The Truth About Rent Control with Tony Lopes

We're like, hey, for the long term, you know, 10, 20 years out, we want to be in the multifamily space because you know what, long term, that's the place to be.

100% agree. Humans will always need housing and we provide housing for humans. Hello and welcome to the Multifamily Strategy Podcast. I'm Christian Osgood, your channel host today, joined by the one and only Tony Osgood. Super excited for the episode we're gonna be rolling out here. We're gonna be talking about rent control, which is something we rarely talk about. We're gonna be talking about cash flow. Is it a myth? Is it not? We're gonna get Tony's take on this. Super excited for this episode and the first one in the new studio. So welcome to the new studio, welcome to the new setup. It will get better as we go. My mics aren't working today, so going off the camera mic. Hopefully the audio is good for everyone. Tony, welcome to the show.

Christian, thanks for having me on. This is gonna be a lot of fun. We already started yacking about things before you hit the record button, and yeah, I think for your viewers and your listeners, this is gonna be a lot of fun. So let's get right into it.

So for someone who doesn't yet know your backstory, Tony, tell us a little bit about where you started and and where you're at today in your portfolio.

So where I started was getting laid off from the corporate environment.

Oh, there you go.

Right. Which is nothing I ever planned for. Right. I got laid off about 4 years after graduating college, having a couple of good degrees. I got laid off unplanned. I wasn't financially independent at the time, so I had to figure that out real quick. Get another job. But real quick after that, after landing another job, I started saying, hey, how do I get my financial freedom in place? And for me, that was with real estate. I already had an interest in real estate. I grew up a little bit around it with my parents having some multifamilies. So I knew a little bit about it. And so yeah, shortly after I landed back on my feet with another job, I I bought my first 4-unit, my first quad, which I still own today. Nearly 20 years later, I still own today. And I love it. You know, my tenants are paying my mortgage still to this day. My tenants pay my mortgage. The appreciation is awesome. It's worth more than twice what I bought it for. The rents have just gone up incredibly. So my cash flow, which is something I know, you know, you love, all real estate investors love, my cash flow's gone up, you know, in a huge way. So there's just been so much goodness with it. So that was my first one. You know, a lot of folks say, you know, Tony, gee, you know, what were the metrics? What was your cash on cash? What was this? What was that? And I'm like, I didn't really go into it like looking at what my cash on cash or my CapEx or any of those. For me, it was strictly how much cash flow per door. And I kept it real simple like that, Christian. How much was my cash flow per door? And for me, it had to be about $200, right? So this was a quad. So I was making about $800 in cash flow each month, right? That kind of made it worthwhile for me. You know, it kind of made it to be like almost $10,000 a year I would make by having this multifamily, which I didn't have to do a lot of work to keep running. I was pretty, pretty self-sustaining. So, so that's, that was my metric, right? I think a lot of folks today who want to get into real estate, sometimes they, you know, see, um, uh, really get bogged down by the, by these metrics. And, you know, just try to figure out why you want to invest in real estate. For some folks, it's cash flow. For other folks who may be older, uh, it may be because they're looking for depreciation of that asset, right, over time. And that's, that's a way to offset other income that they may be making. Right. So, so don't you know, one of the things I also get is, you know, people who try to do what, what I did, right, because I started with that quad, I bought a few others and eventually retired from the corporate environment at the ripe old age of 44. Right. 44 years old. And so a lot of people see that as, you know, such a sexy dream and everybody wants it and I want it for everybody. You know, but that was my dream, right? So don't chase my dream is something I share with people. Figure out what your own dream is. There's people who want to own, you know, you know, 10,000 units, and that's great. I don't want to own 10,000 units, right? That's just not really where my dream is. So I don't chase other people's dream. I don't want anybody to really chase mine. Folks like you and I, we help people. We, we We coach, we advise, we, you know, share our stories, but figure out what your dream is in terms of real estate investing and then go after that.

