Housing Expert: Do Not Buy A Home Until You’ve Watched This! | Jason Oppenheim

So my family's been in real estate for five generations. I started the Oppenheim Group real estate brokerage, done about 4 to5 billion in transaction volume. So I feel like my experience helps me to see what comes next. People are arguing now that we're in a real estate bubble. >> We've had arguably the worst 3 years ever in real estate. Interest rates keep climbing. Volume is at a historic low. When I say historic low, I mean 50, 60 years. >> Do you think buying a home is worth it at today's prices? All these areas that blew up, Miami, Austin, Las Vegas, Nashville, I wouldn't get near those places. Do you think California is doomed? When any one party gets too much control, they veered off track. California's veered off track because it's been dominated too long by people that don't have any push back and there's really no debate. We spent $24 billion over the last 8 years and the problem's gotten about 40 to 50% worse. So, what's your investing philosophy for 2025 and 2026? What are you doing with your money? People overanalyze. It's pretty common sense right now. [Music] >> Terms of the real estate market, people are arguing now that we're in a real estate bubble. What are your thoughts on this? >> I viferously disagree. Who the hell says that? >> Everyone on Twitter. >> That's so dumb. There's a lot of dumb on Twitter. So, you're saying that sales and everything, they're still continuing to trend up. >> We're at You mean a real estate bubble like like like it's high. It's going to crash. >> Yes. >> I mean, that's the the opposite. We've been we've been coming down. Prices have been coming down and volume's been coming down for since 20 late 2021, early 2022. We've had some of the three years in real estate. I'm at I've had some tough year. I mean it's all relative but no the last 3 years have been really tough because interest rates have been high. Volume is at a historic low. When I say historic low I mean 50 60 years um since volume's been this low. So very very historic in terms of the decrease in volume. Prices have come down. I mean I don't want to speak I'm not an expert nationally but nationally prices are not in a bubble. Uh big cities postco have had a difficult time. LA, New York, um, you know, some cities in the in like Miami and Austin and Las Vegas and Scottdale and, uh, you know, the big kind of I mean, it's not a political thing, but the big cities in the Democratic states have done terribly and kind of the more, you know, red cities, so to speak, like Miami that, you know, they that's in a red state. they have a pretty moderate governance. Uh have done a lot better because they're low taxation, tough on crime. Um and a lot of people left the big cities uh during co and went to play like went to those kind of tertiary areas like uh in Texas, Miami. >> Do you think that's here too? >> Do you think that's due to policy or do you think that's just due to the nature of a big city being already dense housing? >> No, it's due to policy. It's due to policy. Um >> so what big cities? So the big the big cities that had the most draconian COVID policies, I'll use Los Angeles example cuz I live there. >> They had arguably the most kind of you know draconian and tough policies in the country. They were the last place in the LA USD was the last school district in the United States to open back up. Um we restricted our economy so significantly and we let out so many people from jails uh that a lot of people left. Uh that started it that started the frustration. Then homelessness kind of blew up. COVID caused tremendous homelessness in Los Angeles. Uh and there's no restrictions on that. It's not really enforced. So it's it was just it was a pretty difficult couple years in LA. We're we've turned the corner. We're getting a little bit better. But I it definitely is policies. I'm not generally political. I consider myself pretty centrist, but I feel like I call a spade a spade. You know, I've been a Democrat most of my life. I'm really independent now, but the truth is Democratic policies have been extremely uh difficult for large cities. The mansion tax is is another one. And the mansion tax, >> explain that for people unfamiliar with that. >> So, Los Angeles put a t and by the way, I can totally see how that tax passed. It's a mansion tax on wealthy people, you know, charging 6% on any sale over 10 million or 5% on any sale over 5 million. Uh, you know, it sounds good. I mean, a few years ago, I would have voted for it, right? Because I didn't, you know, it it ostensibly it's like, oh, taxing the rich, you know, helping the homeless. Great. I mean, who's not going to vote for that? The problem is is that it creates so much friction now. We we have sales down about 70% above 5 million. So it just it's it's decimated the uh sales volume which restricts property taxes. UCLA just came out with a study uh basically coming out and by the way UCLA public policy is one of the most liberal they actually argued for the mansion tax and then they had to come out and say listen we we we were wrong essentially the mansion tax has been terrible. >> Explain the mansion tax. What exactly is that? >> Sorry. So, anytime a property sells, uh, let's say you own a property, you buy it, let's say you buy a property for $5 million and you sell it for $5.5 million, you know, a few years later, um, you have to pay 5% of that to the city. So, that's, you know, $2 whatever, $75,000 or something like that >> on the entire amount regardless of whether or not you make a profit. So, you could buy it 5 million, >> hold it a few years, and sell it for 5 million. Well, no. Sell it for 5 million and still have to pay the tax. >> What's actually happening is yeah, people are b people are bought a house for, let's say, $6.5 million 3 4 years ago. It's worth six today. I I perfect example. I had a client buy a house for $7.2 million, sold it for 65, he lost $700,000, then had to pay the city 300 and then commission. So, he lost like a mill too. He'll never buy, he doesn't want to buy in LA again. He wants to move out. Um, so the mansion tax was very difficult. Another study, I don't want to get into too too much into studies about the mansion tax, but it's costing the city and the state in terms of taxation from the economic loss from property tax values not resetting um about $2 to $3 for every dollar that it raises. It also has only raised 20% as much as it promised. It's been a abject an absolute fail. >> So, why did they not just reverse it then? >> Well, it may or may not be on the ballot. There have been a lot of lawsuits. The courts rejected it. It was on the ballot last year. The the Supreme Court kicked it off the ballot. Um, it's also really hard to put a ballot initiative on saying, "Let's repeal a mansion tax." When's the last time a liberal city voted to to remove a tax? I don't know if it's ever happened in any city. It's not going to happen in LA. Once a tax is in place, it's really, really, really hard to remove. What gives you the credentials to be able to talk about all of these stuff? If you were to list off your accolades, um, honestly, this one's common sense. Anyone with common sense can see it's true. I mean, you can read the studies. I mean, the LA Times has run a very liberal uh publication has come out, you know, with numerous articles the last few months just saying that it's been an abject failure. It's the mansion tax is common sense. I don't think anyone could argue that it did what it was supposed to do. >> Now, what about for real estate overall, though? >> So, my family's been in real estate for five generations in Los Angeles since the late 1800s. I have a background as an attorney. I went to Berkeley for undergrad and law school and then was an attorney in Los Angeles for many years. Uh started the Oppenheound Group real estate brokerage. I have 100 agents now, three different offices. Uh San Diego, Newport Beach and Los Angeles and Cabo. So four different offices. Done about 4 to5 billion in uh transaction volume, probably five or six hundred sales. And I'm, you know, consider myself someone who has critical thinking skills and common sense. So I like to apply that to to what I talk about. And what do you say to people who say you have a bias pro real estate because of what you do and your income is tied to real estate doing well or high transaction volume? >> Yeah, I mean I think that's fair. I obviously want there to be high transaction volume. Um I'm pro- economic growth. I mean who isn't? So I want real estate to succeed. I don't know who doesn't. Uh but it but I'm also not a fluff guy. Anyone who's ever listened to me talk, you guys certainly probably know. I just don't I just tell it like it is. I don't have uh I just like to be honest and direct. So when real estate's not going well, I wouldn't even buy I mean perfect example, I'm not even sure I would buy a luxury property in Los Angeles right now. And that's against my financial interest uh to say that. But yeah, until Los Angeles cleans up its policies, uh fixes its homeless problem, fixes its crime problem, fixes its taxation problem, um you know, until I start seeing some positive signs, uh I wouldn't be investing in Los Angeles. >> Why is the homeless problem getting so bad specifically for Los Angeles? >> So, the the homeless problem has gotten a little bit better the last couple of years. Uh I mean, it probably was at its worst in 2022, 2023. It's gotten a little bit better. Not because of I don't think because of any policies because I think our policies are terrible. Um but just because it got so bad just like crime and homelessness got so bad after postco that of course it's going to be it's going to you know revert what is it regress to the mean revert to the mean and it has but it's still >> significantly worse than it was in 2018 2019. We're about 40 I think 40% more homeless now. But we spent $24 billion trying to fix the problem over the last I think 8 years. And the problem's gotten about 40 to 50% worse. >> So how much value in homes have you sold in the city of Los Angeles? >> 3 billion maybe 5 billion total and maybe 3 billion in LA. >> And how long have you lived in LA? >> 20 years. >> Do you think LA is still a good place to live? >> LA is still my favorite city in the world. I mean, and I've been to a lot of different cities. Uh I think hands down LA is the best city, mostly because of the weather. The frustration I have with LA is that it has so much more potential. It was LA was a better city 5 years ago. Significantly better city. Nightife was exceptional. Restaurants were exceptional. Businesses were coming in. There was a vibrance in the city. The uh movie industry was doing really well. The homeless problem was under control. Crime was not rampant. Uh there was a sense of optimism in Los Angeles 5 years ago. Now a lot of that's gone. It's still my favorite city. Although I do honestly spend a lot more time in Newport Beach uh than I than I used to and traveling. Uh so I'm not as just optimistic on Los Angeles as I once was, but it is it still remains my favorite city. >> So what would you say are the main three things that caused Los Angeles to go from, you know, the great city that it once was 5 years ago to, in your opinion, still the best city, but much worse now? >> Yeah, good question. I pretty simple answer. Uh a lack of crime enforcement. Uh, and that's through a myriad of different things like they got rid of cash bail. They um let criminals out. I mean, I had my house broken into. I had my my car broken into. Those guys get out like a day later. I mean, there's just now we have a new district attorney that is uh changing things, but let's see how that goes. We also have our lowest number of cops that I think we've had in decades per capita. We have our lowest number of cops. Is that due to the defund the police initiative or is it due to just like >> and just a general difficulty in recruitment because there's been such a neg you know a negative uh connotation towards police officers that I think they have a very difficult time. So they have a lot of retirement and they're not replacing them and we have a huge budget crisis so we don't have the money to be paying new officers. Uh so yeah we've been mismanaged I mean financially mismanaged. I mean we have a billion dollar deficit which for a city is massive. How does the city of Los Angeles have a billion dollar deficit when you guys have like the the highest taxes across the entire country? >> Well, it's because most wealthy pe a lot of wealthy people have left. And so LA's answer, unfortunately, to every problem is an additional tax like the mansion tax. Instead of learning how to solve problems, they just tax more. And the problem is that used to work for a hundred years. That worked. California was able to tax. LA was able to tax and continue to increase taxes because people did not vote with their feet. They couldn't really leave. We were not as mobile as we are now. After CO everything changed. Now people are I can't I mean so many people are leaving. I've got so I've got more clients that have left Los Angeles over just taxes alone in the last 5 years than in my entire probably five times as many in the last 5 years than my entire career before that combined. And it's a big problem. So you don't get tax revenue. A mansion tax is a perfect example. They thought it was going to raise a billion dollars a year. It raised about $300 million a year. So not even a third of what they expected because they assume that nothing's going to change and people every except for the tax getting paid. That's not what happens. What happens is people leave. Developers are not building in Los Angeles. You don't see any multif family construction which kind of is counterintuitive to solving the homeless problem. you don't see any investment. You don't see so you don't see people hiring plumbers and electricians. Um you and you don't see properties trading. So that creates a you know economic disincentive and less revenue for the city and the state. So until they can figure out how to solve their problems without just trying to additionally tax and I'm not philosophically against taxing the wealthy at all. Um but you can't tax someone a dollar and lose a $150 in economic activity. That just doesn't make sense. >> What I find interesting is they have this initiative to try to make it really easy to get expedited permits to add an ADU to a property in Los Angeles. And so, guess who sees that and they calculate, I'm going to get a great ROI if I go through this new thing that they just created because they're finally doing a right thing to solve the homeless crisis, to solve the affordable housing crisis, is none other than the man sitting to the left of me, Graham. >> [ __ ] Yeah, you did ADU. >> Yeah. >> Not a lot of people have done ADUs. My gosh, it has been a nightmare. >> You working with the city, you mean? >> Yes, it has been an absolute night. So, when I looked at this, I thought the cash on cash ROI was incredible. And it is. Going through the city of Los Angeles has been an absolute nightmare. Getting the city inspector, they don't want to inspect. It goes straight to voicemail for days. And then on Fridays, when a tenant's supposed to move it on the Monday, they