Urban City Podcast Group
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Urban City Podcast Group
Urban City Podcast Group
3 Major Takeaways:
Economic uncertainty and a weakening dollar are prompting experts to advise investors to move capital into hard assets like real estate, gold, and Bitcoin, while cautioning against over-leverage.
Major news events, such as the shooting of a Blackstone executive, can trigger short-term market spooks and redemption requests, highlighting the fragility of investor confidence.
The rise of AI is creating both disruption and opportunity in commercial real estate, with tech hubs like San Francisco seeing a surge in leasing, but also posing new due diligence challenges for investors.
Transcript
If you’re listening to this, there’s a good chance you work within the real estate investing industry. There’s
another good chance that you would like to increase the sales of your products or services.
Well, you’re in the right place. United States Real Estate Investor is a
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unitstatesrealestateinvestor.com/advertising. That’s United States real
estateinvestor.com/advertising. Get ready to increase your brand
awareness and your bottom line. Attract clients with content.
Welcome to this month in real estate investing where we separate the noise from the news. I’m your host, James
Brown, and I show people how they can make s safe, secure returns through our
prevetted passive investments. Feel free to download our ebook, The Astute
Investor: The Top 10 Mistakes Investors Make and How to Avoid Them, or join our
private investor club so you can get exclusive opportunity alerts that we don’t advertise to the public. Uh, just
go to accelerate capital.com. Uh, in this episode, we’re going to be breaking
down a variety of real estate investing news items, including Blackstone executive shot, fund fallout, Trump
order opens 401ks to crypto and real estate, and Ray Dallio warns against
real estate in current economy. Uh, don’t forget if you’re watching live on YouTube, you can share your thoughts and
questions during the show and we can answer those. Uh, let’s go ahead and start the show.
Heat. Heat.
[Music]
All right. Today we’ve got Dave Foster jumping in
as a a repeat guest. Uh Scott Royal Smith and we may have Eric Burns hopping
in a little bit later. Um Dave, you want to start out and just let people know your background in investing? what types
of investing you focus on, then Scott can jump in. So, I either did something really right
or really, really wrong if you’ve invited me back. I don’t know which, but uh yeah, you know, I am an addin
infected real estate junkie and that’s really sums it up. I’ve dabbled in
everything. But 25 years ago, I had an aha moment and I realized that while
it’s true that you make your money in real estate when you buy, the old
mantra, right, that actually the most important thing is how much you keep at
the end. And that’s when I started diving into tax code usage, in
particular the 1031 exchange, and started spending my life using 1031
exchanges for my benefit and for the benefit of clients, helping them keep tax dollars working for themselves. So,
I do real estate. I live real estate, but I’m also a nerdish little accountant who uh likes to keep money in our
pockets instead of giving it to the government. Awesome. Thanks, Scott.
Yeah. Uh, yeah. So, my name is Scott Royal Smith. I’m actually an attorney and real estate investor. I, uh, bought
my first, uh, business and piece of real estate when I was actually in law school. It was a transmission auto repair shop, which I rehab the building
and the business and flipped it to graduate from law school without debt and continued to invest in real estate
as I was working as an attorney. Um, made enough money doing that that I like had a soft retirement and then figured
out that there was a whole bunch of other problems with wealth. around how do you do more advanced work with taxes,
scaling your real estate, how to automate that with teams, and that’s my company now, Royal Legal Solutions,
which is a fractional family office for people making over 300K a year as household income.
Fantastic. Cool. And people can reach out to you guys at the end of the show. We’ll have you share how they can
contact you. Um, thanks again for coming back, guys. This is going to be awesome.
Let’s dive into the news. Uh from the Texas Tribune, Texas Senate approves
bill to protect Texans from real estate fraudsters. Um said they’re you’re talking about
requiring county clerks to verify information, which you’d think that they already would have been doing,
right? Why would we ever think that it’s important to identify who’s recording a
deed? I don’t know. Yeah. for something as big as a real estate transaction.
