Real Estate Rookie Testimonial | Real Estate Investor Network | Alex Barnett

Thank you all for coming. The next speaker, his name's Alex. Alex and I met about 2 years, 3 years?

Last year.

Last year? Oh my God. Wow, that's quick. I met him through BiggerPockets, correct?

He—

I reached out to him or he reached out to me, one of the two. And, uh, and we met. I, I meet about, honestly, about 3 to 4 people a week through BiggerPockets. Um, they, they buy me coffee, or if they're, they're really interested, they buy me lunch. One, one of the two. Uh, and we meet and talk for an hour, and, uh, I kind of had him in the path. Uh, Alex's path was that he wanted to start out wholesaling. He did. He got— and people ask me this all the time, is how long is it going to take for me to get my first deal? I had one guy came to the office the other day. He literally was calling the first week and got a deal.

Wow.

You could be calling for 6 months and not get a deal. So it really depends. Alex got a deal quickly. We bought that deal from him. It was in Carson. Alex made some good money. We made some good money on the deal. And from there, he's been continuing to do wholesaling. And I know that he's acquired some mobile homes, kind of like you have, and I think actually in the same area that you're investing.

Mm-hmm.

And then Alex asked me to invest in one of them. To flip last month. So that's what we're in the process of doing, flipping a mobile home, because I don't do mobile homes at all. I only do them if they're on land that is owned by the mobile home. This one is. So I, I asked— I told him yes, and he got it, got it at a fantastic price. And he can tell you, tell you what that is. But without further ado—

Sweet.

Come on up. All right.

Hey.

Thank you, sir.

Yeah, this is kind of weird because I'd say 14 months ago now, I first read Rich Dad Poor Dad. My fiancée and I were actually in a band together for the last 10 years. 2020 hits, the whole touring industry which is kind of primarily where we made most of our money, just went down the drain. So never saw that coming. I thought like live music and live entertainment was gonna be, you know, here forever. So we had to relook at how are we gonna make this money? So read Rich Dad Poor Dad. It's kind of cliché at this point, but it just kind of blew my mind even though it's a really simple book. It doesn't really tell you how to do things. So from there, went on BiggerPockets, started just consuming as much as I could about real estate. And then they always say, find a mentor, find a mentor, find a mentor. And it's honestly the easiest path to success so you don't have to go through the same mistakes that everyone makes. Because in real estate, it's pretty much tried and true. The fundamentals haven't really changed. I'm assuming since the beginning, you know. Um, so I reached out to Joe and I think he said, I have a meetup, so why don't you, you know, come and join us? So I did that and we were on Zoom at the time and I was just kind of lurking. I was just sitting there just watching him kind of explain it and he called me out and he was like, hey, like, what do you want to do? Like, what, what, you know, what are you interested in? And I told him, I was like, yeah, I want to learn how to flip. And he said, all right, well, come by the office and I'll take you around to some of my flips that I'm doing. And so I did that. And yeah, just kind of got hooked at that point. And basically he just said, you know what, if you want to get started and you don't have your own money to do it, you should look at this thing called wholesaling. And I was like, all right, what is this? So then you got to go down that hole. But the great thing about Joe is he's always available. Any questions. So it's just an alter— it's a great resource to have. So these meetups and then obviously having Joe there to answer any questions is great. But the main thing for me was that I just started taking action right away. So the wholesaling thing, it's pretty simple. You pull a list, you start calling people. And I did that and I just— Just, just calling, just calling, like even just hand dialing before I got to, um, you know, buying all the software and stuff because I didn't really have any money to kind of get started. Um, and then one of my first techniques was I was calling real estate agents in the area and asking them sort of for, you know, um, pocket listings or anything that wasn't on market. And so I would call 10, 20 a day and And after, I would say, like a month, I got a call back from one of the agents and she said, yeah, I got a deal right here. I need a cash buyer. I'm not going to put it on the market. It was all these things. And so I called up Joe and said, hey, does this sound like a good deal? He said, hell yeah, lock it up, lock it up. And I didn't know like anything. I didn't know. I was scared signing like any little thing. I didn't know what escrow was. I didn't know what a title was and none of that. But I just kind of like every little thing, I would just call him and be like, what do I do now? What do I do now? What do I do now?

What do I do now?

And so, um, got that first deal and that was pretty much on the 1st of January last year. And then once that happened, it was like it was over. I was hooked. Um, it's just like, it, it's, if you put in the time and you put in the consistency, it just, it's life-changing. So from there I started, uh, just doubling down. I was able to get the software, so I was able to text blast and cold call. And then kind of just went from there. I started virtually wholesaling out in Jacksonville. And so through this time, this is maybe 6 months into it, I started getting more into the seller financing and I wanted to buy something for myself and Lauren. And so I started looking out in the Inland Empire. And I ended up in Hemet for some reason. I just pulled a list in Hemet. I was like, okay, this is like reasonable prices, um, and the, the rents make sense. So if I could get something for seller financing, it just kind of makes sense out there. And I ended up going into the mobile homes because out there, uh, they have mobile homes on land. So there's, there's 2 different ways that mobile home parks are set up. Some of them are you, you just buy the mobile home and then it's on— you have to pay space rent. And then there's also mobile homes on land. So, um, I ended up getting into that and I got 2 rentals that way through seller financing. And, um, yeah, like, uh, in December I got another deal. I locked it up originally at $85K and the ARV is probably like $150K, $160K out there. So I got it at $85K, and then I brought Joe down to take a look at it with me. It needed a ton of work. It pretty much needed to be like gutted. It had been vacant for a while. And, uh, so after that, I got it— the price down to about $62K. And so, uh, yeah, from there, just— we're about a week away from finishing the flip, and then we're gonna list it. So. That'll be our first flip. And it's just, it's crazy to see like how much you can get done in a year. So my biggest thing would be just anybody that's just starting out is just learn as much as you can, but also start taking action as soon as possible and just be consistent. Even if you have like a full-time job, if you can put a little bit, like a couple hours per day into your, into your real estate business, it's gonna pay off dividends. So, um, Congratulations. Yeah, thank you.

Can you explain what your seller financing deals look like?

Sure, yeah. So through the wholesaling, a lot of times you're going to be giving cash offers. And a lot of times that doesn't work. People don't want to hear that. They don't want the lowball offer. So another possible way to get a deal from somebody is to ask them, If they'll sell to you on terms. So basically, can I get— I'll give you a higher price if I can give you a little bit of money down now and you carry, basically finance it for me. So I found I ended up— I, I, I'd never done it before, but I just was kind of pitching it out there. And one guy was like, yeah, you know what? Um, Yeah, I'll, I'll do the seller finance for you. And he was, he was another investor. He has probably like 10, 15 mobile homes out in Hemet. And so I just kind of like started the relationship with him, got it 5% down, and then he's going to carry the note for 10 years. So it was really easy to get into there. And, uh, for him it was 4.5%.

That's good.

He's carrying 5%.

Yeah.

So the payment to him is about $800 and it's about, I'd say like $830 or something. And I can rent it out for $1,600. And it's just—

Is it on its own land?

Yeah.

Is it in a community?

No, it's not in a community. It's on its own land. Yeah.

Is this like free and clear?

Yeah, it's free and clear for him. Yeah. So yeah, yeah, yeah. So I mean, it works. It's like the rents aren't going down. I mean, even out in Hemet, it's like you can't get anything for under $1,500. So it's crazy. Um, and then the other one I got was, uh, sorry, I'll get—

You found that you typically don't even pitch seller finance anywhere in like Orange County because it doesn't work. Have you found a way around that, like short-term or short-term rentals?

Yeah, short-term rentals, it may be the way to go. It's just, it's hard right now because Even in Orange County, a lot of the cities are cracking down on the short-term rentals. Um, but I haven't really been able to make it work outside of like the high desert, you know, and out in that area.

What about Jacksonville?

In Jacksonville, yeah, it's a lot— it's, it's a lot easier because, um, just the price points are way different. So it's pretty much as long as I mean, it's the same as a rental. If you can get your payment to the seller low enough and you're still gonna cash flow on top after all your expenses, then you're good to go. So that's pretty much—

What's your experience been like wholesaling across the country?

It hasn't been bad. It's more consistent. So out here I'll do less deals and then over there I'll just do, I'll do more deals per month out there.

Are you looking for rentals or flips?

For what's that?

Are you looking for rentals or for flips in Florida?

Oh, I'm pretty much just doing— I'm only wholesaling out there. And then I have a team member that I just met through a Facebook group, and she does all the dispositions. So basically I'll do the acquisitions and I'll reach out to sellers, and then I'll lock it up, give it to her, and then she finds the buyer, and then we just split it.

Did you get a Florida, like, virtual phone number?

Mm-hmm. Yeah.

So for the, uh, the seller finance deal, why do you think specifically for— why would he decide to actually do payments versus putting on the market? That, that specific—

Yeah, that one, he, he was just saying he wanted to, um, he wanted to start offloading some of his, uh, some of his inventory. but he still wanted the monthly payments. And then he was asking for, it wasn't retail, but it was close to retail. And so I was able to get him that price and then he was able to work with me on the down payment. And so it became a win-win.

Okay.

Yeah.

Capital gain probably.

Yeah, exactly, exactly. Yeah. So, and he's getting a little bit older, so he's trying to like stretch it out, sell one per year. So he's kind of holding the notes and then I'll have a balloon payment at the end of the 10 years.

Okay.

Yeah.

Okay.

That's how I set it up.

Sounds good.

Yeah.

I got a question.

