not doing anything. And the last project you did was what, a year ago?

Yeah, pretty much.

Yeah, it's like we're done. We're done with LA.

Yeah, rather go to San Diego instead if you had to go outside Orange County and Riverside.

Yeah, they're almost just as bad.

Oh yeah?

Yeah, and the distance as well.

Oh yeah.

I think it's closer to— we're closer to LA than we are to San Diego. San Diego's like, if you're going to go into downtown, it's like an hour and a half away. No, not downtown, but maybe here. You know, we're like 45 to an hour away. Your project was in Lakewood, right?

Yeah, the Lakewood one. 45 minutes away. Yeah, about 45 minutes.

Yeah, it's a lot better.

Yeah, Lakewood's right there on the cusp. But so the next topic we have here is off-market deals, the only edge left in 2026.

Trevor's asking, what is the best way to find good deals In today's competitive market, Peter, it's been tough out there. Okay, Trevor. Hey, it has been for all of us. Uh, but guess what? If it was easy, everybody will be doing it, right? All right. So the, the short answer is the best deals are never found on the market. They're not. Okay. Because Trevor, if, if you were to find a deal on the MLS or LoopNet or CREXi, whatever, if it's a good deal, it would only last a day. Right? You will not have a— you will not have time to get it. Also, let me say this: if a real estate agent has a really good deal, guess what? He's not putting it on LoopNet or CREXi MLS. He has clients, his A clients, so he's going to put this deal to them first to see if they want it before it gets to the market. Okay? So you're not going to see it online. So the best deals are found off-market, and that's what we specialize on. Okay? Since 2011, that's been my primary focus is learning and teaching and learning myself how to find deals off market by going direct to the seller. And we have perfected it, right? How to find these sellers. Trevor is asking what—

that's always been the case. Direct to the seller, direct to agent. Direct agent is basically I've got a property here that I've listed. Before I put it on the MLS, I reach out to Alex. Alex says yes. I, as the agent, say I want to represent you as well, because what? I'm getting 2 commissions. I'm getting the listing and I'm also getting a commission from you for bringing you a good deal, right?

Yeah.

Yeah. Cut that person out of the whole deal and just go directly to the seller and you're going to get your best deal.

Right.

From there. But you still do get good deals from agents that you work with. Yeah.

No.

Yeah.

As long as that, you know, they know what they're doing and how to price things out. Um, at the end of the day, if they don't get what they want, they, they do put it on the MLS.

Yeah. Yeah. I mean, I feel like, well, a lot of agents just have that one-track mind and I, I don't know, they think that it's somehow unethical to just go off market and Have a pocket listing?

Well, you know, it depends.

Yeah.

Honestly, it depends on the property. Yeah.

Or, and the seller, maybe the seller's like, I go through an agent, but I don't want everyone, you know, coming through my house and all that kind of stuff. So, yeah. But yeah, we've definitely had the juiciest deals going directly to the seller just because you can, one, you can find out exactly, you know, the problem that you need to solve rather than trying to play a game of telephone, and then the agent kind of, you know, just maybe they don't even know, or they're just, you know, they're just C-blocking you.

Yeah.

Um, so yeah, I mean, what— and what are some ways that, that you think are the best as far as outreach and reaching out to the seller?

Texting, cold calling. I mean, those are tried and true Yeah.

Does that still work after 50 years?

Yeah, still works. Actually talking to a person, uh, not through some— somebody who's, you know, like gate guarding, which is an agent, um, you're gonna get your best deal, you know, and just listen to what they have to say, find out what their pain points are, right? And then find out if you can resolve those for them. It could be time, it could be condition of the property, There's a lot of factors. It could be, you know, they have to go through a probate. There's some title issues involved. You know, they got gifted this property from somebody who used a quitclaim deed, which is really not worth the paper that it's written on.

Mm-hmm.

And now title won't do anything until we find the actual original owner and find out if his intention was to sell it. For that, whatever money was at the time. So there's a lot of, you know, moving parts, but the best way to resolve those is to actually talk to the seller themselves.

Yeah, absolutely. Yeah. How to find off-market properties for sale in 2026? Direct mail?

No.

Online resources, networking, real estate agents.

Yes, yes, yes.

Builders and contractors, wholesalers, public record.

Yes.

Word of mouth.

Yes.