And I'll add to that. For me, I was able to retire my wife from teaching, which was my goal. But prior to that, my goal was basically I would like to have more passive income and that was it. That's as much as I defined it. So I wandered my way into a condo and two duplexes over the course of 8 years of working. I was cash flowing about $2,000. And then I looked back and I was like, huh, this is kind of cool. My mortgage at the time for my house was $2,000. I was like, my real estate's paying for my real estate. That feels great. That was it. I was like, okay, $24,000 a year. Can't retire on that. It's been 8 years. Do I want to spend another 8 years to come up with my next $2,000 of income? My wife got injured at work. She's a kindergarten teacher. School handled it terribly. And I was like, Actually, we want to retire her like immediately. I need to get more income like now. If your goal— if you clarify your own goal and then you put a timeline on it, and then you just work the math backwards of what does it actually cost on a monthly basis to hit my goal, that should tell you roughly how much real estate you need to buy. And if you're like Tony, $200 a month per door, you don't need a ton of alphabet soup of, uh, of metrics. You don't need to know your, your IRR and your You need to know, okay, well, if my return's $200 a door, uh, how many hits at $200 per door, how many doors do I actually need to accumulate at that metric to hit my goal? And you're done. It's, it's the simplest thing, and I found that most people don't hit it until you actually quantify that goal and you put some metrics behind it.

And, and it's also a great, great way— like, for me, you know, I was looking at properties, and, you know, folks say today, uh, and we, we spoke a little bit about this before hitting the record button, you know, there's folks who say, oh, I can't find deals that cash flow today. Well, you know what? It's always been like that. It's not like we're in a new situation. 20 years ago when I was buying property, yeah, it was hard to find property that cash flow back then too, you know?

It wasn't, right?

It's not like times have changed drastically. Sure, you know, we have higher interest rates now than it was, you know, 2, 3, 4 years ago during the pandemic timeframe, right? You know, rents have gone up, you know, in some cases double digits. So, you know, so that has helped offset some, some of the costs, the higher cost of things. But, you know, we had different dynamics back 20 years ago. So, you know, having a metric like I need to make $200 per door, now you can back into the math to say if I need to make, you know, say it's a triplex, a 3-unit building, right? Let's talk with a small buildings because math is easier, right? And say, you know, 3 units, $200 per door, that's $600 that I'm going to cash flow each and every month. Now you can back into the math to be able to say, this is what my offer price should be, right? And be able to start writing offers, right? Because if you never get to the point of writing offers and you're always in this state of, you know, oh, it's, it's different today, nothing cash flows, right? If you never get into that point of writing offers, and submitting it, you're never going to buy anything. So you have to find a way to back into what the offer price is, right? There's so many people who think like— so sellers today who are thinking it's 2 and 3 years ago where they're going to get, you know, more for their property today, thinking the interest rates are still at 3%.

They're not.

You know, they're 7, 8, 9%, you know, depending on your personal situation, right? 7, 8, 9%. So, you know, your million-dollar baby isn't a million bucks anymore. It might be $900K, it might be $800K. I don't know. But, you know, what these sellers are asking for in some cases, it's a pipe dream. So work your numbers backwards based on what you need to make per door. Work your numbers backwards to be able to come up with an offer price and submit that offer. You never know where it's going to land.

One, I think that's exactly right. I mean, that's— exactly how the game is played. You're gonna just— when I was young, well, younger and, and more naive, I used to be like, oh, the buy box is stupid, just buy deals that work, the cash flow, and keep buying them. And if every time your deal cash flows and you buy it, you get more income. What you find as you become a more seasoned investor is like, okay, I have metrics that work for me consistently every single time, and I'm just going to always offer where it works. And if it doesn't work, it doesn't work, and that's fine. And there's different ways to play the game. I, I do like very, very relationship-based. So I, I go out and I meet every owner in the market that I possibly can. And it's a long game and you get a lot of deal flow there. And typically you have to write less offers because you spent more time with all the owners. The other method that you do is you look at more deals, you submit more offers, but you end up, you know, you end up just doing transactions based on volume. Either way both of them, you need to have your set metrics for what is a deal for you and your goals and your portfolio. And if it hits that box, that's something that you can purchase. You keep moving forward until you hit your goal, and then you have the decision: do I keep scaling or do I pay it off? And I've actually talked to a lot of owners who opted to— they're like, I have a lot of 30-year fixed rate debt. They're like, well, I just opted to not re-lever them and just let it wind down. And now you have these You know, I have guys in their 70s who have 100, 150 rentals that they accumulated over their career and they're like, yeah, I have no debt. It's like, okay, so you're cash flowing like what, like $100 grand a month? Like about. Yeah, the numbers do get insane. Yeah. I'm curious for you, Tony, are you— how do you handle leverage in your portfolio when you hit your goal and you're like, hey, this, this worked for me, I'm where I wanted to be? Yeah. Do you roll down the debt? Do you re-lever over time? Do you keep expanding? What does it look like for you? Where you're at today.

