Real Estate Expert Reveals Their Millionaire System

The way that you make money in real estate is you look for the distress. Where, where's the problem? And then how do you solve that problem and make it a win win Simple.

That's buy a home that needs to get fixed, fix it up, put renters in there. It's not rocket science. When you have the fund, you have the wherewithal to go in and take down properties at cash.

Right now, if you have cash, the market is yours. Nobody's jumping in to buy properties at 8% interest rate. So if you have cash, oh boy, can you negotiate. It's a very exciting time.

Welcome, everybody, to another Main street business podcast with an influence. Main Street, A special guest, Kathy Fetke. And I just could keep introducing her for probably three straight minutes or so. But I better first say thank you for being here, Kathy.

Thank you so much. I'm happy to be here.

Oh, I like. Oh, my gosh. Now what I love. There, I've got it. Well, first of all, Kathy's a prominent real estate investor, an influencer and teacher in, of course, the real estate space. All different types of asset classes. She's currently managing two funds that are rental property oriented. We're going to talk about those and how investors can't need to understand the difference between the types of funds they may want to get into. And when I say fund a syndication, think of it like a big partnership. For those of you that have never invested in it, a fund or a syndication, we're going to unpack that. But she has so much experience in this space, part of the Real Wealth Network. She's got a great podcast. We're going to have links to her podcast down below. That's where I'd recommend all of you get started if you want to learn more. And her market updates are phenomenal. Gosh, we got so much to cover. But I'm going to provide some real value for your listeners today. Kathy, again, we're just so excited to have you.

Thank you.

The part, you know, I was going to say this, I want to throw this out. The other day, it was a really neat meme or whatever. I think it came through Instagram and there was 15 guys on chairs on a stage and one woman. And then there was another picture. Big real estate conference, 15 guys or 10 guys, one woman. And I really loved your message. Like, women, if you don't think you have a voice, freaking get off your butts and freaking start making a difference and they'll put you on stage. The stages are dying for women that really want to get up and talk about real estate and investing and I just so impressed with your vision and leadership in that way.

Oh, thank you. I, I'm putting together a women's retreat and also I do one on one coaching because you know, for some reason women are afraid to get up there on stage. And I can tell you, 20 years ago I was too. But you can break through that. Rich helped me break through my fear of public speaking. Signed me up for Toastmasters where I could barely say my name in public. And you know, sentence by sentence, you get through it. You know, I could get up and say a sentence and the next week it was a paragraph. The next week, a year later, I was speak it at their conference. So just one step at a time.

Yeah. And you know, it's, it's interesting and this is a good tip for everybody. I'm only, this is, it's a good fodder and meet on the podcast. Even though it may not be per se, real estate is. We just in our own minds create all this fear and doubt in ourselves when really everybody in the crowd, they just want to hear from us, but we get up on stage and we mind screw ourselves up. You know, thinking that all these things that no one else is thinking, it's just so weird. And so I, I've been in the crowd many of time, listen to you speak and just love your message.

So thank you.

Okay, so let's start. I really want to start with, if I could just. This is so good for my listeners to hear Market update. Let's go. I know we got interest rate stuff. There's markets are so segmented and you is finding the right market, I guess, or I don't know. When someone says, kathy, give me a market update. What would you say? What should real estate investors be thinking about right now?