Real estate auction.

No.

Driving for dollars.

Yes.

Probate and estate sales.

Yes.

Tax lien and pre-foreclosure.

Yes.

Yeah. All those.

Yeah.

Yeah. And you get all those from, you know, uh, on an account at PropStream, basically get all those stuff. Right.

Oh yeah.

And then network at meetups, uh, with people for the, uh, probate deals. You can network with attorneys who do probates.

Right.

You know, try to get on their list. So yeah, it's— I mean, direct mail marketing is something that I would not recommend here in California.

It's just expensive. It's too expensive.

It's crazy. And there's big companies that are doing it, right? But you know, they're spending, you know, what, $10,000, $20,000 a month?

Oh yeah, probably more than that.

Yeah, just, just to get a few people to call them. Yeah. And obviously, you know, they Put that together in their marketing and then they sell the deals. And if they're making money, great, they're making money and they're still spending that amount at the end of the day. But if you're just a one-off person trying to get started, that's not something I would recommend.

Yeah. And you can't really— it's hard to track too. I mean, you can, you can track the calls coming in, but it's like, did the people even get it?

Yeah.

You know, it's—

Yeah. How many said, you know what, don't call me? Take me off your list, or, you know, don't mail anything to me anymore.

Things like that.

Oh yeah.

Yeah.

You said no to auctions. That's out these days.

No, that's out. That's out, really. Yeah. And again, I'm talking here in California.

Yeah.

So they changed the auction rules a few years back, and you have to really hold onto the property for 90 days before you do anything with it.

Oh.

And a person who wants to live in the property can actually outbid you by a dollar.

By a dollar, right.

It's like, okay, so I've got my money tied up for 3 months and then possibly, you know, the 89th day somebody could come and say, yeah, I want to bid a dollar more than what I got it for, and they give it to them because they're going to be owner-occupied.

Right.

So yeah, they changed those rules and I wouldn't waste my time with real estate auctions here. Yeah, here in California.

Yep. Got Driving for Dollars. Well, now they have AI Driving for Dollars.

That's probably best. I mean, Driving for Dollars is Expensive. I drove by a gas station the other day, $7 a gallon. Okay, welcome to California.

Yeah, that's insane.

Yeah, so AI would probably be a little bit better, and I know you've tried to do that. Yeah, I don't know how successful it was.

Well, we're gonna text the list. Uh, well, some people have gotten some deals off of it because I was just giving it to newbies.

Okay.

And, um, yeah, they brought us some deals, and okay, it's led to some—

yeah, and the contracts, those are, those are lists of people that Aren't on anywhere other— anybody else's list. You know, it is literally AI driving, looking to see how distressed the property looks from the outside. That's it.

That's it.

And then, uh, and then doing a cold call, reaching out.

So yeah, but we're gonna start texting them tomorrow, so we'll find out.

Okay.

How they— how the AI did.

Okay.

But, um, yeah, kind of interesting. So, uh, yeah, definitely Prioritize off-market if you're going to spend any time looking for deals. Because I mean, we know people that are getting stuff off the MLS, but you got to be pretty aggressive. You got to be ready to buy. You got to be— you got to have experience.

You have to have a relationship too.

Yeah, a relationship. And they want to know that you're going to close.

Yeah.

Because I've found deals where it's like, wow, this is actually priced right. And then you call and they're like, we've had 30 offers already and it's only been 2 hours.

Yeah.

So it's kind of hard to compete with that.

And who are you? We've never dealt with you, so why would we trust you?

Exactly. And what's interesting is I think the regular retail buyer, you know, since all the prices went crazy, started, you know, picking up on like, how can I get in here? So the— just a regular retail buyer started going after, you know, like the fixer-uppers, and they're, you know, thinking—

And they're raising the prices up because they're gonna move in, so they can pay more.

Yeah.

Yeah.

Well, I know even Story Homes has, a lot of their buyers are just agents that have retail buyers that want to fixer-upper. So they'll obviously pay more. So yeah, even working with wholesalers, you got to dig through the muck and try to find something that has a big enough margin. Because like kind of like what we're talking and talking about in the in the first topic, it's like you you just want to buy right, especially right now, because we don't know where these rates are going to go.