say, "Oh, actually, you know, I'm running late. We're going to cancel this. I they they don't want to work on the on the Fridays anymore and so then they reschedu it and then they swap inspectors. They get a new inspector is actually >> you find other new products. >> Yeah. We need a sewer line CCTV and you have to schedule it with one of our approved vendors and the wait on that is one to two weeks. We already did the work. Here's a CT. No, no, we need from one of our inspectors. Oh, we did this months ago. Oh, you need a new one now. I I did a ADU in in one of my houses and I was getting past final. They sent a new inspector for the same reason and he measured the tread difference in my spiral staircase and he measured like 6 and 1/2 maybe 7 in and it was supposed to be like a max of 6 and 1/2. And he told me I have to redo like my $10,000 spiral staircase and it delayed everything like a month. And then now I've got another client uh north of Los Angeles. He wants to do a mo get a movie theater permitted and they're saying that any because he's doing work he's too far away from a fire hydrant. So he has to bring in a fire hydrant. $120,000 to bring in this fire hydrant to do a movie theater. Like no one's going to do that. Like there's no discretion. There's no common sense. It's too bureaucratic. when you build a new house now they are requiring like this drainage system where you collect this water because you know I don't know we need water conservation or something even though it's just a bucket basically and it costs like $35,000 to install this and so you know you're trying to build something and an additional 35 grand I'm and then there's several of these requirements people are like why I don't want to build in LA anymore >> now before we go into that you got to ask yourself what does the future hold for business because if you ask nine different experts you're going to get 10 different answers from a bull market, a bare market, things are great, things are tombmed forever. Be very helpful at this point to have a crystal ball. But until that happens, over 42,000 businesses have already futurep proofed their business with Netswuite by Oracle, the number one AI cloud ERP, bringing accounting, financial management, inventory, and HR into one fluid platform. You see, with just one unified business management suite, you have just one source of truth, giving you all of the visibility and control you need to make quick decisions. Plus, with real-time insights and forecasting, you're peering into the future with actionable data. So, when you're closing your books in days, not weeks, you're spending way less time looking backwards and a whole lot more time on what's next. So, whether your company is earning millions or even hundreds of millions, Netswuite helps you respond to immediate challenges and seize your biggest opportunities. And speaking of opportunity, right now you can download the CFO's guide to AI and machine learning for free at netswuite.com/istic with the link also down below in the description. Again, that guide is completely free to you at netswuite.com/istic. Again, netswuite.com/istic with the link down below in the description. Thank you again to Netswuite for sponsoring this episode. And now, let's get back to the podcast. So, does this seem like mostly a policy issue? Is it a culture issue where people just don't the culture is you can't punish people? You know what I mean? Like if someone does a bad job, you can't say, "Oh, you're fired." Because if you fire someone, then it you know, it's for some discrimination. >> That's just a problem with government. or is it a legal issue because you have so much so many people lawyering up in the state of California and lawyers can just basically siphon the funds from anybody and just sue for anything. >> There's so many pro I mean I'm an attorney. I've been an attorney for 20 years. Actually, I don't know if my license is still active, but who cares? I'll still speak on it. So, example, when I uh when I built my Newport Beach office, uh we had to hire an ADA expert, you know, someone who comes and and kind of guides you in terms of what you need to do to be ADA compliant. American with Disabilities Act, which we're all for helping disabled people, right? But we want to do it in an in an efficient manner. They what they what he told me is that you'll have attorneys that have no clients. Like no no no no no one with a disability will ever go, you know, has gone on the property, but they're allowed to just sue on behalf of the class. So they'll write they'll come in, they'll sneak into your office, they'll pretend they're a client, whatever. They'll go in your bathroom. They'll measure the distance between like the toilet and the wall or they'll in my case there was a uh they said that my back parking lot was like two degrees too sloped. Um and so they said I had to spend like $40,000 redoing my entire back. Uh, and then I had to there wasn't that this there was a sidewalk and then there was an entrance to the parking lot and so the wheelchair would have to go like 10 ft into you know and come back and they said no you have to have a pathway right through. So I had to spend like another $15,000 cutting through like this retaining wall. Then I had to spend about $15,000 on an automated back door. You know you're not allowed to go out and open the door. You have to have an automated door. So, I I spent about $70,000 uh to be 88 compliant because I they they said lawyers will come in and they'll measure the slope and they'll do all this stuff and you'll get a and then they'll sue you. Um I have not had anyone try to access my property in, you know, 5 years with a wheelchair. If they did, they would have been able to get on very easily, but I've spent $70,000. Now, I personally think I would have preferred to put $70,000 into an account to help people get wheelchairs, to get prosthetic limbs, like to actually help people with disabilities as opposed to repaving a parking lot that was fine in the first place. Um the my landlord at at Sunset Plaza had to spend $250,000 redoing his parking lot because of a slopage issue. Um that's not money well spent. That's just bureaucracy taking over. We're all for I'm all for and I think many people are for helping other people. I'm for taxation, you know, if it's done intelligently. I'm for helping. I mean, my mom's entire job was placing people with disabilities in in job placement. Um I'm just for efficiency. We are throwing There's another example. There's a building um that one of my clients lives in on Beverly and the city required them to put um middle inome low-income housing uh you know in the building even though the building is a building for billionaires. So it starts at $5 million it goes up to $25 million. So, the building has had a very difficult time selling units because a lot of people don't want to have low income in their building that they're spending $20 million on because they're paying an HOA of like $15,000 a month. And yet half the building's occupants, because a lot of these billionaires don't live there. So, there may be 30 units for sale and maybe 10 units that are low income. But of those 30 units for sale, maybe only five or six people live there full-time. So, it's actually a building more predominantly lived in by low income than by billionaires. And the low-inccome pay zero HOA. So, it's the city that that subsidizes it. And yet, you've got the bill, you know, the wealthy people paying10 $15,000 a month for the pool for the gym. >> Low income people get in that building to begin with the lottery system or >> Yeah, you have to not make a certain amount of money for like 10 years. So, if you ever make too much money, you get kicked off the list. So, >> so theoretically someone could >> incentive is you can be living with billionaires if you continually try to make less money. >> Well, and and by the way, they're getting $30 to $50,000 a month in value of living in that building. >> Well, they're getting way more because there's they're not paying any HOA. So, they're that's $50 to $100,000 just in free HOA amenities. And then they have valet. So, for example, you know, the build all the all the buildings amenities are accessible to everyone. So the low-inccome obviously will have 24-hour valet and concier and food brought up and pool gym. >> So how do they get that for free when the person working 100 grand a year? >> The city requires the building to create like I think in this case it was 10 or 12 units that are low income. So the listen I'm not even theoretically against this. Here's the problem though. The problem is the building is having a very difficult time selling the luxury units. So the building lost maybe $30 to $40 million in value because they lost so many potential buyers. So, I think it would have been better for the building just to put in, let's say, a few million dollars into a fund for low-income housing and then they go out and you buy a building that's for sale, you know, like a you an older building and you get with 150 units in it and now you've housed 150 people instead of instead of eight or 10 for for for $5 million instead of the building losing 30 or $40 million in sales. So, it's just so inefficient. That's the problem with it. I don't mind the concept. I actually appreciate the concept. The problem is it's so unbelievably inefficient and how much money is lost and economic activity is lost and sales are lost to help, you know, 10 people when when that money could be used. >> Speaking of that, I had a clip recently go somewhat viral where I said and I made the argument that a lot of buildings in Los Angeles are actually more valuable empty than they are with tenants in them. And I know a lot of people who purposely keep their buildings completely empty because they don't want to deal with tenants and if they want to sell at some point correct because because of rent control but their building is more valuable empty. >> The problem with rent control is and many studies show this rent control does well in the short term. So rent control manages prices and keeps people in in in units in the short term. In the long term it hurts. It hurts the very people that it's trying to help. It actually increases rents because it decreases supply and it decreases investment into the community. So for as an example, nobody wants to buy multif family in Los Angeles because of all the rent control problems. Nobody wants to build single family in Los Angeles because of the rent control problems because of mansion tax. So it actually in the long run and just about every study bears this out. Um but it's really hard for people to change their ways. I mean, you think that California is just going to all of a sudden admit, "Hey, rent control was a bad idea." No, they're just going to keep doubling down like they do on everything. They're not going to admit that the mansion tax was a terrible idea. You won't get one proponent of that to ever admit that. So, people are just very stuck in their ways and they don't they're not willing to think critically, even though I think all the intentions are great. The intentions behind rent control are great. The intentions behind the mansion tax were great. It's just the inefficient implementation. >> Do you think California is doomed? Do you think that it will just continue to get worse and worse and worse and worse or when will the when will they realize how bad it is to actually reverse some of this, you know, layering they've done? >> Yeah, some of it's already happening. Um, people are pretty hard-headed. I I think the problem with people generally is that they'll put their own self-interested dogma in front of a critically thoughtout answer. Uh, most people like to be in camps, you know, like Democrats like to always do the same thing. Republicans like to always do the same thing and they don't question it. They're just many people are just blindly led down the path and they just think that everything that one party does is is accurate when the truth is both parties have really good ideas and the answer is generally in the middle. When any one party gets too much control and it be the same thing for I would say the same thing for a Republican le state that is just you know has has too much dominance for too long. They they they veer off track. California has veered off track because it's been dominated too long by by the same people that don't have any push back and there's really no debate. There's just simply no debate. Rent control is not debated in Los Angeles. It's not debated in California. Of course, it should be, but it's just not. I think that uh I don't think there's any doom. I think California will remain the best state in the nation, >> but it's continued to go downhill. >> It has. I think that there was an awakening. I think what happened was California had a captive audience and Los Angeles had a captive audience before co co when when people were able to not work you know in the office and more things are done online and people are just generally more mobile um I think they lost their audience and so now California has to attract people because of its policies when it used to just have to attract people because of its jobs and its weather and now that jobs can be done anywhere um all we have left is weather and that's just not enough for a lot of people to stay. >> So, should you buy or rent in 2025? >> I mean, I think I don't know that's a difficult question because it's really location specific. I mean, that's a very difficult question. I think it depends on how much personal satisfaction. If you just from a financial point of view, let's say you have no personal uh satisfaction in owning versus renting, you just want to make a great uh financial decision. I'd probably rent, you know, I'd probably rent for a while. I don't think real estate's probably going up. You know, it may be flatline for a little bit. If you can get a good rental, then rent. I don't know why people always think, "Oh, I don't want to throw my money away, you know, in rent." I mean, if you own, you're throwing your money away on interest at a bank. It's no different. I I've never understood the argument why owning is inherently better than renting unless you care about unless you factor appreciation. But if you can rent for, you know, $6,000 a month and it's going to cost you $9,000 a month to own, uh, you know, unless you think interest rates are going to go way down and you refinance and or you get a really good deal, um, I would probably just, you know, stay renting until things look like they're a little bit more optimistic or positive. And and and it really, again, it's very location specific. I would not buy in all these areas that blew up. Miami, Austin, Las Vegas, Nashville. I wouldn't get near those places. I wouldn't get near those places right now. Those places have another 10 to 30% downward trajectory before they flatline. And the other thing is there's no supply limitations in those cities. I mean, every every 250 square feet of land in Miami can you can build a thousand, you know, condos. Austin can be built out. Uh Vegas can be built out. There's there's no limitation on land in these places. So that's where you get crushed in real estate. If you're going to buy real estate, that's why Newport Beach does so