Where are you pulling your leads from? You getting a list from like PropStream or something?

I'm using Batch Leads right now, yeah. And so they have everything integrated in there. But yeah, I was using PropStream as well.

Okay.

So yeah.

Is there a reason why you stopped using PropStream and went to Batch Leads?

Only because I was texting through Batch Leads. And so it's all integrated into the system right there. And the data was pretty good. It was pretty close to PropStream. So I can basically just, you know, pull an area and then they'll have little filters just like PropStream, like, you know, absentee owner, pull that list and then just throw it in there, skip trace it in Batch Leads, and then just load it right into a texting campaign.

Yeah. So yeah, we, uh, we just stopped using PropStream because they no longer— yeah, no more MLS. Their headquarters is around here.

Yeah, yeah.

But what we're finding— so I'm a realtor, so I have my license.

So California, we're okay.

We're struggling in Missouri where it's a non-disclosure, right? And Batch is not that accurate.

No.

Yeah, we're struggling a little bit there.

I don't know if Florida is like—

no, it's not. But I was looking in, in Texas as well, and that's kind of the same thing.

The, uh, you can look at pending sales, right? And I was like, that doesn't make sense because those— that could be—

Yeah, for sure, for sure. Yeah, it's getting a little tricky right now because, um, this year I know they're starting to crack down on wholesaling in different states. And so they're going to make it— I think they're going to start making it a lot harder for wholesalers to gain access to that sort of stuff.

I got— well, I found a way to kind of Get past that because you know when you start wholesaling, you're looking for an end buyer, right? You don't have the cash. So now I'll just buy the deal, right? I'll wholesale it later.

Oh, there you go. Yeah, then that's that's that's definitely the way. It's a way to get around it. Are you using your own funds or do you private money? Okay, perfect. Yeah.

So is PropStream MLS available in California for PropStream?

No, no. So they just got their whole access to the MLS revoked. Um, so they don't have that data anymore. So it's pretty much just going off of public records.

How about, uh, BatchLeads?

Um, I, I don't— I'm not sure if they still have MLSX. They do? Okay. It's just not the most accurate. Yeah.

They say pending, we look on Redfin, it's sold.

Right. Yeah, yeah. So I think they're trying to like update their system, but it's like each software has its own pros and cons, so you just got to find the best one. And sometimes you got to use like 2 or 3.

So, but it's almost like when that happened, I started reaching out to the markets that I'm in, and I go to like realtor.com and I start looking for realtors.

Exactly.

It just makes sense to do it that way.

Yeah, yeah. Because if the, the MLS is gonna, is gonna trump everything because they can see, you know, all that stuff real time. Um, so if, yeah, if you can just reach out to realtors, that's probably the best way to do it. That's a good call. Are you finding that Are you offering them something to comp for you, or how do you work that?

So, because I know like wholesalers and investors are getting a bad rep in the realtor world, so I kind of preference like, hey, look, I need you to find me a deal and I need you to represent me, right, the whole way, right? You'll still get paid, right? Um, I just need like— I work virtual, so I don't plan to come to the state, so you can kind of help me do whatever I need to do.

There you go.

And if you can find me someone who can, you know, work on the deal.

Okay, great.

There you go.

Just kind of build that rapport, show them that, you know, I'm a real buyer.

Nice. Yeah, awesome.

That's cool.

Yeah, yeah, yeah, yeah, yeah, yeah. I know, it's, it's amazing if they'll even answer their phone, you know.

So yeah, you guys don't want any business.

Yeah, yeah, yeah. No, I know, it's, it's, it's— this year is going to be pretty interesting because I know the The National Association of Realtors is really cracking down on wholesalers having a license because that's the one thing— I mean, and I get it from their perspective because the barrier to entry is so low for wholesalers that some people can get in there and lock up properties and end up screwing over a seller who really needs help just if you don't know anything or just out of sheer ignorance. I can see where maybe requiring a license will kind of standardize the whole process, but, um, as of right now, you can still get in there and just without any license, you know, make some good money off of that.

Wow, sweet.

Are both seller financed, the deals that you did?

Yeah, there was— yeah, there was a second one in Sierra Don. Um, so there's like a mobile home park out there, and I got that one, uh, for $75K. ARV is probably like $125K. And, um, like an older lady, and she, she was just done being a landlord. And so she, same thing, um, was 5% down, and then she'll carry the note for 10 years.

So.

And how did you find the deal?

Uh, that one was just through texting.

Okay.

Yeah, so they'll text and I just ask them like, hey, are you looking, are you looking to sell? And they'll say yeah, they'll say yeah or no. And then as soon as they say yeah, then you just get on the phone and talk to them.

How often do you have to walk people through that whole process for seller finance? Like, because every time they—

oh, I don't want to do anything like that, right?

It's crazy, right?

Playing that whole—

Yeah, yeah, yeah. So what I'll do is I'll try to just plant the seed and kind of pull away. And it, it really only works if they want a certain number and they're like, I want this price right here. And I say, okay, well, you know, most people are going to give you this lowball price. If I can get you that higher price, are you willing to sell, sell to me on terms? And they'll be like, well, what's terms? And then I just kind of just try to barely explain it. I'll be like, well, that's probably like a conversation we need to have later, but basically I get you down payment and I pay you over time at a higher price with interest. So you actually end up making a lot more money. So just try to leave it like that. I've done it before where I was trying to explain like a whole hypothetical thing and then every— they get confused. And then, um, basically if anybody's confused, they're gonna automatically say no. So I try to like split it up into different conversations.

Yeah.

Yeah, but yeah, yeah. So how many properties did you wholesale, or how much would you say you felt comfortable with before you started going the seller finance route? I don't think it was necessarily an amount. It was just me, it wasn't an amount of deals that I did. It was just me kind of learning more about real estate. just over the whole last year. And so, um, you know, the more you look up on YouTube and stuff, the seller financing kind of just, just, it comes up. So I was like, oh, that's, that's really interesting because, um, I mean, we have— we've been like independent contractors for so long, so for me to, to even like qualify for a loan, that seemed like insane.

Mm-hmm.

So I was like, okay, this is like a good way to get into it. And yeah, once, once I did it once, I was like, oh my God, like you can build your portfolio so fast if you can find those people that That want to do that, you know. And, and it honestly, it, it's a good deal for, for some people because you do end up making more money if you're just willing to take payment. Um, it's just about finding those people that need, that need help, that have a property that, that can't be listed or that needs some sort of creative solution.

So—

Do you follow up on any dead leads?

Uh, what do you mean?

So someone that said no, do you have a system where in a few months you would just follow up back again?

Not really. What I'll do is if someone says— I'll usually just have warm or hot. And then for all the nos, oftentimes I'll just pull a whole list again and then just hit them again. Yeah, yeah, yeah. With like a new number or something. Yeah. But, but yeah, like people's situations change, you know, like every 3 months it could be completely different. Yeah. Yeah.

So do you use your own money for the down?

Uh, yeah, yeah. So yeah, that's one thing I'm trying to look into right now is like private money. And, um, because I'll come across deals and it's just a matter of, of, you know, getting money for like the down payment or the repairs. And so if anybody has any, any cash that they want, um, you know, like 10, 12% return on there or interest-only payments or something, then that's definitely something I'm looking for.

Anything else?

No?

Cool.

Hey, thank you guys.

Yeah, take this, Joe. Seller financing seems to be a hot topic. Is everybody comfortable with that, what that is? Yes? No? Basic understanding of it. Okay. And you wholesalers, if you're not asking for seller financing, you're really missing out on the boat. We do seller finance deals as often as we can. You know, we're flipping, you know, we've got about 15, 20 properties that we're flipping right now, which is constant rotation. And if somebody wants to finance that flip for us, why not? And that's an easy conversation to have with them. You can sell it to us, we close on the property, we'll put, you know, 5, 10% down, as little as possible, as little as they will bear. They don't have to pay capital gains taxes on their profit until they actually get all the money. They only pay on what they receive. So that's a really good incentive to tell them, a good point that, you know, you're going from, you're going from a landlord who has to take care of plumbing issues, toilets, stuff like that. But now you're like a bank. You don't have to, you're just getting money in. Okay, you don't have to worry about the leaky toilets or anything like that. So we try to sell it as much as possible. It's a good tool that we use. And then, you know, we're in there less than 6 months, they get all their money at that point in time. So if you're not asking, you should be asking. Again, Orange County, you have a more sophisticated seller. And they may not be willing to do that, especially if they, you know, own a really expensive house and they need that money to go buy something else. But out in Riverside, San Bernardino, we're doing deals out there that are seller financed all the time.

Okay. If you carry the seller finance for like more than a year, so like 2, I don't know, 3, they only pay the cap gains on the amount they made in that tax year?

Correct, yes.

Correct, yes.

Believe it or not, Joe, even here there is a lot of people who's looking for that. I do have 2 properties now, one is for 5 and the other one for 2.5, and they're looking to do that just because of the capital gain. They want to waive the capital gain, so they're looking for 5 years or 7 years to waive the capital gain because it's a big portion Whatever that they're making, so they want to waive it.

Right.