So so there number one is NAR settlement, the changes in the commission gate. So guys, this is massive. NAR settled a $418 million class action lawsuit. Making it to where buyers had to distinguish what their commissions would be. Now, making that clear and in the, in the open to where it's not the seller paying for this. Now the buyers have to be aware of this. It's made a difference. And so people now are having to justify their commissions. So the lesson you should have taken from this is you have to provide value. And if you don't provide value, You're not going to get that job. And so make sure as a buyer's agent moving forward into this next year that you are providing value so that you're able to make all the money you need to make because it is going to be a buying frenzy in 20— number one is—

that, that wasn't like about 2 years old.

No, I know it said top economist reveals best 2026 real estate strategies. I think the The thing, the, the link was wrong. But, um, yeah, because basically it was supposed to say, uh, it was supposed to be on like how tariffs plus labor costs are just bringing up construction costs in general, therefore making margins smaller and smaller on flips.

Okay, thoughts on that? At the end of the day, it's all about, uh, you know, What the current market is, what's planning out there, what's available, what your contractors are charging you. Put your numbers together. If they work, they work.

Yeah.

You know, it's like, why are we blaming tariffs and all this other stuff that we really kind of have no local control over?

Because it's easier to blame other people than to actually do the work. So yeah, I mean, We've just seen it in the last like 5 years where flipping a mobile home, we could get it, the whole thing done for $40 grand.

Yes.

And now we're up to like $80,000.

Yes.

Just minimum.

True. So, but we know that. We know what the numbers are, and so you plan ahead.

Yeah, plan ahead, you know. I mean, at the same time, what, we sold one for $220,000 and now we're selling them for like $500,000?

Correct. So, so it works out.

Yeah, it definitely works out.

I mean, double the The rehab and double the price. Yeah, I'm good with that.

There you go.

You know, again, make your numbers work.

Make your numbers work, people. Live and die by your spreadsheet.

Throughout history, there have been 2 things that people have always wanted as a source of wealth. One was gold, and then real estate. And what do you think about if you're nervous about paper currency and the valuation of it? Why not just buy real estate and hold on to it? Is that not a good idea?

It's not a good idea.

No.

It's not a good idea because real estate is more interest rate sensitive than it is even inflation sensitive. So if you were to say, if this environment happens, does it go— it goes down in real terms. It's also an asset that is a fixed asset that is the easiest asset to tax. In other words, you in any place, you're in a particular state, Putting in real estate taxes means that they could always get the money. And so it doesn't— it's not an effective diversifier that way. And also being able to move money from one place to another, the real estate is nailed down.

Throughout history, there have been 2 things that people—

Dalio, he's a stock market guy.

Oh yeah, yeah, he's not a hedge fund guy.

He's gonna say real estate. Yeah, but I mean, if you check back with history The richest people in the world, most of them had real estate.

Yeah.

You know, it's like, hello. I mean, unless you're Elon and you've got all these different companies and, or Jeff Bezos or the Microsoft Bill Gates guy, right? You know, but, uh, average guys, most of the people that became wealthy became wealthy through real estate, right?

Exactly.

And if I knew what Ray Dalio knew about the stock market, then I would stick with the stock market. Yeah, but I don't. Yeah, I like real estate.

Exactly. Well, and it's this— you could use that same argument against him where he's like, it's an actual physical thing, so therefore it's easiest to tax. Okay, but you also get tax breaks, you get depreciation. Yeah, you get all that stuff.

Yeah, and you can't lose like 20, 30% of your money in one day.

Right, exactly. Where does it go?

What happens if you were invested in oil and, you know, today it went down, you know, 10% or whatever? I don't know what it went down, but a big number. It's like, okay, yeah, does that make your day?

Probably not.

You're probably pretty bummed out. No, that's too risky for me.

Yeah, well, and he's— yeah, it's like the same thing. He's, he's He has a hedge fund, so he's gambling other people's money, basically.

Is it easier when you do that? When you gamble other people's money?

Oh, yeah. Yeah.

How does he sleep at night?

I don't know. I mean, he's made people pretty rich. But then if you lose it all, you're like, well, it's just how the stocks are.

People— That's what Bernie Madoff used to say, too.

Yeah, I know. Well, he was giving people the best returns they've ever seen. And then they found out it was a Ponzi scheme. Just keep it going.

Okay.

Yeah. Interesting. So, uh, good investment in 2026.