So, so everybody's case is different. What I've personally done is I levered up some a little more when rates were low. So I levered up when I could get a commercial loan at 4% and I took that 4% money and I put it into Treasuries. And so I'm sitting on Treasuries, I'm doing the arbitrage thing. Where I'm sitting on treasuries making 5.5%, 5.6%, right? Short-term, 8-week treasuries doing 5.6%, right? So, so I'm not losing any money in terms of the interest. I just did that arbitrage so that I have cash available such that if something juicy came on the market, I have the cash on the sidelines. I can write an offer real quick, close real quick, and be able to buy it cash if I needed to. And then I would go and I would refinance it and lever up again and have more cash on the sidelines. But that was a certain place in time. Today, today, because I have cash sitting on the sidelines, you know, earning interest at nearly 6%, I'm not levering up any other properties because the math just doesn't work. But yeah, that's a part of the business, right, that we have to watch and we have to say like when rates were 4% for a commercial loan, you know, you have to be smart enough to say, hey, this, this is a pretty good deal. Let me get a commercial loan at 4%. We probably will never see that again for a long, long time. So I just locked that in for 25 years and, you know, just I'm just going to ride that wave.

And that's a fantastic way to play the game. I don't love re-leveraging. I like buying it once and, you know, you have a 10-year note, at some point you refinance, but I don't like pulling money out of properties. Like, once I buy a property, it's great. And I see so many people online be like, look at all this money I have. And I'm like, you know what? Even when the math does work, debt is risk. I like having less debt. Like, you need to lever at some point to scale. I think the math that I looked at, if you are earning less than $500,000 a year, that seems to be the magic number in today's market. If you're earning half a million dollars a year, you can actually save your way to financial freedom. It is, it is mathematically possible. If you're making less than that, it is really, really, really, really difficult to do that without levering. So at some point you lever up, you increase your income, and when you hit a certain point, your options are, you know, pay it down, don't re-lever it, or you pull a bunch of money out of it and you keep rolling. I have found the only people I've ever seen go bankrupt are the people who just kept re-rolling. You find something that works, you don't have to re-lever it.

Yeah.

You know, you buy and cash flow it once, but you don't keep using it like an ATM. You let it just do its cash flow.

So the only caveat with that that I would throw in there, Christian, would be, you know, because every situation is different, you know, folks that may be in that situation where they're trying to offset their other income, you know, say these folks who have bought years and years ago, they paid down their they have no mortgage on properties and they're just cash flowing like pigs. Great for them. But they're also getting taxed very heavily.

Yes, they are.

So I do see the case for, in certain cases, right? This is a case-by-case basis where you do relever yourself to be able to have that cash to go buy or invest in a syndication or a fund or something where you're going to get a negative income that you could on your K-1, if it's a fund or a syndication, right, you get a negative number, negative income that you can now go offset your other income, whether it's rental income or some, some other investment, right? You offset that other income to be able to pay less or no taxes. So, but there's math, there's math involved there to figure all that out.

There is. And that's going to be on everyone's CPA basis. And I'm But what I've found, because I buy so much, I buy so much with seller financing, I buy a lot of deals, you know, 0 to 10% down. One of the fun things, if you buy a deal 10% down, you run a cost seg on it, which isn't as helpful this year as it was in prior years where the bonus depreciation is going down and down. But in prior years in particular, I can buy at 10% down, I can buy 2 to 3 times the amount of real estate with the same money. As a lot of other people can. The cost segregation study on that is based on the value of the property, though, or at least the purchase price. So on some of, on some of the stuff, if you're utilizing creative finance, I found, you know, if you want to add leverage to the portfolio, the easiest way to do it is do a deal at a high leverage point. You get the largest cost seg possible per dollar and you get huge tax write-offs. And I've found that that's been a really good way to manage my tax. There's so many ways to play the tax game. Where I've seen some of the older gentlemen play the game, where they played it— I'm talking guys who've played real estate game for 50 years— is they're like, you know what, I hit a point where I played the tax game for a long time and you know what, I just paid off my debt and I'm getting taxed on a lot of money. And also I make a lot of money and I don't have to think about it. It's going to be just like setting your goals. It's your personal decision and how aggressive you want to go at it.

