You're Dead To Me! Ethics, Loyalty and Relationships in Real Estate

Welcome everybody. We're back to the number one podcast in Laguna Hills, The New and Experienced Investor, with a new person sitting on the seat next to me. Welcome, Lauren.

Hi, I'm the very new person.

No, you're the producer. We just switched spots today.

Yeah, the producer usually stays behind the camera. I'm missing all my buttons and stuff right now. I feel very out of place, but, uh, we've got full MAGA today.

Full MAGA. Okay, for all you people out there, the adults are back in the room. Things are gonna change for everything. What is the title of this podcast?

It is You're Dead to Me.

Oh my God.

Uh, Loyalty, Ethics, and Relationships in Real Estate.

That was my title. Did you put— did you put the you dead to me there?

Oh yeah.

You did? Yeah, it's on there.

Yeah, exclamation point.

Nice.

It's a very aggressive title for me.

Has nothing to do with you. We discussed this in the green room.

Right.

Yeah, at lunch.

No.

It has nothing to do with you.

Okay, no offense.

So yeah, no, we're talking about—

It's a very loud, long audience thing.

It is.

Yeah. I don't usually use that. That was okay.

That's fine. Anyway, we're going to talk about You know, working with investors, agents, brokers, whatever you want to call it, building relationships, what you should do, what you shouldn't do.

And as the resident introvert, I'm, you know, I know all about that stuff.

You do? Do you want to enlighten us?

I was joking.

What has pissed you off lately?

Pissed me off lately in real estate?

Yeah.

Um, well, one of our properties, I feel like the contractor slipped up a little bit, so that was probably the most recent thing.

Okay. Now, is that— it was that a contractor error or was that a project manager issue?

Probably both.

Okay.

So it was a little bit— I put too much trust in them because I don't know exactly what I'm looking at.

Okay.

But, um, Yeah, it could have been fine-tooth combed a little more.

Was it a little bit the fault of the person that's educating you?

No.

Oh, thank God.

No, I didn't say that.

Thank God.

Yeah.

You got to have extreme ownership. Everything was my fault.

Everything's our fault, but it's just learning again.

It's a learning process.

Yeah. There's always something. Every property has something new.

They'll do what they're told. You just got to tell them over and over again.

Yeah, yeah, yeah.

And you have to have a checklist. And I think you have a checklist now. And you're going to go to one of our projects that is finishing up. And you're going to look at the checklist and make sure that's all done. And that's very important to do before you put it on the market, especially if the home inspector is going to come out.

Yeah, those inspectors, man, they, they don't miss a beat.

They don't. I mean, that's, that's their job.

I know.

That's fine.

Yeah, better off. If I was getting a home inspection, I would expect the same, the same thing.

So let's talk about real estate agents in particular. And I thought everything was going to change after NAR. And I thought that, you know, we would be putting everybody under a buyer broker agreement.

Yeah.

And which we are. And like everything would be nice and rosy at the end of the day. But I don't know that that's happening.

I guess it depends how aggressive you're going to be with that buyer broker agreement, right? So the second someone asks you for your help, is that when you're slamming the agreement on the table? Like, before I can offer you any advice, you got to sign this, it's the new law. Or are you being kind of lenient and then they can go shop around?

Yeah, no, don't be lenient. No, put them under contract, you know, as soon as possible. That way you find out if they're serious or not. Okay, so now you have somebody under contract and you've submitted an offer, and of course you're asking for 3% on this deal. And the listing agent comes back and says, well, I spoke with my client, you have a great offer here, but they're not willing to pay you anything.

I, I almost had this happen on the very first buyer deal I represented. It was right when all this took effect. Literally, we submitted the offer the day the SBPB was required for the first time. And right a couple days to closing, I get a call from escrow. They have a signature from the seller saying they will release the funds in escrow for my commission, but they don't have the SBPB. So there's nothing they can do until they get that. And I double-checked all my paperwork. I had submitted it to the other agent. He was very old school. So he was getting everything like Wet signature from the seller, but she was a real pill. So at the very last minute, she was almost refusing to pay my commission, even though you know we were supposed to close in a couple days. So basically, I went over and did the final walkthrough for my buyer, and I think her agent as well had the talk that like we're not going to close without you signing these documents. Yeah, and I walked in, and Alex Alex waited for me in the car. I was so nervous because I don't deal well with confrontation. Or anything. And it was just me. My buyer didn't show up. So I was doing the final walkthrough for my buyer. And I just basically set this envelope and had a bunch of other documents that were missing from escrow. This guy didn't really keep track of stuff very well. And it was just in there and she double took it. And I was like, these all got to get signed to close if you want your money. And she just signed it. And that's kind of how I worked around it. But she had signed everything prior to that. It was just a paperwork issue.

But Okay.

She threw a huge fit about paying my commission. And then she tried to— she called my buyer separately because they had exchanged phone numbers. She was going to leave some furniture or something.

The listing agent?

No, the seller.

The seller?

Yeah, the seller called my buyer and said, I want to drop both our agents and do this outside of escrow. Wow. Yeah.

Okay.

And luckily my buyer was just like, I'm not going to do that.

Yeah.

Nice.

Yeah.

Your buyer was loyal.

She was.

That's one of the subjects we have today. Loyalty. She was. And she wasn't—

difficult buyer as well. It was the only buyer transaction I've done, but, um, it was an experience.

Okay, okay. So let me put you on the spot. I know you don't like to be put on the spot, but I'm gonna put you on the spot. So let's, let's turn the tables around, and we're in a new market. Um, you put your buyers under contract, but now I want you to represent the seller. Okay, and I'm going to be the buyer's agent. And I'm sending you an offer. And it's a really, really good offer. It's at your asking price.

Okay.

Okay. But I want 3% commission.

