"Don't Buy A Home!" Ben Mallah's Final Warning For The 2026 Real Estate Market

Not everybody's cut out to be rich. [music] That's a fact. You got to have that burning desire inside of you. >> We paid $43 million for this place. [music] I'm not just talking out of my ass like a lot of people. I'm out there doing it. >> Class is back in session. >> If you're in real estate, the most important person in your life is your banker. >> Why is banking the most important thing if you're trying to build wealth then? >> You got enough money to buy a piece of real estate? No, average person don't. Your bank comes before your wife. >> What do you get the money for you want? >> Don't ever buy a house for cash flow. It's stupid. We've identified this property. We're going to thinking about buying it. >> Why did you buy [music] a Tesla dealership? >> Would you trust Elon Musk to pay you rent? But you know what 100 grand a month to him is? It's like you going to the store and buying a soda. >> Do you think it's easier than ever right now to get rich? >> Well, don't worry, you know, the world needs dishwashers. [music] >> It's true. Ben Mallah, you have to spend $70 million in the next few months. How difficult is it to spend 70 million? >> It depends. Whether you want to buy smart or you want to buy I mean, it depends. You got to I'm out looking for deals every day. You know, we just closed on a Tesla dealership. We just closed on a private university. We're in going to contract on a brand new gym. Uh my son's working on apartment building, and you know, that's a major rehab. My other son's working on another rehab. I mean, you got to you got to look. You got to find deals that make sense. >> So, explain why you're in this position. What did you sell to have the $70 million you now need to spend? >> I mean, yeah, we sold um quite a bit of real estate. Maybe I shouldn't have. Maybe I shouldn't have sold. >> What makes you say that? >> thought that the market was going to turn and the banks are >> [snorts] >> keeping it from turning. That's what's going on right >> What are they doing? >> I mean, listen, I'm I'm out there on the street. I'm dealing with brokers. I'm at properties. I know I I really know. I'm not just talking out of my like a lot of people. I'm out there doing it. And all the big shots and all the people that thought they were so brilliant that overpaid during COVID in '20, '21, '22, '23, they're getting screwed up because they didn't know what they were doing. Okay? Typically, you know, these types of properties don't have long-term financing on them. So, they're all locked in at their little 3% rate. They locked it in for 5 years. And now the rate's doubled. They got to refinance. They got to pay the bank back. They're going to not going to cash flow. What does that mean? That means that the loans that the bank made are no longer at the same value they were when they made a loan. Why? Cuz the property can't cash flow a double interest rate. It's simple. And all I Listen, I deal with sellers every day that are just ready to throw the keys and walk away from millions of dollars in equity investment that they had. And a lot of them pooled people together. Okay, with your syndicates and raising money and all that. So, you know, a lot of people going to lose their shirt. But the banks loaned too much money. Not only the buyer does uh the own people that bought property are going to lose, the banks have to lose. Why? Because the property ain't worth it. And a lot of these places, these people shouldn't have bought real estate to begin with. Because when I go out there, because they were bleeding, they're they're not operating properly. So, therefore, the property um deteriorates. It's not being managed properly cuz they don't have the experience. So, they hired a management company and the management company don't care. They have no skin in the game. So, there's a lot of distress out there right now. I've looked at thousands of apartments and multi-family and there's a ton of distress out there. >> So, what are the banks doing right now to prevent the collapse from happening then? >> They're on the fence. They need to get off the fence and realize this loan is not worth what we loaned on it. But, they don't want to do that. They don't want to admit it. They don't want to realize it. They've all been praying and delaying. Praying rates are going to come down. Okay, keep delaying. But, now it's at the point where the sellers or the owners have let the properties go cuz they don't really know what they're doing. >> So, you're you're they're just letting it go to the >> Interest rates have now uh What happens is when your time runs out on a loan, you have a fixed rate for so many years. All right, well, when the fixed rate period is up, it goes to the today's rate. They can't handle that. Okay, so the banks are just trying to work with them. But, there's nothing to work with. >> Couldn't they just delay a little bit? >> Delay? They've been delaying. They've been delaying for years now. >> like they're still delaying. It sounds like they're just delaying another 6 months, another year. >> even paying now. They just They just threw their hands up. Cuz a lot of them they bought these properties, they realized that they're not uh equipped to to to rehab it. They don't do a proper budget. They don't know what they're doing. Too many people have gotten into real estate now that don't know what they're doing. And then what they're doing is they're pulling a bunch of money together, okay, which is even worse because now you got, you know, all these investors and 10 different owners and it's a mess. So, there's a lot of real estate in the market right now that's distressed. And the sellers are ready to just walk away. Hopefully, you know, a lot of them are personally guaranteed. That's not good. The ones that are not personally guaranteed they just walk away. But, the banks have to get it in their head, get this off our books. But they don't want to do that. You know why? Cuz if it gets out, then the value in the stock will go down in that bank. Why? Because the bank is only worth the value of the loans. >> saying a lot of these properties are completely underwater. It's not like they just wiped out the equity. They owe more. >> all over the board. I've looked at properties that are barely keeping their head above water. I've looked at properties underwater. I've looked at properties that have drowned. I looked at 200 apartments the other day, empty. The guy just called me on the phone, you witnessed it. He just told me, "Oh, I got the storage for you in the building for you. It's 20% occupied." Oh, and then in Florida, a lot of people got hit by the last storm. Flood coverage is not much if they had flood coverage. So now they're sitting here. I've I looked at a a 16-story building the other day, shut down. Right here, 10 minutes 20 minutes from here. I looked at hotels on the beach, shut down. Why? Because the flood kicked their ass, and now they need all this money pumped back into it. Some of them are shut down by the city. They got red tags on them. And somebody needs to come in with major capital and put the place back in shape. But in order to do that, you have to buy it right. And the banks have to realize, "Listen, we screwed up. Things happen in life. Okay, the flood came, interest rates are up. These are all things that caused major distress. They got to realize it. They got to just cut their losses and move on." And then we're just waiting for them to finally do it. We're starting to see a little, but not a lot. >> So are you getting good deals now? >> I'm getting a lot of deals where the sellers are cooperating. They're willing to walk. But now we have to go to the bank. We got to go to the bank and say, "Listen, you got to do a short sale. You got to do a short sale or, you know, you got to get you got you got to take a loss. If you don't take a loss, you're going to be sitting here with a property that's going to keep deteriorating and there's no future except going down the toilet. >> So, what are your predictions then? How will this sort itself out? >> I mean, sooner or later, the only solution is the banks have to say, "Okay, these are our troubled assets. Let's get them off our books and move on." [clears throat] >> How could you be wrong? Like, what would need to happen? >> Many times in in in in in in >> So, there's no way that there is any other alternative solution? >> I can't think of any other possible way except it's all about cost basis. Okay, you got to have a good cost basis when you're going to a deal and then prepare for all the rehab that needed and you got to bring up the operating Okay, especially the place is heavily vacated. I mean, you know, the numbers got to work for an investor. Why would an investor go in and and overpay for something and not make any money? It makes no sense. >> So, the reason that you have this $70 million right now that you have to spend is because of the 1031 >> have $70 million to spend. I only got >> Well, I guess now because yeah, you bought the Tesla dealership, the private school. >> I just sold the Harley-Davidson dealership yesterday. 47 5760, all right? Close. >> So, you have $60 millionish to spend? >> That's correct. >> And the reason you have this is because you sold a bunch of properties. >> assets that I didn't see I felt like I I got to the point where I could I did, you know, it was the best that I could do with these properties and I thought, which I was wrong, that the banks would be more and and and encouraged to play ball right now and they haven't. >> So, do you think that it was a mistake then to sell the properties? >> Um some of them, yeah, some of them I should have held. But, I was also kind of worried about the future of some of those properties. Okay? Why did I sell a Harley Davidson's new dealership yesterday? Why? >> Sales are down, right? >> I believe so. And also, I felt like this. I try to use common sense. In my growing up, Harleys were really a big thing with guys that are now today 50s, 60s. You know, after 60, you ain't riding no bike much anymore. And I felt like all the new generation, the new money, wants the, you know, >> fast fast race rockets. >> You know, they want a different type of bike. I think the old Harley style, except the police still use them, I think. Um, I think it was just, you know, it's a it's it's going away. I mean, that's what I felt like. But, it was a beautiful property. It was a great operator. Um, I just felt like, you know what? Why take the risk? You know, I sold a Home Depot. I sold a BJ's. Why? Cuz I felt like the area was declining. The shopping mall right near it was doing pretty pretty bad. So, I felt like, you know what? I've been with these assets, they've been good. Let's move on while I still got some term on the lease. Let the next guy, maybe he sees a different future than I do. >> Why'd you buy a Tesla dealership? >> Would you trust uh Elon Musk to pay you rent? >> Absolutely. >> Well, there you go. >> What's the cap rate on that? >> Close to six. Yeah, a hair on the six. So, I was pretty happy with that. I know it was brand new and it was a very good thriving area. And um, I felt good about it. When I got there, I looked around, I checked it out. Then you got all this stuff going on with SpaceX and all this uh autonomous stuff and listen, you know, I mean, it's definitely the future. We all know that. It's not just the electric car, it's it's, you know, it's it's the cutting edge of technology, you know, with him and that company. >> So, Elon Musk rents your real estate. How much does he pay you? >> I don't know, about a million three a year or something. So, 100 grand a month roughly. >> And what's the >> You know what 100 grand a month to him is? >> Nothing. >> It's like you going to the store and buying a soda probably. >> It's actually probably even less. >> place is making money, you know. I'm sure it's >> He probably makes that a minute. >> Tesla decided to commit to leasing that place from the developer, I'm sure they did their homework. The next Tesla's an hour away in Orlando. Okay, and I'm sure they did a lot of thought process in in into that location and and you know, having a plan for it. So, you know, I'm sure they did not just open up dealerships just to hell of it. They're doing it strategically. >> So, how much does it cost you then per month on the debt service on that property? Like how much are you netting of this 100 grand a month? >> Okay, I don't, but let's say I leveraged it all. Maybe I did 100%. I could do that. I could do it between a uh a line of credit and a conventional loan. I could do whatever I want, but you know, if they're paying me six and my debt's costing me five, I make a point on I don't remember what I paid for it. What I paid for it? >> 22 million. >> How much? >> 22, I believe. >> 22? I mean, the point is this. The reason why I bought it was because if I go out and buy something for 22 million while I'm in a 1031, I have a choice. I could buy that, get a return, or I could write Uncle Sam a check for probably in the neighborhood of close to $4 million. >> Instead of buying a Tesla dealership. So, you got basically $4 million discount. >> dealership for 20-something million bucks or write Uncle Sam a check for $4 million. >> So, you have the $60 million in gains that you kind of do need to spend. I'm curious, does it ever make sense just to pay the tax? And really quick, I just want to say that most people know that they should have an LLC, but they keep pushing it off because it sounds super complicated. Well, that's why we partnered with Northwest Registered Agent. They make the entire process so simple that you could just get it done today. For $39 plus state fees, Northwest forms your LLC and handles the state filings for you. You get your operating agreement, member certificates, and banking resolutions, which is all the paperwork that actually makes it official. And that's all that plus a free domain, email, phone line, brand protection, and mail forwarding are bundled in so your business is ready to operate in the same day. And your home address never goes in the public record. Northwest uses their own address in your filings instead of yours. So, if forming an LLC has been sitting on your to-do list for long enough, today is the day. Just go to northwestregisteredagent.com to get started. That's northwestregisteredagent.com or click the link down below in the description to get your LLC filed. Thank you to Northwest Registered Agent for sponsoring this episode and back to the podcast. So, you have the $60 million in gains that you kind of do need to spend. I'm curious, does it ever make sense just to pay the tax? >> You know, it could. You know, depends on the market. If there's nothing that I'm thrilled about buying, or if I want to start, you know, scaling down a portfolio and think about retirement, and maybe it's not the right assets to leave my kids. Yeah, I could see paying I paid the tax on a couple of items. That was a problem. Last April, I said, "You know what? I'm retiring. I'm going to start living life. I'm going to travel. I'm going to enjoy my life. And these assets, they're really not for my kids. They like multi-family. I'm going to sell some, and I'm not even going to replace them." And when it came time to write that check in April, that number was so big from my CPA, I did it, but I I don't think I could do it again. At