What'd you say? What?

Real estate?

Yes, absolutely. Always.

We're gonna say yes.

Always. Well, and because the thing is, what you buy depends on the numbers, depends on your situation, depends on the outlook, what you're looking for. There's a lot of things.

Yeah.

But again, If you're a stock market guru, stay there.

Right.

You know?

Yeah.

Stay there.

Yeah. So we have here, speaking of your outlook, housing market forecast. They say that home prices declined 1% to 3% across major metros, but the forecast is set to rise. In 2026. Sorry, that was 2025.

It went down a little bit.

This was done.

We don't know.

It doesn't say. So yeah, this could have been at the beginning of the year.

Yeah, it could have been at the beginning or the end of last year. You know, because my prediction was interest rates down to 5, but then we got into a war with Iran. So right, that blew everything up.

Yeah. Well, I and I think I have a note here that actually. In SoCal, prices, they've obviously gone up. I mean, that's just the way it is. I mean, if it declined, it was probably for a couple months, I would say. And then this probably sums it up, a positive but modest forecast.

I agree with that.

It's like it's going to go up 1%, 2%, but it's still climbing.

Yeah, I agree.

An annual price increase of 1.1%, 1.6%. Um, but yeah, I mean, he was right about that where it's, it's interest rate sensitive, but just hold on to it, and then when interest rates drop, that's when the wealth is built, and then you can refinance and buy more or whatever you want to do. Do you agree with that? Do you agree with refinancing, pulling your equity out, and buying more?

Again, it depends on your situation and what you're going to do. I've always been of The mindset that you have a primary residence, and that should be the one that, you know, you have your family and everything in there. And I wouldn't touch that so much as I would if I had investment properties.

Yeah.

Then investment properties, yeah, pull money out. And if you know what you're doing, then go buy another one and keep, keep going. I don't necessarily advocate selling properties either. I think you should hold on to them. Until you're my age or older and decide, well, you know, I'm not going to be around anymore, so my kids can take care of this stuff. But yeah, again, it just depends on your situation and what you're looking to do and how you're looking to do it.

Mm-hmm.

Yeah, I can see that. But overall, I mean, in California, it's historically just going to go up.

Yeah.

And so we still have— would you say there's still a shortage?

Yes.

Major shortage.

Yes. Yeah, I think they won't let anybody build.

I know.

You know, right?

So, okay. And then Prop 13.

Thank God it's still here.

What, weren't they talking about possibly getting rid of that?

Oh, they always do. They've been talking about that since it passed.

Right.

But they haven't been able to, thank God. Yeah.

Is that— did we vote on that?

We're good.

No.

Okay.

What was the thing we were going to vote on? Oh, it was getting rid of property taxes for people over 65.

Yeah. Yeah. That's— I think that's on the ballot.

Okay. It's coming up.

Okay. Vote yes. But I mean, especially if you're over 65, vote yes.

Newsom is probably just gonna sign it. It almost doesn't matter. I don't want to say that. No, he doesn't matter. But I mean, once you see the way that the voting is run, it's like—

True, true. Florida's getting, getting rid of their property taxes.

Oh wow.

Okay, that's going into effect.

Yeah, that's going hopefully going into effect too. I think they're voting to get rid of that. So yeah, if we could do the same thing here, that would be awesome.

But I mean, they need the fraud money though, so I wonder.

True.

Has it— and I was thinking about this, okay, so you know how— I mean, all right, spoiler alert— in the LA, um, mayor run, um, basically with the mail-in voting All these votes are showing up out of nowhere for the person that was dead last, and all of a sudden, you know, they're just popping up.

And there's no fraud.

There's no fraud.

Prove it. Prove it. And like, hello? Yeah, what are we, stupid?

Yeah, it's like 100% for one person and not for any— it's statistically impossible. What was every, um, I guess, political runoff Going back to the '70s and the '60s, was it always like people screaming fraud? And were there always these anomalies happening? Or did it seem more fair?

This all started mostly, I would say, got exacerbated with COVID Oh, right. Because with COVID we went to a mail-in ballot.

Mail-in ballot. That's right.

And then they had ballot harvesting. And I saw a YouTube the other day where they were going to Skid Row and paying people.

Oh, yeah.