Okay.

Okay. So what's your conversation with that seller?

Um, I think I would say something like, if they're demanding 3%, and let's say we had already Because I would prep the seller to kind of be ready to pay some sort of percentage because even though everything's changed, I haven't really run into someone not paying a commission. I know another agent in our office has. But I would kind of try to prep the seller that they should expect to pay anywhere 2% to 3% as like a courtesy and part of just the purchase or the sale. So if it's 3% and it's a really strong offer, I would probably say I would take it. If there's some sort of bargaining power, like maybe they can push for a quicker close, something that's more beneficial while honoring that 3%, maybe we can negotiate there, but leave the 3% in. Otherwise, if they're absolutely unwilling, it's 2% or nothing, then we would just counter with 2%.

Okay. So Question, are you advocating for the seller in that situation or me, the buyer's agent?

So advocating for the seller, but again, I guess it just goes down to all the details of the situation. Is it one offer out of 30 or is it one offer that's come in out of like over 60 days? If it's the only offer that's come in, you know, it's kind of like we should take it. If it's an offer out of 30, then we have, you know, a lot more wiggle room to go back and forth with the agents and try to negotiate down their commission or other, you know, terms of the sale.

Okay, so your ethical responsibility is for the seller.

Yes.

And that's what you're trying to do. But you're basically trying to educate them.

Yeah.

That, you know, we've been on the market for— okay, let's say in this case, you're on the market for 2 weeks.

Yeah.

And you get a full price cash offer. Let's make this real simple. Cash offer. But like I said, I want 3%, you know, or else I'm going to take my cash buyer someplace else.

Sure.

So you're just literally just informing your seller, okay, yeah, you might want to accept this.

Yeah. I mean, cash is king and it's really hard to beat those offers, especially if it's full price. So if it— yeah, if it were me as the seller, like I might present it as like I would take that all day and pay the 3%. If you want to fight back on it, we can fight back on it. Or if it got way down to the wire or something, and I haven't seen this happen yet or have had to deal with it yet, but there could be something maybe in giving and taking like part of my commission to satisfy the whole commission of the other agent just to get the deal done.

Okay. And would you do that?

Potentially.

Yes.

Yeah.

Because like I say, if There's no deal. There's no money in your pocket.

Exactly. Yeah. So you want to get the deal done, you're going to do what it takes.

Yeah, right. I mean, you are the best agent out there. Okay, you deserve 3%.

Yeah.

Yeah. But if it's going to blow up the deal because you're not willing to reduce it down to 2%, then how good are you? How effective are you if you're not getting this done?

Yeah, exactly.

Okay. So in that situation, um, should I, should I be mad at you? Cause you're not fighting for me in this deal. Cause remember we just changed this practice.

Yeah.

The practice used to be where you were the listing agency, you negotiated my commission.

Yeah, that's true. Yeah.

So are you, are you, do you like feel responsible at all for me?

Yeah, of course. I mean, I think usually the standard I see out there even now is like, 2 to 2.5%. I don't see the 3% very often. They do come through. But again, I think other agents are trying to be competitive as well. So the highest I've seen come through for an offer on one of our properties is 2.5%. And I mean, yeah, I think you can push back on it, especially if you know your seller situation. If there's not a lot of money to, you know, they don't have a lot of resources to pay that commission, then of course you have to push back and negotiate. And then, but again, I think every situation is different. So you have to go in.

Do you think the old way that we used to do it is better or this new way?

I like the old way personally, because then you can just set the commission price from the seller's side, right? Like you can just tell the agent what you're willing to pay. Yeah. But in the new way, pretty much when agents call, you know, that tends to be one of their first questions. on a property is the seller paying commission. Absolutely.

Yeah.

And so I pretty much tell them, like, we'll consider it as part of your offer. So they know going in, like, oh, maybe I'm not going in because, you know, some agents might ask for 4%, 5%, 6%, right? They might really up the ante there. So they know going in, like, oh, this is considered as part of the overarching offer. So I need to make my commission offer competitive as well. Or request, I guess you would say.

Okay, so you come back to me and you tell me we're not going to pay anything. You know, your, your buyer has cash, so you should get it from them.

That's true. Maybe that's a better perspective.

But well, it is for you, but not for me.

Not for you.

So now I have to have this conversation with the buyer. Not only do I want you to pay $1.4 million, but I want you to pay me 3%. Yeah. So now it's on me to negotiate with my buyer.

Sure.

So should I, like, for the rest of my life be upset with you?

Probably. Should probably hold a grudge.

Why?

And say you're dead to me.

Yeah, no, I'm asking why. Why I should or I shouldn't.

I mean, I guess it depends on— because there are going to be sellers in this new terrain, right, that are going to say, absolutely not. I'm not paying any commission to the buy side. That's their problem. And if you're their agent, you're going to have to deal with that. And it is what it is, right? Or like I said, you could negotiate some of your commission to make a difference.

But it's not your fault.

Yeah, it's not my fault.

But—

So why should I be mad at you for the rest of my life?

Because it's fun to be spiteful and hold grudges.

Really? Oh my gosh.

She's Irish, Joe.

Wow.

Okay. I'm not mad at anybody right now.

See? Well, that's good. That's the way you should be. It's part of doing Business and real estate.

I would ask, how much does the buyer have in their bank account right now?

Wow.

That changes everything.

Well, they've got $1.4 million.

Okay.

And probably more.

All right, well, okay.

But here's another quick question. Lauren?

Yeah.

How much commission are you getting?

Exactly. Maybe I'm getting 6%.

Are you willing, are you willing to share that 6% with me?

Absolutely not.

No.

So now do you want to hold a grudge?

Well, if you tell me that, yeah, then probably, because then that's your choice. That's not your seller's choice.

Yeah.