well. There's just no land. And so if you buy something with good land in a place where there's limited supply of land, you're going to do really well. So what's your investing philosophy for 2025 and 2026? What are you doing with your money? >> Oh, I'm glad you asked. Uh I'm putting it in 30-year Treasury bills. >> Okay. So we actually just talked about this. What was that? Yesterday. You put how much into a 30-year Treasury bill? >> Well, I put $2 million into an ETF called TMF, which is like a leveraged. It's like It's like So, it'd be the equivalent of buying $6 million in treasury bills. It's three times leveraged. I'm just making a bet. Well, first of all, you get a 4.5% to 5% guaranteed return on your money. That's the yield because of the underlying asset, which is a treasury. So, it pays you a yield. So you're already you're already going to get a 4 and a half to you know four to 5% return. Then if interest rates come down which I'm very certain you know I'm quite confident that they are and treasury yields come down so like a 30-year right now pays about 4.8%. >> If that goes let's say next year it's at 3.8% which I think it will be then my $2 million will be worth like $3 million. So you can make a million you can make a lot of money on reselling the bond because that apprec the yield comes down the value of the treasury goes up. So you're you're getting your guaranteed return and then you're you're making a it's a little >> I've shown Jack is the day after you said that you bought into that it was up about 4 and a half%. >> Yeah I made I made 100k on the first after the day after my investment >> from that because the jobs report came in weak. Yeah, but I this is a long term for me. So, um I also like the stock market. I also have a lot of money in the stock market. >> I mean, I invested on liberation day. Remember when tariffs when the market crashed, I put a ton of money in the stock market. So, I'm not a generally I mean, I like real estate. I'm more of an opportunistic investor. When so when like when COVID hit the market, I put all my money in. Yeah. >> So, what's the most you ever lost on an investment? Um, well, I bought three soccer cards like a year ago. Uh, this gold, well, it's a 2014 Panini Prism Gold, Messi, and Ronaldo. Um, I paid 80 grand for these three cards. And then like two months ago, they'd gone up to like 275 grand, and I sold them. And had I held like another eight weeks, now they're worth like 700. doesn't count as you losing money >> in terms of like thought out investments. I mean, I've done pretty well on those. >> How do you always make money? It seems like anytime you say, "Oh, I'm buying this. I'm buying this." It just it goes up. >> You know why? Because I don't listen to anyone else ever really. I just think there's too many pungents, too much talk, and people overanalyze. I'm very simplistic. I take a very macro look at what's going on. the perfect example, my biggest investment ever. I put all my money into the stock market and when the when it crashed and co I thought this was an overreaction, the market's going to recover. No, of course it's going to recover. I doubled my money in in 12 months. Um, that's common sense. When the when the market crashed because of Trumpannounced tariffs and it went down like I don't know 20 25%. Um, I said that's obviously an overreaction. People generally overreact. So, I put, you know, a ton of money into the market then. Um, when Netflix was down to like, I don't know, I forget what it was, like two, you know, $200 a share. I'm like, this stock has crashed way too much. This is a massive company. It's going to rebound. >> So, put some money in that. >> Uh, interest rates. >> It's common. It's pretty common sense right now. You don't need to like do a bunch of an you don't need to be a bond trader to figure out that the 30-year yield on an American Treasury bill is 5%. You know what China pays their investors that if you buy a a Chinese 30-year Treasury bill, you get 2%. Uh if you buy a German 30-year Treasury bill, you get 3.3%. And yet America, the most safe investment on planet Earth, far safer than than uh a Chinese 30-year bond, safer than a German bond. It's arguably considered the safest bond in the world is paying 5%. It it doesn't even make sense. I know that there are reasons for that like currency exchanges and inflation risk and like that, but that's when you get too much in the weeds. It's like just shut up with all the details. Like macro approach, it doesn't make sense that you could buy a risk-free government bond and get a guaranteed 5% return. You don't think there's any chance that the 10 the 10 or 30-year Treasury stays high because people say the United States is printing too much money? Maybe there's a bit of a risk here with tariffs. Maybe we're less bullish on the economy. We don't know what's going to happen. Do you think there's any chance it stays? >> There's always a chance. There's no way that it's 100% guarantee. I'd say it's an 80% chance that the 30-year Treasury is in the threes. The yield is in the threes within 12 to 18 months. >> And what do you think that's going to do to real estate prices? It'll increase prices, but it'll also increase supply. So, I don't think it's going to be like a direct correlation like, oh, interest rates are down. I mean, if interest rates go back down to where they were, which they will not, um, we would see a massive, you know, increase in prices. Interest rates are not going to go back down to 2%. Or even 3%. If if if you can go out and get a a 30-year loan at 4 and a half%, that's probably the right where we should be at right now. And I think we'll get there in the next couple of years. But again, the problem is it's going to increase a lot of supply. So you're going to see more supply come to the market and you're going to see more buyers able to afford those houses. So it's good for real estate agents cuz you cuz we work on on volume. I don't think I think prices will go up but 5 10% not 25%. >> What about for the people who believe that AI could actually cause deflation so >> will cause deflation? Absolutely. Think of all the things you buy every week. Coffee, gas, groceries. What if all of those credit card swipes actually helped you earn Bitcoin? That's exactly why today we've partnered with Gemini to showcase the Bitcoin credit card, the only instant Bitcoin rewards credit card. With this, every purchase you make earns Bitcoin back. That is up to 4% back on transportation, 3% on dining, 2% on groceries, and 1% on everything else. It's really one of the easiest ways to gain some exposure to Bitcoin because you just make purchases like normal. And instead of earning airline points that constantly get devalued, you get Bitcoin back instantly. There's also no market timing here. You're just investing as you spend. And to put it in perspective, Bitcoin rewards earned and held for one year on the Gemini credit card have appreciated 277% on average. Obviously, crypto is volatile, but it shows just how powerful this can be if you're thinking long term. So, if you want to sign up, head to gemini.com/ist. And when you're approved and spend $3,000 in the first 90 days, you will get $200 in Bitcoin. You can also check if you're eligible with no impact to your credit score. All you got to do to get started is go to gemini.com/istic or use the link down below in the description to apply and start earning instantly. >> See rates and fees in the description for more info. Thank you so much to Gemini for sponsoring this episode. >> What about for the people who believe that AI could actually cause deflation? It would be so efficient. >> Will cause deflation? Absolutely. >> Wouldn't that then result in even lower interest rates? >> Yes, it will. I think that AI is deflationary and puts pressure on will put pressure on the Fed to lower rates. you know, I don't think we're there yet. Um, but I think also it's going to create unemployment and when unemployment is going to put pressure on the Fed to lower the rates. I think we're going to within 5 years we'll probably have, you know, not you probably won't have an Uber driver. Uh, there probably won't be truck drivers and I think there'll probably be millions of other jobs. I mean, I think that Trump is bringing on a lot of or at least he's trying to bring on a lot of onshore production manufacturing because that's not going to be done by humans. I mean, I'm sure he'll say it's going to be done by humans and create jobs, but that'll be done by robots in 5 or 10 years. So now we'll actually be able to compete on a global scale in terms of production because we're not having to pay, you know, $30 an hour. You have a robot that's going to work 24 hours a day. That's three That's three shifts. That's like three human it would take a human being three days to do what a robot does in 24 hours. And the robot won't make mistakes. Won't have to take a break, won't have to go pee, won't unionize, a lot of other things. So, do you ever think that mortgages could get back down to 2%. >> I mean, of course they could. I would be very surprised if in the next 20 years we see if you can go out and get a 30-year fixed at at two 2 and a half%. I would that would surprise me if we see that if I see that again in my lifetime, I'll be surprised. So, if someone wants to have some exposure to real estate in their portfolio, what is the best way of even going about that right now? If they like commercial, is it like single family home residential? Would it be like you know investing in real estate oriented ETFs? >> Those are the most simple. The ETFs are the most simple to be honest. Uh but if you want to get I mean listen it is not for the wary of heart to own uh a property let's say in Los Angeles you know that has tenants. I mean you're just asking for a nightmare problem. But I will say that this is probably the best market that I've seen for a buyer to come into LA and buy multif family. >> I mean I look at it myself just because it's so intriguing. you can buy. I mean, I saw a property on Lexington, which is in Hollywood. 20 unit building. This just shows you how big of a problem, you know, the uh tenant the tenant restrictions are in LA. 20 unit building, 11,000 ft interior uh square footage. Um, and I could have bought the building for 2.8 million. It sold for 28. I wrote an offer of 25. They didn't. They sold it. I mean, rightfully, good for them. They got 28 for it. >> That's insane. I mean, that's that's what is that per unit in Hollywood. It's $260 $270 a unit. $270,000 a unit, which is, by the way, this is what the government should be doing if we're trying to I don't think I think the homeless problem is a lot more complicated than housing. The truth is, we have more housing now per capita than ever before cuz we had 600,000 people leave LA. So, we have it's actually the equivalent of building 600,000 homes, >> but yet homelessness is worse. So, it's not a it's not a direct correlation to housing. I'd love to see the city go out and buy that property and house 20 people for $270,000. Instead, what they do is they hire they have a deal with Union where Union supports the Democratic uh politician and then they run on some some platform to build homeless housing with unions and then those pro then those condos cost about a million to a milloo to build. So, and they never even get built. But even if they did get built, it would cost the city a million dollars to house someone when you can when I could have gone out and bought this 20 unit at $270,000 a unit. >> Does it ever work when the government funds housing for homeless people? >> The government is doesn't do much right when it comes to the homeless. There there's a lot. Listen, I'm I'm a uh I mean, I've been working and volunteering for 15 years for Food on Foot. It's a private organization, which which I I like, and there's so many good people that work there. So there I also think that most of the people in the homeless industrial complex, which is just this huge monstrosity in LA, are all good, well-intentioned people, but I think the problem is that they they won't they're not willing to take a step back and to try to figure out a new approach. They're people are just so stuck in their ways and they just double down and double down and just keep bulldozing through without >> pulling back and saying, "Hey, maybe there's a another way to do this." It's a lack of critical thinking. I think it's been a downfall of, you know, it's it's that that sentence alone probably explains 90% of the problems in the United States and the world. It's just a lack of critical thinking. >> So, what do we do in terms of a housing shortage that they say million? >> There's not a housing shortage. If you and housing is not unaffordable anymore than it was for the last 80 years. If you look at the actual facts, there's actually at least as much housing now per person in America as there has ever been. So people don't usually know what they're talking about when they throw these things out. They just read like a CNN headline in terms of housing unaffordability. Not true. If you look at way if you look at what it costs to rent a 1,000 square foot two-bedroom apartment as I'm just picking as an example >> from 1930 to today and you look at wages from 1930 to today it is almost a perfectly correlated uh similar line for the last 95 years in terms of how much it costs to rent a 1,000 foot two-bedroom apartment in Los Angeles or in America. So there's always talk about it's more unaffordable than ever before. It's it's actually not. It's actually the exact same. It has pretty much followed. Wage inflation has followed rents. And by the way, people talk about, you know, it it's like a clickbait to say housing is so unaffordable. When interest rates are high like they are now, of course, buying a house is of course more unaffordable to the wage than it was 5 years ago. So if people say housing has gone up six, you know, the cost of housing has gone up 60% in the last 5 years. No, it hasn't. The value of the, you know, a $500,000 condo 5 years ago in LA is worth 500,000 today. So it's gone up zero. The cost of buying it because interest rates are up means that it's going to cost more of your wages. That is a fake argument because if when interest rates go down, did we fix the affordability problem? No. That's just another way of saying interest rates are up. That's not fixing the problem. That That's the problem with trying to fix most things in America. It's just talking points. People yelling about things that they have no idea like affordability and um and cost of housing. They don't really If you go on chat GPT and you spend 30 minutes asking it to analyze these facts, you'll actually learn that housing is as unaffordable today as it was. for your grandparents. >> Is this what chat GBT told you? >> I've actually my brother my brother and I did a full analysis on chat uh about 30 minutes about this very issue because we wanted to learn. Nobody does that unfortunately, but they just watch like you know CNN and and and see a headline about unaffordability. They don't even know what it means. They're like if you CNN doesn't even say is this buying a place is it renting a place? You you have no idea. Here here's how they compare it is that they say it used to take 2 to 3 years worth of