least I'm going to try not to do it again. >> How much was the check? >> Um big. Big. Under 10. >> Okay. >> Million. >> What did that feel like to pay $10 million to the IRS? >> I mean, know, you got to look at it every different way. You know, listen, I've had 30 plus years of success and, you know, uh deferring tax. I mean, you know, it's either listen you got a choice. Either pay the tax or, you know, I die and then you don't have to pay the tax. Well, if I die, I'm not going to really enjoy not paying the tax, so >> Yeah. >> I mean, you know, listen, that's life. You can't have everything perfect and, you know, it's it's um you know, it's a balance. It's you know, sometimes you're paying the tax, sometimes you won't. But I'm not going to buy a deal just based on the tax savings. It has to be a good deal, a solid deal. >> Well, at least the taxes >> lose the amount of tax that I would have to pay in that deal, if it's a bad deal. >> At least the taxes though go to a good cause. >> Absolutely. We're building a new wing on the White House. I mean, listen, it's life. You know, what are you going to do? I'm only one schmuck doing the best I can, managing a big portfolio, you know, and trying to prepare my kids for their future. Now, that's basically my main concern. >> So, are you becoming more conservative as an investor to be able to buy a Tesla like that at a six cap? Because before it seems like you'd always be buying eight to tens. >> Yeah, but I'm only borrowing at five cuz I got big power to borrow money. So, you know, uh you do the numbers. All right, if I take a loan on that thing for 80% 22 million, um let's see uh what's that? A 20 million dollar loan or something like that or a 18 million dollar loan. So, I'll get the spread of the four million making a point off the bank. Plus I got my four million that's getting me the 6%. It works out to be a good return. >> How do you borrow at 5%? >> Because I have relationships and I have I'm no risk. Once you show the bank you no risk, okay, you're doing them a favor. I'm doing them a favor by borrowing them money. Cuz I'm no risk. So, of course they got to give me the best rate, the best terms. >> How much do you have to put down? >> I mean, typically I can easily do loans at 80%. But, you know, that's cuz it's me. Plus, the bank, you know, sees my assets. They might have my assets within their bank, within their brokerage arms. There's there's there's a lot of, you know, strings attached to that. You know, but it's about relationship and proving to the bank that they can there's no there's no question uh of any risk in giving me a loan. >> You know what's funny? You were actually on a phone call right before this episode. You're walking down and you get a call, you take it. This guy tells you this whole situation. This guy's a distressed seller. And you're just like, "Tell him I'll give him 10 million bucks." And then he was like, "All right, yeah. I don't know like you didn't even see it. You you just you knew the area." He said, "Hey, it's this property." Like, "Is it the north or the south side of the street?" He's on the south. And you went and you're like, "Oh man. Oh god. All right, yeah. Just tell him I'll give him 10 million bucks." >> You know the property. >> I mean, I've been there 20 years. I know the property. I know where it's at, you know, and I can think about all the things I could possibly have to do to fix the property up. Uh you know, so I offered him 10 million. The bank already loaned 30, which was stupid. >> See, to me it's just crazy that that you have that level of expertise to not look at a picture, to not look at like any of the details. >> He's going to do all the inspections to get back to >> It's only it's only opening the door. >> Yeah. >> You know, I'm still going to go out there. I'm still going to put my boots on the ground. I'm still going to inspect the place. I'm still going to factor in everything, you know, but I make a low offer that I know I can do. Okay? Well, I guess the land alone is probably worth 30 a door. >> Do you think that you're sharper in real estate knowledge now and expertise now than you were, say, 15, 20 years ago, 10 years ago even? >> I mean, I'm sharper now or smarter now cuz of the experience, but I'm older, so I don't have the drive I used to have. And I don't have the passion I used to have. >> So, you think that you'd be more bullish >> Now I don't get a I don't get a thrill out of it anymore. I've done it for over 35 years. Okay, or more. And I don't have the passion like I used to cuz it's age. It's normal. It's a human evolution. But my kids do and you know, so I support them. And I'm always looking for a deal. But you know, I go in, I find a deal, I close the deal and I just say here take care of this deal. >> What's the best deal you've gotten in the last year? >> lot of deals >> In the last year? In the last year, what's the best deal you've gotten? >> I mean, I've had some really good small ones. You know, I got one for sale right now out in a senior affordable housing deal. I'll probably double my money on. It's about 70-something apartments. Um you know, lately I mean, I don't I don't know. I've sold some deals that I've had for many years. But as far as a I mean, let's see. Badabing, badaboom, badabing. I don't know. It's all over the board. I got hotels, I got resale, I got apartments. I mean, everyone's a oh good deal, but you know, I don't have any big home runs that stick out since I've done some I mean, you know, I've I've flipped some properties recently that you know, there was 10 million upside. You know, stuff like that. >> One thing I want to talk about is a lot of people that are getting started, they feel like they need to build their knowledge and their expertise before they move. How do they know they have enough expertise or knowledge in the field before getting into their first deal? Because now, I mean, you are like one of the leading experts I feel like that we know >> They should go to benmallah.com, consult with Ben for pennies on a dollar. >> Why is it so cheap? And I'm not trying >> Because I'm not doing it for the money. All right, he's got to make money, the guy that runs the channel, the bookings, the time, you know, people's time is valuable. But I I truly enjoy helping people. Okay? That just gives me a very big personal satisfaction. Okay? And I'm not knocking, you know, other people. Um you know, listen, I do consulting with guys from nothing all the way up. Yesterday I actually had a call with a guy, he just sold his company. He's probably worth a half a billion. And doesn't know what to do, but he wants to be in real estate. Okay? I don't care. You know, but I really like helping a small guy. I like to help the people that are just get their first deal done. Okay? Whatever they can afford, whatever they qualified for, finding a good deal. Cuz that once you get in the door, then it leads to a lot of other doors. >> Yeah, I actually booked you for an hour Zoom call for the group I run, the Index, link in the description. So, it's a group of entrepreneurs who booked you for an hour. >> nice to you that day. >> You do. >> Not him. >> Not Jack. But it's only what, like $350 for 15 minutes? >> Yeah, I mean, you know, but you'd be surprised you can cover 15 minutes. I can I can know somebody's whole life story in 15 minutes. And all I do is I tell them I put myself in their shoes, and I tell them, "What would I do if I was in issues?" They're married, they got a kid, they live here, they make this, uh their credit is this, uh they never bought a house before, did they apply for FHA financing? And we go through the whole thing. I mean, you know, and and and I've had so many people call me back and say, "Listen, I took your advice, it worked out. We're doing great." I mean, listen, helping people is is a great thing. You know, really helping them, affecting their life. You know, all these Listen, I don't knock actors and sports guys and all these people that entertain people, which is fine. Every We need entertainment in life, it's a human thing. Okay? But I like actually helping people improve their life. >> A big point of our last discussion was that you're trying to lean into retirement, but by retirement you mostly mean being done with real estate. It's It's >> Not done. I'm always going to be around till the day I die, as long as my brain's working. My kids are going to get on a phone with me. They're going to ask me questions. We're going to make decisions. You don't really ever retire when you have a real estate portfolio and you plan on turning it over to your family. You don't retire. But I could be on my boat anywhere or I could be in any country on the phone and I can consult from anywhere. I enjoy doing the consulting. Consulting is going to be a big part of my retirement, helping people. >> Are you trying to lean away from value add like distressed assets with high operational carry or you and lean more into like triple net safer like the Tesla >> It's It's It's a combination of both. In In In my position, and this is not for everybody, in my position, you have to be diversified. You can't just focus in on one type of assets. You know, you've got to be diversified so that gives you stability. Okay, something you need to learn about, stability. You're very >> Unstable. >> Mentally, maybe not physically, but financially, how many house hacks do you How many people you got living in your freaking house? You wake up in the morning and you got people straight in your goddamn house. >> I got four people living in my house. >> Five cuz one of them is my girlfriend. One's moving out though. >> So I I am I'm also going to be moving out and maybe selling my property, too. So if you want to sub two a sub 3% deal in Las Vegas, let me know. Michael Jordan is not worth his time to be sub twoing a deal like >> I want is a turkey sub. What are you buying me for lunch today? >> I'll buy you a turkey sub. >> Turkey sub? >> Yeah. >> So basically, listen, I like diversification. I feel like I'm stable. I've got money in triple nets like the Tesla dealership. We just closed a $43 million apartment building where my son's a partner. All right, he's rehabbing it. He's getting it all going. He's actually physically there being the manager. He hasn't done that in years. He normally has a property manager. He supervises them. But this project, he's moved into the apartment building. My son lives in a million dollar home. He's a multi-millionaire. He packs his family up and he moves into the building. >> Does that make you proud? >> maintenance requests. He's collecting rents. He's doing marketing. He's got a construction project going on. I mean, listen, when your kids act like that, you know, you got to keep backing them and you got to keep supporting them. And then the other son is in the Tallahassee on a project he's a partner in, rehabbing it right next to the university. >> I saw that video video that Ben Jr. did. I I was really impressed by Yeah. He's >> And it's real. >> Yeah. >> And I was out there the other day with him. It's real. He It's not >> So he's living in the apartment house. >> in the apartment. And why? Cuz he's got his hands on it. He He's got control. He's going to get that place running right, stabilized. Of course, eventually he'll bring a manager in, but he's going to make sure that it's in the right uh stage to bring a manager. Plus he's got major construction to do there. He's got about 50 apartments he's got to build from a shell. >> Do you think that always makes sense if you're getting started in Not that he's getting started, but for those that aren't experts in the field, if you want to get into your first deal, especially if it's multi-family, it makes sense to actually live in the property. >> know, you you don't necessarily have to live in there. It depends on the size of it. It was such a big project. He said, "I'm not traveling. I'm going to stay here." Otherwise, he had to drive 2 hours each way. >> So you don't think that you'll ever fully like be mostly done? Like you're always going to be working because it seems like >> contemplating and thinking about hiring a sharp kid that I met, um trained in New York, um on a corporate level to help me manage the portfolio because he has a lot of the skills that See, my kids have been in the in the in the trenches. And uh we need to add a little more corporate type uh structure structure to the >> What would that What would that >> department. >> What would that do for you? >> a kid that, you know, I call him a kid. He's no kid. He's probably I don't know. Well, he's not even 30 yet. Anyway, you know, so I'm trying to get him aboard cuz he I like what he can do. What he What I've seen him I have him come down here sometimes. What he can do in a matter of a couple of hours on a computer, a spreadsheet, and all this stuff, and formulating things takes me days. >> Well, he's just using Claude, most likely. >> Huh? >> He's using Claude, most likely. And he's just typing in the key numbers and >> I like I can have a conversation with him about basis, taxes, returns, leverage. I can have a conversation and we can have a a serious discussion >> could [clears throat] do the same thing. You just talk to Claude. It's going to >> Claude's smart. >> It seems >> It's not the same. It's not reality. It's It's It's It's um artificial. >> Would you say that doing one individual big deal requires a completely different skill set than managing a bunch of different portfolios and relationships with the bank and this and that? Like, what is the main differentiating factor between half a billion-dollar portfolio? >> I really quick, I just got to say I've not had a piece of technology blow my mind in a long time, but these glasses that I'm wearing right now are actually insane. For those unaware, we partnered with Even Realities. They sent Jack and I each a pair of Even G2 and it genuinely feels like the next evolution of technology and AI. Even G2 is a real-time copilot for the conversations that matter. It keeps deal context, live prompts, and real-time translation right in your view so you can stay present, prepared, and effective from the first call to the close. And unlike most smart glasses, they look and feel like premium eyewear. They're comfortable enough to wear all day, and they really just feel like a pair of prescription glasses. I'm actually reading the script right off my glasses right now looking straight at you with nothing in my hands. There's also not a camera in these, so no one's ever filming anybody. You could wear them anywhere, even walking into a restroom, and it's never a concern. And the videos playing are actually how it looks and works in real life. I messed around with the translation for about an hour the other day. I put on a Japanese podcast, and I kid you not, I understood every single thing that they were saying, and I kept up the whole time. I'm genuinely so excited. Next time I go out of the country, I'm going to bring a second pair of these glasses and hand it to a local, and then we can have a full-on conversation while speaking completely different languages. To me, this really just feels like when flip phones changed over to smartphones. It's one of those things you just know you're early to it. So, if you want to get yourself a pair, just head to evenrealities.bio/icedcoffee and use the code icedcoffee for 10% off even R1 and or even clip when you add them to your even G2 