Yeah. And I love that you brought up seller financing because, you know, you and I have both done seller financing deals and it's a beautiful thing. It's a win-win for both parties. And as far as like I was saying earlier, just submitting offers, you know, I've submitted offers on seller financing deals that didn't fall in my direction on day one. But as the original buyer fell out of the deal, let's say, that seller came back to me and said, hey, are you still interested? And so that's, that's the whole point of submitting offers. You never know what's going to come back to you. It may not be accepted on day 1, you know, but maybe on day 10, maybe on day 30, maybe after the property inspection is done, you know, maybe that deal falls through and, you know, that seller comes back to you. And, you know, with seller financing, you can really be creative, you know, not just, you know, interest rate, but, you know, the amount of money you put down and the term that you put forward, you know, there's a lot of flexibility with seller financing to make those numbers work. But you got to be pounding the pavement, you know, and out there and talking to people like you're saying, right? You're out there, you're meeting people, you're creating relationships, you're talking to people with multifamilies, you know, who may not sell 'em today, you know, but maybe in another 5 years, they'll be in a point in place where they want to start selling. And, you know, Christian's name's going to come up because he spoke with them already a couple of times, right? Maybe he sent them a couple of letters.

And that's exactly how it works. My method for me has been call 2 owners in the market you want to buy in every day. Whether they answer or not doesn't really matter. I leave a pretty simple voicemail. But I try to meet with 1 owner per week for coffee, which means in the course of a year, I meet with 52 owners. People understand what I'm trying to do. I don't have to ask them to sell. I don't— I've actually never asked anyone to sell a building, funny enough, because they all know I'm buying because I talk to them. Here's my goals. I admire the business you've built and I learn how they built their business. And that's how I found, you know, my accountant, my lawyer, my property management teams. It's all been by the people who are already ahead of me. But your extent to meet with other players, like you said, the deals start to flow to you when everyone starts to know who you are and they remember, oh, this was the guy who had— like, for me, that's the guy who had the two duplexes who's trying to retire his wife. I just thought of a deal that'd be perfect for him. Maybe it's too small for them. They give you a call, voilà, you bought another deal. And now you call the neighbors of that property, hey, I'm your new property neighbor. It's, it builds on itself so quickly.

And in different ways too, because even if they don't sell the property to you, say they sell it to somebody else, and they get a boatload of cash, what are they going to do with that cash? Now they know they have a relationship with you, maybe they go to you instead of putting the money in the bank for, you know, like 0%, right? And maybe they're not sophisticated to invest in like different vehicles. Maybe they might come to you and they want to still be within real estate and they say, you know, hey, Chris, Christian, you're still buying, right? Maybe they want to lend a little bit of money to you. Maybe they want to play the bank, be the private lender to you on a particular deal. So not just the deals are flowing in your direction, the capital is flowing in your direction.

Momentum matters. And if you're someone who is connected and doing transactions, it attracts people, which, by the way, if you're listening to this podcast and you're You're like, wait, I haven't bought my first property. Great news. If it's feeling hard, it does in fact get easier as you get momentum. You do your first transaction, you're like, it does build on itself. It doesn't take that long. It took me, uh, really when I started buying larger deals, it took me 3 years to accumulate, you know, a couple hundred rentals. Yeah, it builds relatively quickly depending on how intense you go at it. But just note, your first deal is probably, you know, the least, you have the least amount of connections. It gets it does get progressively easier after you've done it multiple times. So the farther you get, the faster you go. Momentum matters, and capital is attracted to that. Yeah, you've done a good job storytelling, and you're like, hey, you know, I've shared my journey of several units, uh, and, and how the deals go. People get excited about that. It's— it brings capital. So this brings me to a question, and I've seen this all over online. This is like this week, this is what I'm stuck on. I've seen it from some of the BiggerPockets boys. I've seen this from some major online influencers. They're telling us cash flow is a myth, cash flow is dead, you can't retire off of real estate, you have to maintain an earned income for, you know, most of your career. Uh, can someone build financial freedom through rental properties? Can you find deals that actually do cash flow above and beyond the CapEx and the maintenance and all the other things that eat into your finances, is it possible to build a cash-flowing portfolio that you can retire off of?