Well, my main focus is on residential housing. So basically homes and how is that market going? I, I could talk about commercial real estate. I think we all know there's some issues there, especially in office. Whoo. Yeah. I wouldn't want to be an office investor right now in a downtown building. But I'm going to focus right now on, on the housing market because there's so much misconception about what's coming. Many of us went through 2008, lost everything. It was a difficult time and those scars run deep. A lot of people think we're in the same place again and the reason they think that is because we're at a new all time high with home prices being way out of reach. And then with interest rates going up, there's this belief that it will all come crashing down because people can't afford real estate. But that's not what causes a crash. So yes, people trying to get into housing right now, people trying to buy their first house or their first investment property, it is unattainable. It's very unaffordable today. It's a, it's a very different scenario for people who actually are in the housing market. People who own homes, either their own home or an investment property, they are sitting in the lowest payment ever historically compared to their income. So let me say that again, the distress in today's housing market is not with people who own homes, it's people who want to own homes. If you go back to 2008, the problem was that people were in adjustable rates and so they could make a payment when it was a very low payment. But when it adjusted right around 2006 is when that started, and then it really picked up speed. In 2007 and 2008, people couldn't make their payments because they were adjusting higher. And the majority of homeowners at that time were on adjustables and had actually gotten into those loans on a teaser rate. So they never really could have qualified for the actual adjusted payment. And somehow people thought, well, that's just never going to happen. Or even though there was a date when it was going to come due, I think people kept thinking, oh, I'll just refi and get the money out and make the payment that way. Whatever the reason, those loans were bad. We all know that when it was the homeowners who couldn't afford the new payment. Fast forward to today, we have much stricter lending rules because of Dodd Frank and about 2012, they rewrote the way that you can get a loan. So it was very open book. You have to show all of your income, all your expenses. You have to have very good credit. The people who have gotten into loans over the past 14 years have extremely high FICO scores. But most importantly, they're in fixed rates. So there is no payment shock coming for people in the housing market. People who own homes, they have the same payment from now till their 30 year term, which could be next decade and the decade after. Their payment's not changing. There's no distress, their payment is lower, that many of these people are in 2 and 3% interest rates while their wages have gone up and their equity is insane. They have the highest amount of equity ever, ever. So low payments, high equity, fixed rates. There's no distress. And you can't have a housing crash if there's not distress.

I love it in some people. Don't freak out. There's not a bubble. And I'm going to, I, I just want to throw this out. I like, this is where I want to go. This, these two syndications of yours, these two funds that you created. You're so smart. What you've seen is it's so hard for people to get into homes. Yep. I wish we could solve that problem. Maybe you've got a red phone to someone at the Feds that could lower the interest rate or who knows what. But if not, why don't we go buy more homes and help people that need to rent, that want to be in a home? And it's a great opportunity to be a landlord. And that has to be one of the impetuses for your, your funds.

Absolutely. I mean, the way that you make money in real estate is you look for the distress. Where, where's the problem? And then how do you solve that problem and make it a win win? That's, that's how you, that's how you have a long running successful business. So today, you know, people are looking in the wrong direction. They think there's going to be some kind of housing crash, but that's not where the distress is. As I just explained, people who own homes are in the best position they've ever been in. The distress today is, is people who would like to own a home or would just like to live somewhere, who would just like to rent a home, just have a roof over their head. That's where the distress is. So as investors, how do we help them? And there's a couple of ways. One is to build new homes, to bring on new inventory so that there's more housing, more inventory available. That's part of the problem is you have this massive group of millennials, the largest generation ever, and the largest group of millennials is age 30 to 34, forming households. So massive demand, massive group of people, and just not enough housing. Because people who own homes aren't going to sell them. They're in a great, great position. So the only solution, really is to build more. And that is why Warren Buffett just invested $800 billion into builder stocks. So if a guy like Warren Buffett, who generally is on the right side of the investment is thinking that new inventory is needed as a, as opposed to like a flood of inventory coming in from a housing crash, which is not going to happen, then, then that's, you know, follow him follow Warren Buffett, who's bringing on more supply because it's needed. So that's what we're doing. As soon as, as soon as I saw that the Fed was raising rates, they, they took too long to do it. But when we, we saw that they were finally going to do it, I did the opposite of what the masses were doing. The masses were freaking out. That was, that's perfect. You know, it's like, okay, well, I see the need, the distresses in with the renter pool. They need an affordable place to live and they're probably not going to be able to buy. As soon as rates went up, about 25 million people got priced out of buying a home, which means what? They're going to live nowhere. You know, they're going to rent so that you providing rental housing or bringing on new supply is where it's at today. That's the opportunity.