order. Once again, that is evenrealities.bio/icedcoffee or scan the QR code on the screen right here, or also click the link down below in the description, and make sure to use promo code icedcoffee. Last October, I was flying to Japan with a couple of friends, and after a delay, I was positive that we were going to miss our connection. But, the flight attendants moved us up to the front of the plane when we were deboarding to get off quickly. They called the other gate to let them know that we were coming, and they even gave us a pep talk because we had to sprint, I kid you not, across the entire airport. We made it. It may not seem like much, but when someone goes the extra step, it makes a positive impression. And if you're hiring, great candidates can also go the extra step and tell you why they're interested in your job on ZipRecruiter as a way to stand out from the others. And right now, you can try it for free at ziprecruiter.com/ich. ZipRecruiter's powerful matching technology does the searching for you. It pulls in the people who actually fit the job. And ZipRecruiter has a new feature that shows you the most interested, qualified candidates first, so you meet the right people faster. It's no wonder why ZipRecruiter is the number one rated hiring site based on G2. Try ZipRecruiter and meet great candidates who will go the extra step for you. Four out of five employers who post on ZipRecruiter get a quality candidate within the first day. Try for free today at ziprecruiter.com/ich. That is ziprecruiter.com/ich. ZipRecruiter, meet your match on ZipRecruiter. >> Would you say that doing one individual big deal requires a completely different skill set than managing a bunch of different portfolios, relationships with the bank and this and that? Like, what is the main differentiating factor between half a billion-dollar portfolio and doing that? >> Zeros. It's all about money in, money out. >> So, it's the same skills, same >> Whether you, you know, you just got to add zeros and add more, you know, there's more things to add on a bigger property. You got more expenses. You got more income streams. You got different things that come up, you know, with the property. But, basically, if you want to buy real estate, you want to own real estate, I highly recommend you run it yourself. Get your hands dirty. That's the best experience you will ever get. If you wanted to go out tomorrow and stop being a house hacker where all these strangers walk around in their underwear every morning in your house, go out, buy yourself a fourplex. I don't believe in less than a fourplex. You got four tenants paying your rent. Okay, and you should cash flow fairly well if you buy it right. And it's not a lot of management. But, manage it yourself. You collect the rents. If there's a problem, send a handyman over to fix it. There's not much else to it in paying the bills on a There aren't any bills on a fourplex. Your tax bill, your insurance bill, your mortgage bill. And then, you got some maintenance. That's about it. >> I got so tired of doing that, though. It was just exhausting. It's It's just It's just It's >> This guy ain't going to work. >> I like to wake up and not have a single care other than just here's a task I got to do and that's it. >> California. You want everything easy. >> I got to say, I just sold two of my multi-family in Los Angeles and every day I wake up that I think I don't own that anymore. >> Well, that's because you've experienced it. But we're talking about somebody starting out. You've experienced it. You looked at the situation. You said, "You know what? These things are a pain in the neck. I live far away in another state. I've already If I sell it now, the numbers probably made a lot of sense even with the tax ramifications." And you do you made a decision. You managed your portfolio. That's what I do all the time. I look at a property and I say, "Okay, is this property a pain in the ass?" Well, whether whether it is or not, it's not going to be a pain in the ass to me, you know, too much cuz, you know, I got people to run it. But do the numbers make sense? Is it best to keep it? Is it best to refinance it? Is it best to sell it? You got to make decisions when you're managing a portfolio. But if you're just getting into real estate, you got to get your hands dirty and run your own stuff. You have to. That's the way you'll know whether you want to grow in real estate or you don't. A lot of people don't. >> Well, one thing that's pretty clear is that you have a beautiful home here, 20,000 square feet that you're selling. What's the asking price? >> It was asking $35 million. Why? Cuz if you go anywhere on this We're in a special little city here on a private beach. You go anywhere in our area on this beach, people are paying 8 to 10 million dollars for a lot a single lot and knocking down a house. This house the land alone is a value of 20 to 24 million. Okay? It's It's just I can prove it. To build this house with the qualities that this house has, I have you have the contractors bills that built it. Okay? You're going to spend minimum 25 million. You have to. With the bowling alleys and the lazy rivers and and and the quality of all this stuff. Okay, so here you are. You're somewhere in the neighborhood of 45 plus million. So, I put it on the market for 35 and you'd have to wait 4 to 5 years to build it. >> Mhm. >> So, here we go. You could turn key, walk into this house less than what the replacement cost is. Okay, right now we lowered the price to 31. >> Have you had any offers? >> I've had about a half a dozen showings. But, honestly, nobody has made me a realistic, legitimate offer that I would even consider. >> Why? >> Cuz people want you to carry or, you know, people want to do some creative stuff. They all had the money to buy the house cuz we pre-qualified them before we let them look at the house. But, listen, it takes time and the market is so small for in this price range and in this area. Now, if this area was in South Florida, I mean, if this house is in South Florida, forget about it. It'd be worth 100 million. >> Mhm. >> In certain areas, like the area you're talking about earlier. Okay. >> I mean, what >> It is what it is. It's a great house. It's going to be You've just got to find the right buyer for it. >> What happens if you can't sell it? >> I just keep it. You know, what am I going to do? I can't sell it, you know, I keep it. >> Would you seller finance it? >> No, I'm not like I don't like it. Listen, why would I have to seller finance? I always say to myself, when people offer seller financing, beware. There's a reason why. Maybe it's helping them tax-wise, maybe. But, typically, let him go to a bank. Why do I need to be the bank? Why can't he just take the money the down payment and go to a bank? If the bank Maybe the bank won't qualify him. Well, if the bank won't qualify him, why the hell would I qualify >> What's your interest rate on this property? >> Well, I locked in a good rate on this deal. >> 2% interest only, right? >> Yeah. >> So, you could sell it seller finance at 3 and 1/2 >> for 15 years. >> That's incredible. >> 7 years have gone by for 15 years now. >> 7 >> years at 2 and 1/2%. >> I got about 9 years left at a fixed rate loan, interest only on this house. So, I'm sorry about that. >> a percent or a percent and a half if you seller financed it at 4% and 3 and 1/2%. >> For 7 years, yeah. >> Yeah, but I wouldn't do it. Listen, I don't want to be the bank. I don't like loaning people money. That's not what I do. >> Yeah, but you're loaning the bank's money. It's not really your money. >> then what? Then you take back and foreclose on them? >> Then you take back the property. >> doing that. I don't want to go after people. I don't want to be in a bad situation. I don't like to be in a You want people going after you? You want people going after me? >> Yeah. >> What do you mean, people going after me? I don't I pay all my bills, so nobody goes after me. >> All right, you'll you'll take on debt, but you will not release the debt. Like you don't want to >> all day long cuz that makes sense for me. I make money on the bank's money. Plus, I'm able to spread my money out, you [clears throat] know, much more by using the bank's money. >> How much money do you have to have to buy a $30 million mansion? >> I mean, typically, you have to qualify, but if you're if you're going to buy a $30 million mansion, you're probably going to have to go out and get a jumbo loan. A jumbo loan is probably going to be at least 25%. Okay, 25% of 30 million, 10% is three, three, six, seven, eight million down. And you have to qualify for the loan. You have to prove how am I going to pay the loan? And then you got the taxes, and then you got the insurance. You got to make a substantial income to be able to buy a house like this. Or, a lot of people who own houses that would buy a house like this, typically, you know, have that kind of cash that they want to just buy it or put a lot down, have a very little mortgage. >> So, you're selling a $30 million mansion. You've had a handful of showings. On average, the people that come see the property want to buy it, how much money do they have? >> I mean, typically, I would think that the rule of thumb in banking is if you buy a if you if your mortgage, let's figure it out. If your mortgage is going to be, let's say, 20 million, right? 20 million, today's rate is probably about 6% okay so that's going to put you at a million two a year correct? Am I right? >> Yeah. >> 20 million is a million two a year is 100 grand a month. >> Multiply by three. >> if you're if you got to pay a mortgage of a million two a year you probably got to be making over 3 million a year to qualify. >> But even so I heard that if you're buying like anything over 15 million you don't really fit the 33% rule cuz those people kind of spread their money out a little bit more. >> And what are your assets? >> So realistically like wouldn't they like you have to have like a 100 million bucks like to to justify a 30 million? >> No you wouldn't need 100 million. Listen if you have a if you have a you can prove you have stable income coming in or a few million a year the bank will loan you you know >> I don't think someone who's worth 20 million dollars is buying a 30 million dollar house. Even if they have the income to do that. >> know I mean but no. Listen yeah you got to be somebody that it's not going to hurt you and and you know to buy this house. It's got to be somebody worth probably like you said 60 70 80 or 100 million. >> What about buying a 10 million dollar house? How much do you have to be worth? >> I mean a 10 million dollar house I mean I would think you had to be worth max minimum 20 million. >> You think that's responsible if you're worth 20 million dollars to spend 10 on a house? >> Depends on what your income is too. It's not just a question of your worth. Okay you can be worth a lot of money but you know what's your income what's your returns what's your investments you know the bank looks at the whole picture. >> Also I'll caution you again to the hitting the >> Hit Jack >> I know our editor is going to be like yo just like Just hit Jack instead. So >> How much time do you guys have? I need a cigarette. I didn't even smoke >> yeah if you need to take a break we'll just we can pause whenever. >> I'm going to go have a cigarette man. In Scotland I just came back from Scotland you know what they call cigarettes there? >> So in owning a $30 million 20,000 square foot house, how much does this cost you per year for random things? >> I mean, you know, number one a house like this pretty much requires two full-time housekeepers. >> So you have two full-time staff members here that >> had two full-time housekeepers for 20 something years, but yeah, this house definitely you need it, you know, because you got to maintain everything. >> What's the cost of that? >> all that much. >> What does a housekeeper do? >> you know, what do you mean? Every day they they got to work all >> Cleanings, okay. >> clean the bathrooms, they got to make beds, laundry. I mean, you know, everything. Go through the whole house, make sure everything's neat clean and and kept up, you know. >> going to be 100,000 a year just in cleaning the house. >> I mean, it could be, you know, yeah. I mean I don't know how much they make, but it's a significant expense. Then you always going to be on top of all the maintenance stuff, you know, have money for maintenance. Now, I did rip out all the lawns but fake lawns in, so I cut the landscaping down about down to zero, you know, and I'm lucky my guys could pop over here and trim whatever I need. Once a year you got to do the trees, that's going to cost you no more than a few grand. Um it's not tremendous, you know, but uh [clears throat] the tax bill is significant, so we're a quarter million a year. And then the insurance, you got to have insurance, you know. And >> How much is the insurance? >> insurance I don't think is much. You know, it's probably about 25 grand a year. I don't have much insurance. Typically somebody I probably spend more than that. >> Hm. >> Probably 40 or something like that. >> And what about pricing the neighborhood? Like different contractors when they give you a quote to replace a door as opposed to someone else, if they're walking into a 20,000 square foot massive estate, like they could jack up the prices a lot. Have you noticed any of that? >> You always got to know what what the industry uh cost is for anything you're fixing in your life. You know, no matter what. You You got to know what's the industry and what AI today will you tell you. But, you know, you got to be careful not not to get taken advantage of of people that want to over inflate your bill because you live in a big fancy place. >> What's the craziest quote you've ever gotten for a repair? >> From small or big. I've had companies that, you know, we have a what they call a Crestron system here. All houses run by computers. You know, they want to charge $100 an hour just to talk to you on the phone. So, you know, that seemed a little ridiculous to me. I got a simple question for you. You're going to bill me for a hundred bucks $100 minimum, you know, just to talk to you. Anyway, I mean, you know, listen, everything you do, you got to look at your options, what your options are. Basically, whenever I hire anybody in any aspect, I think about time, how long it takes to do the job, materials, overhead and profit. Okay? And I come up with a realistic price that should be fair for everybody. Okay? If it's a two-hour job and the guy's making whatever to be bills the guy out at, you know, 50 bucks an hour, I don't know these days with plumbers, electricians, I don't know. All right, so you got a couple of hours with a plumber, you know, that could be 100, 200 bucks. Then you got the materials. Is it a toilet? All right, well, what toilet do I want? Toilet could be another 200 bucks. Then you got overhead and profit even though he's already making money over billing out the guy for what he's paying him. So, you come up with some sort of, you know, realistic uh number that makes sense. >> People are kind of scared to ask the contractor, like, how much did this cost you? How much upcharge are you having? Like, to to see how much you can even trust them. >> Yeah, can you even trust what they're >> Problem is, number one, you can do a lot of homework on your own. All right, with