Even here there is yeah yeah yeah. But you have to ask. Yeah. You know you don't get anything unless you ask. So here we are 2022. If you're not awake, this is the same thing that happened in 1980, and I know a lot of you weren't around back then, but I was. We're in the middle of inflation. Okay, back then I used to buy a brand new home in a brand new housing tract in January, and the builder would not finish building it till November. I bought it for $125,000. By the time it got down to November, it was worth $175,000. And so I literally just took possession, put it back on the market, and sold it. I'm doing a flip here in Mission Viejo. Not the same thing, but kind of. The guy was going into foreclosure. I bought it for $750,000. One of our wholesalers called and said, well, I'm getting foreclosed on in 15 days. And I called my real estate agent and, you know, all the real estate agents are so incredibly smart that his real estate agent said, oh yeah, I can't do anything for you. Okay. We said, yeah, we can do it. Not a problem. So we ended up closing it in 15 days. Okay. I gave him 30 days rent-free. I held back $10,000, all the things you're supposed to do in these type of deals in case he didn't move out. He didn't move out. So he lost the $10,000, but 5 months later, I finally took possession a week ago. Okay. But what you have to look at is what's happening in the marketplace right now. I bought that place for $750,000. The after-repair value was $950,000.

Wow.

Okay, so do I care that he stayed another 5 months? No, I wasn't pushing him out. I mean, I'd call him and say, hey, you moving out this month? Well, no, Joe, I haven't found any place to— okay, I'll call you next month. You know, he's probably thinking, gosh, you're the nicest guy. And he wasn't paying rent either. He was just like nothing. Yeah, like, I'm a nice guy, you know, but okay, it's gone up $200,000.

Yeah, you know, 5 months, no big deal.

So, um, he would have waited, he could have sold at a profit. Yeah, but yeah, he couldn't wait. He had about $300,000 of equity in there, and so if he would, he would have been foreclosed on, he would have lost a lot of that, you know. So that's why, that's why he, he let me buy it from him, basically.

Can you explain the $10,000 thing you said?

Okay, so, um, I never trust anybody. Okay, sorry, I don't.

Which is good.

And so when he bought the— when I bought the place from him, he was the homeowner. He was living there. He said, can I rent it back for 30 days for zero? I said, sure, we can close the transaction, but I'm going to keep $10,000 in escrow to make sure that you get your butt out in 30 days. If you don't move on the 31st day, that money automatically comes to me. Which is what happened.

Where'd the money come from?

That was from his side of the escrow.

He—

that was his money. That was, yeah, sale price. So that's his money to get if he complied with moving out. He didn't.

So basically the purchase price increased by $10,000.

Well, no, no, not increased, decreased for me. It decreased for me. So the purchase price was $750,000. He got $740,000 and $10,000 was held there. He was going to get $10,000 more, but he didn't get it because that came to me because he didn't move out. So I actually bought it for $740,000.

Yeah.

Because it's not like he had $10,000 cash to put it down.

No, no, he didn't have anything. He had nothing.

So did you foreclose on him or he just left?

No, no, no. He finally said, I found a place, I'm moving out.

And you said thank you.

And I said thank you.

Did you get the money when you took possession? Or—

oh, you— we closed escrow. 31 days later, I called escrow. I said, he's still there. Escrow says, oh, let me call him. She called him, says, oh yeah, I'm still here. Okay, I'll send you the money, Joe.

So $740,000 sale.

Yeah, yeah, yeah, yeah. But then I've held on to it for the last 5 months with nothing, and that's cost— it's costing me Because I have a hard money loan on there. It's costing me about, I'd say about $5,000 a month, around there.

Yeah, but you made probably $200,000 more.

Correct.

Just appreciation.

Correct.

Is that the one on YouTube that you put on YouTube?

Yes. Yeah, it's on YouTube. Yes. Uh-huh. Yeah. Yeah, I'm training somebody how to flip properties, and a young lady, and I asked her to videotape me. And so that's, that's the one that's on there. That's on YouTube. Yeah, if you want to see it. How did that lead come in? You said they called you up because they're about to get foreclosed on? No, no, I'm doing the same thing he's doing. We're pulling lists, and he just happened to be a name on a list, and he just happened to be getting foreclosed on in 15 days. And a lot of times we'll pull lists where people, you know, have already had the notice of default on file, which is the paperwork that the bank sends over to the county recorder's office to say that You know, you're not making your payment.

Right.

And so don't you think those are good leads to go after? Yes, but everybody else is going after them too. And it's just a matter of timing. I mean, you could call them the next day that thing's filed and they could say, yeah, you know, come over, let's do a deal. Or you can wait, you know, 15 days before they get foreclosed on. And I'm sure this guy got hundreds of postcards, hundreds of letters, Hundreds of phone calls until that 15-day, you know, drop-dead date. The bank said no more postponing, we're going to foreclose. Then, then he was able to make a deal. He wanted to make a deal.

So how did you secure the deal? I mean, before you got to the escrow, did you sit down with him, did a purchase agreement?

Yes.

So that's, that's kind of the first thing you did?

Absolutely.

He left and you called your private lender like, I want it tomorrow.

Yes.

Secure me the money, basically.

Yes.

Because that's kind of a time game, basically.

Yeah.

Yeah.

The private lender I work with, he can fund something in 3 or 4 days. That's, that's not an issue.

Okay.

Yeah. They're, they're very quick. Yeah. Especially when they, they, they evaluate the deal like you, you're a flipper. So when they look at the $750,000 and they go ARV $950,000, that's a no-brainer for us. And plus it's Joe and Joe does like, you know, Yeah, not hundreds, but tens of loans through us. I think we got like 20 out right now. So, um, you know, we know that he's good for the money at the end of the day.

You know, there's some private money, uh, lenders that are back east that are kind of scamming people with false appraisals about how they're going to— like, a house that's valued at $80,000, they'll say it's like worth $200,000, and then you'll Reappraise that house for like 75% loan to value, and now you're on the hook for about, what, $200,000 or 85% of that, and the house is not even worth that much. And that's just a way for them to make money. So when I was talking to the person that this happened to, I was like, you have to be really careful.

Yeah.

Because now you're just paying this high percentage rate on the money that you, you know, pulled out of this house for no particular reason because that house isn't valued for $80,000. That kind of tripped me out. I didn't know you could do that, but you got to watch people try to scam you.

Did you ever watch The Sopranos? They, they had a scam going just like that. They, they had an appraiser in their pocket basically overinflating the value. Uh, they were getting the money out of it, and then after they got the money out, they went to the house and took all the copper and everything out of it. Yeah, that was— I love Sopranos. But anyways, anyways, that, that's just a scam that they were doing. That's, uh, another big reason I don't I don't invest out of state. And I tell people, when you're going to invest out of state, you have to be careful. You need to have somebody there that's going to see everything that's going on and it's going to tell you that, okay, yeah, this is, this is a good part of the neighborhood. If you go over there, that, that's a little sketchy, but here is good. You can buy here. I've always been here in Orange County because I grew up here. So I, I've never had the need to go out at all. But yes, you have to be careful always. How often do you guys do deals in Orange County? Um, just because, you know, I came from a virtual background, and then when I broke in here, I just leaned towards Inland Empire and cheaper parts of LA County. You've got like more distressed areas, but like in Orange County, I haven't really marketed much because I feel like I'm competing with the normal buyers who Don't care, they'll pay market value even though the house is not really that nice, you know, whatever the case might be. How do you compete against that? Are you putting— it's not a foreclosure situation, it's just a normal— Are you putting offers that are on the MLS? No, we do all off-market. Okay, well, you shouldn't— I mean, you're going to receive the normal competition like us and, and Alex and stuff, but you shouldn't have normal buyers looking at any of this stuff that you're going to put offers on. I mean, Honestly, most of the properties we buy are literally like hoarder houses. They're very distressed. They're not something normal that you can even put on the market and get a deal from. So the reason you're probably not getting anything in Orange County is, again, you have a more sophisticated seller here. And then the prices, we don't purchase anything over $800,000 here in Orange County. Pretty much anywhere. Because once we start getting up into the million, you know, range, you have buyers that literally come in and they go, did you get that tile at Home Depot? Because I saw that there, you know. It's like, my gosh, you want me to pay $1.5 million and that's Home Depot tile? They're too picky. They're really too picky. Yes, I don't like dealing in that range. I'd rather deal in, you know, the normal middle cookie-cutter range where people are actually looking for a house. They bring their kids with them. You know, it's like Oh, it's brand new. Everything looks gorgeous, Joe. Yeah. Okay. Not that I buy stuff at Home Depot because I don't. We have relationships with tile companies, cabinet companies, everything around here that's all wholesale. So we get it at even better prices than you would get at Home Depot. But sometimes Home Depot is there because it's there and it's convenient. And so I'll go grab something or whatever. But yeah, we have, we have 2 properties in Orange County right now. My son's doing the other one. He bought it. It's in Foothill Ranch. He actually got it off the MLS. I don't know how he does it, but he does. He calls the agent and, you know, he kind of like sweet talks to the listing agent. And they like, literally, it's on the market like less than 3 or 4 hours. He gets an alert because as an agent, you can put alerts on, you know, whatever properties or areas you want. And he gets an alert and he calls them and sweet-talks them into, you know, hey, is this what you want? Really? Is this what you want? I'll send you an offer. And they end up accepting right away. So the last, I think, 3 properties he's done that with and off the MLS, which is literally, if you're an agent, that's almost impossible to do, you know, especially if you're an experienced real estate agent. If you're a rookie, maybe you can get away with it.

But He bought it creative financing, you said?