Well, if I can ask, and this may be a good transition on this as you're going to. Your next point is that if you want to profit from this or help in an altruistic way, go buy a fixer upper, turn it into a rental. Go build a, find a lot and build a rental. But if I don't have the wherewithal, the time or the credit or the capacity to go do that, join a tribe that's doing it, join a fund, join a leader like you've got. So tell us about your two funds. I get that because that's one of those solutions. You said let's pool money and go out and do it on a larger scale so we have better buying power. Tell us your trick.

Yeah, I know. I love what you said. People make mistakes when they, when they can't put themselves into understanding something fully and really being able to do a good job at it. Right. So real wealth has been in my company, real wealth has been in business for 20 years to serve that person, the person like you, who's got a great job and is really good at it. Nobody wants you to stop doing what you do. Right. You're so good at it. But if you're so good at what you do, you maybe don't have time to be really good at something else. And that might be going out, buying homes, fixing them up, leasing them, like you don't have time for that. So professionals, you know, professional athletes, actors, tech people, these are all people that are members at Real Wealth. They have great jobs, they make a ton of money. Their problem is not making money, it's investing it. But they don't have the time to be super hands on with that or the expertise. So for years we've been helping high net worth people or just people with, you know, in the Bay Area, San Francisco, you could make a few hundred thousand dollars and still be considered poor. You know, it's hard, hard to get by. So we're helping them say, well, you know, maybe you can't buy a home in California. Maybe in San Francisco you're going to be a renter, but you need to get into the housing market. And you can do that by buying a 200 or $300,000 house somewhere else and renting it to somebody who can, you know, who needs that home. And you're still building wealth through real estate. You're just not living in that property. We've been doing this for 20 years, helping California investors who just are priced out of the California market build their portfolio in Texas or Florida or Ohio or you know, somewhere else where the numbers make more sense and where they can get into the game. You know, if you, if you want to buy your starter home in San Francisco, it's going to be like $2 million, you need $400,000 down payment, whereas you could take that $400,000 and buy a few houses outright. Or you could, you know, you could buy a bunch of houses with using that money as a down payment and get far more write offs. And well, you know, that deductions all kinds of benefits by owning a rental portfolio versus just living, you know, spending all that money and buying a home for yourself. And we've been doing that for years. But if you still don't have time for that, you know, it still takes a lot. You gotta apply for the loan. You've got to sort of manage your property manager. We help all along the way with that, but you still are actively involved in again getting the loan. You know, speaking with your property managers, some people just, I mean these tech guys, they work 80 hours a week, they don't even have time for that. So that's where the fund comes in, where, you know what?

Now before we go to the fun, I want to tell everybody, real wealth.com go to real wealth.com you can meet with a financial, I call them specialist finance. I think that's your team members. Love those guys. Met him at your last conference in California. And you can do a discovery call. Any of you listening today for free. Get on there, make an appointment. They can talk about what your goals are in real estate, what you want to do, what type of rentals are A good fit for you. The different markets around the country, 20 different markets. I think that you have a network in where they can help people find property. If you want to be more active, if folks, for those of you want to be more active, that's where you go. It's still great, still good. But then you're about to say, for those who don't want to do that, the fun. So reveal.