4 or 5 bucks, a dollar. One guy, you know, he asked, how much did you get? I got 4 bucks. He goes, well, I just talked to the other guy, he got 5 bucks. He goes, shit, I got ripped off, didn't I?

Right.

Yeah. And literally, here, just vote and let me have your ballot, I'll turn it in.

Yeah. And they give them like fake addresses to put on there and all that stuff.

Yeah, all that stuff.

Yeah, I know. And it's all on camera and nothing's gonna happen.

No, nothing's gonna happen. No, you would think something would happen.

Okay, so it all happened.

Nothing's gonna happen.

I thought this was always— this always happened and people were like, there's fraud.

No, no, no, that's when it really, really got bad, was, was back, back when that happened. I mean, because we had, we had, uh, the Governator, right? He was Republican, right? You know, when we had Reagan, right? You know, going really far back. Yeah. So, we have had Republican governors over the years. But yeah, over that period of time, they've made it very, very difficult to be a Republican and run for any office at all.

Yeah.

Just like almost impossible. Orange County used to be what I would call a red county.

Right.

We're purple, if not blue. It's like, yeah, it's like whatever.

That's crazy. Well, I guess the Republican guy got in for the governor, right?

He did, yes.

So yeah, but he's already saying—

Yeah, because the billionaire is like really, really far back. I don't think they could cheat for him, and plus he's a billionaire, so I don't think they like him anyways, right? So they had him, they had him spend I think $250 million of his own money. Just like, dude, are you nuts?

Like, oh my God. Well, I guess if you have a billion, it doesn't matter.

Okay. But it doesn't matter to me.

I don't know. I don't know what they're gonna do. But yeah, kind of interesting. Um, okay, so getting back to real estate, uh, what's the single best move for a new investor right now in this exact market? Where, where we're at, um, where a 30-year rate is basically 6.3% right now, um, and people are saying it could get down to 6%.

Right. I think it's going up, honestly.

I know.

Um, if, if you're looking for yourself, then I would look into assumable loans. If you're a wholesaler or an investor, then I would look at subject-to properties and things with probably little or no equity as far as if you're gonna find something to move into.

Oh yeah.

If you're gonna wholesale it, then yeah, obviously it needs to have a spread there for you to wholesale it. But that's where I would start looking. And then the distressed situations, which is always, you know, I'm just looking for distressed situations, whatever, whatever that may be. That may be pre-foreclosures, that may be somebody in the family passed away, the, you know, the spouse can't afford the house anymore, so they have to sell it. California, our foreclosure is 3 months, 21 days. So it's not like there's a lot of time there before the banks say, you know, we want our money.

Right.

And they'll foreclose on you. Um, you know, those, those are distressed situations that I would look at. Okay.

Um, yeah, speaking of the low— the little to no equity, um, Pace is kind of getting some blowback for teaching newbies to go after no equity and also like no money in the deal.

Yeah, because he's teaching people how to do it Put the deal together, and then unfortunately they don't know how to handle the deal and they're walking away.

Right.

Yeah, and I agree that's that's not good.

I know.

So if he's you know teaching it, he should be teaching it correctly the right way.

Well, and and I mean to play devil's advocate of my you know what I'm saying here is he basically I mean he when he was first starting out teaching it, I think that's what it was. But then since he was focused on the education, he was signing up so many new people. you know, just morons with no common sense taking these skills and then just kind of, oh, whoops, I screwed up. But in the end, it's like you're screwing over a family or like an old lady or something.

Yeah.

So, um, yeah, he's basically getting some blowback for that. Everyone's like, well, yeah, no equity and no money in the deal, like what could go wrong?

They come back to, you know, like personal ethics and stuff, you know, if you If you're taught to do things incorrectly, that's what you're going to do.

Yeah.

Or if you're that type of person, even if, you know, he teaches you or anybody teaches you the right way to do it, if you're unethical, you're going to do something, you know, not correct. Yeah. The wrong way.

I'm working on getting a guest who is— she was basically in Sub-2, and I think I told you about her. She was like a federal agent for 7 years.

Oh yeah, yeah, yeah.

So I'm working— now she's She saw what was going on in the T— in, in— because she was a TC. Yeah, a lot of sub-2 deals. Yeah. Um, so now she's just kind of raising awareness for that, but I'm gonna get her on the show.

Okay.

So we can talk about it.