No, no, no, no. He bought it off the MLS. He didn't compete with anybody. They literally sold it to him in 3 hours. The agent— I don't want to bash the agent, but the agent wasn't intelligent enough to tell whoever called and said, hey, yeah, let's just let it run for a week, especially through the weekend, see how many offers we get. I sent an offer yesterday. For a property in Costa Mesa. It's not a fixer. It's a nice property listed at $1.4 million. The agent called me back today, goes, Joe, I just want to let you know, I want to be fair with everybody. I go, okay, here we go. 35 offers, most of them cash, and you're the lowest. I go, I'm thinking, well, why are you even calling me? I want to be fair. He goes, $1.6 million or above, remove appraisal. All contingencies must be removed in 10 days. That's going to get you in the ballgame. I go, okay, well, yeah, we're 1.5. So yeah, my client's not going to go for that. So that's how crazy the market is right now. Absolutely crazy.

Are you reevaluating?

I know you've always said like capped around a million. A million now is what used to be $800,000. Like, so are you When you say you don't buy the super high-end properties, is that— has that number changed for you? Is it like $2 million now?

No, no, no. We're still— we've been having a lot of success in Riverside, San Bernardino. We're buying properties for $200,000 and $300,000, selling them for $400,000 and $500,000. And so if we can buy stuff in that price range, you can buy 5 of those if you're looking to buy something at a million. Hello. And we, you know, are making the same return because it's crazy market. You know, we're making, you know, $60,000, $70,000, $80,000 on each deal. Hello, if you do that 5 times instead of 1, wouldn't you do 5 times? I would.

Yeah.

So the time holding a $500,000 to $700,000 property, in 4 days you'll sell it. Yeah. A million, whatever, you may take Yeah. So that 2 months getting a loan and stuff, that's money, that's expense. We did buy a property recently in Bakersfield. Does anybody know where Bakersfield is? It's like, I told my son-in-law, I said, I'm not going out there.

City of dreams.

I'm not going out there. You know, Bakersfield, the place where, you know, you don't even want to drive through it. You know, it's like, it's way out there. It was like a gorgeous place. It was 1.2. Okay, you think Bakersfield, $1.2 million? It had a tennis court in the back, swimming pool, huge 5-bedroom house. It was gorgeous. It was like on the golf course and all that. It was a wholesale deal and we bought it at $1.2 million. We literally— they moved out, we sent the cleaner over there to clean it up, put it— literally put it back on the market, and we got an offer the other day at $1.4 million. Yeah. I love those deals that you don't have to do anything to, but it is in Bakersfield. My son-in-law goes, well, wouldn't you drive out to Bakersfield for $200,000? I said, yeah, now that you say that, I'd probably do that. But I think that's the farthest we've purchased something now. Like I said, we have a couple in Big Bear that we're doing. One we're going to turn into an Airbnb. The other one we're just going to sell off. Um, he took— he, he just— we just got another property under contract in Joshua Tree. Um, he said, he said $400,000 and it's worth $600,000, so we're probably just gonna flip that because, um, he, he really doesn't want to get into the Airbnb business, but whatever.

I don't know, in Big Bear, is that a— does everyone have to take the trash? I had an Airbnb this last weekend and I had to take the trash A different place, like 3 miles down the road.

Yeah, yeah.

So I was like, don't I pay for this? Like, I go to this Airbnb and I gotta throw my own trash away?

Yeah, I used to have a cabin up in Big Bear because, um, my dad and I built one up there, and I sold it a few years ago. Uh, but we had trash cans there anybody wanted to— I didn't do Airbnb yet, I just had family and friends. We had trash cans in there, and the trash company would come by, so I don't really know What you're talking about. I don't know, maybe they've changed something up there. Yeah, maybe they've changed something. I know that even Big Bear is starting to put some rules and regulations on Airbnb stuff. And so we are going through a permitting process right now to get all that approved. And I heard that they were going to start limiting the amount of Airbnb properties up there. So like 100 a year or whatever. So if you go up there and you wanna buy something, make sure you check all that stuff before you go up there. Same thing with Joshua Tree. Joshua Tree is getting really heavy into Airbnb stuff, and so they're gonna start putting restrictions on there as well.

Is vacation rental gonna be on this? Are there any different tiers of like, That type of rental? Like, are they focusing on Airbnb, or is there going to be like a special— like—

No, they're all the same. I, I'm just, I'm just saying Airbnb because that's the most popular, but pretty much they're all the same. Yeah, they're all the same.

Joe, do you leverage your, your, uh, investments to do conventional loans? Like income that you get to get like a low interest Do you guys invest on conventional loans when you acquire properties? So like the income that you receive from all the flips, would you leverage that to actually buy property on conventional loans?

No, no. All the money that we get from our flips goes right back into the business into buying some more. Everything that we, we buy, um, we do hard money on.

Okay, the reason why I'm asking is because on creative financing you own the deed deed, right?

Uh-huh.

But the, the seller actually do still make the— on the sub-to, basically, the seller still actually makes the payment for the bank. So if I'm doing a refinance or if I'm buying a conventional loan, the bank technically wouldn't see it on my credit report that I actually own this property, but he would find out from my bank statement or from my tax reports, right, that I actually do Making payment on this property. Do you think that would affect on a DTI if the bank trying— if I'm trying to get a new loan or refinancing an existing loan?

Okay, so you're talking a couple of different things. Okay, seller financing means that the seller is going to finance it for you. But what happens if the seller has a loan from the bank? Can you still do a deal like that?

Absolutely.

And that's what he's talking about. So the bank has a loan for $100,000, and then the seller is going to give you another $100,000 on top of that, and then you run wrap all that into one loan. Okay, the bank is never going to know that you're paying their mortgage for them. And your question is, is that somehow if you go to get some more financing someplace else, will the bank find out that you own this property? Okay, yes, because you have that property as a rental and you put it on your 1040. The minute you put it on your 1040, the bank's going to ask you to give me your 1040 for the last couple years. They're going to go, well, wait a second, this property in Hemet is not in your name. What, what, what's going on there? You know?

Well, it will be in my name.

Well, yeah, it'll be in your name, but there's like no loans attached. So if you tell them that there's no loans attached, that's up to you.

Free and clear.

Yeah, if it's free and clear, it's free and clear. That's fine.

They'll find out from the bank statement.

Exactly. Well, they're going to find out because if they do a title search on that property, they're going to go, wait a sec, there's a loan? There's actually 2 loans on there. So they're going to find out.

But I mean, if you're doing a rental and the rent is actually as high as, or maybe 1.25 higher than your PITI, it washes it out, right? So it does not add to your—

Yeah, but the banks use a formula where They use 75% of the income.

Yeah, yeah. So if I'm making— if I make like, let's say I'm making $1,250 on a rental and my PITI is $1,000, it breaks even, correct? So correct, it really doesn't matter how many sub-2s you would have if—

correct, you'd be able to go through that, correct? Yeah, talk, talk to the bank. Okay, it depends, it depends on how they're feeling that day because literally I used to buy properties for 5% down Conventional loans, and then it got up to 25%, and that's probably where it's at now. Correct me if I'm wrong. On, on an investor loan, how much do you require them to put down?

25%.

25%.

Yeah, yeah, yeah, exactly. So, uh, we've gone this, you know, circle. I was hoping that, you know, we'd come back down the other side, but They got mad at investors 10 years ago when all this happened, and you know they haven't forgotten that you know that happened. Not that it was our fault. You know, it's like you guys were giving out 100% loans. Why would we not take advantage of that? You know, for the industry that they that they require the higher down. Yeah. Okay. And so when a bank makes a loan, they make a loan for $100,000. You hold on to it for 30 years. You pay off in 30 years. How much money?

Double.

Close to double, 2 to 3.

3 times. So do you feel sorry for the banks? I don't. Like, they're making $200,000 on a $100,000 loan. Yeah, that's their business. That's what they do. That's how come they don't want to take properties back. You know, they were forced to because there were so many properties last time. But, and then I don't think you're going to see that this time either at all. We're gonna start seeing a slowdown, but not anywhere close to what happened last time. There's too much equity.

I was just gonna ask, it seems like back in 2005, '06, when I was a toddler— not a toddler, but I was a youngin' then— but I still do remember that there seemed to be more of a construction boom, so the supply side was higher. And it seems to me that this time the supply side's not as high. Even if the demand drops, That we're not going to see as dramatic of a drop as there was back then?

No, not at all. Because back, back then you were buying stuff for $500,000, and then the market did a downturn and was only worth $200,000. Right now, you know, if you, if you bought something for $500,000 3, 4 years ago, it's worth $1 million. You know, you've gone really the right way in that You're not going to get foreclosed on because you have a lot of equity there. So you're going to call a real estate agent and say, I can't make my payment anymore. I can't afford this house anymore, but I'm not going to lose it. I need to sell it. So put it on the market, let's sell it and give me my money. And, you know, I'll move someplace else less expensive. You got a couple of trailers that are for rent out in Hemet, right?

I do.

Yeah, there you go. How do you know if it's a good sub-to deal? Like, does the income that you would be making need to outweigh the mortgage that you're going to be paying, or the payment that you're going to be paying the seller? Like, how do you know when you're going in, like, okay, this would be a great sub-to deal? Well, absolutely. Yeah, it's like, if you're— if your mortgage payment, whether there's a first on it— I, I, I sold one of my condos 20, 30 years ago to my renter because he wanted it. And I took 3 loans back on it. I took a first, a second, and a third on it. And each was maturing at a different time. That's why I did that. I also did that because— sorry, I knew at the end of the day he wasn't going to be able to afford it and I was going to get it back. But when you structure a deal like that, You have to make sure that there's enough room in there to make everybody, you know, happy. So the people that you're paying their mortgage to, the property taxes, the insurance, anything else that goes on there. And then on top of that, you should have at least $300 or $400 coming in every month in your pocket.