And when I say active, I mean it's not very active. Applying for a loan is a big pain in the butt, right? So you have to have the time and ability to do that. If you just don't, you just don't want to be a landlord. We started a fund for so many of our members who wanted to get into the renovation business but didn't want to do it themselves. So let's face it, the best deals are the ones where you can buy something at a huge discount because it's got issues. Maybe it doesn't have an operating kitchen or there's something wrong with it. And if you can go in, buy it cheap, fix it up, make it really nice, then you can have all this built in equity. But that's almost impossible to do if you're out of state. You know, you're buying in Texas or Florida or something. It's really hard to do. You'd have to rely completely on a team. And if you're a busy person, you're going to screw it up, I guarantee you, because it's hard enough to manage a contractor in your own home, let alone in another state. So I've been working with a property manager for over 10 years. That's what our company, Real wealth does, is we set up teams in these different cities that come with a great testimonial from our members. So property managers that our members rave about, or brokers that they rave about, it's kind of like a yelp for real estate where we get great feedback. So these are the people on our referral list. If they don't do a great job, they're not on our referral list. So there's one property manager we've referred people to for 10 years, and she does really cool deals herself, but she wouldn't sell those deals to our members because they kind of. It would freak people out because she's buying properties for super cheap renovating them. But for someone out of state, we're going to be like, well, what are you doing? And how do I trust you? And how do I know you're doing a good job? And so forth. She doesn't have the time for it or the desire. But when we talked a year ago and we saw that there was going to be this incredible need for rental properties and affordable ones, especially in Texas, where jobs are abundant and even more abundant after Covid, so many businesses were like, we're going to move to a place where they're pro business. We don't want to be shut down for two years. So so many businesses have relocated to Florida and Texas because those two states kind of stayed open during, during the pandemic, and that has drawn so much business. So we, we knew right away, oh my gosh, there's an opportunity here to provide housing that's needed. But I want to do these renovations without freaking out investors. So we decided, let's do a fund together. She's been a property manager. We've been really happy with her. She's got renovation teams. She's built a $40 million portfolio herself doing it this way. But she wouldn't work with people one on one. But she agreed to do it if I was the partner, meaning I'm the one overseeing her, versus 50 or 100 investors all asking questions. You know, they could ask me the questions. So we basically have a, what I guess you could call a BRRR fund. If you heard that the buy, renovate, refi, rent, repeat that whole thing where you. You kind of get all your money back out because you, once you've bought the property and renovated it, you've increased value so much that there's 20% equity that you can refine, get all your money back, and do it again. So we created this BRRR fund, and it's still open for another month or so. I think we can extend it maybe just a little bit. And that's exciting because investors get to kind of play the way that she does, you know, and be able to operate the way she does without having to do any of the work. And we just split the profit.

Profit folks, we'll make sure the link to the website for the fund and how they can apply and get more information. And for those that aren't familiar with the terminology, you're going to go through this accredited investor path. Some of you already have the income level or the net worth to just fill out a form and have your account and sign it super easy. Some you might need to make a couple adjustments in your portfolio, and it can be very. It can be doable. So getting into a fund could be as low as I think 50,000 is.

Yeah, 50,000 is our minimum. And an accredited investor doesn't mean you have to take a class or, you know, go to college or anything like that. It means that you earn $200,000 or $300,000 if you're married or you have a million dollar net worth excluding your primary residence. However, I know a lot of people will get an equity line or cash out, refi on their home and take the cash out. And if it seasons for three months, then it counts. It just can't be the equity in the house. I believe you can also value your business. So there's ways to be accredited, but it really isn't about education, just the IRS or the SEC thinks if you're worth a million dollars or you make $200,000, you must know something about investing. They're, they're wrong about that. That's why I spend a lot of time educating people. Because just because you earn $200,000 a year doesn't mean you know a darn thing about investing. And, but the IRS or the SEC just looks at it like, well, you, you have a high enough net worth that if you lost your money, you'd be okay.

I'd love it. And thanks for unpacking that a little bit. And okay, so one thing I'd like to give some advice to our followers, to our listeners today, is that. And I've loved your authenticities and transparency. Those are big words, but maybe they're overused. But when you were on stage at a conference in Maui, I saw you get up and say, you know what? I did this big project. It didn't go so well. Let me tell you what I learned. And to have the, the fortitude and the strength to be honest about mistakes and what you do different was so refreshing. Um, and so I know you're not. So I want to ask you this, and I know you'll talk about your fund and what could be going really well there. And you're always transparent when investors are out there saying, I do, I want to, I want, I want to invest in a fund. I want to be in the real estate industry. And, and through a fund scenario, what should they look for is a fund manager or a fund creator and the type of projects are doing, because it can be a little ugly out there too. What would you give them?