Can you get Brandon Turner?

I'll try. Yeah, I will try.

Yeah. Yeah, like he's out there talking about everything. I'd love to interview him. Yeah, you know, see what he has to say about losing $15 million, right?

And we're just the whole time we're like, how do you sleep at night? Yeah, you just keep asking him. No, really, how do you sleep at night? He's like, well, I take, uh, propofol or whatever. Whatever happened to Michael Jackson?

Yeah, that was it, propofol.

Yeah, yeah, Dr. Murray. Um, okay, what about if you are an experienced investor and you're sitting on equity right now? What do you do?

Do you just keep sitting on it or do you Again, your situation, if you're 70, you're just sitting on it right now. If you're young and you have a lot of equity and you want to continue to do more, then pull money out, do more. You know?

Right. Well, you can pull it out and not get taxed on it.

True.

Which is nice.

Yes.

And then you just keep doing it, keep doing it, and then you pass away and then let the next generation figure it out.

And they don't get taxed on it either.

Right.

That's the hard part about it, you know, 'cause I can't benefit. The only way I benefit is if I die. And what benefit is that? None to me.

It won't matter.

But, you know, if you're in the game and you wanna, you know, ramp up from having 2 or 3 homes to 20 or 30 homes, and if you're young enough to handle that, then go for it.

Yeah. My view now is probably, Just the least amount of homes, but just enough to cover all the expenses as far as cash flow goes. Because, you know, some people are like, I want 1,000 doors. And I'm like, why? Yeah, that seems like more headache than— yeah, you know what to do.

Yeah, yeah. 1,000 tenants, 1,000 LLCs or land trusts, or, you know, to kind of protect yourself, you have to do all that stuff.

1,000 tenants.

And then, you know, you sit down with your CPA and you go, yeah, here's 1,000 properties we have to account for in our taxes this year.

Yeah.

What?

Yeah.

Yeah.

I mean, at that point, maybe you would just do multifamily and have 300 doors in one place. But then—

And lose $15 million.

Yeah, that's what I was going to say.

Yeah.

Yeah, but then you're running into the, like, wait, the rates didn't drop like I thought they were going to. Dude, all your equity is gone. All your hard work.

What were you thinking? Come on.

It's too optimistic. I mean, he called it. He was like, maybe I was too optimistic.

You think?

Yeah. Thank God. Yeah. That's something I've had to learn over the years is like pull the optimism back into, uh, yeah, be optimistic, but also you gotta, you gotta be realistic at the same time because good God.

I agree.

You can get caught real quick. Um, what's overrated right now that everyone keeps talking about?

I don't know what's overrated.

I would say, I mean, I, I, I hate to say it, but probably co-living.

I think that was overrated from the beginning, and I told you that. Yeah.

Yeah.

I said, you know, I've sat through a couple of these seminars, webinars, whatever. And at the end of the day, I always thought it was way too much work for what you were going to get at the end of the day. You invested differently in that you invested just your money into the project. But if you wanted to do the whole thing and actually manage the whole project yourself and the tenants, and I stopped listening When the guy who owned one said, I go over there every Friday and I take pizzas with me and, you know, we have a great time. Yeah, I'm—

That's your nightmare.

I don't think I've ever taken a pizza over to any of my tenants before.

Yeah, yeah, you don't want to do that.

No, like, what is this, like, uh, you know, we're all friends here?

Like, that's—

yeah, no, he's not treating it as a business.

No.

And it's like, yeah, not going to work well.

And now that I've seen it kind of on the inside for a year, it's— it— I don't know if any of them have gone the way that any of the operators have thought they have.

That's like syndication. Syndication. The only people that really make good money are the syndicators. And that's the same thing with that. It's like they put the deals together because they get the tenants and then they give them to you and then let you manage it, but they take a piece of it. Along the way?

Yeah. Well, yeah, with all of these, there's probably been capital calls on every single one that I've been a part of.

Wow.

Yeah. Even though they've had reserves, they built it out, made it look really nice. Then all of a sudden it was like, the foundation is crumbling. And I'm like, you guys didn't— I mean, they got an inspection report, but all of a sudden the foundation was all screwed up.

Really?

Yeah. And then another one, the plumbing was all screwed up because it was like a 1920s house and Florida. And yeah, it was like, what, what, what were you guys thinking?