I think the first question, like, if you can enter into it with Like, if they don't have any room, if they're like underwater, I mean, your consideration is real low. Like, I'll give you $1,000 for showing up. Yeah, because you're taking the brunt, you're making the payments. So like, for them to have a higher consideration, like, I want $5,000. Well, like, you're gonna lose this house anyway. Yeah, yeah, I'm gonna make you a deal. Like, yeah, I'll give you $1,000 for the keys.

I just listed my, uh, my friend's house, and I actually think that it might be a good subject. And I think that they would do it. So I'm thinking like maybe I should pitch that to them, but I just want to know, like, I want to know if it makes sense for me because I don't want to put myself in a bad position. Yeah, it makes sense. It makes sense to you or anybody if you're going to make money on top of everything that you have to pay, number one. Or number two, if you're a gambler, let's say you buy right now in January and inflation keeps going like I I know it's going to. Keeps going. And in December, it's worth another $100,000. Would you do the deal?

Yeah.

Well, hell, if they, you know, they say 5% down is fine with us because we like you, we trust you, and we're going to do 30-year financing and we're going to give you— let's say they're really nice and like Alex's people, 4%. Okay. Me, if you were talking to me, I'd be charging you anywhere between 9% and 10%. Why? Because I want you to pay my loan off real quick. Okay. And that's your incentive to pay it off. But let's say not, 4%. Okay. And let's say they'll let you borrow that money for 10 years. I'd do that deal every day.

Absolutely.

Twice on Sunday. Yeah, yeah, every day. Absolutely. Just set it up so that, um, you know, everything works out for you. Like he said, with rental, if you can only rent it for $3,000 but all that adds up to $6,000, that means you're going to be losing $3,000 a month. Okay. However, in this market, if you're losing $3,000 a month for 10 months, that's $30,000, but it's gone up $100,000 at the end of the year, would you still do the deal? Yeah. Again, you're like gambling at that point. So you have to make sure you're doing the right thing.

Okay.

Thank you. Okay. The other thing you can do is seller financing. Okay. So for example, you did that, you put that all together, then you go out and you find somebody that wants to buy the house. You buy it for $500,000, you find somebody else and you go, I'll give it to you for $600,000. Give me 10% down, which means you've got the money you put down and then you wrap Both those loans, like he was saying, and have them start paying the mortgage to everybody. Okay, and now you're completely out of the deal other than you've just created a mortgage for yourself where you're getting money from that deal.

That's crazy. And that second piece, the higher the other person at which you wrapped it, they have a higher interest rate.

Correct, correct, correct. Because with the higher interest rate, let's say you have 2 loans that are like 4% and 3%. If you charge like 5% or 7%, You're charging that for all of the loans, so you're actually making money on these other loans as well. Yeah.

I'm excited.

That's creative financing. I lived on that in the '80s. It was like, that was, I mean, the interest rate was 16% back then.

Wow.

You know, so you had to get really creative on how to, you know, buy property and sell property. When I sold my house, I took back a loan for $100,000, you know, and I did that for 3 years, and then the guy ended up paying me after 3 years. 'Cause we came out of the '80s. If you're a history buff, we had that peanut farmer president. What was his name?

Carter.

Thank you. Carter.

Peanut farmer.

That's what he was, a peanut farmer.

Was he?

Yeah.

Yeah, he was a peanut farmer.

Oh, shit.

Yeah. And then we got Reagan right after that. And then the market did this. Kind of good timing that, you know, I did that because I needed to sell my house and I bought the one that I'm living in now that I've been in there for 42 years. Same house. Do you ever get wholesalers calling you? You know, I was talking to somebody the other day. I don't get wholesaler calls. I do get a lot of postcards because I own a lot of buy-and-holds. So I do get postcards and letters all the time. I mean, literally every day I get something, but I don't get calls. I do not get calls, which is— I don't know why, but I don't. I'm curious, so what is your— are you primarily flipping or are you doing any wholesaling? I've got a team of wholesalers. They do the wholesaling. I don't like to make calls, so I put a team together and they do the wholesaling, and then we buy the properties from them, give them, you know, their fair share, And then we go in and flip the properties.

Got it.

Are they directly like your acquisitions and your dispositions? Yeah. Yes, yes. I did that about a year ago, year and a half ago, because I saw the writing on the wall. We were buying stuff off the MLS, we were buying stuff at the courthouse steps. That was all drying up really bad.

So, so how do you make your determination for like wholesales, like ones you're going to flip or ones that you're going to actually Is there like a metric that you look at? Like, well, I don't want to deal with this, so I'm going to wholesale it off to someone?

Bakersfield? Yeah, we don't want to drive that far. And if we can put it on the market and make, you know, a couple hundred thousand, why not? You know, so we didn't do anything to it. Uh, most of the properties we're buying in Riverside, San Bernardino, like I said, you know, those are, those are like literally like hoarder houses. Some are in not a great area. But anything that's for sale around California, I mean, it goes like that. And so we go in, we fix it, people fall in love with it, they buy it, move on, we move on to the next one. So determination on what we do, you know, it's just like my son-in-law, my daughter, and I sit down and go, yeah, let's just either wholesale that one or just, you know, fix it up and And sell it like it is or do a complete flip. We just, we talk about it. That's it.

That's all we do.

Do you still use PropStream for your leads?

No, we've used PropertyRadar forever. And so we pull lists from PropertyRadar.

Okay.

Yeah, for all our leads. And then my son-in-law and the head wholesaler that we have are really heavy into Facebook and Instagram. Google. So they do all that stuff. We spent about close to $100,000 on marketing last year, and, and that got us, uh, about 35 properties. And at the end of the day, like I say, we're making $50,000, $60,000, sometimes more. I mean, honestly, the people are so crazy that they're putting so high of an offer. We're thinking we're going to make $60,000, we end up making $120,000 at the end of the day. It's like It's really crazy, really crazy, but it's okay. You know, remove the appraisal contingency. We don't want to deal with that. And people are just literally dying to buy these properties. Not literally, but they're dying to buy properties. Seller financing works really good on older people, okay? Because older people want to get rid of what they have because guess what? You can't take it with you, so you may as well use it while you're still here, right? And a lot of them don't want to be landlords when they get to be older, so it's like a win-win for them. It's like, yeah, I don't need the money, but yeah, you want to give me like $800, $900, $1,000 a month for the rest of my life? Yeah, that sounds good to me. Why not?

Yeah.

And I don't have to take care of the toilets. I don't have to Listen to people calling me. So when you're talking to older people especially, you know, ask them, you want to do seller financing on this deal?

Especially when their pensions are getting cut.

Yeah. Social Security. Ooh, I've had to deal with that lately. Oh man, Social Security is terrible. Medicare is terrible. Medicare, I started and they ask you, well, how much are you going to make this year? And I said, yeah, I think I'm going to only make $50,000. And so then I filed my taxes last year and they saw what I really made. Okay, so I was paying $148 for medical, which you have— you're required to do when you turn 65, so be prepared. They sent me a letter just recently, a couple months ago. Guess what? Your Medicare bill is going up. What is it now?

$500.

a month for Medicare. And it's not like you can't say no, like, you know, cancel my insurance. No, that don't— this is the federal government charging me $500 for my Medicare. Huh?

Like, even if you get other insurance?

Yes, I have other insurance. Yeah, I mean, I'm fully covered 100%. Medicare becomes your primary. You know, I'm off topic here, but Medicare becomes your primary, and then the one that you had That's secondary.

That's fascist.

Don't get me started. Yeah, don't don't get me started. Don't get me started. Yeah. I read a book when I first started. What's called Money Dynamics. And in Money Dynamics, Vanita Van Caspel, I believe was her name, and she says invest in this, this, this, and this. One of the things she said about insurance is don't buy insurance unless it's a term policy, because a wholesale policy, they're basically— you're lending them your money. You can do way better investing it yourself. So I never did. I never had a wholesale whole life policy. Because I kind of took her advice. Now it's up to you to investigate whether that's good advice or not. She also told me to invest in gold and silver, and I did when it was up here a long time ago. And then it did this, and then I had to wait literally 20 years before it came back up. And then when it came back up, I sold it all. And so I broke even after 20 years. I didn't make any money on that. Okay, so I'm, I'm off gold and silver. When I first started investing, I was investing with a— we used to have You know these people that are called stockbrokers? And they used to invest your money for you because they were the professional. That's why you hired them. Okay, so I sent $10,000 to my stockbroker. He sends me a statement back the month after, $9,000.

And it's gone.

He sends me back a statement the second month, $8,000. I give him a call. I go, hey, what's going on? Oh, you know, Joe, stocks go up, stocks go down. I've got you in something long-term. Don't worry about it. Just sit back. Third month, it comes down to $7,000. I knocked on his door and I said, hey, I can lose money just like you. Let me have my money back. That's the last time I ever invested in the stock market. I don't do that. We had the dot-com. I know some of you are not old enough to remember that, but we had the dot-com bubble and people used to— I lost all my money in the stock market. Oh my God, Joe, how much did you lose? Nothing. I wasn't invested in the stock market. I learned my lesson. Okay, and then we've had other ups and downs. You know, same thing. I lost all my money in the stock market, Joe. How much did you lose? Nothing. Okay, so that's me.

We were talking about these self-directed IRAs. Yes.

Legislation.

I know that they didn't pass that legislation completely.

Thank God.

But they were talking. About maybe 2030, and capping the limits to $10 million.

Yes.

So that kind of says what I mean.