So seller was very generous and gave you 6%. But you're not willing to give it out. See, that's a different story. Okay, now you're dead to me.

You're dead.

Okay, now you're dead to me.

The lesson here is always assume the worst and that everyone is working against you.

No, no.

No, I'm just kidding.

No, the lesson is you have a fiduciary responsibility to the people that you're working for.

Yeah.

And if they—

you have to remember that.

And if they're giving you 6% to work with to get the deal done, you should give up a little bit of that to the buyer's agent. Being a buyer's agent is hard work, you know, just like being a listing agent is. So everyone's just trying to do their job.

Do you think ethics falls into any of this?

Yeah, of course. I mean, you're representing someone's, like, probably biggest purchase and biggest sale that they're going to make in their lifetime.

Ethically, like, to me, this is, you know, a very, I'm going to say small community, even though it's not. But the people that are actually working, it's a small community. And you may be on the other side, of the issue when this happens again and we work together again. And I'll— I will definitely remember that.

Oh, yeah, you're getting zero. Yeah, absolutely.

Do the same to you, you're getting zero.

Yeah, sorry.

You know?

Yeah, I mean, it's a relationship business. And what comes around goes around.

So, okay, so let's, let's move on to Loyalty. You're dead to me.

You keep looking right at me when you say that.

Sorry.

Sorry.

I shouldn't be. Let me look at your husband, Alex. Hey, get off the phone. You're supposed to be producing.

I'm doing some PR right now.

No. No. You're supposed to be listening and you're supposed to be producing and making sounds. She never makes sounds. Thank you.

I do the air horn every once in a while.

You know, you know that I, you know, I am very supportive and have the ability to teach people what I do for a living. I don't charge.

Just lunch.

Just lunch. But I'm always hopeful that I'm speaking to adults. And usually adults know that there is no free lunch. Okay.

Yeah, sure.

Dark mega. I'm telling you, there is no free lunch, and you're gonna find out what happens when the adults go back into the room.

Okay.

So here I am teaching you all these skills, encouraging you, providing you with contracts—not car contracts, but private contracts—that I've been using for years. And then all of a sudden you have a deal, you close on it. Great. That has really nothing to do with me. It was off market. So you've closed this deal, but now it's time to, you know, bring it back. And I do. I always discuss, you know, if you're not a real estate agent, it'd be probably nice if you brought it back to me and I could list it for you. And I guess I'm going to say dumb me. I even say I'll list it for you for 1%. It's like, how much of a better deal can I give you? Seriously? Okay, it's crazy. Yeah. And then I get a call. Joe, yeah, we've decided to go with another realtor. Oh, just stabbed in the heart. Why? Why does that happen? Is it something that I'm doing or not doing? Should I be charging them?

Um, hmm, hmm, hmm, hmm. I don't know. I don't know what that is. Um, sometimes people make stuff up in their head, like a local agent or, you know, this other flashy agent is gonna do better for the property, whatever. Um, Alex and I have never operated that way. We brought you our very first deal ever, you know.

Which is one of my requirements.

Yeah, requirement now. Yeah, yeah.

No, it always has been. It's like, yeah, I'll teach you how to wholesale, you just bring me your first deal. Yeah. And you did. Yeah. Well, that's— it's not— that doesn't happen with everybody.

It doesn't. And I don't think they, they realize how much, you know, like you said, you're doing this all for free. You're, you're giving all this knowledge away. There's plenty of gurus, there's plenty of people out there that charge anywhere from like $10,000 to $100,000 for the same things you're giving people for free. So I don't— I can't even wrap my mind around doing something like that. Just not bringing the business to you or coming to you first to help me like see something through.

Is that because you guys are adults in the room? I guess so. I'm trying to figure this out. It's like, you know, you give so much value and so much value and it's like, okay, I've decided to go someplace else.

I mean, it's just like anything. You're gonna have people that do that, but then it kind of shows like their true colors. So then, yeah, you don't have to waste your—

They're dead to me.

They're dead to you and you don't have to waste your time on them anymore. Like if they come to you for resources, you say, yeah, I already gave that to you. You know, sorry.

Well, some agents, some agents will spin a tale about how they're gonna get them over asking.

And that's true.

I've got buyers on buyers and you know what I mean? So in case you choose to believe that, then that's—

Yeah. And that's a, and that's a great question. So should I be more talkative when I'm doing a listing presentation.

Straight lie to their face and tell them what they want to hear.

No, no, no, I don't see that.

I can't do that.

But you know, 40, 45 years, you know, in the business, I think I've done just about everything that's out there.

I mean, the 1% commission was— if this is like one of your students that bought an investment and then is reselling the investment, like, they're gonna find out real quick when they go to sell how expensive it is to sell That property, whether it's a flip, whatever it is. If this new—

No, no. Now they're working with an agent that is a local agent in the area. They know what they're doing, um, and they can service that listing a lot better than I can.

Oh, okay. Interesting.

So let's move on to another example. Um, I, I currently have a listing, and to get the deal done, I had to reduce my commission from 3% to 2%. And that's fine. And I asked for 3 because I knew if you're a real estate agent and you think nothing's going to happen in the transaction, you haven't done any deals because every transaction there's something that goes on. So anyways, uh, to make the deal work, to make his number, I had to reduce my commission down to 2%. So I'm over there at the property today. And originally I had told him that You know, don't worry about this. It was a fixer house. Don't worry about your furniture inside. I will take care of it for you.

There was some cool furniture in there.

Okay, I'll take care of it for you. And I have been, and I hired, you know, a guy to come take the trash. I still have another one that I need to do. And I, so I was on the phone today and I told him, you know, hey, um, he asked me, well, what about the trash? What should I do with it? And I, again, I told him, I said, no, I'm a man of my word. I told you I would take care of it. I'm taking care of it. Okay. So he's looking to make $1.2 million. You would think that he would say, oh no, Joe, I can't have you do that. You've already reduced the commission. That's $12,000 I gave him. You've already reduced that. And now I'll give you back your 2 grand, but no, no, no.