today's technology, you can figure out what it takes to fix almost anything. And then basically listen, if a contractor is not willing to be transparent with you, nine times out of 10 he's ripping you off. >> So you should ask. >> And you should be able to figure it out for yourself. The other day, on top of our LA Fitness down the road here, we have this giant metal crown thing that's like a, you know, like a design. It just sits on the roof. You know, some special design they came up with. All the LA Fitness have them. They need a paint job. All right, the guy throws me some crazy number out there. I said, "Listen, is because it's on top of an LA Fitness?" You know, anyway, the long story short is we sat on a phone and I said, "Okay." He says, "Well, I need a lift." I said, "Okay, how much is the lift going to cost you?" "All right, I don't need a lift for 2 days to do that job." Fine, how much is the lift going to cost you for 2 days? I could call up and find out myself. All right, we figured out what that was. It was like, I don't know, be delivered and picked up, 1,000 bucks. Huh. Then, what's the paint cost? All right, we do need special paint so it doesn't rust again like it did and it might be some prep work. It's probably a 2-day job for about a couple of guys. All right, couple of guys, couple of painters, maybe they're worth 300 bucks a day. That's 3 6 9 12, make it 1,500 labor. What the hell, I'm always a little We got 1,500 labor, we got 1,000 bucks for the lift, it's 2,500. The paint is probably only couple of hundred 300 bucks. We're up to 2 grand. He's got to make, you know, 20% another 500 bucks. The job's cost $2,500. >> And what did he quote you? >> Five thousand. We settled at three. >> So you fully went on hey, itemized expenses. Tell me how much everything >> you know, everything is accessible these days. You know how much sub costs? You simply go online and figure out and I'm going to buy it. Even a part for my boat, I will look up the part number and see what it would cost me to buy that part. Okay? And in boats, you got to be really careful. Boats, planes, I can't do much about it. You can't argue with the plane guys. Cars, I do I do. My son my my partner that raised me in real estate left to my son when he passed away his Rolls-Royce, Vincent, the black one. Wow. He loved the car. But cars start to get old and you know, fixing an old Rolls-Royce can be very expensive. He went to the dealership cuz he needed some kind of turbo injectors and this and that. $40,000. That's what the dealership wanted. Luckily, I got a friend down in Orlando who is in the car business and he knows a mechanic that used to run a dealership that started his own company, his own auto repair. You're right? We took We had to call up and put it on a truck. We shipped it down to Orlando and the guy looks at it. He says, "You know what? I could rebuild these." We spent $4,000 instead of 40. And then we sold the car. It's more going to keep it >> Yeah, of course. >> And then I gave him my Bentley. I said, "I'll tell you what. Sell your Rolls-Royce, I'll give you my Bentley. There you go. Done." Um So that that just goes to show you. 40,000 compared to 4,000. That's the way it goes with everything. You got to Money You got to You got to spend your money wisely. You can't spend money you know, on anything significant unless you do your homework. Everything is home Oh, stop it. >> Just hit Jack instead. >> All right. You got to do your homework. All right. Anything you spend your money on. Before you part with a penny, do your homework. Make sure you're not getting ripped off. You know, in In company, we have a rule. We have to get three bids on everything. I got a million dollars worth of AC work I got to get done on a university I bought. >> Mhm. >> Well, I had contacted three different AC companies and see and make sure they're all bidding on the like when my son builds a building, I was impressed. He had seven contractors bid on exactly what he needed done. And then he compared each bid. Now, they played their little games where they they hire one thing low and another, but in the end, you got to pick the guy that you know he's not sticking it to you, at least not too much. >> How do you know that they're not going to quote you really low and then go in and say, "Well, actually." when they're halfway through the job? >> Well, those are considered change orders. You mean, once you got a contract, you got a contract. When you're building, you got a contract. Okay, this guy has to build it for this price. Now, if you start making changes, that's a different story. >> Mhm. >> But, he's got to bid it based on whatever prices are the materials at the time. He's got to bid it on the labor. I mean, you got a contract in writing. He can't go up in the price. Always get things in writing, always. >> So, what are you noticing then throughout the entire real estate market right now? How has it changed in the last 6 months? >> weird zone right now. Okay? We're in a weird zone. But, if you want to make money in real estate, it's all about 99.9% of it is finding a deal. Find a deal and make sure you bought it for the lowest possible price to sell it sell it for. You have to come in and lowball. Not saying you're going to end at that price and get at that price, but you got to play the game. You got to get in low. So, you're down here, he's up here, and then you got to set your maximum price you're willing to pay. You have to buy it right. If you You buy it right, you get screwed. >> What type of real estate has the best deals right now? Is it apartments, hotels? >> All right, number one, you don't want you want to run away from office space because nobody's leasing it. All right, it it's a bloodbath in offices. Okay, unless you have some magic wand that you can rent the space out, you're die. And you can't convert them to anything else. Everybody's tried apartments. I thought maybe storage, but listen, it it's far-fetched. Stay away from office. Multifamily is always a great sector of real estate. Okay, cuz it's not very difficult to run. People pay your rent, you fix something if it's broke, you maintain it, you pay your bills, you're done. And the banks love to loan on them. But you have to buy them right. Okay, you can't go on strictly projections. A lot of people buy because they say, "Oh yeah, uh rents are going up." Rents aren't always going up. Right now in Fort Myers, where we just bought, rents are going down. My competition is giving away 2 months free. >> So, how do you compete with that? >> We try to you know, go beyond the normal marketing uh leasing. Well, number one, the product we bought was built as condos. That's why I felt good about the property. There is not one apartment building that you can rent in Fort Myers that's going to give you the square footage and the amenities that we have because it was built as condos. You're basically renting something somebody typically would buy to own. >> Mhm. >> With garages, with private elevators, with big square footage, you know, things like that. Um so, I felt like we can market that property above everybody else's regular apartments. Um plus we're going to think out the box. We're going to go right to the big uh employers. We're going to do stuff management companies won't do cuz we're the owner. A management company and don't get me wrong, there are good management companies out there, but they're still even the best management companies are not going to cross the line and go beyond the call of duty. They don't care. They're going to charge you a fee based on the gross rents that they collect and they're going to do an average job of industry industry standards. But we as the owners, we're going to go beyond that. You know, uh yeah, there's a guy named Paul that works for me, right? I gave him a building out in the in that senior building I I I I have and and there was a problem filling the vacancies there. Why? Because it was in a very um rural area. What does he do? He buys those cheap bandit signs, he drives around all maybe a 20-mi radius or a 15-mi radius. He's sticking signs out in the high traffic areas, grocery stores. He's contacting senior centers and programs. We do stuff that nobody else going to do because we're the owners, all right? Um average people employees won't even do it, you know? I mean, what we we as owners will instruct employees to do it and they have to do it. But a management company, they're not going to they're not going to lose sleep. We lose sleep when we lose money. So, you know, multi-family is always the best smartest thing. If you're small, try to get into a fourplex. Why? Because up to four units is still considered residential. It's very easy to get a a loan for. You can get FHA. You can get VA if you're a veteran. Four units is a great place to start. Retail, the only way you're going to make money in retail, I'm telling you right now, you have to buy with vacancy. I mean, otherwise you buy it for a good cap rate. You buy at a cap rate, that's the end of it. You get your little increases over time and that's it. Retail is strictly about buying it with vacant space that you could fill. That's your upside. >> How much does bad management ruin a deal? >> Management [clears throat] is everything in real estate. Management is everything. You know, maintaining a property, keeping it rented, making sure you're at market rents, taking care of your tenants. I mean, management is is is after you buy it. 99% of real estate is finding a deal. Then 99% of it once you have to you buy it is managing it. And if you're doing rehab, you really got to make sure you got a good plan. Um, and then you talk about hotels and storage facilities, those are more of a business. That's all based on supply and demand. You have to buy real estate like that where you know there's a demand. Okay? Cuz I've seen plenty of places, hotels and storage places do well in a high demand area, and I've seen them go belly up because there was no demand. >> What's the worst situation you've seen an owner be in? >> I mean, typically they overpay. That's the biggest problem you're going to see in real estate. You overpaid and now something came up and you're going to be underwater. Okay? You didn't do your homework. You didn't check the roof. You didn't prepare for, you know, everything has a life expectancy. Okay? That's why the on your tax return everything is depreciated. Residential's 27.5 years. They depreciate your rental income. Why? Because they feel like these things are losing and so eventually they're going to have to be replaced or money's got to be pumped into them. On commercial it's 40 years. So basically, you know, everything has a life cycle. You got to be prepared for the end of that life cycle. If I walk into a 200 unit building and all you look at all the ACs and the ACs are all 20 years old, ding ding ding, I may have to be replacing a lot of ACs soon. Same with appliances. You got to check the roof. You got to make sure, you know, you got to do your homework. Plumbing, electrical, equipment. You got to take all these things into consideration when you buy a piece of property. You got to look at the future. You got to protect your for what could and will eventually happen. We all know nothing lasts forever. >> How quickly could you tell if a seller's motivated? Are there any signs to look for? But really quick, baseball fans, do you think you know who's going to hit a home run today? Well, FanDuel is giving you a chance to call your shot with daily dingers. Joining the action is easy, just make your free pick on who's hitting a home run in their game. If you're right, you'll get a profit boost to use on your next bet for a chance at extra winnings. And don't forget, you can make a free pick every single day during the MLB season. It's just another reason why FanDuel is the home for home runs. So, are you ready to play your game today? Join all the action at fanduel.com. That's f a n d u e l.com to play daily dingers and make your free pick on who's hitting a home run. Once again, that is f a n d u e l.com or just click the link down below in the description. Play ball and swing for the fences on FanDuel, an official partner of the MLB. And as always, just make sure this comes out of your entertainment budget. Transparently, I do like sports betting, but I always make sure that it's just a little bit of fun money that I put on the side. It's not an investment. 21+ select states for Kansas in affiliation with Kansas Star Casino. 18+ DC, KY, no purchase necessary. Opt-in required. Bonus issued as non-withdrawable profit boost tokens. Restrictions apply, including any token expiration and max wager amount. See terms at sportsbook.fanduel.com. Gambling problem, call 1-800-GAMBLER. 1-800-MYRESET. Call 1-888-789-7777. Visit ccpg.org/chat. Connecticut, visit mdgamblinghelp.org. Maryland, visit gamblinghelplinema.org. Call 800-327-5050. Massachusetts, call 1-877-8-HOPE-NY. Text HOPE-NY. New York, call 1-877-770-7867. Louisiana. >> How quickly could you tell if a seller's motivated? Are there any signs to look for? >> If it's on the market, okay? I don't believe in all that off-market. Off-market, off-market. Please, I ain't got time for off-market. I want something on the market. The seller is ready to sell. Okay? I mean, you got every every deal has a different story. The first question I ask a broker, or I don't even ask this question, they tell me right off the bat, "What's the story here? What's the story? There's a story behind every real estate deal. You know, is the partnership splitting up? Did the guy pass away and the family don't want it? Does the place need work? Uh he doesn't want to fix it up. Uh does he have a problem managing it? It could be a million different reasons why it's selling. You got to find out the story behind why he's selling. And then you have to act accordingly. And then you got to come in and lowball the out of it and make sure you're buying it at the lowest price possible. >> Do you ever walk away from a deal just so that they'll chase you? >> I walked away from plenty of deals and they chased me back down. >> Does that work? >> Is that a good strategy? >> because, you know, I know this guy is not getting a hundred fifty thousand a unit when his rents are only twelve or thirteen hundred a month. He's dreaming. Okay? He thinks he he created his own lottery. It don't work that way. It's all numbers. It's all underwriting. So, I'm going to say, "Listen, I can't pay you more than a hundred a door." Simple as that. You won't hear from him. He'll go through his marketing process. The broker will come up with no offers and he'll either move on to another broker, which is a waste of time, or he'll have to come down to reality. Okay? And a lot of times they'll come back to reality. The broker will call me up and say, "All right, you won't take your hundred, but he'll take a hundred ten if you want to move quick and show him some hard money." I get my deals because I know I move quick. I get in there. I get all my inspections done right away. All right? I I have bridge loan that I can do myself with a line of credit, so I don't need to wait on no banks. Okay? And I can move quick and quick money normally gets you the best deal. >> What's the most insulting offer you've made that's been accepted? >> I mean, I don't I don't think there's anything I mean, a lot of people say that, "Oh, he was insulted by your offer." This is business. This is