Yeah, if you're asking me, absolutely. The answer is yes. The answer is yes. And I'll give an example. I just, just had a client who purchased a duplex, you know, again, a small property, and it's hard to get duplexes to sometimes cash flow. But he, but he bought it right. And he so far he's rented out one, one of the units for, for more than he thought he would be able to. Right. He did a little market test. He thought originally going into it, he ran the numbers at like $2,500 a month for rent. He actually ended up renting his first unit for $2,700 a month. Right. So he's going to cash flow.

Right?

He's going to cash flow about $700 a month for each unit. So on a duplex, a silly-ass duplex, around $1,400 a month in cash flow. $1,400 a month, right, for 2 units. I mean, that's, that's huge. So yes, people are still doing it. People are still cash flowing. So whoever says it's a myth, um, you know, they're not out there. I mean, we're doing it with bigger deals. Uh, we just saw back in May, we we closed on 153 units down in Florida, which some people either love or hate Florida. We love it. I mean, 1,200 people a day moving down to Florida. Those people need someplace to live, right? Either a house, apartment, or under a bridge. So, and very few are going to choose under a bridge. So that's where we come in. So we love Florida. And so, you know, after we bought the deal, we had people call us and say, "Holy cow, how did you buy a deal like that?" Well, it's just going out and making offers. Right.

So I have a friend, Caleb. He's on my channel often. He's 21 years old now. At 20, he bought one 25-plex with it with a capital partner. So it's just a JV, not a syndication. He bought— brought in a capital partner.

I love those.

He owns 50% of the deal, 51% actually. That was a stipulation by the buyer. They wanted him to be the majority party. He owns 51% of the deal and it cash flows $9,000 a month. That is one deal. It was $0 out of his pocket because he had $300 at the time. Uh, you know, granted, that's a really good deal, but he has $4,500 of cash flow on one deal that he spent $0 out of pocket for at 20 years old. So I'm looking at these people online saying— and some of these are like major real estate influencers saying cash flow is not possible. And I'm like, uh, I saw a video and I actually posted— I won't, I won't name drop them, but someone Someone said they— a major podcast— like, I don't know one person who's retired off of cash flow. That's not real. I'm like, how do you not know one person? Uh, I, I almost don't have anyone on my podcast who hasn't either reached or almost reached financial freedom through their rentals. And a lot of people, you know, they did it in anywhere between 3 and 20 years. Either of those is massively shorter than a 40-year career. So I like—

one of the things I like to share is like, for the listeners and the viewers here, like, you know, I don't get paid for coming on podcasts. Christian, you don't get paid for going on podcasts. You know, we don't do these podcasts to like, hey, join our real estate group or do our coaching or whatever. You know, we're just here, two guys, you know, shooting the shit, you know, just basically saying that this is possible. We are real people. We've had real jobs. We're just like your neighbors, and we are the example. We've actually done this stuff. So, you know, we don't have to be doing this, but we do it because it's real. You don't have to subscribe to, you know, to my channel or to Christian's channel. It's great if you do because there's a lot of free stuff we put out there, but we love this. And it's doable. We've seen it, we've done it, and we have a passion for it. So yeah, for some of those folks out there that are saying it's not possible, that's BS. It's absolutely, totally possible to do what we've done, even in today's economy. And I think it's even going to get more possible. And I think if people wait 10 years to buy, I think they're going to be kicking themselves and they're going to be saying,, you know, oh geez, I wish I bought back in 2024 because, you know, I do a lot of, a lot of talking about, you know, renter nation, how we're becoming more and more a nation of renters than actual buyers. And we look at a lot of different statistics and a lot of different things. And that's why we're, we're still buyers. We're still buying units is because, you know, we from a society perspective, from a political perspective, from an economic perspective, there's a lot of different perspectives where, you know, things are just trending. Unfortunately, I don't want to be doom and gloom, but they're not trending in a direction where we see the homeownership growing. We see it staying flat, if not falling off over the long term.