And then, yeah, and then someone called looking for all the furniture.

Yeah, yeah, we won't talk about that. Yeah, some people just— yeah, I just, I literally tell them, you know what, we're going to close next week. You better go over there and take whatever you want because I've got the trash people coming on Wednesday, which was yesterday. And whatever's left is going to be dumped. As far as I'm concerned, it's all trash. And then they called back and said, oh, did you get rid of this? I go, yeah. Oh, wow. What about this? The bookcase? I'm still like puzzled with the bookcase. Like, this was bookcase up against a giant wall.

It looks like a built-in. So that's what's even more puzzling about it.

Yeah, it's like, you built it for that wall. What do you want with a bookcase?

I don't know. But You're too nice, Joe. That's, that's the moral of the story.

Is that it?

Yeah.

It's my fault.

No, no, no. Stop being you. Don't stop being you. You'll attract the right people, and then the rest of them are dead.

They're dead to me.

Yes. Yeah. Again, I hope I never get on that list.

It has nothing to do with you. You know, you guys have been perfect. See that? You've been perfect. I just wish more people out there weren't dead to me. Yeah. You know, because there's lots of people with potential out there. And, you know, I like teaching. I like, you know, giving information and stuff to people.

Well, you give so much, it can be a little hurtful when people don't give back to you. Yeah. You know, maybe not hurtful.

Maybe just, I don't know. When it's when somebody slaps me in the face like that, you know, and it wasn't honestly this was a one percent commission deal. I'm talking four thousand dollars. My gosh! Four thousand dollars.

So then they're gonna go to this hotshot agent and end up paying twelve and possibly pay twelve on the other side. That's twenty four thousand dollars just in commissions. Correct. That's crazy. Well, I hope they have a really good spread. Yeah, I hope they have a good spread on this property. That's all I can say.

No, this person said they don't have a good spread. And that's why they wanted to come list it with me.

Well, they're gonna get in trouble.

We talked for about an hour. And then the next day, they called my assistant and said, yeah, no, we've decided to go with somebody else.

Unless there's this random agent somewhere else offering 1%. Is that common?

Could be. No, it's not really. And again, I only do it because I have relationship with people that I, you know, Do because I'm teaching them. But no, you know, it's not common. I don't know many people that are going to work for $4,000. You know, I can barely wake up in the morning if it's only $4,000. You know? Yeah. I mean, we all go out to lunch. You know, there's like 6 of us or whatever. And I'm sure it's $4,000. The bills. Yeah, it's like way up there. So I need at least 10 to get up in the morning.

Come on.

Oh my God. 10? You'll do it for 10?

Well, at least 10.

At least 10.

Yeah.

Yeah.

Anything below that, I'm not—

Anything below, you don't even wake up.

Yeah.

Yeah, it's like if you live in California, people always ask, how's the earthquakes out there? I go, yeah, they're okay. Anything above 6.5, I just sleep through it. You know, 'cause you're so used to it.

I've only noticed like 2.

Yeah?

Yeah.

In your entire lifetime? Really?

Yeah.

Were they above 6'5?

One, I think, was— we were living like on a hill. And it just looked like the room was like going like this. It was crazy.

Wow.

And then the other one, I just felt—

Were you and Alex together at the time?

Yeah.

You were? You sure it wasn't him getting up from bed?

Yeah. It was like everything. Yeah. It was interesting.

Okay.

I remember, what was the big one? Like '94 or something?

There's been several, at least in my lifetime.

Northridge.

Northridge.

Northridge.

Northridge is a big one.

Yeah. Caused a lot of foundation issues, I heard.

That's probably what we're dealing with right now.

Yeah. I just remember getting ripped out of bed by my parents and having to stand in a doorway and being like, what's going on?

Yeah.

Yeah.

So tell me, if you were me, Would you change anything that I'm doing? Would would you recommend that I become a guru and you know put some courses together and start charging people?

I mean, if you wanted to have like an advanced course or something that was a little more maybe like an exclusive like meetup, something like that. But I think if you change what you're doing, like the gurus now, like when you watch them, they're just like they feel soulless to me. They don't feel genuine in what they're presenting. It's all to. just get more signups and make money on their courses. And who knows if any of them are actually still doing real estate or what they're promoting, you know, it's all to sell the courses. And that has become their livelihood. If that's what you want to do, then I might be richer.

Yeah, if you want to get richer, but is there anybody out there that wants to put some courses together for me and sell them? Michaela, is your husband available? No?

It's hard.

No? Okay.

I don't know. I mean, because if we wouldn't have found you, we would have ended up in some crazy, like, money-grabbing thing and been totally lost. You know?

I felt sorry for him when I found him on YouTube during COVID Not on YouTube, on Zoom. I felt sorry for him. He's like sitting there like, I'm lost.

That's one of my best qualities.

Yeah, I'm lost. It's like, can you talk to me, Joe?

Yeah, it worked. And look at us now.

Yeah, look at you now. Yes. You've come a long way in a short period of time. Thank you. Yeah.

I owe it all to you. Thank you. I do appreciate it. Yeah, I seriously do.

I don't know. That's up to you. That's something to explore.

It's too long. No, I'm giving it up to Joe.

Thank you. Thank you. Yeah. Sorry. Let's look at some videos. Are we ready for videos?

We, we do have some videos really quick. Um, oh, we have some questions. Yes. Uh, Liz would like to know, how's everyone doing? Good. Good, Liz. Hi. Awesome. Uh, Chad would like to know, how many agents do you think really run their business around fiduciary duty and ethics?