wages to purchase the average house and now it takes 6 years to 10 years worth of wages to purchase the average house and that's how they they calculate the cost of living and the affordability index. >> Well, first of all the affordability index should be that that is in when you're talking about buying that's interest rate dependent. So for example then according to that logic you could say cost of housing has doubled in the last five years but that's nonsense interest rates have doubled >> throughout the 70s and 80s though interest rates were 15% but the the cost of >> well that's why well that's why you should use rental that's why you should because rents are not as tied to interest rates. So the real to me I think the real question is how much of your of the average person w the average person's wages does it take to rent a two-bedroom 1,000 ft² apartment in X city that seems to be the more logical way to do it and actually there are arguments now that there are two people working in households uh whereas you know one generation ago two generations ago it was just one usually the man so there's only one income so it actually you there's an argument to say it actually cost more of someone's wages back then than it does today because there's usually two earners. U but again it gets very that's the thing it gets so complicated and no one likes talking about complication but the bottom line is there's not an affordability crisis. We it is housing renting a a condos or renting a apartment is just as unaffordable as it today as it was for your parents as it was for their parents as it was for their their parents. That's how similar it's been for four generations. >> What about for the people who say that they should have a right to be able to buy something that they don't want to even get me started on entitlement? I mean, everyone's entitled Everyone is thinks that they are entitled to the American dream when you're entitled to an opportunity to work hard and achieve the American dream. That's much different than just being entitled to the American dream. Um, so I don't, you know, my response to people who you even use the word entitled is no, you're not. None of us are. I mean, you're entitled to equal opportunity. I think that's a fair statement. >> So, how much success in real estate right now when it comes to buying is due to strategy versus timing. >> It depends on if you're going to hold longterm. If you're going to buy long-term, I don't think timing is important. Same with stocks. I don't think it matters. Like I am an opportunistic buyer in real estate. Um I'm an opportunistic buyer in the stock market. So I, you know, I'll buy in a crash. And and by the way, if you want to buy real estate and you don't and you're not going to hold it for 30 years necessarily, buy in a crash. Buy stock in a crash. Wait, everyone over over always overreacts. Um so just wait for the next wave of lemmings to overreact. >> Yeah. Speaking of being a contrarian investor to a certain degree, as I was speaking with a guy uh who was a prominent investor in San Francisco for the last 30 plus years who said he believes now has never been a better time to buy in San Francisco and he's actually making a ton of offers and he's getting properties for 30 to 50% less than he could buy them for in 2018. commercial or or residential >> both properties and he's like this is the best opportunity for me even though >> a lot of people are moving out businesses are moving out but like this is the time you want to buy and I almost look at this in LA because I've seen some of these deals that you were talking about like there there was a 7 unit in Santa Monica that I saw for three and a half and I thought it was worth 3 and 1/2 and it had sold years ago for like 3.8 they're taking a loss on it. It's a great deal. It didn't sell after 6 months. Yeah. >> I was thinking, man, at 2.8, if they take that, it's a killer deal, but they just didn't sell. So, maybe now is a good time to buy into these places because everyone like us is overlooking it to a certain degree. I know you're still making offers, but like I would look at this and think, I don't want the hassle anymore, but it's a pretty attractive price all things considered today. >> I I agree with with when people are not doing something is usually the time to do it. I don't disagree with that investor in San Francisco. I don't think it's a bad idea for the the only thing that I that concerns me is I don't want to be dealing with the problems. I don't want to deal with the lawsuits. I don't want to deal with the, you know, the phone calls. I don't want to deal with all the risks and insurance and, you know, tenant that goes on in a in owning a property. So, for me, it's personally it's not worth it. 15 years ago, you know, I had the hustle for that. Yeah. That's great for like a young person, you know, at 23 years old has some money or 28 years old, has some money, wants to invest in multif family, I would buy I would go buy right now in LA is probably the best time to buy multif family. >> Telling Jack about this this >> and by the way, don't look at don't look at the returns right now. Look at the appreciation because when interest rates go down, that $2 million 10plex will be worth 2.5. So, that's how you make money in multif family because you'll raise rents. But more importantly, your uh the cap rate will be affected by interest rates. >> Speaking of that though, I was telling Jack the other night about a new legal scheme that seems to be going on throughout California. It's a tenant habitability issues that they could basically claim my unit's not habitable because of >> insects, mold, whatever it might be. and then they claim a code violation with the city >> and they try to settle with the owner. And this is usually common on like larger apartment buildings like 12, 20 units plus. They settle with the owner because the owner knows they're going to spend 20 to 50 grand defending themselves. So it's let's settle for 20. Done. Now the lawyer on that case could send a mailer to every other tenant in that building saying that this owner was found to settle this case. you might be entitled to money and now every single tenant can now file a claim against that owner. >> Yeah. >> Potentially bankrupting the owner. And >> we're far too we've gotten far too latigious. I don't I think the problem is that these lawyer organizations, they just fund the these Democratic politicians. And so the politicians keep laws in place to allow all these lawsuits. >> So this is something that Jack actually brought up because he said, "Who's lobbying for this?" And there was a new ordinance that came throughout Los Angeles recently where now you have to put a uh you have to put it in a common area of any rent controlled property that said the tenant is entitled to free legal services. Here's the number and it needs to be displayed at all times. And if it's not properly displayed and the tenant falls behind on their rent, you can't evict them because that whole eviction case is going to be thrown out because they didn't know that they had uh an entitlement for those legal services. and Jackson said, "Who who comes up with that?" >> When you go too far in one direction, tenants will abuse the system. And I know that it's like, you know, you're not supposed to say anything negative about tenants. Oh, and here's the other thing, too. So, LA, in all of its wisdom, just passed um a new law saying that I renting out this house, as an example, um I have about a half a million worth of furniture and art in the house. And so I charge $33,000 a month and it and I charge a two-month security deposit, $66,000 on a half a million. City of LA says, "No, I can only charge one month security deposit even if the house is furnished. I cannot charge any more money for a furnished house versus an unfernished house." That's LA in all their brilliance because they were trying to protect, you know, ostensibly trying to protect someone in like the thousand, you know, to $2,000 a month uh price point and didn't want them they wanted them to be able to afford their their security deposit. So now they're limiting people that have $10 million homes from getting a two-month security deposit from another millionaire. Like it's it's so illegal. And here's another problem, too. >> I now can't sell that house. Up until a year ago, I could tell the tenant, "Hey, your lease expires in February. Um, when you move out, I'm going to put the house on the market for sale, and I'm going to sell my house." Now, I cannot get rid of that tenant. That tenant can now live there forever >> indefinitely. >> Indefinitely. Yeah. I cannot You cannot get a tenant out just because you want to sell a property. That's no longer just cause eviction. So, even >> So, how can you get a tenant out? >> You can never get a tenant out in California. >> I was telling >> you're not You cannot But you have to move. You have to I'd have to personally move back into that house >> for two years. >> For two years. But I don't want to live in that house. That's the only way to get otherwise that tenant can live there forever. Here's even though he's paying $30,000 a month, LA thinks that they need to protect that tenant and not allow me to sell my own property because that tenants lease expired and yet he's allowed to continue to live in my house and pay $30,000. >> There's you literally can't say here's, you know, 90-day notice. You can't >> Nope. In fact, what happens is the tenant will go, "Oh, you want to sell your house? Give me 200 grand and then maybe then I'll move out." That's what happens because they have all the power now. >> I was telling Jack, if you make too many offers to the tenant, a cash for keys, they could now sue you for harassment. >> Yeah. And also now if you if you enter into a deal for cash for keys and you pay a tenant let's say $20,000, you know, to move out and he moves out, he can move back in the next month. He can say, "I changed my mind and moved back in. He has to give you your money back." So you can't even actually conduct business. You can't even move along with the understanding that that this signed contract is is enforceable. That tenant >> there should be an exemption for luxury properties. >> Of course there should be. If you have well, you should just be able to kick someone out of your own property. >> Well, it's just common. That's what I'm saying. They've lost common sense. So, as an example, if someone's paying over $10,000 a month in rent, they don't need the city to be managing security deposits. They don't need the city to tell them that they don't have to move out at the end of their lease. I don't know why the city is is is promulgating codes protecting millionaires. They don't pass these things to purposely harm economic activity. they just aren't smart enough to figure out all the damage they're causing. >> It does appear as though that's probably something that's just lobbyed by lawyers because the more regulations, the more loopholes, the more layers of paint that they put on this mound of regulation is just another thing that they can exercise to get more profit. Basically, they just like, "Oh, this one code. Oh, this code." If there's a million codes, they have a million choices to be able to try to, you know, >> Well, I think it's execute. I think it's different. I think it's tenants rights groups well-intentioned say, "Hey, there's a pro." Oh, here's another example that LA did. You can no longer discriminate uh on on tenants based on criminal history. So, you I don't think you can even >> uh look up criminal history now. I don't think you can. So, if someone committed like a a crime >> and you find that out, you cannot say, "Oh, I don't want to lease it to you because you burglarized a house or something like that." No, you have to lease it to them. That doesn't make sense. That's not helping anyone. That's just creating inefficiencies in the market. >> What if they committed a crime of fraud? >> There's no By the way, Jason, I do want to correct you on something. >> Yeah. >> Uh the term now is justice involved. >> What is not a criminal? Not a criminal. It's a justice involved individual. >> Shut up, >> Jason. Look it up. >> I don't care. >> I'm being I'm being 100% serious. >> You're going to be cancelled. >> I'll be cancelled then. I'm not saying justice. Being serious though, you can't you cannot call them a criminal. It's a justice involved individual. >> Well, you you can you can what I'll do is I'll say criminal and then my mouth will go justice involved. >> If I know that a tenant committed a violent and burglarized someone and committed fraud, I can't be like, "Oh, I don't want to lease my apartment to you." The city require says I'll be I'll get sued. I'll get sued for discrimination if I don't lease out an apartment to a violent felon who's committed a violent crime or a fraud. >> What about what about a >> Let's say that he lived in another apartment building and burglarized the other tenants >> and committed fraud on the landlord and then beat up one of the other tenants. >> I cannot I I cannot discriminate against those acts. I have to let him >> Well, how what can you choose? If you put a listing out for rent and you get 15 applicants, how are you able to choose which one you rent? >> Well, uh, based on their job employed on their employment and their credit score, maybe. >> But what if you have 10 people that apply that all >> qualify? Then you'll get sued. We have a case right now where where a client is getting had a bunch of applications. picked the the best one and there was another person that applied for the uh property in a protected class that was losing their job and it literally stated that they will be unemployed in 60 days and they didn't choose that person because of that. >> So this person they basically put out this listing they got a bunch of applicants and then they went with the most qualified individual >> and now they're getting sued >> and now they're getting sued by someone and >> in a protected class. Yes. even though that person said they were losing their job. >> Now, isn't that just a money grab, though? I don't think it's an actual >> 90 95% of lawsuits are a money grab. I'd say 95%. Um because they know it's usually they're suing a wealthy individual or landlord or company, whatever. And they know that that person is going to spend 50 to $75,000 in legal fees and a year and a half of their life defending it. Um, and so the person thinks, "Oh, I can get a quick 20 or 30 grand." I mean, that's 90 plus% of lawsuits. That's a problem with how legitious we are is that it's so easy to make a claim and it's so costly to defend it. So, you just see that's why n I think 98% of cases are settled. Um, yeah, it's they're it's basically legal extortion. >> What could be done about this? >> I mean, I think higher higher bars for for lawsuits for sure. I mean, I I'm not exactly sure, but you know what? You know what I think would probably be the easiest way to solve this? >> If you lose a case, if you bring a claim and you lose, you should be responsible for the other person's attorneys. That alone, that law alone, >> but they're going to say that lowincome people who justifiably should have a lawsuit against someone and win, who don't have the resources to do