numbers. I'm this is not a personal >> But do you ever just throw out a number it's But is this [laughter] >> I've lowballed the out of stuff and I've lost them. Why? Because I didn't want to pay more. I've gone to my max. I always determine this is the maximum I can pay for property to keep me in a in a safety zone that I feel safe in. Okay? I just offered 4 and 1/2 million dollars on a 16-story empty building over here. Not far from here. It was ruined by the flood. The broker said, "Listen, yeah, you're going to give him quick cash money, but I got other guys who are real players offering six and eight and all that." So, well, it's not for me. Place needs a $10 million rehab. I knew it for a fact. I already calculated. My son had to walk up 16 flights to the roof cuz the power is totally shut down in the building cuz of the flood. And we figured it out. We need 10 million bucks. We need all new power. We need all new uh plumbing. We need, you know, the the hot water heater systems. We needed new elevators. We needed everything. We needed to fix up all the units, you know, blah blah blah blah blah. We figured 10 million bucks. We needed parking lids, parking lots, landscaping, all that. And I said if I pay him more than 14 4.5 and I got to throw 10 million into it, I'm into it for 14.5. Well, it's only like 180 units and they're small units. So, it don't make sense. You got to set your comfortable price and not exceed it. >> Do you ever buy anything you don't want just because it's a good price? >> I mean, if it was a good price, then I should always have the option of flipping it. If I got it for a good price, I could always flip it. But I mean, listen, I bought deals that wasn't that maybe I shouldn't have bought it. I did it maybe because of the tax reasons, but I I don't know. I mean, you really never should never buy a deal that you're unhappy with. If you're not happy the day of closing and you feel like you made a smart decision, you shouldn't be closing that deal. >> What's the quickest you've ever flipped a property? >> I've flipped properties. I've sold them before I even bought them. >> So you like whole sold it wholesaled it wholesaled it? >> and somebody wanted to buy one piece out of a five package deal. So when it came to closing I bought it at a certain price but then I let the other guy take over that piece at a higher price. >> How much did you make on that deal? >> Probably about 30 grand a door it was about 20 doors so I made about 600 grand. I've also bought flipped deals at the I used to when I was young I would do foreclosures on the courthouse steps. That's the way they used to do them. We'd all stand on the courthouse steps and the property's going up for auction and the guy comes out from the county and he's taking bids and all that and we're all bidding against each other. And I would win properties in California and as soon as the auction's over the guy comes up to me says you know I should have overbidded you. I really wanted that place. I was willing to pay X amount of dollars more. Here you win the money. I wouldn't even take title to it. Wow. Give me the money. I'd tell the guy put it in his name. I mean there's always opportunities there. You know if you find the right deal. >> So purchase price is the most important thing. >> Most important thing. How much are you paying for that property? That's all that matters. >> What do you think about using AI to evaluate deals? >> AI AI >> What do you think? >> be AI Ben's Intelligence. And you go to benmall.com and give me on the phone and you can get some of Ben's Ben's AI. >> That would actually be interesting. >> Yeah. Ben's Intelligence. >> I like that. >> That that's a good idea. So people are making you know you have chat GPT they have other GPTs where you could put in all of your information like how you analyze a deal everything and record for 3 hours straight 5 hours however much you >> all of your videos by the way. >> and then chat GPT can make a BI and people can ask it questions and it's like you're getting an answer from Ben. >> We use AI a lot, especially with Sun now when it comes to contracts and leases and things like that. It's actually killing lawyers right now. It's cutting down lawyers' hours and their bills. >> What about for evaluating cash flow? It's like what's a good price to pay for this? Is it accurate in comping? >> don't know. When it comes to cash and money, I don't I don't trust anybody but my own self and a calculator and a pen. I'll sit there old school and I'll write down how much money is this place going to bring in a month realistically. What are my costs going to be? Okay? I'm going to tell you you can do all the underwriting in the world and I'm always right. And my son just doesn't He likes to do all the put in the numbers and do all the calculations and spreadsheets and all this stuff and it's great. He gets it to the penny almost. Me the no-fail sure way of being safe if you're dealing with 100-plus unit buildings okay, this really doesn't work as well. It's too safe for less than 100 units cuz less than 100 units typically don't have the same expenses. Okay? But for 100-plus units, it's real simple. You figure out what your gross rents are. Let's say the place is making you a million dollars a year gross rents, right? Okay, that's reasonable. Million dollars a year you cut it in half. Half your money is going to your all your expenses, include your property taxes and insurance. Half the money is going to operate. That's the way it typically works. >> Huh. >> Then you have to calculate your debt. So you got a million bucks coming in, a half a million dollars to run the place, then you got to figure out how much debt you're taking on and what the interest payments going to be to come off that half a million. Then that's you're going to be your return. It's always going to be so close it's going to blow you away. >> They say for single-family homes, it's usually about 15%. >> 15% is a lot. Yeah, 50% single family homes, smaller buildings it don't work. You get a much You have less expenses. You don't use the 50% rule. >> Is that what you use? >> use the 50% rule cuz now you got to understand, the 50% rule works for 100 plus units because you have managers, you have maintenance, you know, you got a payroll, you got grounds, you got all these expenses that you won't have with a single family house. Single family house is really nothing. You collect the rent and if something fix, you you send somebody over on stop a toilet. Typically, you can make the tenant take care of their own grounds if it's a single family house. You don't pay no utilities, it's all on the tenant. There are no expenses. But single family houses don't cash flow. They're a worst investment you can ever buy for cash flow. You flip single family houses. You buy them, you fix them, sorry, you flip them. Don't ever buy a house for cash flow. It's stupid. It makes no sense. >> This guy >> I've never seen it make sense. And then then some people end up with a ton of them. Now you're sitting with all these single family homes, you're not going to be able to package them together and sell them. Very rare. Okay? Very, very rare. You have to sell them individually. And they're not going to cash flow, especially if you have debt on them. And if they don't cash And if they don't have debt on them, you're going to get a return. >> Now a lot of people say in terms of single family that we are in a housing crisis, but there does seem to be a lot of inventory right now on the market for single family homes. >> cuz people can't buy a house right now. Why? Cuz they don't they don't they doesn't fit their budget at 6.5% interest rate for the house they want. They got to pay 6.5% interest rate, they got to pay principal, they got to pay insurance, they got to pay taxes. It Now is the time to rent. So now is definitely the time to rent. >> So what do you tell people when they say should I buy a house right now? >> I mean, if your budget can handle it and your lifestyle requires it, you know, or it's a necessity would you know, and you can handle it then yeah, you always buy a house if you can afford it because it's a personal thing. You know, it's not really an investment. Houses are not investments. Typically, yeah, you buy a house and you live in it for 5 years, it typically appreciates, you make some money after 2 years, you don't have to pay no capital gains tax up to 250 or 500,000 if you're married. It works. It works. But it's not an investment really. Houses are personal purchase. And never buy them for investments unless you're flipping it. I mean, typically the best smartest thing to do is you buy a house and you improve it. Cuz the houses that There's a reason why a house is not selling, too. Okay, because there's something wrong with that house. Maybe it doesn't have enough bathrooms. Maybe it's too small square footage. You come in and add value to the house. Maybe it needs to be fixed up. Whatever the story is, is there a solution to the fix? You come up with the solution, do the numbers make sense based on what you're buying, based on what you're spending improving, and what the market will pay for it. This is And you want to be below the market so you know, you can sell it quick. >> This is the first time though that I've ever seen it where people are getting less than the price that they spent fixing it up. Because it seems like the prices right now for materials and labor, people are overspending. So they might put I've seen $500,000 into a property, but they might only get back 375, 400. So they're taking a loss to fix it up. >> Nobody knew that the price of gas was going to go to $5 a gallon. Okay, that affects every aspect of our human life. Everything you need is tied to oil. You know, because the cost of making stuff, the cost of shipping stuff, uh so now because the price of that went up, the price of everything goes up. You have to you know, nobody has a crystal ball. >> This is what I thought that would really help the housing market. I wish they do this. Imagine if they said for people that build a house in the next 10 years, If you build, your profits could be tax-free. Imagine how many people would build a house everywhere they could. It seems like that would completely solve the housing shortage. If they just >> for who? Somebody buying them just to sell it? >> Yes, a builder. Building adding a new housing unit onto the market. If you're able to add, if you take the risk, the time, the capital >> that going to help anybody except big the builders more money? >> Because it adds more supply into the market. More supply should lower the prices. >> Well, it's not so much I mean, listen, the cost of building is not cheap. There are so many developments right now. I bet you if we looked at it, you go to Lennar's or you go to all these places, I'm sure they got plenty of developments where they can't sell those houses and they already built them or they had plans to build them. Stop kicking me. >> Jack. >> Where do you eat some >> I I didn't know that was your foot. Yeah, yeah. >> I invite you to eat? >> Yeah. >> All right, is everybody to eat? >> Right now? Sure, if you're hungry. Yeah, we could take a >> I mean, we'll eat quick and then we'll knock it out. >> What time you guys got to get out of here or what? >> We don't have Today's Today's your day. >> What do you want to talk about? Banking? >> Why is banking the most important thing if you're trying to build wealth then? Like what did this seems like that >> Cuz you need their money. You got enough money to buy a piece of real estate? No, average person don't. You got it. The bank is your best friend in the world. Your bank becomes Your bank comes before your wife. >> Really? So, if your banker calls at the same time as your wife, which one do you pick up? >> The banker. My wife knows Well, banker calls, done. Nobody's more important than your banker. >> Okay, what about your wife and your banker both want to go out on a Saturday night 9:00 p.m. Who has priority? >> Typically, bankers you don't want to take out on dates. >> It's not a date. It's just a business meeting. They just say, "Hey Ben, I want >> Yeah, you don't do banking after hours. We do lunch meetings, stuff like that. But the point I hear him stating trying to make is if you're in real estate banking is the most important person in your life is your banker. >> So, if you're trying to develop a relationship with a bank, do you pick a specific bank or do you try to have relationships with multiple banks? Do you get to a point where you don't shop the rate they provide you anymore? >> You'll get to a point where you don't need to shop around. But at first, you got to kind of see who's giving you the best deals. And whoever gives you the best deals, the best rates, the most LTV, you know what LTV is? >> Loan to value. >> Loan to value. The people that are going to make your life easiest with the best terms, the best rates then you'll end up throwing more stuff their way. Of course, common sense. But and you know, I used to work with 10 different banks. Now I only work with one. >> Who's the best bank? >> In my world, BofA. >> Bank of America? >> Biggest bank in the country, in the world, I think. >> Why not Chase or Wells Fargo or >> I've dealt with Wells Fargo. I've dealt with Chase. I dealt with them all. The problem is when you get to my level you need to have a brokerage relationship and a banking relationship. So, you need two companies or basically BofA is the parent company. BofA owns Merrill Lynch. Right? >> Mhm. >> So Merrill Lynch knows the brokerage. BofA knows the banking. Right? So, basically my broker technically works for BofA cuz he works for Merrill Lynch. Merrill Lynch is under BofA. They tell BofA they tell Merrill Lynch what to do and control everything. It's it's a relationship. The broker goes to bat for me to get my loans. Why? Because I'm his client. And the more money I make the more money goes in his brokerage. The bigger he is. It's it's it's all ties together. But I've actually believe I made it to the top level. I've been with every big shot bank there is. Okay? And I'm going to tell you they've been the best and easiest to me. Not only that, once you have a you when you have that kind of money to be in a brokerage wealth management side you're basically getting a lot of help. Cuz these people care about you. They care. They have to care. Because your well-being is their well-being. Okay? If you make more money, more money goes into the brokerage. And they get credit for all loans they throw BofA through the brokerage. Everybody's making money. >> That sounds very similar to my second loan that I got. The first loan I got I shopped it around with like 10 different places, got a really good loan at 2.875 during COVID. And then now I bought last year and the problem was I shopped it around. First of all, couldn't get qualified cuz like YouTuber income is very hard to show, but I shopped it around a bunch of different places. I was getting 6 and 1/2% 6 and 3/4 and the best rate I got was actually through my brokerage. >> So you Schwab to qualify? >> your assets up to get the loan. >> I actually don't think that I did. I think I was able to leverage my relationship >> He got a discount because of the assets with Schwab. >> but I didn't I don't have to keep my assets there. It just showed because I was also having trouble qualifying, but having assets in Schwab I was able to use >> What? >> You need your tax returns? >> Tax >> Do you file tax returns? >> Oh, yeah, yeah, yeah. The problem but but as an entrepreneur you have like weird money flows and routing and stuff like that and this was confusing them and it wasn't like getting their seal of approval. And so I had to shop it with Schwab and Schwab has Rocket Mortgage. They're you know that's like their Rocket Mortgage's parent company is Schwab and so I was able to get the best deal by miles actually using the the brokerage. >> There you go. It's all about relationships. >> So if someone's just starting, where do they begin? Do they go to Bank of America? They just like >> Listen, when you first start it's a whole different picture. >> Yeah. >> You go wherever you can get in. Okay? You know, cuz if you're just starting out, you're not going to walk in the bank like a big shot and and and want to get a loan. It's not going to happen. Okay? Like I said, it goes back to risk. You know, if you're still a high risk person then you know, you're going to have to shop around. You should definitely if you're a first time buyer, you should be doing FHA with low money down and the government backing a percentage of that loan. Okay? Typically most people start with FHA when they want to buy one to four units. That's what I think. Um you know, but when you're first starting out, you just got to shop around and get the best rate like we all did. I used to borrow from hard money guys when I was in my 20s. Why? Cuz no bank would loan to me. And then once I got established and then I made a few bucks, then I went to the D paper. Then I moved up to the C paper. As I move up the ladder, the interest rate comes down and the terms get better. You know, and then I eventually went to B and now I'm at A. B of A. >> So why is it that you want to do so much consulting? I'm curious why you enjoy it so much. >> Uh to help other people, you have to do it to understand it. Okay? When I get off the phone with somebody knowing that I made an impact in their life and I helped them, I get a certain human feeling that money can't buy it. You can't buy that kind of feeling. You know, it's just like I felt that I really did something in life. I accomplished something to help other people while I was on this planet. Okay? I just I know it's the right thing to do. Okay? It's like religion. Some people believe, you know, in the religion's part of it. They get some sort of special religious feeling. I get a great feeling by knowing that I helped people while I was here. I did it and I showed them how to do it and helping people improve their lives. If the whole world acted like that, it would be a beautiful peaceful world. I mean, honestly, you know, helping people that generally just want to improve the quality of the life. I came from nothing, from the most dangerous neighborhoods in the world. I should have been dead or locked away in jail growing up in New York back in the '70s and '80s and luckily army saved my life. And I just know that helping other people is the right way to live in. That's the way humans should live. Always try. I'm not saying give away I'm not saying, you know, some I mean, helping people help themselves. That's the greatest thing in the world cuz then they don't need you. >> It's It's interesting to me because uh when we're taking breaks between the podcast, the one thing you get so excited about it you just want to talk about is the consult. >> I like >> Even when we're just hanging out, it's just you want to talk about the consult. >> and helping them resolve their problems or putting together a plan that they're going to be successful. It's I'm passionate about that, okay? And not a lot of people, like I said, I've had some sports guys, you know, come and tell me, "You know, you're really lucky. You know, yeah, we go out there, we entertain and we score and and [snorts] people clap and applaud, but you're actually helping people." I mean, what what greater diff is that in life to that to help the next person come up and enjoy their life and live a better life. It just makes everybody happy when everybody's doing well, doesn't it? >> Why don't you write a book? >> [gasps] >> I don't know. I never went to high school. >> You don't have to write it though. You could have someone else write your book. >> I need a ghost writer. >> Yeah, you could have someone who just follows you around for a year. >> But I have to find the right person and sit there and go through my life story. What am I going to find? I mean, there's a lot of things I could do, but you know, I need the right people to help me. >> I think you can do anything in life. You can make, I think, one of the best real estate money wealth books in existence. >> I mean, you know, listen, to me it's such a something that I really enjoy. You know, if I could stop even being in real estate tomorrow and just help other people, I would definitely love doing that. Plus, I could do it excuse me, from anywhere. You know, so it's just it's a great thing, you know? Imagine if the whole world just had that, you know, if all the successful people in the world helped other people. It's like the old saying, you know the oldest saying in the world? Give a man a fish, eats for a day. Give the man a fishing pole, eats for life. You ever heard that before? >> Yeah. >> All right, so there you go. It's perfect sense. Teach people how to help themselves. Get them a push to where they can help themselves and they can grow as big as they want. That's what you should do in life. Now, it's up to them how big they want to grow. But if you help them, at least they can't say nobody ever tried to help them. >> How do you know who is worth helping and who is not? >> You could tell by, you know, they explain their situation. You know, people The average guy calls me up, he tells me, you know, he's married, he's not married, he's got kids, he owns a house, he doesn't own a house, he's got this much in the bank, this is what his annual salary is. What do I do? And we sit down and we look go over your options. I don't tell him what to do. I just tell him what his options are, what he could do if he applied himself, and what I would do if I was in his shoes. Like all these young guys in college, I got I got a big audience of college kids. That's what a lot of my audience is. I've even talked to colleges, and I tell every one of these young guys in college or girls, "Get your real estate license while you're in college." Okay, you're already going to school. What's one more course online going to hurt? Take the course online, take the 4-hour test, right? And it's a license to make money. But not only is it a license to make money, it's going to put you in a circle of people that are in real estate. You got that license, you can walk into a busy brokerage that's doing deals, you can hang your license there, you latch onto a team or other people who are seasoned in real estate, you learn from the ground up, and and you're in it. You're in the mix. That's how we say it in the street. You got to get in the mix. You know, it it puts you around what's happening if you're serious about being in real estate. And once you learn to sell for other people, then you end up buying your own. Or, in my case, I went the management route. I didn't go to sales route. Uh I went the management route. I started managing other people's properties, and then if you can manage other people's properties, you sure can manage yourselves, your own, as long as you you know, you had the money to buy the property. So, my entrance into real estate was management. People would pay me to manage their properties, and I did very well. Then I just moved on to ownership. I mean, you know, it's up to the person to just take that ride and drive that car in the direction they want to go. But pushing people, giving them some gas to do it, that's what is is the great thing to do. Cuz once they get the gas in the car, and they start the car, and they start driving, and they start traveling, and and accumulating real estate assets and making money. I mean, that's they're on their way to a great life. Listen, we all know or maybe he doesn't know. I [clears throat] know you know. Listen, going through life without money sucks. Let's face it. I feel sorry for all the people that have to go to bed at night wondering how the hell you're going to pay their bills. Do you know what the hell I pay? I'm not kidding you. I pay five, six, seven eight kids. I pay for eight kids to go to private school. >> How much is that? >> Each kid is over 30 grand a year. >> Oof. >> The ones in college, oh my god, that's going to jack me up with room and board to 50 or 60. Okay? I mean, you want to making money is definitely it's part of our life. It's our system. It's part of being human and you know, in in in our world. Okay, we don't live out in the woods. We're not hunters. We're not killing for our food. You know, having money does make your life easier. Knowing that you got enough money to pay your bills, get your kids a good education, live in a decent house, not worry about your car breaking down you can't fix it. Insurance, you know how much expensive it is to live these days? It's crazy. I don't know how my employees do it. Okay? They got rent, they got utilities, they got cars, they got clothes, they got food. It costs a fortune to live these days. So, anything I can do to help people make their lives easier and better by making money is a great thing. And like I said, it just it would be so great if everybody thought that way and everybody tried to help other people get ahead. People that want to get ahead, they got to have the want. You can't waste your time with somebody that just doesn't want it or have the drive. >> What do you say to people that that want to tax you more? >> Listen, running a country is running a business. We need leaders in charge that are more like accountants. That's what we need. We need accountants to be politicians. Cuz it's all about money. You know, like DeSantis is talking about you know, giving a bunch of property tax relief. >> Mhm. >> Well, if the counties can handle it and not collect as much as they collected cuz they have a surplus, like you know, I see them doing a lot of stuff that I don't think that I don't know. I don't The problem is people in politics are not business people. That's the biggest problem we got with politics. Okay? And then when you do get a business person, we get someone who I'm going to say it, cuckoo's. You know, cuz you know why we we you can't find good leaders in politics? >> Why? >> Cuz nobody wants the job because of all the bureaucratic bull and all the people in politics that don't know about business and they all got their wacko ideas on how things should be. They don't just look at what is makes sense. Okay? What What What is it makes sense that we need to do here that is just normal and and pretty much is fair to everybody. Okay? Taxes, listen, I got to pay 37% of of all the money I make and earn, okay? I think that's a bit high. But the first thing we need to do is let's look and have a real budget. Okay? Where are we spending money at? Where are we wasting money at? But nobody wants the job because there's too much bull that goes on. All the CEOs of companies, successful companies, they wouldn't touch politics with a 10-foot pole. Because you got all the people that don't belong in politics in politics because they just want to have a ride the system job and they want to, you know, push their ideas on you and that's how they think things should go. You know, listen, and I'm sorry to say, people who are not successful do not belong in politics. If you've never run a business and you've never created anything and you've never had any experience running anything, you know, with employees, and then you shouldn't be in politics. >> I would vote for you. Would you ever run? >> Never. Cuz too many cuckoos. I tried to get a I I downtown Clearwater, right? It's occupied by the Scientologists. It's a fact. I'm not talking bad about them. It's a fact. They bought up all the real estate, and everybody's crying, "Oh, they own everything. Oh, they own everything." Well, you let them. Now, we don't have no tourism, and downtown is dead. Okay? Well, they're always crying about that. Everybody's bitching about it. Well, do something about it. Okay? I went to the mayor, and I said, "You know, we need on is the crossing the beach. The beach is here we get tourism, but on the downtown side, on bay side, we get no tourism." And we had this beautiful waterfront. I said, "Let me I brought in the designs and everything. Let me put a Ferris wheel right here on the waterfront. The kind is air-conditioned, good all year round. It'll be a great draw. And the people will come to Ferris wheel, just like in Orlando. They'll come to the restaurants, they'll come to the all the the stores and shops around there, and we'll create a buzz. Okay? Num- number one, the mayor straight out told me he doesn't have the power to approve it. Great idea, but he doesn't have I was going to pay for it. All he do is give me a little piece of land to lease. I would have put it there, bought it there. I would even done shared profiting with them, profit sharing with them. He says, "Well, I this city has a a no-power mayor." The mayor can't even make a decision. He has to go in front of like seven or eight board members. And these people these people aren't qualified to run an ice cream store. I've seen them. They've never done nothing their whole life, but maybe a government job, and and and they had no clue about business. They had no vision of the future. All they want to do is and complain about everything. We have the wrong people in politics. That's the problem. We don't have educated business people. >> Is this ever going to change? >> Unfortunately, the the way our society is, we got half the country that are doers and half the country that are just want to ride the right of ways. >> Takers. We have doers and takers. >> Democrats, you got Republicans, and then you have your kookoo whatever What do you call the other people? Anyway, the point is this. You know, everybody needs to come together and just do what makes sense and be fair to everybody. Of course, we need services. We need police. We need fire. We need the roads. We need everything. Schools. Takes a lot of money to run a place. Yes, you need taxes. Absolutely positively, we have to have taxes. But do it reasonable. You know, do it do it where you get what you need. All this waste that goes on. You know, we got people How many people in this country have jobs that we probably don't even need in politics or in bureau- bureaucrats. You know, I I I mean, I'm just saying it. It's just With technology, you know, these people should be more in private sector. Private sector is what makes this country run. Without private sector, you got nothing. You wouldn't have government without private sector. Right? Private sector employs the people and then gives the money to government and then the government employs people because they're getting the money from private sector. But, you know, it starts with the public, you know, and and we just got to get rid of all these people running for office that just don't belong there. >> Do you think it's easier than ever right now to get rich? Hey, by the way, really quick, if you want extra content just like this as well as early access and a bonus post show posted every