Chad, that is absolutely a great question. Just me. As agents, we have to take ethics courses every 2 years now. Used to be every 4, and now it's 2. And I'm sorry to tell you that I think real estate agents are probably the most unethical, right above a car salesman, as far as ethics goes.

Mm-hmm.

And that's Being taught ethics every 2 years. It's like, I don't know if— I guess nobody's listening or whatever, you know.

Well, remember the first agent we had when we were selling Rogers? You remember that guy? That guy was a piece of work. Yeah. And he must have advised his clients to release their EMD, and then they called everyone screaming, and it's like, sorry. Nothing we can do.

Yeah, they called escrow and they said, hey, when do I get my money? And escrow says, well, you signed a piece of paper to release the money to the sellers because you didn't perform. Oh, well, who do I complain to? Call your agent. He's obviously the one that discussed that. So yeah, Chad, I'm sorry to say, I don't think there's a ton of ethics out there. So hopefully that answers your question.

It's got to be a few, but, uh, you're gonna be hard—

Me and Joe are very ethical.

Hard-pressed to find them. Um, Coach Steph says, next year, or, uh, next will be Feats of Strength. Merry Festivus to the rest of us. So it's more of a comment. Um, what are your thoughts with the upcoming real estate market and Trump being in office?

Dark MAGA, baby.

I'll let Joe answer this one.

Dark MAGA. I think you're gonna see a big change in real estate. You know, the first thing he's gonna do is, like he said, drill, baby, drill. What's that gonna do? It's gonna lower oil. Oil is a driving force pretty much for everything. And, you know, if you're not having to pay so much for food and everything else, housing, interest rates, I think that's going to be a huge effect.

I saw a YouTuber breaking down that if he gets rid of some of the building regulations, not all of them, we need some of them, but that builders are gearing up and getting ready to just start building everywhere. So housing supply may potentially go up, which is good as well.

I agree. And I hope so. And For investors, I'm planning on him keeping the tax cuts that he put into place.

We need more tax cuts.

Yes. I'm, you know, hopeful that that's what he's going to do. I'm hopeful that Vivek and Elon are going to take care of the rest of the government. You know, it's easy to say that that's what's going to happen. I think it's going to be very, very hard for that to occur.

Don't most of the agencies have unions and stuff? And that's basically what caused the issue. Yeah, but you know what?

I was listening to a YouTube the other day of Vivek kind of describing what he was going to do. And I thought, wow, that's a great idea. And I'm going to call it What they used to call it in my previous job, freeway therapy. Okay, you're an employee in Washington, and we're we're gonna like literally downsize your department. And not only are we going to do that, but we're going to move it to Texas. We can still keep you as an employee, but you have to move to Texas. How many people you think are going to move to Texas? Or let's say something better. We're gonna put it in Alaska.

Alaska's pretty cool. I'm not gonna lie. We went there last year.

Do you want to freeze your you-know-what in Alaska? I'm going.

We were there in the summer.

Wow. That's like freeway therapy to me. You know, let's have him work way over there someplace. Oh, no, I'm gonna quit. So, you know, when you're dealing with the smartest people in the world, they come up with this stuff and it's like, awesome. Awesome. And I think, you know, they're going to have a hard row, but they're going to do it.

Mm-hmm.

You know, mass deportations. I think that's going to happen. I mean, you just have to look at the guy that they put in charge for mass deportation. And like, okay, I'm gonna leave. Sorry, I'm going to leave. Okay, I'm leaving. God, don't look at me like that. I'm leaving. Okay. You know, gosh, please let me go. Okay. So I think you'll find a lot of that as well.

And this is all really good for real estate.

All of it. All of it. All of it's good for real estate. Absolutely. Yeah, we can get the prices down, you know, get more people to buy houses. Yeah, absolutely. I think it's all it's all good. You know, he's a he's a he's an investor at heart. So hopefully he takes care of the rest of us investors and real estate agents, and I know he will. He did before. So. I would love for him to get rid of the taxes. I don't even know how that's possible. He says tariffs, tariffs, tariffs. Okay. I don't know if that's possible, but—

I guess we're gonna find out.

In the next 4 years, there's gonna be a giant change on the way this government does business. So you're right, we'll find out. We'll definitely find out.

And we have one last question. What if someone wanted to buy a house through you using Dogecoin? Elon loves Dogecoin, by the way.

I would take it. I have some Dogecoin, so you can pay my commission in Doge. It might be quite a few though.

There you go. You have an agent that accepts Dogecoin.

I'll definitely accept Bitcoin.

Yeah. Is Dogecoin still around? Oh yeah, it is. Yeah.

Okay. It's doing pretty good right now.

Yeah. Yeah. Okay.

Before we jump into the videos, why don't you guys talk about the meetup real quick we have coming up on Monday?

Meetup on Monday, Hangar 24 in Irvine. We have a special guest live. Speaker, Alex?

Yeah, it's gonna be Mike Morawski. What do you want to give his backstory and what he's doing now?

Mike, Mike, I met about a month ago at an event. It was a charity event. And we rode in a limo together from Irvine to the Nixon Library and had a great, great conversation, Mike's backstory and He wears it on his sleeve. During the downturn in '08, he was doing multifamily and syndication and all that. And you know what happened in '08? He lost his shirt. His partners left him high and dry. His investors came after him. He spent, I believe he said, 10 years in jail over that.

Wow.