that, might be less likely to >> Okay. Well, then you can do it this way. You can still take a case on contingency if you don't have money. But that that contingent lawyer, that lawyer then has to be responsible taking the risk. Not just the risk of his time and energy and and money that he spends on the case, but also the risk of having to pay the other side's attorney's fees. That will because the problem is this too. Lawyers will take any case because they know that they can settle out for 20 or 30K. So they should be resp, you know, let's say you get sued, Graham, you should be able to say, you know what, I'm not going to settle for 20 grand because I'm 100% right here. I'm going to spend the $50,000 to defend this and then you're going to have to pay me back. That that lawyer is should be responsible. So if that lawyer want thinks that that case is a case, he's not going to take it. Now, a lawyer will take a case because he's like, "Oh, I can shake this wealthy guy down and I'll and he'll settle for, you know, 30 or 40 grand. I know he's not going to go to trial." But if there's a risk of having to pay that other side's attorney's fees, then they wouldn't do it. Then then lawyers would only take good cases because they don't want to take that risk of >> it's ever going to happen. >> No, because I think that attorneys lobby so much to make sure that doesn't happen because they love all this latigiousness. >> And what's going to be the result of that? Just no one buys real estate. People are afraid to put themselves. >> I mean, what it creates is Yeah. It creates a disincentive for legitimate action. you know, I mean, it's a economic disincentive, but you want people to be able to uh to act freely in in a capitalist manner, right? You don't want to create friction costs. That that's a friction cost like insurance. Let's say insurance was was 10 times higher than it should be. Um, that's a friction cost. This is essentially an insurance policy. I mean, because every time every time you do something, you're thinking, I could get shaken down. I could get sued and I have to spend $100,000 to defend it. I mean there are a lot of problems in California. I can't solve them all but that is probably the way to solve how ligious we are. >> And what do you think are the best opportunities going forward right now in terms of market investment real estate? >> Um you know so I was buying real estate every year but mostly I was buying real estate because interest rates were so low. >> Um and now that's gone. So I'm not really buying real estate right now. So I don't know if I'm going to sit here and just recommend you know buying real estate as an investment. I mean, I think it's a fine investment in the long term. You know, it's going to go up 5, 8, 7% a year. Truthfully, though, I think the market right now is probably going to go up 5 to 10% a year for the next few years. And you don't have to deal with tenants, you know, >> and maintenance. So, I'm I'm think I'm probably going to leave my money in the stock market and put my money in 30-year treasuries uh and just hang right there for a little while until I see another opportunity. I will say if you are glutton for punishment, you should go buy multif family in San Francisco or Los Angeles because it's it's so low right now. you can get. You go spend $5 million in multif family right now and you're and you're intelligently buying. That'll be worth $7 million probably in three years. Hiring always sounds so simple. That is until you actually have to do it. Trust me, we're going through it right now. You wait for the right candidates, dig through stacks of résumés, and half the time the people you reach out to aren't even looking for jobs. It's such a grind. Well, the future of hiring looks much brighter because our sponsor, Zip Recruiter's latest tools and features help speed up finding the right people for your roles. So you save valuable time and right now you could try Ziprecruiter for free at ziprecruiter.com. So instead of chasing candidates, Ziprecruiter smart matching technology works for you, instantly connecting your job post with people who have the right skills and experience. They even invite top candidates so you're not just waiting around. And if someone really stands out, you can unlock their contact info and reach out to them directly. Over 320,000 résumés are added to Zip Recruiter every month. That means you're always pulling from a fresh pool of talent, whether it's entry level or highly specialized roles. It's really no surprise that Zip Recruiter is the number one rated hiring site based on G2. And the results speak for themselves. Four to five employers who post on Zip Recruiter find a quality candidate within the first day. So, if hiring has been slowing you down, save yourself the hassle with our sponsor, Zip Recruiter, at ziprecruiter.com/ic. Try it completely for free. Link in the description. ziprecruiter.com/ic. Again, that is ziprecruiter.com/ic with the link down below in the description. Ziprecruiter, the smartest way to hire. Remember that doctor's appointment you were supposed to make a long time ago? The one that's been probably sitting on your to-do list for weeks, maybe months. Maybe it's just an overdue annual checkup, a weird rash that you keep googling Graham, or it's your dentist reminding you it's been 2 years since your last dental cleaning. Trust me, we've all been there. Booking a doctor's appointment has always felt like such a hassle until now. That is where our sponsor Zachdoc comes in. For those unaware, Zachdoc is a free app and website that allows you to search and compare highquality in-et network doctors and book an appointment right on the spot. You can also filter by insurance, location, medical specialty, and even look at what verified patients have to say about them so you know exactly what you're walking into. And then once you find the right doctor, you could see their real time availability and book an appointment that works for your schedule. And appointments made through Zodoc happen fast, typically within just 24 to 72 hours of booking. And you can even score sameday appointments. So stop putting off those doctor's appointments and go to zdock.com/ to find and instantly book a toprated doctor today. That is zdoc.com/istic zcooc.com/iced. Thank you so much to ZuckDoc for sponsoring this episode. Link in description. Do you think that there's anything to the philosophy that people that are really tight with their money have less opportunity just coming to them because they have more of a scarcity mindset as opposed to those who have more of an abundance mentality? I know Graham was telling me that you are totally fine overpaying for whatever like you don't even you don't even really consider it. >> I was talking about the 4GT and I'm like Jason you might be overpaying by 20 30 and plus sales tax on top of that if you just wait and you're like dude I don't give a I'm not going to waste my I just want the car. I totally so I have always been I had a lot of uh um what what's the word? Um >> risk tolerance. >> Tolerance. Yeah. Thank you. I've always had a lot of tolerance for risk in my investments. I'm okay losing money. I think in order to make money, you have to you have to be pretty risky. If you are going to be if you're too careful, if you have a million dollars today and you are a careful investor, you'll have $3 million in in 20 years and uh at best maybe honestly not even that. You probably have $2 million in 20 years and a more aggressive investor would probably have $5 million in 20 years. So, it's a big difference. Um, I'm a believer in in taking risky investments, not stupid investments, but like again this uh a lot of people told me not to invest in TMF because it's three times leverage and it's like it's like who gives a so I'm taking uh I believe strongly that the Treasury yield's going to come down. I mean I think that's an intelligent risk. I put a I put a ton of money into the market on li, you know, when Trump announced a terrorist and the market crashed. I think it's very intelligent to believe the market's going to recover. I think that's a I mean, I guess that's you're taking a big risk, but I think those are calculated. >> It's not just that though. I think I think it's overall from what I've seen, you spend a lot of money. I mean, at least compared to what I'm used to, >> the dinners and the experiences and the cars and the houses and the, you know, the trinkets and the watches and the going out and the entertainment. It's like I some of this. >> I don't I don't want to I don't have kids and I don't need to die with money. I mean, I worked hard and continue to work hard to have fun. I think money is not doesn't do anything sitting in my bank. I am all about spending my money. Um, as you well know, I'm not shy about it. >> Do you think that's given you more opportunity than let's say me on the other hand? >> I don't think it's given me more opportunity. I don't think going out and buying a I just bought a Rolls-Royce for 500 grand. I don't think that's giving me opportunity. I think it's fun as [ __ ] >> But the the ab abundance of living that life, I do think I'm a pretty firm believer that it does end up somehow coming back to you. Maybe in the way of like someone sees you in a Rolls-Royce, so you get a connection because you're wearing a watch or you go to a fancy dinner and so instead of staying at home, you meet someone and you do deals with them and you develop a relationship. You enter that web of people or it could be in such a way of just like like what you put out is kind of like, you know, I mean, I don't want to go there because I think there are too many people that that shouldn't be doing that that pretend that they're wealthy and they're running out there and like, you know, buying bottle service and dumb. Um, so I wouldn't encourage that behavior unless you can afford it within your means. Um, also if you have a family and a wife or whatever, you know, then probably not the best idea. I purposely don't have kids because I want to go around and I want to go I want to buy a Ford GT and a Rolls-Royce. Um, and I want to go fly first class to wherever with my girlfriend. I mean, that's to me I don't understand how people work hard and have money and don't do that. I really don't get it. I I I I think they're fun. They're fun coupons. That's what money is. They're fun coupons. Why are you leaving fun coupons in the bank? Go use them to have fun. >> If you're rich, what's the best thing to spend money on? >> I There's not one thing. I think clothes. Uh other >> really I think people say that's the lowest ROI. >> No, I love clothes. I love cars. I love travel. >> Food, but you can't spend that much money on food. Let's be honest. I mean, you know, not you can't you can't go out and buy a $500,000 dinner. You can buy a $500,000 car. So, I'll dis I'll say travel. Definitely travel. You spend 100 grand on a European vacation. And I but I will say the arguably the most fun that I have with the with my money, best ROI is spending it on other people. I love being able to do things with my friends. I think it's great that I can provide, you know, opportunities for my friends traveling or dinners or whatever that they wouldn't otherwise do. I also don't understand why people who have money to me. If you're at a dinner, the person who's least affected by paying the bill should pay the bill. That's that simple. If you're out traveling, it should be based on who's least affected. It's a utilitarian. >> We picked up the bill just a couple days ago. >> Oh, for the ice coffee hour picked up the bill for the Mexican food. >> To be fair, I told I told my staff to pay it and then they said, "Oh, hey, Graham paid it." >> Yeah, you did. >> And by the way, does not count. Don't Don't bring up the fact that you finally bought lunch. 15 years of me buying lunch and I got to hear about the one Mexican restaurant you guys. >> We're I'm never going to live that down. >> And P's tacos, by the way, does not count as dinner. >> What does it count as? >> That's like a cheap lunch. That counts as like a half a lunch. >> Okay. So, it's mostly spending the money on other people. That's the highest. >> I say that's probably the best ROI. Yeah. I mean, because two people get the enjoyment. I get, you know, I do something nice for my girlfriend or my brother or a friend. Um, I get the enjoyment of it and they get the enjoyment of it, you know. I think it's a it's a great thing. If you can afford to do nice things with your friends, I think that's awesome. >> What do you think is the optimal amount of money to have? >> That's a interesting question. You don't want to have so much money that everyone's angling at you, you know, and you can't even have a normal conversation with someone. Uh maybe 100 million maybe. The other thing too is if once you have so much money that you can, you know, total [ __ ] you money, you can do whatever you want. I don't know if you appreciate it as much. So I don't I'm not going to say a dollar amount. This is what I'm going to say. I think the goal is to continually increase your net worth so that you can continually get nicer and nicer things and so you can continually appreciate those nicer and nicer things. The last thing you want to do is one have so much money that you stop appreciating things or two you have a lifestyle and that you have to that you have to come down. So I I've always found that like perfect example is my I now drive a Rolls-Royce Colinin but I didn't just go out you know and that wasn't my first car. That would suck. You start out with a Rolls-Royce Colon and SUV. You're never there's no better car on out there. So there's no I I started with I don't know I forget what you know who cares what my first cars were but up until you know finally I was able to get a Bentley you know like 5 years ago and then 5 years later I got a roll like so I when I got into my Bentley I'm like oh my god this thing is amazing and now I'm in my roles I'm like oh my god this thing is even better. So you just want to keep living to where you can continually increase your quality of life and then you will appreciate it every time. I never just I never want to come down and also I guess you don't if you have if I had $50 billion I mean it I don't know then you can do anything. So then nothing's fun. You know what I mean? I like to be able to I like there to be things I can't do. I cannot go out and buy a private jet. So I I like you know it's nice to be able to not do everything. I feel like theoretically you could buy like a $6 million private jet. >> Yeah. But then you're stressed out about the costs and the use. You know what I mean? That's stressful. That would be stressful for >> So, how much money do you need? How much money do you need to buy a private jet? >> 100 million. Minimum 100 million. Probably 200 million to even start thinking about a private jet. >> Okay. >> Yeah. I'm not I'm not there. >> What if you What if you traveled a lot? you used it like a few times. >> First of all, I'm not even if you travel a lot like to Europe and what you're talking about, those private jets cost like 30 $40 million. You got to be worth like $400 million before you're stepping up like that. Um, and I don't even like I'm not even a huge fan of flying of flying private