Absolutely. It's so ugly. And yeah, I am transparent. And I did make mistakes early on with being a podcast host. One of the first ones, I had a really big following kind of overnight. Rich took my radio show from San Francisco in 2005 and uploaded the whole thing onto itunes when the first day they came out with this new thing called a podcast. So I was one of the first. I ended up going from a San Francisco audience to an international audience. I was in 27 countries overnight. I had a group of Australians listen to the show and they flew me out to Australia and there were a thousand Australians just throwing money at me, invested for me. I had too much power too soon in my real estate career. So some of the projects I did back then were we knocked out of the park. I mean, it was 2009 and we were picking up subdivisions for 10 cents on the dollar. It was insane. And some of those deals, investors made 40% IRR.

Wow.

The good old days. But then I would say, honestly, I feel like I got a little cocky. If I could say that, even though I'm a woman. I don't know. But all right. I just started to think, well, everything I touch turns to gold. And I started to do some really fancy things. And this is where things went wrong is I went off the beaten track. So anytime you do something new and cool, and believe me, sexy is attractive, right? Someone came to me with this idea of a wine village and, oh, I raised money overnight for that because it was such a cool concept and on paper it had tremendous returns. Basically. It's like wineries would come and rent tasting rooms from you, but you'd be in a high trafficked area so they could kind of get their wine out to people and they pay a lot of money for that tasting room, even though it was a little tiny space. So the return was really high for a commercial building. But go to your lender and ask if they'll fund a wine village and you're going to have a hard time because they don't know what that is. If you go to your lender and you say you're getting a retail space or an apartment or storage or warehouse, they have a box for that. They know what to do with that. But with a wine village, they don't. So even though the numbers were beautiful, we couldn't get the financing. Even though we had it before we did the syndication. That lender dropped out and then we couldn't get another one. So we're stuck with raw land. You know, that. That type of thing where I should have just stuck with what I know, which is housing. Residential housing is my thing. I'm an expert in it. If I just stuck with that, imagine if all I did was funds in single family housing starting in 2012. You're like you know, stick with what you know. But I did fancy stuff and, and you know, lessons have been learned and I, I don't do that anymore. And that's why when I do a fund like today, I, it's a, it's a few things I, I can count on. One is, I know housing. It's already built these properties, I mean, we have a build to rent fund, but we're only closing on it. We have negotiated with builders where we don't even close on it until it's built. So we're not taking on the construction risk. If we are doing construction risk on other projects. I have, it's only with developers that I've worked with for 12 years who have a 40 year track record because there's levels of risk. But if you buy raw land and try to develop it, there's a lot more risk than a building that's already built. Right?

Yeah.

So I just, I didn't understand the risk levels of these, of these different things. So looking at a risk level of a property already built that is in an area of high demand with more jobs than housing, you know, you're in, there's a lot less risk there.

So when, and your story is so really inspiring because you learn from the mistakes which we all make and we try to re engineer and improve and do it better the next time. And you've been through that. When people are out looking at these funds again, like they don't, they may not be sure what these.