Gosh, yeah, 10 years in jail. It's like that has to be a high dollar amount that, um, you know, just poofed, went in the air. Not— I'm not saying it was his fault, you know, it's just the market. But obviously they needed somebody to blame, and then they sent them to Club Fed. Because I asked him, I said, are you a pretty good judge of character? I mean, you know, some Big giant guy comes up and you kind of know what's gonna go on with that conversation. He goes, no, it's like somebody come up to me at Club Fed. It was like, when's tea time? It's like, what do you think? Are you into bowling? Or, you know, it's like, I go, oh, so you— this is an easy jail. It wasn't like a hardened criminal jail. Oh, no, no, no. It was just Club Fed. But he spent 10 years. So he's back. He's back in good graces with the SEC. Did he just get out? No, it's been a few years that he's— and it took him a little bit to get back into good graces. He's back doing syndications. Wow. And I thought he would be an awesome speaker.

It's a very interesting story.

Yeah. Because You know, like we were talking about before, I've got 45 years of experience and I part, you know, I tell people like, for example, you're dead to me. I told this person, I said, you know, before you close on this, do you have a binder policy? And the person goes, what's that? Uh-oh. Yeah, I go, what's that? And I go, well, do you want me to save you about $1,200 to $1,500? Yeah, Joe, yeah, save it. I go, well, this is what you need to do.

Yeah.

Okay. Oh, okay. But then again, they listed with somebody else. They're dead to me.

Dead to us.

They're dead to me. So yeah, so Mike will be our special guest. I know there's like a big giant storm in NorCal. Yes, I saw that. Like, it's bad.

Are we getting rained out?

I don't think we're getting rained out. I'm checking right now. Yeah. I don't think we're getting rained out. No, I think we're good. Are we good?

I don't know. Hold on.

Oh, God.

Hold on. Hold on.

Yeah, please.

We'll figure something out.

Because if we do get rained out, this is Alex's fault.

50% chance of rain.

Really?

On Monday.

All right. Let me call over and see.

Hold on. Hold on. I'm checking the times. It's always right. It's like 20% at 6 PM.

Oh, okay.

It actually looks like it might be more midday. So that's like chance of precipitation right there. Flatlines at 6.

Oh, okay. So it'll be over. Well, then that's for now.

Yeah, but that's gonna change.

We gotta keep an eye on it.

Yeah. Okay. If not, we blame Alex. We always do. Alex will figure out where we can go to stay dry.

Here?

Pack everyone in.

Yeah, that's not gonna work. No, maybe get us inside and kick the karaoke people someplace else.

Honestly, nobody does that. Yeah, it's like the same one guy.

It's the same guy every time we're there, and he always sings the song from Mulan, Be a Man, every single time.

He's working.

Great song, great movie, but he sings— that's his go-to.

That's his go-to. All right, let's go ahead and jump into the videos. So this first one, right on topic: strategic relationships equal money in real estate investing.

In real Deal and making five grand, or maybe I do a deal with Pace and make some money. But if I can think way past the deal and think about, man, if I can create a strategic relationship with a Pace Morby, then what is that going to mean for me in the next ten years or twenty years? And that's the way that you really operate your business. That same concept holds true with your money lenders, other investors in your market, JVing on deals with other wholesalers, and even your sellers. So like, if you can create these relationships with sellers, think about that. They're going to know other people. I can't tell you how many deals I do that's a referral from a seller. I don't know. Other investor, a seller tells their buddy or their mom or whoever about this great deal they put together with Jerry, and now they're referring you to other people because they had a great experience. In real—

yes, I agree. I agree.

Relationships are number one. That's the most important thing.

Just replace Pace Morby with, if you could do a deal with Joe Holmes. Wow.

Well, and it's looking beyond the one deal, and there's so many people that do this. They'll, they'll get heady over like $2,000. And it's like, you don't know where this person's going in their relationship or, or in their career. Yeah. To where you could reach out to them in 5 years. Like, that's a long time in our minds, but really it's not that long. So it's like, you gotta think beyond the one deal.

Let, let me give you an example. I'm very loyal to the people that I work with, title companies, escrow companies, home warranty companies, home inspectors. Because I know the type of work that they do, and they do a good job. And for example, we had a deal, all of us had a deal together where there was something on title that was kind of questionable.

Mm-hmm.

And we asked Noah from First American Title Best title guy out there, and he was a dad today, by the way. So congrats, congrats Noah, congrats Noah. Anyway, because we've had this long relationship, Noah said, "Yeah, let me check with my company." But yeah, let's not pay it and see what happens. And he knows at the end of the day that I'm good for it if something does pop back up. And of course.

So we had to pay it back.

Something did pop up. And so like a week later, we ended up having to pay it.

Yeah.

But we were able to close escrow on just my word and my relationship with him that he knew that, you know, if he had to come back to me and say, Joe, sorry, but we did receive a demand, you know, it was kind of a weird one. But yeah, it's a valid one and you're going to have to pay. And then we sent the money in. That's, that's what I'm looking for.

Yeah.

Those are the relationships that, you know, he was talking about. That was Jerry, right?

Yeah.

That Jerry was talking about. Those, those are exactly the relationships that any real estate agent or investor should have. You know, if I've got a relationship with Alex, who's a wholesaler, Alex is going to be calling me first before he calls anybody else, you know?

Yeah.

Why would he call anybody else before he calls me? Because if he called somebody else, he'd be dead to me.

That's right.

I'm never gonna be on that list.

You're dead to me.

Okay, uh, so number 2, loyalty in business. This is just a general one. Canceling a $100 million deal over loyalty.

Spite.

And he had just canceled a $100 million deal that he had because he found out that the guy who was going to do the deal with, uh, had cheated on his wife. And he sat there and he looked at me, I was like, dude, you canceled $100 million deal. If he cheated on the person that he sleeps with, there's a high likelihood that he'll cheat on me.

Yeah.

And it's like, it's not that it's going to happen or not, it's the fact that there's character flaws that can be changed that a person needs to work on. And he had just—

what do you think about that?

What about the preemptive, you're dead to me? You find something out about somebody.