What were you thinking?

I just joined in as like a capital partner.

I know. And you still need to do your due diligence with that.

Yeah. I didn't.

Obviously not.

I didn't. Well, they said, yeah, they said that's classic. They said, yeah, they said everything was great.

I mean, you, you were on a big kick, what, about a year, year and a half ago maybe? Like, let's find something out in Riverside, 5, 6 bedrooms.

Well, no, no.

I, I—

Convert it to 9.

Right.

I think out here it could do pretty well still, but it's definitely over—

You are an optimist.

But it's definitely overhyped, that's for sure. It's definitely overhyped.

Are you gonna drive out to Hemet every like Friday with pizza?

No, there's no pizza parties.

You sure?

Yeah, I would want like just regular Amazon factory workers. That's it. And then you could still cash— you probably still cash flow like $2,000, $2,500 if you find the right property. But you're gonna have issues.

A lot of work.

Yeah, you're gonna have issues.

Yeah, there's just a lot.

So, so yeah, you, you on, on the spreadsheet it's $2,500, and then at the end of the day you're like $300.

Yeah.

And all that work, and like the house is now chopped up and Yeah, so I don't know. So that, that's what I would say that's overrated. Um, on the other side, what's underrated that nobody's talking about?

Mobile homes. Oh, mobile homes. Yeah, yeah, especially here in California.

I know, we try to tell people, grab them by the collar.

Did you see Seattle just put a bunch of little Tiny homes? Tiny homes for the homeless people.

Oh God, how much did that cost?

No, they're actually pretty reasonable. I thought it was pretty reasonable. It was like $25,000 each.

Oh, okay.

But it's, it's literally probably the size of this space right here.

Oh yeah, yeah, yeah, yeah.

And, uh, I was, uh, looking at, um, Gutfeld last night.

Yeah.

And they were making fun of it. Basically, it's like This size. And there's a little closet, but just the hangers for hanging your clothes. And then there's a desk. And then one person said, what the hell do you need a desk for?

You're homeless.

It's like, what do you need to do?

Shop up your drugs on there.

Yeah. And then Greg said, basically, give it 2 or 3 months, you're not going to even recognize what this place looks like.

I know.

They're going to tear it apart.

I know.

You know, so it's like, yeah, not good. I feel like— and plus there's no rules.

Oh, yeah.

Yeah.

No, that's it.

No, no, it's just like—

It doesn't matter if you're sober or not. Yeah, right.

That doesn't matter. Exactly.

Because that's racist.

Oh, come on. Yeah, it's like, really? It's like, so you're moving them from the street into here, but there's no rules and no way for them to, you know, get ahead. Yeah, you're not offering any of that stuff. It's like, this doesn't make sense. It's just—

I know, bizarre. I feel like that would be a good move out here. Go to the desert, put a bunch of them—

I can't go out there, desert's too hot.

Mini splits.

Do you remember the— was it the sheriff in— Oh yeah, Joe Arpaio.

Joe Arpaio, yeah.

And he had tents out in the middle of the desert, right? And he didn't have air conditioning. And you know, everybody was like, ah, it's supposed to be— same thing with the home—

supposed to be uncomfortable. You know, that's the point.

That's because that was prison.

Yeah, but well, here. Okay, okay, okay. So closer. All right, closer. We'll move it closer. No, no, let's, let's do desert. Okay, well, I'm thinking the amount of grants you could probably get to run like a homeless thing, and then we pay ourselves a salary, and then, you know, like a certain percentage goes there.

I don't know, let's call it the Leering Center.

Exactly.

Yeah, we'll just call it the Leering Center. I don't think that name's been taken yet, has it?

I don't think so.

No. Yeah, let's just call it the Leering Center. Yeah, that'll be a good business.

I know. And they're like, where's all the people? We're like, uh, uh, uh, uh, all the homes are half built.

They're not going to complain that it's hot because there's nobody there.

Yeah, exactly.

Nice. That's a good idea. Thank you. Let's start that.

I know. That's what I'm working on. Stephanie says, what's overhyped? Buyer reluctance and justification. Is that an inside joke?

No.

Oh, okay.

There's buyers out there that are looking at properties, but they're never good enough. Pull the trigger. Yeah. You know, they're not good enough. The property's not good enough. The loan's not good enough. The agent's making too much money. They're not willing to kick back any money. And there's a Multitude of excuses out there. Yeah, I agree.