Most of the flips I do now are through my 401 because I don't have to pay taxes on it until I use it. So I take my money, I buy the property, I fix it up, and then I take everything and put it back in. And yes, I do have a custodian. But it's self-directed, so he only charges me like $150 a year. So it's very low. And then I have a checkbook. So I literally, like, I was writing checks today here out of my 401. It's something that if you're young that I would literally, you know, think about doing, especially if you're going to be involved with real estate and flipping real estate. It's a good way to— guess what? We all get old. We're all headed in the same direction. And they did change the age where you had to— they make you automatically withdraw it. Why? Because they want to charge you taxes on it. You've been doing all this tax-free stuff. It used to be 70. They increased it to 72 now, which is good. Okay, but at 72, then I have to start drawing from that. But isn't it a good thing that I'm going to put an extra $200,000 when I sell my property in Mission Viejo into that? I don't know if I'll ever use it. I'm hoping to be around at 72, but who knows? You know, probably going to be spent by my kids.

Do you know if it works with a Roth?

Yes.

So that you don't have to pay taxes at the end?

Yes, yes, yes, yeah, yeah. The Roth, yeah. The Roth IRA, you put money in, it's taxable money you put in, okay? But you can take it out tax-free.

Yeah.

The IRA or the 401, if I— let's say I put in— I always put the max in. So let's say I put $30,000 or $40,000 in, I deduct that from my taxes for this year. So I made $30,000 or $40,000 less because it went in there. But when you get 72, you have to start pulling it out. They're going to tax you then.

That's how Mitt Romney made his money, right? With a Roth 401.

Yeah, you're young, you have about $25 million.

I don't know how many people have kids, but I recently— that's like a year— I have 4 kids. So, um, I recently started a sole prop company for my— how I pay my kids. And you can pay your kids up to $12,500 to where it's, um, you don't have to pay any taxes on it. So for each kid, I pay them at least that much per year, and I dump it into the Roth IRA and let it grow in the self-directed. So I, I get like Vanguard stock so it grows. But the plan is maybe about 4 years from now I'm going to take all 4 accounts and then self-direct them and then buy a property within the trust. So that's one way you can kind of—

Excellent, excellent.

Yeah.

Yeah.

Huh?

From what age? From when they're born. Yeah, from they're born. You can pay a baby. You know how you pay a baby? I mean, they have to do something. You take a picture of them and put them on your website. Talent. Yes, absolutely.

Really?

Absolutely, yes, absolutely. You know, as they get older, yeah, my 3-year-old was licking stamps the other day. Yeah, putting them on these envelopes for me. Yeah, you just need to justify whatever age they're at, how much money you're paying them. Yes, especially if you're going to deduct it from your business. Believe me, the rich get rich because they know all these things, okay?

They create.

Yeah, exactly. They created all this stuff.

So it grows. So we buy all the things that we're looking to buy later in the trust so they can happen when we die.

Until then, every day. I was watching a TikTok. I got hooked on TikTok because I think it's so hilarious and people are so creative. And this wife was talking to the husband, hey, what if your daughter called and said she wanted $2,500? You have $4,000. What if your daughter calls and says she wants $2,500, and then a little bit later your son calls and he says he wants $1,500? How much money would you have left? The husband goes, $4,000, because I'd ignore their calls. I thought that was hilarious. Any other questions before we, uh, we break it up and you can network? We're here till 9 o'clock. The cost segregation, are you familiar with it?

The what?

Cost segregation.

Cost segregation. Yeah, yeah, that's a new fancy thing that Big investors do. So if you have an apartment complex, you can do what's called cost segregation, which basically says you send a company over there, they go, yeah, you have 12 air conditioners, you've got a roof, you've got this flooring, you've got all— they break all that stuff apart and then they say, okay, you can accelerate the depreciation on all this stuff.

Okay.

Instead of normally taking it over 27.5 years, you can do it Year 1. The non-structural, the non-structural, you get it year 1, but you get your money ahead. Correct, yeah, correct, yes. So you, you write off all that depreciation to begin with, which means that your income goes from here down to here, so you have to pay way less in taxes. So you get to keep that. Yeah, and you get that credit, you can use it for something, you can If you don't use all of it, you can roll it over to the next year, correct?

Exactly.

Yes. Yeah, that's just another tax thing that the rich have out there. Any other questions?

What's your plans for 2022?

Keep doing the same thing I'm doing. I don't see anything different. The more properties, and you wholesalers here, if you want to get rid of your stuff, please call me. You know, we buy properties all the time. You know, if you want a good website to do your numbers in California, go to peligo.com. That gives you everything that you need from this is what it's going to cost, this is the after-repair value, and then you put in a rehab value and it'll tell you whether I'm going to make a profit on that flip or not.

Okay.

I'm looking for at least a 10% return on my money. So if I buy something for $500,000, I want to make at least $50,000 on it. Okay. And I don't see anything changing for the rest of this year. Even if interest rates start going up, it just gives me more opportunity to buy stuff at a better deal. Yes. Do you buy vacant land to develop on? No, no, no. I need, I need, I need stuff that cash flows as quick as possible. And most of the time it's just flips. I'm in and out as quick as possible. We're literally like Ring Around the Rosie right now. And I don't want to be caught without a chair. So I want to go in and I want to come out as quick as— because if something turns around in this market, if Russia decides to invade, okay, and then the Biden administration goes crazy because, yeah, Russia invaded, like, oh, what do we do now? You know, who knows where this market's gonna go. So I try to be in and out as quick as possible. You could wholesale bomb shelters with that. Yeah, that'd be a good business. Yeah, yeah, you want a teeny house? Yeah, it's underground. You know, I used to get a kick because when I was growing up, we had— and I don't know if it's still even around— Duck and Cover. When you were in school, so literally the teacher says duck and cover. You go underneath the the table. Okay, but then you grow up and you go, wait a second. A nuclear warhead hits. You may as well kiss you know your what goodbye because I don't care if you ducked and covered or not. You're gone.

You know?

When I used to be in the army, they teach that same principle. And when you're training. They said like in the event of a nuclear blast, this is what you're supposed to do. And I laughed. You're supposed to like just lay down on the floor, tuck your feet.

I'm like, come on. Yeah, yeah.

You're just gonna die.

Yeah, yeah. A few years ago, Hawaii decided to put their air raid sirens back into function, okay? Because North Korea is threatening. They still are, okay? Oops, the alarm went off. And everybody's panicking. They're running to shelters because they still have them over there. And it was a false alarm. And I'm thinking, come on, Hawaii. You know, this is 2020. Yeah, it's 2020. You know that if that nuke's gonna hit Hawaii, there's nothing gonna be there. You're gonna have time maybe to call your mom who lives in New York and say, hi, Mom, sorry, bye. Come on, reality. Okay, really, reality. You know, they just don't deal with reality. It's like, you know, whoever thought that up, other than like, let's say if I was the governor of Hawaii and I go, uh, yeah, this guy puts, you know, air raid sirens together, and him and I are really good friends. Let me do this air raid siren thing. Let's put them back together, you know, because my friend's gonna make money and, you know, he's gonna take care of me, you know, next election. That's what they're thinking, you know. So I don't know who the air raid siren guy was over there, but I'm sure he made some money.

Yeah.

It's crazy.

It's almost like if an asteroid were to hit, do you think the government will let us know? Like five minutes.

I I hope they don't let us know. You know, let it hit, and you know whoever survives at the end of the day, sorry, because you're gonna die a slow death. You know.

Really like survive people.

Bakersfield. That's true, that's true, that's true. Yeah, yeah, no one would go there. Or we— if we have the big one, then people in Bakersfield can have beachfront property. Yeah, you know. Yeah, yeah, all those stories have been around for a long time. You should have kept that property. I know, I saw it. I saw another, another, um, TikTok the other day And they were talking with a guy from the Midwest, and they had an earthquake there. And it was like a, you know, 4.2 or whatever. And the guy just jumps up and he's going like, oh my God, an earthquake, you know. And then they had another guy from another part of the world. It was like 6.5. And the guy goes, oh, wow, wow, that was a sharp one. And then they came to California, and it was like an 8-point, you know, whatever. And then they were filming this guy in bed, And an 8.0 earthquake, and the guy goes, eh, what the hell? We're used to them, you know? I tell my wife the same thing. It's like, did you feel that earthquake? I go, what earthquake? It was a 6.5. It was like in Northridge or whatever. I go, I didn't feel nothing, you know? And so what? If the big one hits, it hits.

We haven't had a big one.

It hits.

If they come in the middle of the night and you're sleeping, that turtle's looking pretty gnarly.

Yeah, the big one's coming.

I haven't experienced that yet.

Okay, anybody else have any questions for me or anything else you want to bring up? What was that website you said again? PelleGo, P-E-L-L-E-G-O dot com. You type the address in there It'll find it and it'll do all the calculations for you on the first page. So as a wholesaler, if you're in California, that would be a great— unless you want to do like Curly and find a real estate agent, because everybody has a friend that's a real estate agent that wants to help you do comps. Yeah.

Mm-hmm.

At the end of the day, at the end, we use that, but at the end of the day, we always come back and Check it on the MLS. Verify it on the MLS. Because I think you were saying before, it's hard to find comps for this one that you're doing.

Yeah.

Same thing will happen with the Pelago website. And if you're an agent, you need to speak to an experienced agent that knows what they're doing, because if they don't, they can lead you astray real easily, okay? Especially if they don't have, you know, what I call a dog in the fight. They, you know, they're not going to get any money So yeah, this guy calls me every 5 minutes. Here, I'm just gonna give him this number, you know.