Yeah, done that. But he could have done the $100 million deal and somehow like given the wife the money.

Well, it's probably $100 million in a certain amount of years. It's probably not like straight up you get $100 million.

Just tip the wife off, like divorce him now and you'll get half the deal.

Would you have canceled the deal?

$100 million. I would see before canceling if I could somehow make her like the— like pay her instead of the guy or something.

What about the guy we went to lunch with?

But I think that's a good— that's what I was gonna say. Let me tee that up for everybody.

Oh, that's different.

Okay. Well, why is that different? But let me tee it up for everybody so that everybody knows what we're talking about. So Alex receives a call from a guy. And, um, was he an agent or not? No, no, he was, he was a host. He was an attorney. He was an attorney, longtime attorney, but he did some bad things and spent some time in jail. And he gets out and he proposes. We went to lunch together. It was like 4 of us or 5 of us at lunch. And, uh, he loved Alex. Alex was his best friend. But anyways, um, he says, well, you know, I've got this thing going on that I've got this connection with this attorney. Who tells me all these high-dollar profile people that are going to jail for these crimes that are probably not going to get out, but they own houses and, you know, expensive cars and stuff like that. And he says, I'm thinking about if I could, you know, connect with them and then refer you the business to list their properties to, you know, sell them so that they have enough money to pay for the attorney. you know, that might be a great idea. And we're all kind of thinking like, well, that's not a bad idea. Because like, if you're doing probates, if you're not connected with a probate attorney, you're not getting any probates.

Yeah.

So you have to be connected with a probate attorney. So this was kind of along the same ropes. And so we start talking to him and he's talking and he's like, I'm looking at Alex and I'm kind of thinking like, This guy knows too much about what's going on with these people, especially in jail. It's like, I don't know. I just get this feeling that you know he's like way overly experienced with this. You know, so we get back to the office and I go, Alex, he said he was in jail. He was honest about that. He said he was in jail and he's out of jail and he's just trying to put some things together. And I said, you know, why don't you Google him? Okay, that's what everybody does, right? Why don't you Google him?

Google him.

So it turns out he was in jail because he was a child molester.

That's— yeah.

Child molester.

We did not answer any more of those phone calls.

So I asked Alex, I go, hey, what's, you know, what do you want to work with him or what? And Alex said, no. That's like your $100 million deal. What if this person, you know, was a child molester?

That's a little different. A little different.

Why?

Why?

I mean, this person obviously had ethics.

Yeah, no, it's a huge character flaw. It's like, how can you trust them? I thought those were all the points.

I think he's right. Like, you know, he said, like, if you're gonna cheat on your wife, you're probably gonna cheat on me. Because, you know, all we have together is just business. We don't have any personal relationship.

That's true. You know, but what if—

Less likely.

Spite deal, you take all the money and run. Give half to the wife. Robin Hood right there.

I don't think that works like that.

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

Wishful thinking.

Yeah, you're taking care of the wife, but I don't even know if you could even do that. Because, you know, the minute the wife finds out, the deal's going to be blown up anyways. Oh, yeah.

Yeah. Yeah, it's not good. It's not good to—

So did we decide, or Alex, did you decide to work with this guy?

No.

No. Why?

What are you talking about?

Tell us why.

If, um, well, he—

And how many times did he call you back after lunch?

He texted and called me a couple times and I just ghosted him, but I have a feeling he's used to that by now.

Yeah, yeah, yeah. He—

So you don't, you don't think you were the first one he approached with this?

I don't think so.

Do you?

No, because he said he did bring it up to some people. They're all gung-ho, but then nobody follows through. So I was like, oh no, I follow through. I always follow through. Yeah, I could do that.

Did he buy lunch or did we buy lunch?

I think we bought lunch. No, I did. I think he did buy lunch. Yeah.

Okay. So, I mean, again, we talked about this the other day too. That's my philosophy is like, you had somebody in here the other day. It's like, I keep telling you, it's like, why bring them here? Make them pay for lunch. At least you get a lunch out of it.

People are finding out and they find out now that we roll like 6 deep, so they don't want to come to lunch with us anymore.

No? Oh, I see. Yeah, no, no, but it's like a one-on-one. You don't have to roll with the crew.

Yeah.

You know?

It's one-on-one.

Yeah.

Yeah, no, you're right. Totally right. Okay, the last video we have—

Wait, before you go. Stephanie was telling me earlier that she likes this office environment because we are so close. And I told her that this is very similar to the previous job that I used to do. And I think it's a good way to learn from people. I mean, I can yell over and tell Michaela, like, hey, what would you do in this case? Because Michaela is a very smart person.

I noticed.

We are out of official desks, though. So sorry.

No more?

Well, yeah.

Yeah, but no more people?

No, people can come in. You just got to sit at the conference table.

Oh, that's okay.

All the desks are spoken for.

You're always welcome. You're always welcome. Anybody's welcome in the office, especially if you're going to produce something. Okay, next.

Leave your first deal in-house. Um, so this is, uh, this is a different one. I want to see what you guys think. Ethics of we buy houses cash companies.

If you're not paying fair market for what the property would be worth, should it be Actually marketed out there in the public.

And that's the— I mean, I guess that's one of the things when you talk about off-market deals and you see the we buy houses, like that is a big sign of like more than likely that's not an ethically charged industry.

That's exactly what these— the cash prices. I've never seen any other way. I've been involved in several of these transactions where people have called me. I've never seen any way that a we buy houses for cash person can operate without violating this law, absent showing up and buying a property and go for cheap. I mean, if you agree to sell your property to me for 40% of what it's worth, and I actually close, purchase it, go in, renovate it, or if I just turn around and say, okay, now I'm slapping a sign in the yard for $30,000 more, there's nothing illegal about that.

No, but you can do that.