Oh yeah, I didn't really answer your question. Yeah, so, so let's go to your question. There are so many things to be cautious of. One is really just be, be cautious about investing in something you don't understand. And there's probably a really good chance you don't understand it because that's why you're investing in the fund. But have someone review the documents who is familiar. You should have an advisor, just like you'd have a financial advisor, but somebody who would review the documents and ideally have an underwriter who would review the numbers. Because I have an underwriter now, I'm so cautious now, I'm overly cautious. I turn down more deals. I turn down deals all day long because I don't want to make another mistake. I won't make another mistake. And I look at these deals that come across the table and I've got an underwriter who, who ask 20 questions and when the operator can't answer those questions, like why did you not increase taxes on this deal? And taxes are going to be going up, or why are you assuming that rents are going to go up at this rate? Or why are you assuming the cap rate is going to be. They ask so many questions that I wouldn't know to ask. So make sure you have a really experienced underwriter. Just review the deal. Hey, if you're investing 50 grand and it's no big deal if you lost it and it's, you know, it's a, it looks pretty, maybe you don't have to worry about it. But I've seen people invest like a million bucks into one project and lose it all. You know, in some of these multifamily deals that are going down because they, they, they did have they leveraged far too high the last two or three years. The only way you could get a multifamily deal or any kind of commercial deal was to put very little money down, and then they would get the bridge financing, which is blowing up right now. So there's a lot of people that are going to be facing some issues. But had you just, you know, had somebody review the documents, an attorney to review the actual legal documents, because you're in a partnership, when you're in a partnership, especially with a syndication, you have zero control. You might have some voting rights, but these are things that your attorney should look at and tell you, you know, yeah, you do have voting rights. If they're doing something that's not according to the plan plan or hey, look in these documents. We noticed on the underwriting that they're paying themselves a $500,000 salary. I actually had a guy bring me a deal like that. Like, no, you don't get a $500,000 salary per year. You know, but if you don't know how to read the documents, then you might end up. I, I actually did a deal, a syndication with somebody that afterwards, this was again, my older deals where I didn't know how to look for these things or like, what is this, what's this fee in here for, for an airplane? It turns out we were paying for his private jet, you know, and, and when I went to my attorney to say, how, how, how can they do this? He said, well, you didn't have in the documents saying they couldn't.

Oh my gosh, that's crazy. You know, and on that note, I want to throw out this, this was a really an inspiring story. When I heard about it was Arnold Schwarzenegger, prior governor of California, who, when he, the, the story, he tells it in speeches on YouTube. You can get it in some of the great Websites of speeches. And I just want to summarize here briefly, because you're making the same point that what Arnold talked about, Governor Schwarzenegger was that when he came to America, he was at Muscle beach and he started getting in the movie industry. He got ripped off at a couple movies early on, and he felt it was a language barrier and he got taken advantage of. And maybe it was Conan the Barbarian. He said, I'm not going to do this again. Every time I put my pen to paper, I'm going to understand the document. And he was working so hard learning English. His story, love him or hate him as an actor, as an individual in his private life, his story is. Is really compelling, but he ultimately is Governor. The story that was relayed to me through a variety of sources was that his cabinet, he drove him insane because he would never sign a bill or sign anything unless he understood it. He goes, I just want to understand it. And he would ask questions. And so even if you don't have access to an actuary or access to an attorney, these documents are built because of the sec, the securities and Exchange Commission, to protect us as investors and go out there that we should be able to read it. And if you see the word airplane or this or that, start asking questions. And if people start stumbling over their words, it's a key indicator. You might be with the wrong group. And. Yeah, so I don't know. You're saying the same thing. It's just.

Yeah, I mean, there will be a section on expenses. And so make sure you really understand what the fees they are getting paid, you know, and if it's reasonable or not. Obviously, if they're managing a fund there, there will be fees. They need to be paid for that. They have overhead. But is it. Is it going to be extravagant? You know, and then what kind of costs? If it just says expenses, general expenses, and you really want to dive into that. That's a good question to say, is there a cap to this? Are we covering your entire office and all your staff? I mean, what does this cover when you say expenses? And if it's not clearly defined, then that means it's open for interpretation and you don't have a lawsuit if you don't like the way they're spending it. So you just make sure everything is really outlined clearly. That would be one. But the easiest way to protect yourself is to. Is to do a syndication with someone who has a track record, who has been doing the same thing over and over again successfully. Some of the mistakes I made is I would work with somebody who had a great track record, but doing something else. Like I said, the guy I partnered with on the wine village had done a lot of developments. He had just never done a wine village. So had he done 10 of them successfully, that would be a different story. But he didn't. So if they. If they really have this consistent track record, you should be fine. But still read your documents.

Yeah, still read. And that's why I like the simplicity of your. It's kind of like you've.

You've.

It's just all clicked together for you right now in your career. And I love to see you and your husband Rich. I love Rich. Running the Real wealth team on the grounds, helping people buy individual properties. You're out there on this. These bigger projects, your project in North Dallas. This. This rental fund. What I'm trying to say is it's just simple. It's just simple. It's. Buy a home that needs to get fixed, fix it up, put renters in there. It's not rocket science, but when you have the. When you have the fund, you have the wherewithal to go in and take down properties at cash, really get. You got teams on the ground that you could. That are already under your control and your thumb, and you can control costs. Then you flip it. And I just.