$1 million.

So any other questions? No? No, really? If you're a real estate agent and you're looking for employment, I am hiring. Just throw that out there, okay? Hopefully you get your contractor's license back. You should be flipping properties as a contractor. I don't know why you haven't been, but definitely you should be. Yeah, get that license and flip. You don't need it. I mean, we hire contractors all the time, but if you want to go through that process and get it, that's going to save you 10% to 15% on each deal. But you probably have all the contacts you need. Just go find the properties and start flipping them. So what Yes.

Huh?

What did you just say?

How does it work? What?

If you have license, you can save on it?

Oh, the contract— general contractor is going to charge you about 10 or 15% more if you— than you hire all the subcontractors yourself. So that's kind of their fee for managing and hiring everybody for you, around 10 or 15%. Maybe more. You know, it just depends. You got a contractor that works at this price and you got a contractor that works at this price. So it depends on who you pick.

Okay.

Do you have virtual assistants that take calls? Yes.

Yeah, we hired 4 of them the other day. We've got 2 in the Philippines and we've got 2, of all places, in Where's it at? In Mexico? Not Mexico, but along the coast there where everybody likes to go.

Costa Rica.

Costa Rica. Yes, a lot of Americans have actually moved to Costa Rica, and so they're calling for us, you know, because they speak really good English, obviously, and they're calling for us. And what we do is we literally dump the list on them. We pull We pulled a list of 250,000 homes the other day, and we just dump them on them, and they cold call them, and they give us back the warm leads. Like, yeah, I'd think about that, you know. Okay, yeah, hold on, let me have somebody call you. Then they switch them over to one of our closers. Like, you know, you said you were a closer. Switch them to one of our closers.

Do they offer them like the Does who offer who deals? The virtual assistant for the home seller. Do they offer them a number to say, oh, let me think about it?

No, they're just, they're just gauging whether they're even interested.

Interested. Okay.

Yeah. So they just, they just, yeah, they just warm up because if you've ever done any cold calling, you're going to get people that F you and do all that stuff. So if you're like sensitive, Some people are really sensitive. You know, I don't want them yelling at me. They're on the phone. They're not going to hurt you, but I don't want them yelling at me. So that way, just get a virtual assistant. You don't have to listen to that, and then they send you. They're like, "Yeah, I may. You know, I'll talk to somebody." You get a warmer lead. You get somebody at least that's going to be polite to you. I had a guy. I call. I called him. He says, "Joe, I'm really interested." I go, "Okay, well." Are you thinking on a price? Because I always have them tell me a price. I don't offer them a price because what I found is I'll give them $300,000 and then the guy goes, I'll sell it for $250,000.

Okay.

You know, so anyways, this guy goes, yeah, I'm really interested. I'll sell it to you for $500,000. Put it in a bag. I'll tell you where to drop it off.

Oh my God.

You leave it there, okay? And then I'll sign the deed for you. Leave the deed there, I'll sign it for you, and we have a deal. He's joking, obviously, you know, but those are the kind of calls that you have to go through to get to the person where he's actually going to say, you know, yes, I'm interested in selling you the property. Husbands and wives need to sign. Okay, I bought a house at a foreclosure auction once. It was $150,000 in equity still left on the property. Okay, we bought it, we contacted the owner. It was a divorce situation. He was fighting with her, she was fighting with him, and none of them wanted to sign. They'd, they'd rather lose the money.

Okay, whatever.

You know, not my fault. So, um, yeah, just if, if you, if you can do virtual assistants, they're not that expensive. I mean, it costs a little bit of money, but I would rather have them call and warm up the leads and then we take over after that. If you're going to increase your business, I mean, you guys actually calling? We have leads that we're calling. Okay, you do. Okay, because I was gonna say the only way to increase a wholesale business is to hire VAs, you know, 8 hours a day. And we're all human, okay? If somebody says you're a what, what, what, we know we're on the other side of the phone, they can't hurt us, but you still take it to heart, you know? It's like, gosh, why did he do that? You know, I'm a nice guy, why would he do that? And you think about it all night, then you can't sleep, you know. You get bored and Huh? Do you get the recordings or not? Oh yeah, I have them. And I— when they send me the recordings, sometimes when I hear it, yeah, yeah, funny. Yeah, yeah.

People tell me, why don't you go find a real job?

I'm like, yeah, I'm too smart for that. Yeah, yeah, yeah, absolutely. Yeah, you have to have a thick skin if you're gonna be the caller. Definitely have to have a thick skin. Ask. Do, do not stop asking. How much you want. The other question that we ask that we get a really good response on, I'll answer your question in a second after I hear it. Do you have anything else to sell?

Yeah.

Do you know somebody else that's selling property? Okay. We get people, oh, you know what? My Aunt Margaret that lives just down the street, she was thinking about selling her place. Thank you for reminding me about that. Let me give you her number. Hello, ask all those questions all the time.

What CRM system do you recommend?

I don't know what my son-in-law and my wholesaler are using right now. I think they're using Podio, and somebody set up the account for them through Podio, but I'm not sure. Like I said, I don't do calls.

Yeah, I don't.

I'm very. I'm a nice guy. I'm very sensitive, right, Lauren? Come on. Yeah, I'm a nice guy. You know, it's like I don't want somebody yelling at me. You know, not that I can't take it. You know, not that I can't give it back because I do. But I'm a nice guy.

You know, you're a nice guy, Joe.

So you did it before, right? I did. Yes. It's like anything else when you're first starting out. Yeah. When you're first starting out, you have to do all these things. Absolutely. Yeah. When I first started, I mean, I didn't start flipping 50 properties all at once. You start with one and you go, wow, I made $15,000. This is back 40 years ago. I made $15,000 on this. That was really good back then. I go, let's go do it again. So then you just keep going at that. Back then it was way easier to buy property. There is no such thing as wholesalers. You'd buy properties off the MLS. I'd buy properties off the— they had a little throwaway newspaper called the Penny Saver around here, and there people advertise their properties on there. And this one lady goes, getting a divorce, take over payments. What? Yeah. So I called her and I go, what's happening? She goes, well, the property's worth $50,000.

Oh.

Property. Yeah, property's worth $50,000. I have a loan for $45,000. Take over my payments, you can have it. That's almost like owner financing right there, isn't it? And back then you could do that stuff with the bank. They stopped that after that. But back then you can actually assume that loan. Okay? So I said, sounds like a deal to me. So I put $5,000 into it and I took over the payments. On that, on a deal like that. Yeah, yeah. I mean, seller financing, you know, is like really good if you can get that. It's really good, you know, even if you're paying more for the property like Alex said. At the end, at the end of the day, the way things are going right now, you know, hold on to it a few months and put it back on the market, sell it.

Has anyone ever dealt with like subject to? Like a lot of people don't know that you can subject to a VA loan. And, um, in order to get around that, you just do like a contract for deed. Because I had a recent one for that, like, because VA loans are very specific, you know, as to like the person who owns it. So in order to get around that, you just do a contract for deed. So that's like the easiest workaround for that.

Yeah, VA loans, they let— they still let you assume the loans on VAs. Everything else they will not let you, but there's ways to work around it. Okay, so if there's a loan on a property, just do a land contract and and just you know wrap everything into one. Yeah, there's ways around it. You know, it's it's like honestly, it's like anything in in real estate. You were talking about wholesaling, you know, of possibly getting rid of wholesalers and having to get licenses and stuff. I can tell you I've been in this. industry for over 40 years, the most unethical people are real estate agents. Sorry, but they are. And so if they say you can only wholesale if you have a license, big deal. Then you pair up with somebody that has a license, which is how we handle everything. We have a 2-page contract. It clearly states on there we're buying the property to make a profit. And this is our license number. Who's doing it?

Us.

Not somebody that's licensed. It's one of our assistants that's doing it. But at the end of the day, we're responsible and we're licensed. Okay, so there's ways around everything. You just have to find that way. Why did you move to America? Because we're the land of the free, the home of the brave, and you can work around everything, right? Right? There's ways around everything. Okay. As long as you pay the government, you're good. Yeah. I mean, how many people have come from— I don't want to pick on Mexico, but how many people have come from Mexico in the last year or 2? You know, I mean, if you're in New York, you don't have to be a citizen and you can still vote. Like, how does that work?

Yeah, that's crazy.

We're headed to politics here. I don't want to go there. Okay, I don't want to go there. I know. Yes.

Anything for like on the investor side?

I mean, you've been talking a lot of like the buying and selling side, but more best, like where do you look at in California for us to entry level? Uh, so I don't recommend anything. I don't recommend anywhere in California to buy and hold unless you find a niche like Alex that's buying stuff, you know, less than $100,000, but he's able to rent it out and make $400 a month. That's awesome. It's a mobile home park. You don't get really thrilled from a mobile home park, but if he's making $400 a month, who cares? So look into those type of places. But California is, I mean, it's so hard. If you buy something, you're not going to cash flow here. It's very, very Unless, like the place that we bought in Big Bear, we're turning it into an Airbnb. And when I mean turning it into an Airbnb, it's not simply doing a normal flip like we do. It's got to be Airbnb likable, ready, friendly. When the downturn hit 15 years ago, there was a guy buying Properties at the courthouse steps. They were literally selling hundreds of properties a day in Orange County. Now there's nothing. Yeah, now there's nothing. He was buying everything around Disneyland, and he, he must have had the, the thinking cap on. He was turning them all into Airbnbs, and he would have themed Airbnb Disneyland homes. He would put Disneyland characters on the walls and all that. Okay, until the point where it came— everybody was, you know, following him and doing the same thing. And then Anaheim said, that's it, no more Airbnbs. And so that's really where it started, was Disneyland said, well, we're losing a lot of money because these people are doing this Airbnb stuff. Yeah. And then all the hotels around there said, no, yeah, we're doing that. So then they started complaining to the city. And where do you think they get their Donations from to run for office was them, these big people. Okay, so then they started putting rules into place.