because I get nervous turbulence and then, you know, the pilot's not as going to be as probably as good as like a, you know, a commercial pilot. And the bigger the plane, the safer it is, the less turbulence. I mean more you more crashes on private planes than commercial planes. >> What's the biggest lesson you've learned about money that nobody teaches you? >> I mean I would say that money does buy happiness. People tell you it doesn't but I think it does. Um doesn't guarantee happiness. I think that's what the saying should be. Money doesn't guarantee happiness because that's true. Money definitely buys happiness though. Um, and I think that maybe people don't realize that money is meant to be spent, you know? I mean, I I think you you're on this planet for only so many years. I don't I don't understand how people are wealthy and don't spend it. And then the other thing is, I guess I circling back on this, spend it on your friends. I encourage my mom, >> my mom has uh I beg my mom to spend money. I She's buying a Porsche right now. I mean, she's never had a nice car. She hasn't had a card, you know, over 100,000. Well, not probably. I bought her a Mercedes for 100k, but before that probably, you know, she has a pickup truck and she's got money now. I'm like, "Mom, like she, you know, she doesn't spend money." I like I beg her to spend money. I actually >> like have long conversation with her. I I I think that some people need to be encouraged to open up and enjoy other fruits of their labor. I don't know why people so many people have money and don't spend it. >> So, what's your advice to me? Yeah, >> because here here's how I look at it. >> What do you do with your money? Are you are you having kids >> one day? Here's how I look at it. I I see the amount that I have invested and I just think I could spend 3% of it a year and not run out. So that's kind of what I base everything off of. But then I think if the market falls 50%, I don't want to go down in lifestyle. So that 3% now turns to one and a half and I spend that. That's it. One and a half. >> But does that assume that you're not making any money? >> Yes. So you are making money. >> Yeah. So that adds to the top and then I could spend 1 and a half% of what's invested. >> Well, but then you have to figure out how many You also have to minus how many years you have left, right? >> Yeah. 50 plus years. But I I don't want to run out. So 1 and a half% over 50 plus years, assuming my expenses keep going. >> Assuming a return of how much a year? 5%. >> I do 5 to 6%. >> To me, this sounds borderline mental disorder. No, no, I don't think >> I think 1 and a half% if if the market falls 50%. I don't want to be affected by it. I don't even want to think about I want to be like >> I think I think what you should do is be diversified enough that that that doesn't happen. >> Oh, I am. But let me give you a perfect example of how you can hedge that. >> I'm really pitching 30-year treasuries. >> The inverse leverage buy the 30-year Treasury. Why? Because if we go into a recession, what's the Fed do? Lowers rates. So you have you could put in 10. Let's I'm just going to say you have $20 million. I you don't have to tell me what you have. Let's say you have $20 million. If you put 10 of it into into 30-year treasuries, then you're guaranteed a 5% return, which is pretty solid. And you're also investing that to some degree because if rates go down, but you're it's a hedge against inflation. >> Uh no, sorry, it's not a hedge against inflation. That was stupid. It's a hedge. It's a hedge against a recession, right? >> So, if the market goes down and we're and we got unemployment and hitting the fan, rates are going to go down. So, have a balanced portfolio and then you don't have there's no way you're going to lose 50% of your money. So, then then 20 then then you could do 25%. >> But I still think there could be a small chance we turn out like Japan that just goes down for like 30 years. >> Well, then rates go down in Japan. Yeah, they went to like zero. Correct. But but the market's going down at the same time. >> I know. But you can My point is you can hedge. That is a perfect hedge. I I spend money to remove stress. Uh I I'm overstaffed, you know, personal assistant. I have a stylist. What, you know, I have I don't do anything anymore. I love that. I think there's no better way for me to spend money than to have somebody pack for me. You know, why do I want to or go to the grocery store for me or get my, you know, dry cleaning or my shoes clean. Why do I want to be driving to drop off my shoes to get cleaned? You know, it's a dumb argument. And I know I'm sounding like a douchy guy, but douchy. But I mean, why do I want to be doing anything? That's the best thing for to >> Graeme will lose sleep over a quote that he gets from a contractor that's like $700 more than what he thinks. >> Like he will literally lose sleep and then we'll have a podcast the next day and he'll be like groggy and people will comment, "Graham looks tired." One of one of the things that that I've done to change Graham is I used to be so difficult about contractors and I always used to think I was getting >> and I would negotiate them and get a second bid and a third bid. And guess what? You are getting like 90% of the time. I have now it was it's less about money for me. It was more about uh psychology. You know what I mean? I was I was feeling like someone was getting one over on me and I was being treated unfairly. And now I'm like, you know what? I'm wealthy enough that I who care. What's the worst case scenario? This is the way I think about it. The worst case scenario is this contractor who's working hard is charging me $1,400 for a $900 job. So, okay, so I'm giving this dude $500 more than I should. Is that the end of the world? It's going to that guy and his family and it's increasing his quality of life a hell of a lot more than $500 is going to increase my quality of life. Just look at it as like a tip. Just a massive tip for a hardworking dude. Uh, and I'm just way happier when I look at it like that. I just don't mind getting as much. >> How I look at it is that I don't spend that extra 500 bucks and I think when I spend that here, I could have done all these other things that I purposely didn't do because I'd rather just save the money and then it just poofs go just goes away. >> Think about it like from a utilitarian perspective. Who's going to have more happiness from that $500? You or that dude? >> That dude. >> That dude. So worst case scenario when you leave this planet, you have just made other people happy. That's the worst case scenario for you. That's a a good way of looking at it. I I don't I mean I really don't negotiate as much as I used to. I'm not as I don't get, you know, second and third bids. I tip like crazy. Tip 100 bucks to everybody. I mean, what is So the bathroom attendant or the or the valet is going to get a 100 bucks. Do you know what he's going to do with that? He's going to take his girlfriend to dinner and have a whole good night. What am I going to do with 100 bucks? I don't even know what I would I mean I nothing I don't know what you can do with 100 bucks. So buy tacos. >> Yeah, exactly. Buy grand buy grand lunch. So that I I think you have to look at it like that's the same reason why I buy dinner. I I've never I mean in 10 years I don't think I've never not picked up a tab unless you know someone's adamant about it. Um because it doesn't affect me and it affects other people. I would always look at it like that from a utilitarian perspective. >> And it feels good. Yeah, it really it feels good to to >> The main thing that I see is like sure Graham could be spending money to increase the quality of his life. But at the same point, the thing that it sucks to see is when he's stressed out over these money issues and he's like and he's on the phone with contractors trying to negotiate something down and on hold for an hour and he's like clearly stressed out and he gets an anxious and he gets angry and he gets all these negative. >> What about hiring a personal assistant that just does all that for you? just pay a person 100 grand a year. >> The thing is it just it it comes up so infrequently and it's so like last minute where today I have nothing but then it could be one phone call at 400 pm that just comes out of the blue and and now it's like I I really want someone to come over like quality of life is more important than money. >> If you can if you have the money to not have to worry about that then and and you're still worrying about it then you're not using your fund coupons appropriately. They're really meant to be like to de-stress. >> I have very little stress in my life. I use money to to de-stress my life. That's the best thing it can you can use it for. >> I'm still rooted to like how much I feel like $1,000 is for cuz I remember like $1,000 commission early on would be like, "Oh, wow. I could I could do this and this and this and make this last and invest it here." That just having it go away in seconds feels like it's >> irresponsible. you have a problem cuz I went gambling with you and you lost like $30 and he and he got so upset. I was like, "Dude, you don't make this is not fun. I'm like losing like seven grand and I don't even give a shit." And Graham lost $30 and he's like >> he's like, "I'm I'm done. I'm so done with this." He's so upset. >> I don't know, bro. We're We're cut from a different cloth. Um, >> also the other thing, too, is >> I think that you would be just as happy with half as much money. I don't think you would really. So, if I don't think I think you should spend the out of it, bro. >> And the other thing, too, is like I bought that the $450,000 Ford GT. That is not spending $450,000 just like or my Rolls-Royce or, you know, I buy a baseball cards or a whiskey like whatever the it is I'm buying or artwork. It's not like I can't sell it in the future or a watch. Let's say I buy a $30,000 Rolex. Someone's like, "Oh my god, you spent $30,000." No, I spent $5,000 because I'll probably be able to sell that thing in a few years for 25K, so who cares? So I So I only look at it as spending 5K. All I do is look at how much money I'm losing. When I bought that Ford GT, >> maybe I'll lose 50 or 70. Maybe I'll lose 100 grand max, you know, with taxes and maintenance and >> and I'll have it for, let's say, 10 years. >> So I look at that as spending 100 grand. I don't look at it as spending 500 grand. >> How has the show Selling Sunset changed your perspective on everything? Uh, I wouldn't say it's changed my perspective that much. No. I mean, it's I think it's made me wealthier, you know, and more more of a public figure. I don't think it's changed my perspective on things. >> But has anything changed when you go out now and that you're recognized all the time? >> Yeah. But I don't think that changes my perspective. I mean, it changes my life in as much as I'm taking, you know, photos with people when I'm out, but other than that, uh, it's pretty similar. If you took away me taking photos, 99% similar as my old life, >> you know, al although also it's I think it's helped me build my business and my career. So >> I'm wealthier because of that. But no, I don't think I'm a different person. I mean, [ __ ] you've known me since way before the show. >> You've mellowed out though a lot. >> That's not from the show. >> Okay. >> The show is just does not show stresses me out. Mellowing out I think is therapy. years of therapy and uh which I probably credit more than anything, but then learning not to stress out over things. I think I perfect example like if I if I got a contractor bid of $1,400, I would immediately get a rush of cortisol. I would be this is, you know, I'm getting this is probably only $800. Show me the labor, you know, show me the parts. Let me get a second bid. And I and all of that would be anxiety and stress and cortisol. Um, and I have in my phone, I literally have in my phone, don't sweat the small things. I know that's kind of cliche. >> Where do you have that? >> Look, I just opened up my phone. It's on my notes. So, it's it's my >> You know what's so funny you did that? Let me show you this. >> For every decision I make, I f I go through that return on hassle. >> Ah, yeah. >> Like how to spend money. Yeah. >> Screenshot. That's very very >> um I'll read like four or five for the for the people watching here. Well, some of it's you know about me being a boss, so I'll skip that. Uh be a positive personality and then I put like my dogs like Nico, Zelda, Thor, because my dogs have the best personalities. >> Uh don't be too hard on yourself. Set an example. Compliment, appreciate, and validate people more. Be more serious. Sorry, be more serious. Be less serious. uh more light-hearted, humorous, easygoing, be more present, patient. Um these are these are the most important one is don't take things personally. I now try not to personalize so many things, you know, like other people's actions are a reflection of them. My therapist told me, you know, and know so many people like, you know, someone gets angry or someone's driving and they cut you off and flip you off. It's not about you. Maybe they're having a bad day. Like it doesn't need to get you so upset. So I now don't let other people affect me as much. I now also this one is the mo the most important one is don't sweat the small things because I used to think everything was a big deal and I always have to react immediately and get my cortisol up and solve it. And I now realize that everything resolves itself. Everything 99% of things resolve themselves. 