Let me tell you right now, if you have cash, the market is yours. Nobody's jumping in to buy properties at 8% interest rates. So if you have cash, oh, boy, can you negotiate. It's a very exciting time. And with our fund, we are raising $50,000 per investor. Some are putting in much more than that, but as a result, we have cash. So when there's these people out there called wholesalers who have ways of finding owners who are in distress, and they find the deal, and they wholesale it to you. So these wholesalers, just a year ago, wouldn't give us the time of day because there was 50 people who wanted those properties. Now they're calling us, and when we're sort of ignoring them or saying, I don't know, can you do better? You know, we're getting the kind. This is the kind of deal we're getting. They'll come to us with something like, hey, it's $100,000 if you can close in a week. No. Next thing you know, we're buying it for $50,000. It's incredible. But even more exciting, I mean, you know, you could buy a $50,000 property all day long and in the outskirts of Pennsylvania, you know, and that Property will be $50,000 in 10 years, in 20 years. So there's. It's not like getting a $50,000 property in itself is a big deal if it's not going up in value. But where we're buying these properties is right in this area of North Texas that's now becoming the chip manufacturing hub of the world and of America. The Biden administration passed the Chips act, and that's $52 billion going to reshore chip manufacturing to the US and one of the locations that has been chosen for this manufacturing is in this little tiny town called Sherman, Texas, which is about an hour and a half north of downtown Dallas, right almost to the Oklahoma border. But this little tiny town has billions of dollars pouring in from all kinds of massive chip manufacturing. Billions of dollars, and yet we're buying houses for 50 to $100,000. The average price in the area is 3 to 400,000 now. So we fully expect price. Not only are we getting massive cash flow right now, but appreciation in the future. Cash flow is okay, but it's so much better when the property goes up in value. You know that you need both. You need the double whammy.

Yeah. It's crazy. And who knew that chips Hawaii was so popular? Those little elves making cookies. But chocolate chips are important, and. Oh, you were talking about computer chips, I call them.

Yes. Okay.

All right.

But I do love a good chocolate chip, too.

No, it's just amazing how this little area. And I was.

I

was just so surprised that all these tech companies have figured out Texas is where it's at. No state tax, cheap land in the middle of nowhere, and workers are dying for great jobs, and now they just need somewhere to rent.

Yeah, exactly. And. And the other thing is, chip manufacturing needs a ton of water. And this part of Texas is by a river and by a lake, and so there's just plenty of water. So there's also. And lots of land, like you said, but it's really not that far from. From a lot of things. Like downtown Dallas is one thing, but growth has moved out all the way to Frisco. So Frisco is really not that far from Sherman, and Frisco is kind of its own huge metro area. Yeah, I didn't realize it because I remember when Frisco was first being built, this is how old I am, and it was just like this little town. Now, I went there recently, and it's. It looks like a. It's a full city with high rises and everything. And so Sherman is really not far from that. So the way that Texas works is you'll have a hub and then it gets too expensive and they move out and there's another hub, you know, like anything. So it feels like it's far out in the boonies, but it's only a half an hour from a big metro.

Wow.

Yeah.

Well, what does the future hold for Kathy Fettke? I guess this bundle close in a few months and then you're going to just keep working that Dallas market. And.

Well, we have another development. I've been working with one builder for 14 years now that we just keep doing home runs over and over. And this is his market. I met him in 2009 when I. Like I said, we were buying foreclosed subdivisions that were almost complete or, you know, we would just get a little. We got 4200 lots for 10 cents on the dollar. Back in 2010, we're still selling lots in that development outside of Tampa. So this is his market. He wasn't having any fun or buying any deals over the past five years because it just wasn't that interesting. But now, now there's distress with commercial real estate. So remember I was saying in 2008, the reason the housing market crashed is everybody was on adjustable rates. That's not the case today. Most people are on fixed. So they've got fixed rates with lots of equity. They're not in distress. The distress today is commercial real estate because most of that is on adjustable rates and they went from 2% to 8%. They can't make their payments. And these loans adjust. They're, you know, they're out of luck.