But this methodology that they're using, where it's the win-win situation for— well, they claim it's a win-win situation for both sides, where it's a guaranteed win for them no matter the outcome, no risk. That's not right. If you're—

Are these just agents or brokers?

They are pissed. I'm not sure. Okay. He said he's been in like 2 of the 2 or 3 transactions or whatever. He's seen them. Okay. So he's making a judgment on that.

Because from my perspective, take the agent hat off now. Um, we've come across some situations where it is a win-win, where these properties are in such horrendous shape That just to like, you can't list a hoarder house on market. I guess you can. Ryan bought one on market, but no retail buyer is buying that.

It's just not happening. It's sour grapes is what it is. That's, that's, that's all it is, you know. And this guy, inexperienced, has probably, you know, no idea what he was really talking about. I don't think maybe lost, maybe lost a deal.

Yeah. I don't think he knows people's situations. Sometimes people need cash immediately. And even with some of the prettiest properties right now, they're sitting 30, 40, 60 days.

Yeah.

Right? That's common on market time right now. So you're telling me someone that needs cash right away isn't going to take a haircut on the price to move that property or move it in its current condition? We've taken over plenty of properties where The people just brush their hands off and leave everything behind. And that costs thousands of dollars to remove all that stuff. Tens of thousands of dollars. Are they going to pay to remove all of it? Probably not. They're probably not in the financial situation to pay for it. We pay for it.

And then, okay, so you're in pre-foreclosure. You've been, you've been with your head in the sand the entire time. You're going to get foreclosed on Friday, this Friday. Yeah. Okay. Yeah. It's like you're gonna lose all this money. Why wouldn't you put together a deal?

I think what's happening is, of course, you always have people that are gonna take advantage, right? Any industry. We just talked about agents that do that. So you have cash buyers or even inexperienced wholesaler buyers that take advantage of people. We just heard from someone Alex is working with, I think last week, where They were making an offer on a pre-foreclosure one day before the sale, and the lady signed with someone else. Well, we could see on PropStream it sold. So these people didn't actually stop the sale. Which that to me, that's major ethics violation.

Yeah, but they're not licensed, so they don't have any ethics.

Sure. But if you're talking about bringing ethics just into when I feel like when we go into situations, we're always trying to help people. That's where I come from. Because both our moms lost their houses in 2008. And if there was a cash buyer knocking on their door or someone that, you know, could have bought the property and not gone the short sale route.

Did I buy their house?

No.

No? Where were you, man? I was buying houses left and right in 2008.

Oh, you didn't go to Arado and Rancho Santa Margarita?

Yeah. Or stop the foreclosure, anything like that. Any sort of resources instead of the bank telling them, you know, just give it up, just walk away, you know.

Oh God, I wish they would've called me.

Yeah, me too.

I could have helped them. There was bank, I'm trying to remember the name of the bank, but when I was doing short sales, I'd negotiate everything with this particular bank. And the bank like sent me an email one day and said, oh, this is a— oh, World Savings. This is a special loan that we did for this person. And we'd like to pay him $30,000 upon closing. I go, what?

Yeah, that's awesome.

I ended up closing and I went, I asked escrow to please give me the check for this person. Yeah. Because I want to deliver it in person. Yeah. And I did. And I said, here, this is for me helping your house get sold.

Yeah.

And this is, but this is from the bank. And they looked at me like shocked. They go, oh my God, are you serious? I go, yeah, I'm serious. They gave you this money. It's like, I wish I would have met them back then. But, uh, well, yeah, but things happen.

So I think, you know, there's definitely people out there giving cash buyers a bad name, maybe even some of the bigger companies like Opendoor and all that. Yeah, you know, because what— from our experience when we talk to sellers, what they do is they come in with the cash price and then they walk the property, and then when you actually close They put all these additional closing fees. And correct, one seller told us one of their closing fees was like $40 grand. Correct. Which is crazy.

Yeah, because they take off the commissions, the commissions, but sell it at the end of the day.

It was like an administrative fee.

Yeah, well, they can call it whatever they want. It's a junk fee at the end of the day. Yeah, but yeah, that's, that's the difference. And when we go to talk to people, you know, I always tell people, it's like, okay, well, Can I see the offer that you got? You know, let's compare here.

Yeah.

You know, but I mean, it's just like, no, no, we're not going to charge you that. Yeah. No, no, we're not going to charge you that.

Yeah. You know, it's just like anything in business. If you have the time, then you can wait for that perfect offer like your other sellers at the $1.2 million.

If the house doesn't look like a hoarder house, then you got a good chance of selling.

Yeah. But if you, if you have certain things that you have to To, you know, if you can't put it on market because there's so much stuff that people can't walk around and like they're going to get sick if they walk in the house, then yeah, you're going to have to trade probably your price for convenience or getting the deal done. Right. Right. So I disagree with that. But there are always people that take advantage. There are always people that don't operate, you know, so he's in the same code.

He's dead to me.

Yeah, I think he's jealous.

I think so too.

I think he's a jealous guy.

Jealous, uneducated. Yeah, doesn't really know what he's doing.

But yeah, dead to us.

You got any more videos or no? That's it?

That's it. We're at the 5-hour mark right now.

We should just list off all the people that are dead to us now. Like rolling credits?

Scrolling, yeah.

Scrolling credits.

So stick around, see if you're on the list at the end of the show. Make sure you guys share this with all your investor friends, and we'll be back next week.

Wow.

You're not dead. You're not dead to us.

With that, thank you very much for showing up. I appreciate it. Thank you for filling the chair. You did a great job.

Thanks.

And dead to you has nothing to do with you whatsoever.

And not our viewers, right? The viewers are not dead to us.

Well, not the ones that work ethically with us. The rest of them are dead to me. Sorry, they're dead to me.

All right.

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