We as investors make a significant amount of money essentially betting against the government having good policy. For the homeowner. I, I am highly confident that we will continue to print money regardless of administration, and then we will continue to have a relatively inflation-proof industry. Uh, a lot of the expenses pass through, and unfortunately that ends up on the renter. A government control on this— rent control. This is one of the ways they propose to fix this. It's a hot topic right now, and a lot of states, a lot of states who haven't implemented yet are still considering it. In fact, I believe, uh, in my home state of Washington I'm in Texas now. Go figure. But my home state of Washington, we have kept it off by, I think it came down to one vote. One surprisingly liberal vote said, hey, I can't in good conscience look at the statistics on this and say this is a good thing. So we have held it off in Washington state, but it will eventually get passed there for sure. It absolutely within the next decade. There's going to be rent control in Washington State. Yeah. What are your opinions on rent control? Is this a good thing? Is this something that we can actually, you know, the government can come in and actually do something that is helpful for the renter?

Not, not through rent control. I think that unfortunately it hurts the renter in a lot of different ways. And it takes, you know, sometimes a second, third order, fourth order kind of thinking through this. To really see how that happens. And so, you know, one of the things I share with folks is, you know, just what I'm doing to protect myself from, from a rent control situation. Right. So number one, we're not doing any, any loans with GSAs, right? Government-sponsored agencies like Freddie Mac, Fannie Mae. We don't do— we don't— we're not— even though it may cost us a little more to go do another type of loan, private loan, we're just not using Fannie Mae, Freddie Mac, government-sponsored. Agencies, because once you do that, that's the government's entry point into controlling essentially what they own because you're paying the mortgage, they own the asset, right? So through that entity, through that Fannie Mae, Freddie Mac mortgage, they can say, hey, you have a mortgage with us, you can't increase your rents more than 4% a year, right? Or 2% a year, right? That's going to be their their entry point. Same thing with— so we're not doing that. We're also, you know, weaning ourselves off of subsidy-type programs, you know, Section 8, things like that, the welfare programs, because again, that's another way for the government to, you know, be able to enforce rent control. Because if you have a Section 8 tenant, you know, you're not going to be able to go up 10% on their rent. The Section 8 agency won't allow it. You may be able to go up maybe 2%, maybe 4%. They're going to set the mantra for how much you can go up for rent. Whereas if I have somebody else who's just a market rate tenant, right, I can go up what I want to go up. Right. So we're looking for, you know, all those different ways where the government may try to control our cash flow and we're looking to protect ourselves. We're looking to get in front of that. We're not going to wait until, you know, 5 years from now or when it's going to be for them to say, hey, this is how we're going to do it. No, we're trying to distance ourselves from that rent control situation today because we don't want to find ourselves nor our investors in that situation, right? So some of these new investors that are getting into it, Section 8 may look like easy money, you know, consistent cash flow, but today it's something you really have to consider whether you really want to lock yourself in with a government-sponsored program like that.

And there are mixed reviews on the government-sponsored programs, but on rent control in general, the only people who make money— and there's, there's a ton of statistics on this, you can look up any, any state that has implemented it, look what happened to rents— the people who made money are the people who already owned real estate. What it basically does is if they say you can only raise rents by 5%, every landlord now becomes terrified that they're going to fall behind. And so everyone raises rent by 5%. In most states, you'll find you can actually find— like, if you don't have rent control, you can find a lot of properties that are way under market rent because landlords have relaxed on rent increases. They bought at a certain price a long time ago, they're cash flowing, and they just don't feel like raising rent. You don't see that in states that have rent control. Everyone is terrified. Everyone Scared they won't be able to raise rent. So landlords are making all the money, it drives rents up, and a lot of your rehab projects are no longer feasible because you are relying on the government to give you essentially an exception to raise rents. You have to apply for exemptions. And for most people, it's like, oh, I'm just going to go to a state that will let me renovate a property without applying for it. It, it gets wild. And so you end up with dilapidated properties, lower quality of life, higher rents. None of these are good things. This is why you notice you're investing in Florida, investing in Texas. These are, these are going to be the last places that we want to see rent control.