99% of things when you look back on them 6 months later were not nearly the big deal that you thought they were. So, I just take that approach to everything that everything is small and I remind myself every day that every issue I'm going to deal with is is small. And it is. It ends up that they're small. And I have a lot of issues I'm dealing with. I probably have more issues today with a 100 agents and four offices than I've ever had. And I'm the least stressed because I've just, you know, I've kind of turned, you know, I I I look through things from a different prism. >> Were Were you addicted to cortisol in the past? >> Yeah, I think so. I think so. Yeah. I I used to think that I needed cortisol to have the energy to work hard, you know. I used to think that that was my motivating force and I had to have this reactive, aggressive, you know, cortisol infused kind of approach to things. And I realize that I'm calmer, happier, more relaxed, uh less reactive, more, you know, I think arguably more thoughtful, um, and happier. And I handled just as many things. And I think the people around me appreciate all of that more as well. >> What led you to go to therapy in the first place? >> Uh, me and my brother were fighting a lot. So I I said, "Let's go like, you know, brothers therapy." kind kind of like couples therapy be but for brothers and I thought it was helpful and then I said I want to continue to see you you know individually um and it god it worked when I she almost quit on me I was so Brett and I would fight so much in therapy and I was so >> what were you guys fighting about just silly >> I can fight over anything honestly we can we can we can trigger each other and just really get after it >> because you guys know what buttons to press >> yeah exactly it's like 40 years of skill we're both lawyers you know we just go at it um Yeah, I used to be very just I if there's one thing I was is that I was very reactive. I would just get that cortisol rush and I would follow it. You know what I mean? And >> yeah, I just don't anymore. I feel it now and I'm like, "Oh, you know, I don't need that." You know, and I am just so happy. I'm so much happier. And everyone that knows me tells me how much like, you know, more chill I am. How long did that take? >> Five years. Probably. Five years. But that's me trying. I It's me reading my list every day. That's me going to therapy every week. That's me thinking about it and wanting to improve on these things. You know, it's not you can't be lazy about it. For me, it's like the gym for my mind. You know, I I go I've been going to the gym for 30 years. Uh I go five times a week. Um same, you know, you got to you got to have that same approach to to therapy. >> Why do you think it took you so long to finally make that decision to try to actively work on it? Um because I think it's really easy just to kind of well first of all I thought that I needed this reactive cortisol you know aggression to kind of continue to succeed in business but something made you change your mind that you don't >> I think for everyone it's different you know I definitely don't think it's other people telling you to that you need to change that's not going to change it you really have to want to change and I don't know if there's anything other than that just you know people just have to wait for that moment for themselves I'm not sure there's anything you can do or say to kind of make yourself ready. You just have to get to a point where you and I'm I'm just someone who wants to improve. And for so much of my life, improvement for me was getting, you know, getting good grades, getting into law school, opening up a business, making more money, growing that, you know, I mean, there's all these markers that that that we have, especially in a capitalist society, of what success means. And it wasn't until I kind of viewed success as, you know, my happiness and my my ability to kind of create, you know, happiness among people. Like when I started realizing that that's actually what success is, then I'm like, "Oh, well, in order to be successful under this new definition of success, I need to see a therapist." How do you know if a therapist is good or not? >> Uh, if you're getting better. You know, for me, I I probably could have, no disrespect to my therapist, but I could probably talk to a brick wall to some degree because it's it's really about me telling my therapist what my problems are, what situations I got in where I did not handle myself in the way that I wanted to and then how I wish I would have handled it. So, it's almost me like talking to myself. And now you got uh chat. I mean, I think everyone should be using therapy apps now. How is ChachiBT in terms of therapy having used it relative I am >> I've used it for certain situations and it's fantastic >> I've used it >> I use it for conflict resolution I say like give me a script to follow and it's really good >> I I believe that chat or when I say chat I mean AI I believe that AI will be 50 times better than than the best therapists on the planet AI will have been able to read and take It essentially AI will have 500 PhDs, you know, or more, whatever. It will know you far better than your therapist knows you because it probably hears you all day long. It probably hears instead of having to go to your therapist and tell them about a situation. It will probably have heard your situation. It It'll probably have heard Graham on the phone talking to the contractor, you know, or whatever, raising his voice or, you know, whatever it was. Um, so I think I mean that's the answer. The answer for for therapy is going to be AI. >> The pro I feel like the problem though with that is people assume because it has the 500 plus PhDs that it's the smartest thing that they can possibly talk to that they'll start treating it as though anything that it says is completely without question true. And you say, "Hey, I handled the situation like this." And then ChadBt says, "Oh, well maybe it's because, you know, 5 years ago this happened." And then you're like, "It has to be that. >> There's no way it's not." Well, people already do that with their therapist. I mean, people always already give too much credit. I mean, chat right now is not that great, right? AI is is is still in its B, you know, it's beginning phases. Uh, in in 5 years, it will be probably 99.9% right. And it will probably give you the best therapeutic answer you could possibly have ever received. You know, I do do I believe everything I read in chat now? No. It's got I mean it literally we did a we Graham and I did a thing on it yesterday where I literally prompted it to pushed it in a different direction and it gave me a totally different answer. Um but in 5 years I think you know this will be the answer to people that can't think critically you know and people that need therapy. >> I'm curious I'm sure you spend a lot of time with billionaires or ultra high netw worth individuals. What differences do you notice in those sorts of people as opposed to your everyday person? >> Very little. very very little. I don't think there's much difference between a billionaire and you know really Yeah. >> I imagine to be a billionaire you have to have an outside the bell curve personality. >> No, I I think Well, first of all, let's call it somebody with $100 million or more, you know, cuz it's I don't it's all relative. I mean it's I don't know if there's a cut off but no I'd say they're successful but I think there are millions of people that I think that you are arguably more intelligent and a better critical thinker than most billionaires at least half of them and you're not a billionaire um most of it is being in the right place at the right time most wealthy people were in the right place at the right time >> yeah I'm not saying they're not smart you have to be smart you know and you have to be hardworking. Um, and you have to be in the right place at the right time. That's how I'd say 75% of billionaires. >> But I tend to believe that it's not like a like a switch, like a light switch and it's like, okay, I made this one correct decision. I was in the right place at the right time and I became a billionaire. It's more so like you got an opportunity and that opportunity led to another one. You made the right decision there and you made the right decision there. You failed and you learned from it and it's a series of good decisions. >> I I would disagree. I'd say it's usually right place at the right time. So you think most people if given that exact right place, right time opportunity, not most people but like most intelligent, hardworking people, yeah, >> I think you could replace top 1,000 wealthiest people in America with probably a million other people and nobody would know. So you said3 million but there are there's I I I truly don't think that that that >> I I think arguably you if you were put in the if you personally were put in the position of half the billionaires in this planet you would have done equaled or greater but you said intelligent and hardworking. >> Thank you. If you said intelligent and hardworking so you think those are very important characteristics for someone that is going to achieve that level of success. Yeah, I think those are the two I I think someone generally a very successful person is a is a generally a problem solver and a problem solver requires critical thinking skills uh and and a certain level of intelligence and I think all of that also needs hard work but those are not skills that that are super rare. I mean, I'd say 5% um of people have all those skills. That's 15 million people in America that have those skills. There's probably only a few hundred, couple thousand billionaires. So, I don't think there's a big difference. I mean, I don't think there's a big difference between a lot of the wealthy people that I know and a lot of the just the hardworking, intelligent people that I know. I've got a lot of friends that are no less hardworking or intelligent than billionaires and they're worth, you know, nothing. >> That is a really interesting thing to point out because now I'm thinking about people we've had on the podcast or just people I've met. And you take the archetype, the the type of human that wants to achieve billionaire status and they chase it and they chase it and they chase it. Those are never the billionaires that I met. They're like, I always wanted to be a billionaire. Every billionaire that I've met has been someone like Papa John. It's been someone who's who's achieved this ultra wealthy status not because they wanted to be a billionaire but because it just kind of happened to befall on them like >> I I don't think that wanting to be a billionaire listen does everyone want to be wealthy to some degree. I'm sure that you know everyone thinks about that like going >> but there's a difference between wealthy and 100 million. >> I think people I mean there's nothing that turns me off more than someone telling me what they're going to be. You know, I I think there's too much of that to, you know, another thing about most billionaires that I think I should address. They're not entitled. I mean, maybe they're entitled now, you know, because they're billionaires. They have everything, but >> they they didn't get to being billionaires by being entitled. I don't think that a lot of these billionaires h felt like they were the a victim or and I'm not saying there aren't victims out there. I'm just saying that mentality does not push you into, you know, billionaire status. And and having entitlement does not either. I think like I as a personal example, I never felt I always felt like I could do something if I kept at it. I um never felt entitled, you know? I I just felt like I had opportunity and I would just keep working hard. I never had aspirations of being a billionaire. I thought if I could make $10,000 a month, I could live a great life. That was my goal. That was my goal is $10,000 a month. I that was my goal up to not long ago. Um that's a healthy goal. I don't think anyone has these anyone who has these annoyingly high aspirations is just that annoying. I tend to agree. And I also think another thing to to note is I think that the people that make it to that ultra wealthy status are able they have an accurate grasp on reality. And then you have these other people that are somewhat delusional which are the people that have a victim mindset or the people that have an entitlement mindset. they fall into that category because both of those are under the premise that they are the center of everything. If you're a victim, it's because the world is trying to keep you down. If you're entitled, it's that you are owed everything that the world is is there to cater and serve to your needs. You want something and it will just manifest. It will follow you. And so the other people are like, "No, the reality exists in the same way that just the reality exists. Like I'm here. I'm placed here and I need to do my best to see reality for what it is. play my cards right, you know, and and basically have an accurate prediction engine of do I see reality for what it is? Do I predict if I make this action, will this outcome occur? And it's not just have an accurate grasp on reality. >> I I think you that was super well said. And I also think that some people think that it's just one decision or one big bet or whatever that's going to make them wealthy. That's a terrible approach. I mean, go in and say, I want to be successful at the in this career. my my goal is to make, you know, a couple hundred thousand a year or whatever it is. Like baby steps. Don't just otherwise if you're trying to get wealthy super quick, you're going to be making dumb risky decisions. And I think what you said, it's just one intelligent decision after another and then 800 intelligent decisions and a lot of hard work later, you're a billionaire. But yeah, I still don't think I know a lot of dumb rich people, you know. I don't think that that it's intelligence is a requisite to being rich. I think there are >> I think it's more likely that you're intelligent and hardworking >> and have critical thinking skills if you're very wealthy. >> Um but I think it's probably more right place, right time than anything else. Uh so I would just encourage people to I don't know if I also don't know why people always listen to billionaires. Like give me a break. The guy invested in oil in Texas in the 80s. No, he's a billionaire. You know what I mean? You could be an idiot and invest in oil. You know, what is it? I saw I saw this the No offense. Well, I hate the cowboy, so I'm just going to use this example. Jerry Jones invested in, you know, finding oil in Texas in like the 80s or whatever, made, you know, $50 million. It does not mean that he's a genius or that he's got some exception. So it doesn't mean that we should sit down and listen to what Jerry Jones has to say about >> politics >> X. >> Yeah. >> Because I mean that's being at he was at the right place at the right time. He's probably >> has a modicum of intelligence and critical thinking skills and hard work. I give them all that. But there's no difference between Jerry Jones the billionaire uh and probably you know 15 million >> other people person. That's a really interesting point you made right there. Well, I'm not saying there's no difference between him and a blue collar person, but there but there's no difference. If that blue collar person is hardworking and intelligent and is a critical thinker and is working hard, yeah, there's really probably no difference. I'm a decent example. I mean, it was right right place at right time for me. I mean, would I still be successful? Yes. But would I be this successful? No. I mean, I happen to have some beautiful women working for me on the Sunset Strip and I had a producer come up and want to create a show that ended up being a hit. That's when am I going to sit here? Is it should everyone listen to me now because I have, you know, some success and some money? Not necessarily. I mean, listen to me be if you think I'm intelligent and a critical thinker and I've got But don't just listen because I'm have money. I was at the a lot of my money, at least a decent amount of my money has to do with the fact that I was at the right place at the right time. I I mean, I'm not going to take credit for that. >> What about being a good boss? You said you had other notes on your phone. >> Uh, positive reinforcement at the office. Compliment everyone and be specific. and don't criticize mistakes, make them teachable moments. Um, those are two that I try. I mean, I fail at that every day. You know, you can't be perfect, but I try to remind myself. I do better with positive reinforcement. You know, when I was an attorney or something and someone says, "Hey, great work on this." You know, let's focus next time on I think you can do even better on this part. You know, that like that kind of positive as opposed to saying, "Dude, what the you know, why'd you give me this?" you know, look