So many corporations are having their employees work from home. And now these buildings are like, we need tenants. And yeah, it's perfect storm.

So there's, there's opportunity and commercial. And, and so my partner Fred, he, he loves this kind of market, so he just. But he likes to build homes and that's what's needed, like I said. So we found some land in just right outside of San Francisco. It's kind of. There's, believe it or not, there's still farmland outside of San Francisco. So we're going to do an entitlement project with him. I've done lots of entitlement. That means you take the farmland and you re entitle it for a different use, but you have to get permission from the city to do that, to rezone it. And that in itself is pretty risky. But he's done it so many times. He. He's so good at it. There's Big bucks in entitlement. But it's also risky if you don't know what you're doing. He, he does, thankfully. So we're going to do just, it's like a two year project where we just take the farmland and re entitle it to residential and we already have a builder ready to, to pay for those lots. That, that's going to be fun. And then we've, we were able to find some land where somebody who kind of cashed out the tech world, bought a bunch of land, thought he could develop it, got stuck. So we're bailing him out, buying his land for really cheap, developing it, and then we'll give him a little bit of the profit so he's not, you know, losing everything. But it's, you know, these kinds of deals. Fred really knows how to negotiate win win, I'd like to call them win win situations because otherwise this developer would lose everything and we're going to help him make something.

Well, one last tip for our listeners or viewers today is the importance of our personal health, our personal emotional and physical health. You've got, you've made such a big commitment to retreats for other women with you and couples retreats. We did a couple's retreat with you in Malibu. Loved it. It was a really neat experience.

That was so fun.

Yeah. What do you, what do you tell people? Like, I mean, how would you tell them how important it is to take that time and get away?

Health. Well, health first of all is everything. It's wealth without health. Is, Is, is not health wealth at all. Right. Yeah. So I mean, that comes first and foremost. But you know, Rich, my husband wrote a book called the Wise Investor and one of his quotes in there is invest in assets. And assets are anything that bring you joy, happiness, you know, time. Whereas liabilities are the opposite. They stress you out and they take your time and they take your happiness. So too often we invest in the liabilities and you know, that's not okay. We've got to be investing in the things that matter and that. So our retreats, we do some just super private as you know, just like 12 people max at our home. And we go pretty deep on those more like I said, more one on one or small group. And those are really fun. We just do like four a year. But we also, Rich does webinars every January to help people really get reset on what matters most. Again, if you're not investing in your relationships, he'll say you're going to lose 50% of your wealth. Right if you're not investing in your most important relationship, right. If you end up in divorce, and if you don't invest in your health, you're going to lose 100% of your wealth. You know, it'll all go to your medical care. So got to balance it. And so every January, he does a really beautiful New Year reset that's free. And people have raved about that. But also, the Wise investor is a really great way to kind of remember what matters most.

I love it. And you get to all these functions, the resources and these retreats@real wealth.com. is that the best?

Yes. Okay, real wealth.com then. My podcast is the Real wealth show and I do a little, little podcast called the Real Estate News for investors. And that is like daily 7 minute updates on what's going on. News wise in real estate.

I love it. Well, all those links, everyone, are down in the description. And Kathy, thanks for finding some time with us today and your sage wisdom here trying to help people invest in the real estate industry. It's, you're a, a shining light for and especially for so many women that want to have a mentor that say, I can do it. If Kathy can do it, I can do it too. And you're such a great example to other women, too.

Thank you so much. I am going to do a women's retreat that's going to be a big one. I can't wait to get women really comfortable on stage and doing podcasts and getting their voice out there. I love that.

Love it, love it. Well, thanks again and we'll have you back. I appreciate it. Thank you so much.

Thank you. Thank you so much for having me. Good to see you.