Do you do multifamily or apartments type deals?

I don't. You're almost running into the same situation with them. You know, they just don't cash flow. You'll find that most people that are buying multifamily is foreign money, that they're basically taking their money like from China or places like that. And parking it over here for safety reasons. So they don't care what they pay for it. I mean, I do some property management as well, and I have a Chinese agent that calls me and she goes, Joe, I got another one for you. And you ask, well, what's another one? Another one is she has these Chinese investors, they come over here and they buy brand new homes in the brand new housing tracts in Irvine. And then what do they do? They turn around and rent them.

Yeah.

Okay? The problem is that a few years, or not a few years, a few months later, the renter that she puts in there, and I've told her this time and time, you have to run credit. You have to do all this stuff to these people. You should see the one I got the other day, a 500 credit score. I mean, I wouldn't let this guy, you know, come in and do my toilets in my house. You know, it's like, you crazy? And she's letting these people rent, and then they stop paying. And so now she puts it on me because I like to do these things. She puts it on me to to evict them out of there through my attorney and handle that process. So you know it is what it is. But I you'll find that a lot of foreign money comes here, and they park it in multifamily and stuff.

Yeah.

So they make money. They speculate. Yes, they make money. Yes. Yeah. So I mean, your question, what do I do as a young investor that's going to make me some money at the end of the day? You can do the same thing Alex is doing. You just have to find the right spot, the right niche, and then figure out, okay, what am I going to do with this? He's got a couple of properties, more than a couple properties that he's holding onto. And then this one he called me on, he said, do you want to do this? Because I've never done a flip before. And I said, yeah, I'll teach you how to do a flip. So how many times have I been out there? Once. And that was to take the price from $85,000 down to $63,000 or $62,000.

$62,000.

Yeah. I mean, literally, I told them, because I love doing this, okay, you can introduce me as anybody you want. Introduce me as your contractor. See, I'm walking around going, hey, Alex, remember? Yeah, this is gonna cost you about $5,000 to do. And I'm talking loud so that this guy hears. You know, and this is gonna cost— oh my gosh, I don't know if— I don't even know if I want this job, Alex. I don't know. It's really, really bad. Okay. At the end of the day, we left. And then I said, Alex, take over. I go, I'm not gonna partner with you at 85. Call me with a good number. So he calls me back with 62. I said, that's a good number. Okay, that's a good number. Okay, I'm gonna parse it. No, no, no, no, I didn't go that low.

Were you partnering as a wholesaler or partnering as a flip?

As a flip. We're 50/50 partners with me putting all the money in. How's that work? He's a very good, very good person. He does all my YouTube stuff for free. We do like 2 videos a week, and I always love it when he brings his fiancée because she's beautiful. And so I'm here and we had a script going on. I'm hearing it, and then she's in the background One day, and, um, I go, you didn't clap. I go, what, what happened? It's like, you're supposed to clap. And she wakes up and goes like, okay, whatever. Yes.

Uh, well, I just piggyback on the long-term holds. I, I like still long-term, but I just opened up yesterday a little duplex. I have a cash-on-cash of like 18%, um, $1,100 a month. $384,000. So they're out there, San Bernardino County desert area, but built in 2005. So I mean, it's, it's rare you'll find your niches, and those are on MLS. So it popped out of escrow and I nabbed it. And, uh, it's, uh, they're out there. But yeah, it's hard in this market. The rents are crazy right now.

Yeah, absolutely.

Yeah, it's sad.

Yeah, so that, that's the purpose of meeting with this group, is to get young people like you started. You have to get started, like Alex said. You have to get started. If you don't get started, then don't come back next month because, you know, you really, you have to get started. Don't be afraid to get started. You have to get started because if you don't get started, you know, you don't do anything really. So find your niche, find what you want to do. Don't worry that you don't have money because, you know, money flows to good deals. If there's a good deal to be had out there, somebody will lend you the money. You know, they will. You know, I'll take 50% of the deal or whatever it is. You know, if it's your— if it's your first deal, are you going to be happy with that? Hopefully you're going to be happy with that. You know, it's something to start out with, educating yourself. So, um, you know, never say no to a deal. If you say no, then have them call me and I'll look at it. You know, I'll take it.

Okay.

Yeah, I'll take it. But yeah, Get started. There's no really— there's kind of really no bad time to get started if you know what you're doing. I don't like doing buy and holds. Sorry. I do too. Yeah, I don't like doing buy and holds right now. I'm going to wait till the next downturn, which whenever that comes, and then I'll go in and do my buy and holds. The last downturn, I ended up buying 20 properties. I have maybe 10 of those left because I've sold them over the years, and they were— 10 of them were in my 401, so I didn't have to pay any taxes on it. I just put the money back in there. Um, I've, I've been investing in San Juan Capistrano, if you know where that is. I think everybody knows there's a great area if you're an investor. It's called The Villas. It's about 1,000 condominiums from Oso Road. You get off at Jay Serra and then you make a left, and on the right there's about 1,000 condominiums there. And I've been investing there. The first house that I told you about that I bought from the lady, I paid $50,000. The last downturn, they were selling at $500,000 in the ghetto. I call it the ghetto because I've lived here my whole life, so I know that it is. It's Orange County ghetto, but it's You know, it's a ghetto. Okay, $500,000 for these places. They dropped to $100,000. And what do you think I did? I bought 10 more. They're back up to $400,000, $450,000 now. Like, that was a no-brainer for me, you know?

Yeah, yeah. Pardon me?

Yeah, they're condos. Yeah. Uh-huh. Yeah, they're actually townhouses because nobody above or below you. That's the definition of townhouse and a condo.

Yeah.

Cash flow? What do you think? Okay, let's talk about rents. When I first started investing, the rent in that condo, 2-bedroom, was $500. It's $2,500 now for the same 2-bedroom. The entire time I've owned it, over 40 years, I have never ever lowered the rent on that place. Never. Okay, so last downturn, everybody that's underwater or whatever, where do you think they're coming? They're coming to my rentals. And so what happens? Supply and demand. This is America. Supply and demand. They come over here and guess what? The rents go up. That's what's happening right now too as well. The rents go up. They don't go down. They never will. Rents never go down. They always stay up. Always. I've never ever spoken with somebody that said I had to lower my rent for whatever reason. No, not at all.

I would venture to say that Section 8 is probably gonna grow, not shrink too.

So yeah, now Section 8, yeah, government-guaranteed rental. Section 8's gone through a massive Like turnaround, I would say. I used to rent to Section 8 people, but they would literally destroy the place.

Yeah, okay.

Now they receive what's called a voucher, and they're on that voucher, and it takes them like 3 years to get that voucher. And if they lose a voucher, they're back out on the street, okay? And by the way, the new term is not Homeless? It's unhoused. Only in America can we come up with these names, you know? Yeah, the unhoused people that are down the street, you know. Oh, you mean the homeless? No, no, unhoused.

You're racist, Joe.

Oh my God. Okay. Yeah, so, uh, where was I? No, besides the homeless. What was I talking about before that?

Section 8.

Oh, Section 8. So Section 8, really, really not really great people. But now because it takes them 3 or 4 years to get this voucher to move into a place, they take care of the place really good. I have Section 8 people. I actually have an old guy. I mean, the problem is as a renter, as a landlord, for renters, please don't ever fall in love with your renters because everybody does. The problem is that then you don't raise the rent. Well, this guy is like, he must be like 80-something now. I've been renting from him for 10 years. I've never raised the rent. Oh gosh, throw something at me, please. It's like, oh my God. But he's like, he's like 80-something, you know? He's on Section 8 and his wife passed away a couple of years ago. I'm just kind of saying, you know, it's like, whatever, you know? It's like, I've got enough with this other stuff. Let us leave this guy alone. He calls me every once in a while. He's— I know he's starting to, you know, get senile. He calls me, goes, Joe, did you get my check? I go, yeah, I haven't been to the post office yet because I have everything going to the post office. I don't want him to know where I live. Uh, everything goes well. I haven't been there, but, uh, yeah, I'll check, you know. And so I go over there, I go, no, it's not there. He goes, oh, Joe, I'm so sorry. I'll mail you a check right now. I'll mail you a check right now. In fact, I'm gonna mail you 2 checks, once for this month and then hold on to the next month's check. He's a nice guy, you know, nice guy. So don't do what I just said, okay? Really, don't do that. Just, you have to, if you have a rental business, treat it as a business, okay? Because if you fall in love with these people like I have over the years, because remember, I'm a nice guy, right, Lauren?

Yeah.

Yeah, see, I'm a nice guy. You're not going to make a lot of money at the end of the day. And that's, that's what you're in the business for, to make money, correct? Anything else? What time is it? 8:00.

8:00.

4:20.

8:00? 8:00. We have another hour. So please mingle, ask questions. If anybody wants to meet with me for an hour, it is coffee. Or lunch, just let me know. I'm happy to talk to you for an hour and get you started in the right direction, whatever that direction is. You'll gain a lot of good information from the hour, right?

Yes.

Yes. Okay. Any other— that's it? Thank you. Appreciate it.