single week, feel free to join as a channel member to get immediate access to all of that as well as early access to everything else that we post along with priority responses to all of your comments. So, if that sounds cool, feel free to join. We'd love to have you on board. Thanks so much. We'll get back to the podcast now. >> Do you think it's easier than ever right now to get rich? >> I think it's always easy to get rich if you find what you really have a passion for doing and have a good plan. I think, you know, listen, I get consult calls from kids they're in their 20s. >> Mhm. >> They're making millions. E-commerce. E-commerce. They don't even touch the product. I don't know much about e-commerce, but they're making millions of dollars online with technology. I think it's even easier today. I mean, you know, but if you have a passion for something you're real serious about it, you know, and it has the potential to make you rich, you know, I mean, the world needs everything. >> So, what do you think then is the main thing that's stopping people, if it's easier than ever to get rich right now, from becoming rich? >> lot of people getting rich, and then there's a lot of people that just want to sit on their phone, have the drive. And that's fine. I don't knock these people. Listen, you know, I was told a long time ago, you know, I think the guy he he told me, you know, when I failed at whatever shitty job I had, he says, "Well, don't worry, you know, the world needs dish washers." It's true. You know, but you have to stay a dish washer your whole life, no. Maybe you make it up to sous chef, maybe you make it up to chef, I don't know. Depends on the individual. Not everybody's cut out to be rich, that's a fact. You got to have that burning desire inside you. Just like, you know, I don't know about you, but he has it, where he knows he wants to get up every morning and he wants to create, and he wants to grow, and you want, you know, he wants to be wealthier. That's the reward. Getting rich is the reward for hard work. You work hard, you get rewarded. >> So, you think the main obstacle in becoming rich then is mostly just a motivation and like a want. How badly do you want >> mind. Okay? It's a frame of mind. If you have your frame of mind and and you don't waste your time with nonsense. If you have a logical, you know, frame of mind that says, "Okay. If I do this, this, and this, it's going to get me to this point here. You know, it's just like if I get off my ass, like I tell everybody calls me, get off your ass and get an agent to help you look for the deals that you can afford. Okay? Why not? Why? Sitting around talking about buying something or looking on your own? Why? Get a professional to help you. Find a tool that's going to help you. Find an agent and then if you don't like the agent, find another one that's dedicated and motivated to finding you the type of real estate that you want to buy and you can afford. Okay? That understands what you're looking for, what you're trying to accomplish. Okay? It's like when I sit down with lawyers, accountants, wealth managers, bankers, I got to really feel that when I'm talking to you and we're discussing my situation, that you understand what I'm trying to accomplish and you're going to be instrumental in helping me accomplish that. Okay? You got to get with people that are on the same page and then you got to just keep moving forward. Get your ass out there. Get a list through your realtor. Look at all the deals in your area. Draw a circle on a map. All right? In your price range. Understand the market and look for opportunity. >> Is real estate still one of the easiest ways to build wealth? >> I mean, it's all I know. I don't know how to make money doing anything else. Anything else I ever tried or really barely tried in life, you know, I never put forth the effort. Real estate's worked for me. That's why I like to talk to people and help them with real estate because I know from real life experience that it's helped me and I am more than happy to share that knowledge and share my experiences with other people so it can help them. Right here. I created that. Oh, I banged. I created this. It was a thought. I said, "You know what?" I looked at a Mustang one day. I said, "That's a boxy car. You know that would make a cool pool table if we just whack off the roof, right?" And we did it. I put together the right people that had the right skills. This one's a Camaro, by the way. And it was just something I wanted to have for myself. What happened? It so great that we started making them and selling them. I shipped these all over the world. I shipped these to Dubai. I shipped them all over, you know, and it has real parts from cars. This is real. This is real. Emblems are real. Lights are real. This is We make this. We use a good table. You know, we make it and we It comes in pieces and we have it put together in somebody's Tommy Hilfiger bought one from us. Okay? >> was it? >> How much? >> I mean, they start at the bottom and I do 15 grand, which is not a lot for This is a real This is a real item. And this is quality. The paint, the table, the fiberglass, the parts. We have a license from GM and Ford to produce these. I didn't have the the the the the time to put one in a trailer, go to all the classic car shows, like, you know, Mecum, >> Barrett-Jackson, >> Barrett-Jackson's. You know, travel around the country. I didn't hire a salesman. I didn't market it. So, you know, we sell quite a few, but not nowhere near the level it could have been if I would have put my heart and soul into it, but I couldn't because real estate is where I need to put my heart and soul in because real estate is big numbers. Big numbers. It's very, [clears throat] very possible I could go out tomorrow. I could buy a deal for 10 million bucks, and I could turn it into 15 million bucks. In real estate, that's not hard to do if you apply yourself. So, I focused on that. But, my dream in life was to sell car pool tables. Step right up. Step right up. Hitting a ball at the big show. People flocking around. Look at that. It's a car and a pool table. The ultimate man cave toy to have. >> Are you good at pool? >> I used to be in the army. Yeah. In the army, I was good. Now, I am playing for a while. >> So, >> Practice. You got to practice. Practice. Practice. >> So, what do you do all day with your time these days? >> I wake up in the morning. My phone starts ringing at 8:00 in the morning. Brokers are calling me. I got all kinds of brokers calling me. What's the latest deal? What are we working on? What are we writing an offer on? I'm talking to bankers. I got different three, four different refinances going on right now. I'm talking to uh you know, management. I got to go through all my assets in my head. Make sure I'm on top everything needs to be done. The school we bought. When I bought this school, the university, part of the deal was I have to put on a new roof on that place. The seller gave me a credit for it, but I have to get on the phone. I got to get bids on the roof. I got to get a roofer lined up to get that done. We need a million dollars worth of AC work that was promised to the tenant to be done. I got to get bids on that and get that job cooking. I got to go through my whole portfolio. I'm managing uh you know, a whole bunch of assets and I got to be on top everything those properties need and whether it's financing, whether it's uh improvements, rehab, whatever it is, you got to be on top everything, you know, and um and then I try to you know, take a time out. Any books uh consulting calls, which I probably do better off in the evening time when the day is kind of slow down. I'm on the phone with my lawyer every day. I'm on the phone doing deal my 1031s. I'm dealing with all kinds of stuff. >> Do you enjoy that? >> I mean, it's my life. It's my career. I I mean, yeah, do I enjoy it? I enjoy it when I'm productive. I like at the end of the day to think back and say, "Okay, what did I get done today?" That's where I really need to have that feeling. I hate to the day to go by and I didn't really get done. To me, that's depressing. I like to, you know, time management is very important. You know, me and Aaron drove around all the properties. We took pictures of everything that we need to be done. He wrote up a big fancy report. We emailed it out to all the people that were, you know, pertain to. We need this done. We need that done. We want that fixed. We want that painted. You know, we need hotel rooms built over here. What's going on with the permit? Uh do we have all the subs lined up to build do the build out? I mean, it's managing a portfolio. That's what I do. Run a portfolio and make sure every asset gets the proper attention to maintain that asset and make it grow, you know, or maintain it. >> What is the greatest success in your life? >> The greatest success in my life was being able to sit here with Jack and do a podcast. I mean, >> Well, I'm glad to give you that success. Mine, too. You're welcome. >> If I dropped it tomorrow, I could say I sat at the table in my house, my table, with Jack and did a podcast. >> Well, I'm honored. Thank you. How do you like the new boat? >> It's a great boat. I love it. You know, but you know, that requires management, too. I got a captain. And then we need uh somebody to help him a lot of times, a mate. We got repairs that have to be done all the time. We got to maintain it. It needs all kinds of stuff done. And I have pretty much have to manage it. He helps me and does it, but I got to oversee and make sure everything's being taken care of. We're not overspending. You know, if we're going on a trip, we got to hire a steward. We got to stock the boat. We got to plan where we're going to go. We got to get uh dockage here. We got to get fuel delivered. I mean, you know, I have the captain that helps me do all that, but I still got to be involved. He has something that needs to be repaired. Is this the best cheapest way of repairing it? Or should you replace it? >> How much How much is it? >> Everything in life is stressful. If you want to really take it to that level. Could I hire somebody to handle all that? Yes. But I like to be involved. This way I know people do make mistakes when it's not their money. I don't I always I'm not saying I don't trust people with money, but I like to you know, monitor it. You know, and make sure that everything is right. Just like I told you about the Rolls-Royce story. You know, if I would have told somebody that worked for me, an assistant, "Hey, get that Rolls fixed." They would have took it to the dealer, would have cost 40 grand, and there you go. But no, I thought about other ways and other alternatives and options, and it cost me 4 grand. Saving money is making money. >> Is the bigger yacht worth it? >> I mean, the yacht that I have now is it has different features than the yacht yacht you were on. Like this one has bow seating, real bow seating with tables and in the very front. This one has the on-deck master, so I don't have to hurt my knees going down the stairs. This one's got a big open-top deck. I mean, you know, it's a it's a step up. I mean, yeah, I don't need a 20 or 30 million-dollar yacht because [clears throat] then you need a big crew, and then you have a tremendous amount of maintenance and expenses. That's not my lifestyle. My lifestyle is where you basically what I got now, 92, maybe pushing to 100 one day, and that's good enough for me. You know, but everybody has their own comfort zone. My comfort zone is the boat I got now. I did buy it right, maybe I'll sell it, maybe I'll get something, you know, a little faster, a little newer, if there's something out there, I don't know. But I mean, I like to be in my comfort zone. >> What's something that I can improve on? >> High platform shoes. >> Okay. >> I think the extra few inches will make a big difference in your life. >> Okay. What's something I can improve on? >> I don't think there's much hope for you. >> So, I'm already perfect. >> [laughter] >> Um >> The thing is you can't go any lower. >> Perfectly. No, I don't want to pick on you too much. I mean, listen, everybody really knows what they need to improve in their life. I know I'm overweight. I know I smoke. Okay. I mean, but am I doing anything about it? Am I changing? Everybody knows what part of their lives they need to improve. It's just a matter of doing it. >> You think those are the two main things for you? >> Me? Health and smoking? Those are two things that are going to kill me quicker. >> What do you think if you were to really, like you said earlier >> here for a short period of time. >> Your favorite phrase, gun to your head. >> Gun to your head. >> Obviously, mute the G word. >> Yeah. >> What do you think is the first thing that comes up that you need to improve on? >> Uh probably getting overspending anxiety. That's what it is. I get a lot of anxiety spending money. >> What is the last thing you got anxious spending money on? >> I didn't buy This sounds so bad. It sounds awful when I say this, but there was a SpongeBob animation cell that I really wanted to buy, and I set a price for myself where if it goes beyond that, I'm not going to bid on it. I really wanted the thing. And then I I lost it over like 150 bucks. This is dumb, but like >> do you regret it? >> Cuz it was a great piece of SpongeBob art. It's from the first season. It's a master key cell of SpongeBob himself. >> Would you pay $300 right now to have it? >> Plus $300 extra? >> Oh, yeah, extra. Yeah, I would. >> Listen, you know, I used to have a lot of problems spending money, too. I always had to buy something for the cheapest cheap cheap cheap, you know, everything. And now once you get to a level that you know you've never been at before, uh now you have to enjoy your life, too. I you do. Within moderation. It's like, you know, me and my wife and the kid were sitting in the car last night, and I said, "You know what? We've traveled a lot, but I've never been to Monaco." And let me tell you something. If I open up my wealth management account on any given day, it could be up or down by millions of dollars. Not a lot of millions, but a few. Depending on the market. Bonds fluctuate, values fluctuate. I do have stocks that I let them manage. Okay? So, if my account can fluctuate by millions of dollars a day, and it doesn't really change my life whether it does or not, is it really going to matter if I blow 50 grand to go to Monaco? It's not going to change my life. It's not going to affect me not one single penny. If I saw $50,000 less in my account tomorrow, it has no impact on my life. Is it going to make me and my wife and my kid and family a lifetime memorable experience? Yes. So, you got to spend money when it comes to quality of life and if it's not going to hurt you. >> You also went out and bought a Ford GT. How much did you pay for that? >> 306, and it's worth $500,000 now. >> How much did you pay for it? >> $306,000. >> Sell [snorts] it. >> No. Have you seen the prices of these things lately? >> you're at a height. >> No. No. No. No. They're only going higher. They're No. >> When you bought it, did you buy it as an investment, did you? You didn't buy it as an investment. >> I did buy it, sir. >> I know. I walked in in the dealership, and I could have bought the same car for $50,000 less. >> listen to my advice. >> Why did you >> fit in it. I was too fat. >> And Ben, where are you