Yeah. And, and we can't expect the government to solve our problems. I mean, just, just look at— and, and I'm not here to get political, I'm just here to state facts of, of what is right. Yeah, we have the Biden administration that, you know, is talking about housing affordability and how they want to give certain people, you know, $25K for down payments to buy homes and all that sort of stuff, right? But in the same breath, 2 years ago, they had their Secretary of Commerce, Gina Raimondo, their Secretary of Commerce, putting tariffs on lumber coming in from Canada to build homes. So tariffs on lumber coming in is just going to raise the price of homes because homes are made from lumber, right? You know, so, you know, these governments, you know, conflict themselves, right? One's trying to have more housing affordability, but in the same breath, you know, they're raising tariffs on products coming in that are just going to make houses more expensive. So like, what's this administration really going after? They can't get out of their own way. If you think they're going to be able to figure out rent control, there's like 100 other things that are broken in government that they broke. I think it's the best thing we can do is welcome back in the Adam Smith invisible hand. Let the market dictate itself, right? Let it take care of itself, right? This invisible hand theory of, you know what, if you want to go up 10% on your rents, Go up 10%. You know, let the population decide with their feet and with their wallets whether they want to walk to your property and rent from you and write that check to you each and every month. If you want to go up 10%, let the public determine. And when the public says, "No, we're not going to pay for that. That's too high," they're going to go someplace else that maybe just raised their rent 2%, right? Keeping it more in line with the market. Let the public decide, let that invisible hand work itself through rather than the government dictating what the rent should be or what the increases should be. So I'm in favor of that.

That sounds like supply and demand.

I know it sounds simple, doesn't it? I'm not a complex guy. I like to keep it simple. And, you know, same thing with real estate. I got to 54 and retired from the corporate environment by by keeping it simple. It is possible, right? Don't try to overcomplicate this stuff. And that's what the government's doing with rent control is they're overcomplicating things. They're using it to pander, you know, for votes is really what it comes down to. They're pandering for votes. And unfortunately, these folks who today we have, you know, not to get on a soapbox, but unfortunately in society, we have pretty crappy critical thinking skills. You know, the school system, the education system doesn't develop critical thinking in us anymore. And so folks out there, a lot of them don't have second, third, fourth order critical thinking skills to say, hey, how does this affect that? And how does that affect the next thing? You know, how about the next thing? Where does this go? Where does this lead? And so when folks like me and others, and we deal with some really super smart economists and folks, you know, we think this through. We're like, hey, for the long term, you know, 10, 20 years out, we want to be in the multifamily space because you know what, long term, that's the place to be.

100% agree. Humans will always need housing and we provide housing for humans. Again, supply and demand. Also a great way to choose a market. Look where population's going up. That's likely a place where you want to provide housing. Simple, simple economics still work. Uh, you heard it from Tony, you've heard it from me. Uh, guys, rent control, not a good thing. Uh, understand how to play your markets. Um, I, I like the caution on Section 8. I actually use a good deal of Section 8. It's part of how I set a lot of my pricing on lower income buildings. There are inherent problems with it, which is if you're in real estate for freedom, you're signing up for government programs. You got to keep that in account, and I would not make that a majority of your portfolio. I keep mine to a maximum of about 20%. Tony, super fun having you on today. Fantastic insights. I agree with everything that you said. If someone wants to follow you, learn more about, you know, the things that you have to say on real estate, the economy, how to buy multifamily, where would someone find you online?

So they can go right to my website, DirtyBootsCapital.com. They can find me there. They can shoot me an email, TonyLopes@DirtyBootsCapital.com. I have a book out called Freedom at Risk: How to Protect Your Personal and Financial Freedom. Shoot me an email, put book in the subject. I'll shoot you over a copy of that book. And yeah, and then I have a podcast called, guess what, Dirty Boots Capital. So look me up there. Actually, we're going to have Christian on in a couple of weeks here. We're going to figure that out. We're going to have him on and we're going to talk some more about real estate. And yeah, so we're just out there to help people, right? You know, we're not looking to like get people into our fund or into our syndication or anything like that. I mean, look, I already retired. This is just fun for me at this point. If it gets hard, if it gets too much like work, I don't do it. So, so yeah, yeah. Look, look me up and yes. See the fun interviews we've done on the YouTube channel. And yeah, we're gonna have Christian on in a couple of weeks there. We're gonna have more fun.

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