Well, if you've ever seen House Hunters, um, it's probably triggering for a lot of buyer's agents because all the people are like that. And the one that Lauren and I like, there's like Caribbean Life where, you know, the— it's like the same every time. The buyer's agent meets with the couple and they're like, I want something on the water but also in the mountains And he needs to have 3 bathrooms, 5 bedrooms. He's like, okay, great. Yeah, let's, let's go ahead and find that for you. What's your price range? $100,000.

Yeah. Yeah.

And then it's like, how are you gonna do that? It's just, there's no way.

Well, they think they can. Yeah. They're in a foreign country. So.

So I can imagine out here, it's, people are probably like, well, I have $300,000. Can you find me something in Orange County, like by the water? You know, um, no, absolutely.

Yeah, we'll find that for you. Yeah, not a problem.

Not a problem.

This little garage space, you know, it's not the whole thing, it's half.

Yeah.

Okay, can you live in there?

Right, storage center, and you get 50% off your first move-in.

There you go.

So perfect. Yeah, that's, uh, interesting. So she says, uh, what's underhyped? This podcast.

Thank you.

Thank you. Yeah, we, we need to get someone to help promote it, but that's what I'm supposed to be doing. But I'm a new dad, so I don't have time for this.

Instagram together and let's promote this.

There we go. That's gonna be season— what are we on?

5.

5.

Yeah.

Okay, season 5, we're gonna start marketing the podcast. Um, so Um, I was thinking for the next episode we're going to talk about some seller financing stuff.

Oh yeah, good topic.

Some, uh, maybe novations. Novations are coming under fire. Yeah, a little bit. Because some people don't know how to do them right.

Yeah, Stephanie's doing a novation.

I know, that's great, that's great. Oh yeah, maybe she can call in and, uh, tell us about it. Yeah, because it is a powerful tool, and especially in a situation with her situation Um, or, and maybe we could just talk about it really quick. Well, basically she's selling a mobile home on leased land, 55+ community. It was in, it was a little bit distressed. And with the—

A little bit?

A lot distressed. And with the 55+ community, they don't want to do any work. They're not looking for a fixer-upper. They want it move-in ready. So she said, hey, why don't I pay for these fixes? And then, you know, you don't have to worry about that. We'll relist it. So it looks brand new. I saw some, some video of it and it came out really nice. And thank you. Then, yeah, since I did all the work— Oh my gosh, I knew it! I could tell by the craftsmanship. And then, so then you list it, people are excited, and then, you know, she gets some profit from that. And, uh, it's a win-win for the seller and the agent/investor. Yeah, it can be.

So absolutely.

So it's just another tool in the tool belt. So we'll talk about that and we'll do some subject-to stuff since the rates aren't coming down, so on and so forth. So that's going to be next week. So if you guys are interested in that, definitely join us. Yeah. So yeah, there you go.

Thank you.

You're welcome.

Thank you.

Oh, I forgot to Talk about this, um, on the 29th, our meetup. Learn how to flip in 1 hour.

1 hour, that's all it takes.

Yep.

I'm going to teach you how to flip.

That's right.

And if, uh, if you want to look up my YouTube channel, I did this maybe a year and a half ago as well, right? Learn how to flip in less than an hour.

People loved it.

If you want a preview of that, uh, go Go there if you can't make the meetup. We'd prefer to have you at the meetup, and we'll even buy you the first drink.

That's right. Oh yeah, the first drink's free. First drink's free. Oh yeah, yeah. Okay, that's amazing. And yeah, I made a little post about this. I looked, I think I'm on project— I think I put 26, but I'm actually on project 24 since I started. That's crazy.

That's crazy.

Yeah.

That's good.

That's all from you.

Thank you. Yeah.

So, well, thank you for—

You had a little bit to do.

I had a little bit to do with it, but actually—

Okay, you held my hand. Lauren had everything to do with it.

And that's not even counting like the, the wholesales. That's just flips.

Yeah.

So kind of nuts to think about. So if you guys are ready to make a change in your life, please come to our event on the 29th. But anywho, fun day. Thank you guys for joining us. We will be back next week.

See ya.

See you then. If you want some more advice on real estate investing, reach out to us one-on-one.