invested? >> Okay, let me explain to you what I did. I used to be a day trader. During the I got my ass handed to me in a crash. When you guys were still selling in the Boy Scouts. >> Was that I doing? Was that the 1920s crash? >> No. Anyway, the point is this, you can't do everything in life. All right? You got to pick something and do it the best you can. You can dibble and dabble a little, but you know what I did was goes back to relationships. Okay? I let the experts do it. So basically my relationship with Merrill Lynch is yes, I'm mostly in tax-free muni bonds. That's where I like to be at because it's safe and I can borrow against it and it's tax-free. All the interest on that 5% tax-free is really like 8 to 9% to me. But I give them a piece. You know, I don't know, whatever it is, you know, 30 20 30 million whatever it is and they have their models where they have a team that discusses what's going on in the market, where they think that they should be investing in, what's good, what should they sell. They got like a dozen people that sit around a table and discuss this like pretty often. And then they manage their customers money which they get a very, you know, reasonable fee for. Maybe I don't know. It's not much. It's probably the Yeah, but don't you think you could achieve the same thing as buying an index fund? I mean yes, you can do that, but I ain't got time to worry about any of that because the reason why I'm as successful in real estate is because I'm focused on what I know I can do. Okay? Stock market investing, leave it to the experts. But you got to be with the right experts and they going to have their have their ups and downs, but I believe they've in the past couple of years they've doubled my money. I mean I know it for a fact. I think I gave them 20 or 30. Okay? I think I gave them half of that 2 years ago. You gave them 15 million and they make gave got you 30? I think Well, the market's up a lot though. I think it was like really really good. I think honestly to be honest with you they went from 10 to 25 couple of years. Everybody's done well in the market recently especially with tech. So, you know, listen, everybody's got their own lifestyle, their own time management. You know, my son likes stocks. I let him play with my little edge account. They have a thing called edge account where I can trade myself. I let him play around with that cuz he showed an interest. >> Uh-huh. >> But, you know, it do you is does he have an interest or is he just like gambling? >> Uh-huh. >> That's the question when it comes to stocks. Are you going to do your homework? Are you going to look at the news? Listen, I was offered SpaceX by Merrill Lynch at its IPO 135. And I should have bought it, but I was busy that day with real estate, so I didn't buy it. Then I saw the thing go right up to >> 200. >> And I said, "Oh, I should have done something." But, yeah, I didn't. IPOs are very rare lately. And then it came back down. I don't know where it's at now. What is it? >> 155. >> 150, okay. So, whatever. It goes up and down. Listen, I got no time to be on a roller coaster. The only way I could trade stocks is if I sat in an office and watched CNBC all day long and kept doing research. [clears throat] >> Absolutely not. Oh my god, look at the price yesterday. I looked at the price yesterday. What was it? >> What was the price yesterday? It was 137. >> No, it wasn't. No, no, go back more than a day. Go back more than a day. It was 155. >> Yesterday it was 137. No, I'm sorry. That was That was several days ago. >> No, it wasn't. Right there. That's what I was looking at. What day is that? >> July 9th and today is July 15th. That was a week ago. >> There's no way. >> What is it now? >> It was a week ago. 135. >> Okay, so it's back to the IPO price. >> Holy crap. >> I'm just saying. How can you just write off what I say without having any idea what you're talking about? >> It's the last thing I looked at. It's It's Apparently you need to look at things a little bit more closely. It trades during the day. Last thing I looked at was a week ago. >> Tell me if you agree or disagree. >> not trade during the day. >> Okay, the people The people that are in the stock market, serious players, serious stock brokers that are doing all this trading, okay? Don't you think it's like a game you're playing when you're one of them, okay? Things go up, things go down. They drive I I always have this I always think I have I always had this conspiracy theory about stock market. I could be wrong. >> Uh-huh. >> But I think they all kind of know what they're doing. When something comes out, they buy the out of it, drive the price up, and then they when it goes up to the price they want, they sell it, take money off the table, and they have their own system of making money. Okay, I really believe that. And I don't think they even communicate with each other. They don't have to. They just all know that yes, IPO comes out, everybody's emotional. Ooh, it's SpaceX. It's He's a trillionaire now. Uh blah blah blah. That thing goes through the roof to 220. And it's all hype. There's nothing The problem I have with the stock market is it's not logic based. If you look at their income, they'll There are companies that the stocks go through the roof based on speculation of the future. Okay, I don't There's so many companies that don't make a dime, and their stock keeps going up. Am I right or wrong? >> Right. >> I don't believe in that. I mean, yes, it's it's just a whole 'nother world that I can't be in. If I was in that world, I'd be out of office every day while the stock market's open, trading like I >> You don't have to. You just buy >> And when the stock market's not open, I got to be doing research. >> You just buy an index fund, and you average 6 to 8% a year >> say >> 20 years. >> Well, not necessarily. Index funds go down. >> They do. >> airlines? Airlines are getting crushed right now. >> they're but >> The price of fuel, they're going out of business. >> but if you look at the global stock market, like a big fund that covers the global stock market, even if airlines go down, something else will take its place. >> I'm invested in. >> V T VTI VOO the Vanguard index funds. >> All right. You're happy with it? You recommend it? I believe it. You know, because but you know, they got tons of people behind that making the decisions. They're experts. >> They might have them invested more aggressively in a lot of tech. The mag 7. I'm just saying an index. Like I wouldn't even be doing that. >> on BlackRock. Or Blackstone. One of the two. >> Prob- probably BlackRock. >> Yeah, well, because they had some fund that, you know, was speculative, too speculative on startups. And >> Yeah, but if you owned BlackRock itself, the company itself has done incredibly well. >> It's true. If you You know, everybody should do their homework and get their comfort zone and invest where they want. But there's no way that I could sit here and start buying individual stocks on a daily basis. It would drive me nuts. >> But here's what you're doing. >> My real estate portfolio will go down. >> Your muni bond, because we're invested in the same one. >> Nothing. That's That's a piece of >> But >> It's a walk in the park. >> But I'm saying, the reason it's a walk in the park is because that muni bond that you bought is a collection of bonds. >> The fund. >> The fund is. So, the index fund would be the same thing of stocks. >> Yeah, but the muni bonds fund is only muni bonds. >> Correct. >> Muni bonds, and I know somebody's going to say I'm wrong, cuz there've been very, very, very minuscule occasions, don't fail. Unless you go to Puerto Rico. Uh, muni bonds don't fail. They may go down. They track the interest rates. >> Yes. >> But at the end, you're going to get paid back. Okay. So, I like muni bonds cuz I believe in the government. I believe in the municipalities not going to you know, fall you know, fault on a debt. And uh, 5% tax-free to me, like I said, it wasn't always 5%. When interest rates are really low, you're only getting 3%. Okay. So, I'm upside down in some of those muni bonds, but who cares? At the end of the day, I get my money back. And it's tax-free income. But right now, if I buy a muni bond for 5%. In fact, I bought a million dollar one yesterday. I know I'm getting 50 grand a year tax-free. And I could borrow up to $900,000 at like 3% if I want to borrow against it or three and a half. It works for me. May not work for everybody else. But everybody's got to figure out what works for them. You know, that's it. But you know, stock trading is is something you got to be totally into if you're going to do it with real money. I used to go to bed at night and sometimes wake up in the morning and lose millions and it would crush me. It would drive me nuts. I can't do it. I don't have the I don't have the the the the tolerance for that. >> That's why I stick with index funds. You're not going to lose millions. You might be down the worst in a in a day. The worst might be like a few percent, 5%. >> a combination of all kinds of bonds managed by a bond manager. That's all he does. A muni bonds, different grade levels, different classes. But they're never going to fluctuate more than 5%, you know, and then they go up and down, up and down, but no more than 5%. You're never going to lose. >> Do you have any real life advice for either Graham or I? >> I mean, you know, listen. If you have money that you don't and you want to put away like what I call a war chest, you got to have a war chest. In case the bottom falls out or in case some super great deal comes your way, you got to be able to tap into something so you don't lose the opportunity. See, the biggest problem in life is that a lot of people get opportunities but they can't execute it. That's the worst thing in the world. I've been in that position. A greatest deal in the world came up when I was younger, but I didn't have the money to do it. I didn't have the wherewithal to do it. You got to stash that money so you have the muscle, the strength. And it's always there to protect you. COVID comes, your hotel's empty, what do you do? >> Here's a question for you. What percentage should you have as a war chest? And does it matter, let's just say if you have margin? >> I think you should basically you should definitely stash as much cash as you can. All right, you always got to have enough money to pay your bills and live. But besides that, I mean, and it could be an investment that you like, like your index funds. Whatever it is, you got to have something liquid that you can access like that. You never know when you're going to need the money, whether it's an emergency, whether it's an opportunity. You never know. You got to You got to stash your cash. >> 20%, 25, 30? >> As much as you can. As much as you can. Now, me, I spend my money on real estate, a lot of it. So it's a different story. You know, I may have, you know, whatever, a couple hundred million in real estate, couple hundred million here, you know, couple hundred million, whatever. I mean, you know, I'm more diversified because real estate is my profession. But you Everybody needs to have something put away for that rainy day. >> Graham is saying how much in cash for someone like Graham who has a diversified portfolio in index funds and stuff like that. >> Nothing should be sitting in just cash. >> No, cash equivalents, muni bonds, etc. >> Tax-free muni bonds. If it's invested in something that you are comfortable with and you are happy with the return, that's good enough. >> So 25%, 20-25% tax-free muni bonds. The rest is real estate and other stocks. >> different. It's tolerance. I don't need to have a risk tolerance. I don't want risk. That's why I lean towards muni bonds. I mean, you know, I don't need to worry about really growing. I've made enough money to last me a lifetime. Now I got to figure out how I'm going to pass it down to my my family in generations, you know. So, you know, it's whatever you're comfortable with where your money's at. Me, I just happen to be a big believer in muni bond funds And muni um muni bonds because I like the comfort of the safety and knowing where I go to bed tomorrow, even if you look them up in the worst crash possible, they're not going to go down more than 10% in the as if the total hits the fan. Okay? Even when interest rates go way down, which they can't happen again, they're still not going to crash. It's still valuable because the government's going to pay back that loan or the state or the county or the city or hospital or whatever. Everybody's got their own, you know, taste. Me, my taste is being safe. I have a little risky, you know, what I let Merrill Lynch play with, but they turned out good. Main thing is my focus is real estate. The point is, make as much money as you can and stash it away in things that aren't risky or too risky. You know, but if a real estate deal does come your way, you want to be able to run that cash and snatch that real estate up if you know you're going to make money on a real estate. That's what I do. >> Is there anything else you want to mention like consulting or >> We we we try really hard to put out good content, you know, that's entertaining and helps educate people and show them what the real life is. Listen, I'm not I'm not knocking anybody. But how many real estate guys go out there? I mean, yeah, you got your house people, you know, but I don't really consider them my world. You know, they're doing houses, which is great for people that want to do houses. I don't do houses. You know, but I would I would like to, you know, educate more people in the world. So, you know, we we focus on our videos, we go out there and show you what we're doing, how we're buying, what we're looking for, and analyzing deals, underwriting deals. We try to explain that and teach people that cuz you know why? They don't teach it in school. They don't even don't you in school how to run a bank account. Do you believe that? Kids are graduating high school 18 years old, never walked into a bank and made a deposit. I had to teach my kid how to make a deposit. Or, you know, now it's online. Or they've been online. I mean, you know, listen. Educating people so the world can all be grow together is what I'm looking for. And and that's it, you know, we try to put out good content. You know, share our video. Uh and um the consulting, I love helping people. And um I'm looking for the next deal. It's all about finding a deal, baby. Finding a deal. >> We highly recommend the consulting. I I've been saying this for a while. I think you're undercharging. So, for anyone interested, what's the website? >> benmalla.com Consult with Ben. >> Link down below in the >> Yeah, what is the link in the description? >> All of Ben's stuff is linked down below in the description, guys. Thank you so much for listening to this podcast. We would not be here without you. So, endlessly grateful for you guys >> especially if you made it to the end. Thank you for >> also, for the members, there's a lot of content in here that we did not include in the main episode. So, if you want to see it uncensored, by the way, join the membership. You're going to get extra content, early access, uncensored, and I personally respond to all the comments. I think that's pretty good. That's a good deal, too. >> want to know the latest styles and haircuts, here you go, righty. >> [laughter] >> Thank you guys for watching. >> Till next time.