at all these misspelling. Like, don't if if I don't think people really react so well to being criticized. Um, I know I don't. >> So, how do you how do you motivate someone if you find them falling behind or you think they're maybe just not doing as much as they could do? >> I mean, listen, I guess there's something called like a I I think like a posit like a sandwich. You're supposed to sandwich it. >> Yeah. So, you say something criticism sandwich or whatever. >> Yeah. Either way, I mean, there are I don't like all these rules and I don't actually have never used that in my life even though my therapist told me to. It's too like I don't like, you know, fake, but just put yourself in their position. Like, I mean, I get, you know, things that I think could be done better all the time. Um, I just don't think you can just, you can't just rip on somebody. I just, you have to think about what is going to make them want to do a better job. you getting upset at them is not going to be they're not going to walk away and be like, "Oh, I definitely am going to do a better job next time." They're gonna walk away and be like, "Oh," you know? So, I it's kind of common sense. I mean, you just have to be motivating and you have to have I think you actually have to care. Like, I truly care about the people that work for me. Um, I care about their quality of life. I care about their happiness. So, you know, you take the time to kind of nurture that and and develop that. Uh I'm not excellent at it. I'm a hell of a lot better than I used to be. I mean, I think it was probably hard to work for me 10 years ago, probably even five years ago. You know, I was really tough, aggressive, negative, tur reactive, um you know, very demanding, very detail-oriented, but not in a constructive way, in like a critical way. So, you know, I think you have to create a culture of do people want I and I'd always ask, you know, the people in my office like what's going to make you happier working here? Uh I think if you create a culture where people want to come to work, I look forward to Monday morning as much as I look forward to Saturday morning. >> It's so funny. We just talked about this last night. I I went to a doctor's appointment and they're closed from 12:00 to 1 for lunch and I show up there at like 12:55. If they open the door and the doctors are walking in and they say, "Oh man, it's all it's almost 5:00 p.m. We could almost go home. Three more hours until I'm out." >> And they're like, "What are your plans for Friday nights? Oh man, it's almost there." And I remember I briefly had an experience where I would think to myself, "Okay, only two more hours until lunchtime." And then after lunch, I was like, "Okay, only three more hours until I go home." And then after one more day, it's Friday and then it's the weekend. And then Sunday, I just remember that dread of like, man, I got to be up at 7 a.m. that next morning. I haven't felt that way in like 20 years. >> Same. I haven't since since I was a lawyer. >> Yeah. >> Just thinking through that of of hating what you do all day just to be able >> I would say it's hating. I'd say it's not enjoying. >> Sure. >> Yeah. I mean, unfortunately, that's most of America. Um, and listen, most people are, you know, I'll be most people are probably cut out for that, right? I mean, not everyone's going to be an entrepreneur. You can't have that. Society wouldn't function. Um, so, you know, I think for a lot of people, that's probably fine and acceptable. I think for the people that it's not fine and acceptable for, they go off and do things like you and me. I do not like 9 to5, you know. I'm not cut out for it. We got a question about creative finance deals. Do you get a lot of seller finance? Have you heard of sub 2? What do you think about any non-conventional way? >> I don't like any of it. I I honestly anytime anyone even says the word creative financing, I'm like, "Shut the get out." >> But doesn't it make sense if that's the thing that can push a deal through? For example, if someone buys a house 3, four years ago and they got a 2 and a half% interest rate and now rates are 5 1.5 6%. Doesn't it make sense to try to just sell or finance the equity that's there or pay someone pay someone money to be able to take over the loan? >> You can't do it. There's no way to to There's really no >> great way to keep a loan and transfer an asset. I trust me, I would do it if I could. I have been in this business for, you know, 15 years, done billions of dollars in deals. Not a single deal, a single deal have I been able to have the original loan kept. So, we've spoke to this guy, Pace Morby, and this is like his whole big thing. He's got like couple thousand units or something. He talks about it. He's like the guy on YouTube that talks about creative financing specifically also sub 2, which is basically you go in, you take over the mortgage payment. So, you just send the money and then I think what he does is he puts the deed in a trust or something. Uhhuh. >> And it doesn't count for a sale. And then, you know, you have the do on sale clause of the of the loan. >> Yeah. And that's when it like only ever he's only ever been called on once out of his thousands of deals that he's done for this. But doesn't he remain liable for the asset, liable for insurance, liable in litigation? >> So, you're saying the He's the owner. How is that any different? How is that really substantively any different than a lease with an option to buy? >> It's it's similar. Yeah. Yeah, I mean that's not a transfer of an asset. I'm not saying it's dumb. You know, I think a lease option can make sense, but it's just I I my understanding is that he would still be liable for anything and everything. Maybe in commercial real estate, you know, you can isolate that risk a little bit. Maybe it's a little bit different, but in residential real estate, there's really no great way to do it. So you're saying the seller in this instance if you are selling a house sub 2 to someone else. So sub 2 is like when you just take over the payments basically then as the seller you're still liable for anything that could go wrong with the house. >> Yeah. Cuz you probably created some type of joint venture or trust or whatever it is. >> So his >> also the other thing too is um you have to remain the sole owner. If there's any other ownership then the bank can call the loan. >> Mhm. But he's he's been called by the bank once, but he said most of the time the banks just want to ignore it because this is just one small thing that's been sold off and sold off and sold off in I'm not going to risk my loan. >> As long as they're performing, then that's all that matters. >> I agree that you're right. And there's also I will say there is it >> there's added benefit to the seller that that we haven't even considered which is you know if you're selling a house at a 2 and a half% interest rate basically when you take over the loan then the person can overpay whoever's buying the house or what you also see >> wait let me ask you a question you you you I own a $10 million house >> right I have let's say I have $5 million of equity >> and I have a $5 million loan at 2 and a.5% >> and I structure this does this I give me cash up front. >> So you could >> Yeah. Yeah. 100%. So let's say it'd be similar to lease options, >> but but that but that cash up front is going to be treated as as income whereas on sale it's treated as long-term capital gains. >> So now I'm paying 50% tax on the on the on the on the money that he gives me when I could be paying 28% tax. >> Or what you could do is just increase the sale price of the home, >> right? >> No, I'm not sure that how how's that solve it? Well, you could, wouldn't it solve it if you just sold the house at a premium? So, for something that's not technically worth sell it, remember, you can't sell it because if you sell it, then they the bank calls the loan. They can't transfer the asset. >> They haven't. >> No, he was he's not transferring the asset. He's still he's still he's still on title. >> Otherwise, of course, >> I have no idea how I when even when Pace is describing it, I'm like a big real estate guy. I listen I I there's no way for me to transfer this house to another person um without the loan being potentially called or no I mean it would be called if I transferred it to him. Now could I put it into an LLC, let's say, and then have him buy 50% of the LLC or something like that? Yeah, technically the bank can still call the loan and then he'd have to buy the LLC by giving me money. So let's I'm I mean the whole point of a sale is I want to get my $5 million of equity, right? Mhm. >> But if he gives me $5 million, then it's income and now I got to report $5 million of income and pay 50% tax on it. There's just no way to get my equity out on this. There's just no way. I mean, I've thought about it. Even on a long even on a long-term lease with with an option, you're still going to get an upfront payment that's being treated as income. It's 50 tax at 55%. That's crazy. Whereas, if when you sell it, it's long-term capital gain. So, you can't mess with that structure. There's no way to get your equity out except taking out a line of credit, you know, if you want cash. I'm just telling you there's no good way to do this. I I would be happy to argue with that guy because I just I don't I don't buy it. >> He says for the seller, the benefit is that if you're trying to sell your place for a mill, you know, a million, you're not getting it. Now, you could sell it for 1.1. >> Yeah, but you're not getting one one. I mean, so it's just a number on a piece of paper. You're really getting you're really continuing to take all the liability. you're getting your monthly not covered, but you'd be getting that covered by rent anyway. So >> So I and you don't get any equity because if you're getting any equity, you're paying massive tax on it. So where's the seller benefiting from this? I don't I don't get it. >> I mean, you could argue for the people that aren't in a rough financial position, it's more like an annuity. And then you could argue for the people that are in a rough financial position. A lot of people uh if they let's say my example, this $10 million house, right? and it's only costing me $20,000 a month >> because I've got such a great loan on it and low property tax basis. >> So this guy is paying me >> what 20 $25,000 a month. I mean he's he's just >> he's paying it 30,000 a month. >> Fine, but I presumably I can rent it for 30,000 a month. So maybe he's So why So how's this guy? I mean he's getting all the benefit. >> Yes, but also there's the situations cuz he doesn't do this typically sell it at all. Well, he's not doing this with like massive million dollar homes. Who cares? No, because a lot of the people, they're getting in a position of bankruptcy and they don't want to file for bankruptcy if they're underwater in the home and then he's basically able to take and monetize the home more effectively than they would be. >> How is he able to monetize it more effectively? >> Well, they've never been a landlord before. And then >> that's a totally different argument. You're saying he's a better property than I don't buy that. That's a different argument. I don't buy >> it. Is a different argument. I'm just saying that that makes this option a little bit more viable. then then the seller is not a is not a a a good commercial actor. I mean, if he's if he's buying properties off idiots, then sure. But if you have an intelligent seller, why would an intelligent and I don't even mean that intelligent. I mean an average seller who just know has a modicum of of of understanding of his asset. Why would he want to enter into this transaction? I get why that guy wants to. I totally get why people would want to buy like that. I've had a dozen buyers try to buy my, you know, buy properties for my clients like that and I tell them to off. Why would the seller want to do it is the question. It's a fake sale. It's not a real It's not a real sale. You think you sold it for a million50, but you didn't. You You got You got $20,000. You got whatever you rented. You probably could get more money just renting it out. You're never going to get your equity. When are you going to get your equity? >> I guess with renting, you would be responsible though for repairs. >> You still are. Well, you could >> if the if the buyer >> you could find you could find a tenant that's why why not just get a property manager and just say hey you got I'm >> because then because then the buyer for anything and if the buyer defaults on that you would take their down payment let's just say >> how is this any different than a than a good property manager why is how is this guy >> the buyer is going to be responsible for the issues with a property manager property manager let's say you hire a property manager you still have to pay the property manager and you still have to pay for >> well but at the end of the day if the dollar amount's the the dollar amount >> like let's say a roof repair like you saw >> let's say let's say you get a property let's say listen let's say you have an asset that's only costing you $20,000 a month you know obviously it's going to it could rent for more and you get a good property manager to say hey this property manager says hey I'll get a I'll guarantee I'll rent it for 10 years and I will pay $20,000 a month and I'll handle all the everything property it's like a triple triple net why don't we look at commercial how is this guy any different than a triple net tenant except that he has a right to take the asset. He's just a really bad triple net tenant. >> I get why he wants to do it. I love would love to be Hey, I'm going to offer you here's a triple net lease on the tenant. Also, I have a right to buy it at this price. If I, by the way, if I want to or I can or you know, I can if it's ever not in my financial interest, I'm not going to buy it. If it is in my financial interest, I will buy it. By the way, guys, clearly we are filming currently in our studio, but recently you may have noticed we're on the road for a lot of these podcasts and it's very, very difficult to lock down a studio space. However, White Glove Estates, we were there in Los Angeles. We filmed an episode with Msk and with Stable Ronaldo and Mike Mleak, he was also there. They were so generous to let us stay there, film our podcast. They gave us the entire space for nothing just because they're very friendly people. So, they're also they're also right next door to the Oppenheime Group. They're my best friends and they do all of my personal properties and probably 90% of my clients work. So, I love them as well. >> Yeah, check them out. The link down below in the description because they've seriously helped us out a lot. So, >> we should say what they do, too. They do like home home remodels, you know, AV, uh, pretty much design, everything. >> The best of the best, like the highest end stuff you could imagine. They do it all. So, again, if that's you, the link is down. >> Oh, they actually built out all of the Oenheim Group offices as well. So, if you like those, yeah, they did all of them. Looks great in there. >> Thanks. Yeah. Cool. Thanks so much, Jason. Your info will be listed down below. Thanks so much. And >> thanks, guys. Till next time.