That’s crazy. Yeah, this is one of those things where someone jumped up and said, “Hey, there
ought to be a law.” Which is right. There ought to be something. The problem is every time you say there ought to be
a law, then you find another reason to create another law on top of it. Um
something that could be solved very easily, right? With an ID. Yeah,
I think like so like to take it as like pointing counterpoint on it, right? Is like I think everybody agrees, right,
that we would say well we want transactions to be like safe and secure. Now the question is is is like is we
already have criminal penalties on the books though it’s already fraud. It’s already criminal to like to to create a
fraudulent instrument, right? So then the question in my mind says well what are we going to gather by creating like
additional criminal penalties for something right? So like why why do we
need it? Like is it um I think a lot of times I the one thing
that bothers me is a lot of times when we start creating like legislation to be able to say we’re going to create legislation to increase penalties but
it’s actually not going to solve the problem any better. So what did we actually get is we actually ended up like as a misdirection that happens. He
says, “We actually don’t know how to what we’re going to do to, you know, whatever this underlying problem is. So,
we’re just going to do something and that’ll make all the people that are upset about it happy.” But it didn’t
actually fix anything. Yeah. And that’s like the most annoying part of government. I’m a limited government guy. So, like creating more laws to fix
stuff for me, I’m offended. I’m like, “Well, is it really going to do anything?” Well, because every time you create a law, there’s going to be people that are
going to be finding ways around that. So, if we already have enforcement in place, why not just use that? By the
way, as you guys know, this is going through Florida now that there’s a move to make a Florida realtor’s license a
statutory ID for a regular transa
what do you mean? What does that mean? The Florida driver’s license or the Florida the Florida realtor’s license is
going to count as a legal ID. Oh, like your driver’s license, you can
substitute it. The reason is not everybody in Florida has a driver’s license.
[Applause] Yeah. [Laughter]
Well, that’s interesting. I don’t know. I don’t know where all this ID like any ID stuff will really go. typically
whenever you create more restrictions like if you create like voter identification that was like how was
like the was the big the GOP stuff it’s like we want more voter ID right and it’s always pushed upon the fact that
it’s like well if we have more identification more barriers people have to go through we’re going to have more security right but anytime you increase
security you also displace people that are good actors but don’t meet the
security requirements right so even so in these kinds of things you’ll I think when if you anytime you I don’t know
here like how much of a difference that’s going to make for you know I having people have ID for recording
deeds and whatnot. Um but it does add like an extra piece now that everybody’s going to have to do a closing and that
means that there’s extra stuff that has to get checked. So, you know, there’s it’s a small thing, but um I mean,
particularly with people that are like low income or like elderly people that are trying to like navigate the system,
uh otherwise, the more things that they have to do to be able to do the transaction, the more difficult it
makes, right? For all of us that are like smart, capable like business people or whatever, it’s not going to be a problem, right? But you start like a lot
of things like is there impacts on the fringes that we should be concerned about to like create another law to then
have more penalties in place when we already have laws that have penalties for that kind of behavior. You know, why would we take extra steps
to disenfranchise people?
Call me a lawyer and a debater, but you know stand. That’s a stand I’ll take on that point. Yeah.
All right, let’s go to the next one from United States real estate investor. Manhattan executive shot dead $53
billion Blackstone fund faces fallout shock. So this the one we highlighted at
the beginning. So Blackstone’s executive Wesley Leatner
um was shot. I guess it said the shooter Shane
Tamura, a former football player with documented mental illness, cited NFL
related trauma as his motive, which it’s like that’s not a motive, right? Like
it’s he might have some issues going on, but that doesn’t relate to like why he
shot this guy. So that’s kind of weird. But like in the article they’re talking
about the investors all getting a little spooked and
um redemption requests get trying to get their money back out is uh becoming a
problem because of that. Do you think like they all just get spooked because the like you know
leadership different leadership right? Yeah. Yeah. No one’s steering the ship.
Yeah. Right. Or or somebody else is steering the ship. They they don’t know what’s
Oh, wait. Uh oh, that was a woman. Antonio says, “Besley is a woman with a
typically male’s name.” Interesting.
You know, I think um I don’t want to make too much of a link of it, but the
United Healthcare incident of a few months ago, you know, very very similar. You’ve got a high level executive
who is murdered and there’s there’s a practical aspect and
then there’s the the overarching theme. The practical aspect is look what look
what happened to United Healthcare over the last three months. They’ve come back pretty nicely. Um which just goes to
show that if you’re a multi-billion dollar company, honestly one executive
is not going to make the company. Yeah, good point. But the overarching theme here though is why is this
starting to happen? And I just kind of wonder, I don’t know, Scott, there seems to be a growing divide. You’ve you
already started talking about it in terms of ID and disenfranchisement,
but if people are starting to feel disenfranchised and unable to affect their own lives,
are they reaching out in anger? And these are the kind of things that start to happen. And if so, how do we how do
we prevent it before it becomes an epidemic?
Yeah, I don’t know. I mean, I think I think there is like a disenfranch disenfranchisement that’s happens, but
it’s like um you know, what does it mean when the populace starts killing off the
oligarchs? Exactly. Like that’s that’s like what we’re starting to see, right? is and we and
what do we we get for it as news is saying like all these people are crazy, right? But what if they’re actually not
so crazy, right? Like it’s easy if you’re the people that are like the ones that are trying to tell like craft the
narrative about what it is to just be like, “Oh, these are just like random outliers of like crazy people that are targeting, but it’s like these are
strange people to target, right?” Like, but you’re just targeting like the high-profile ones. I think that to me
that’s the the bigger underly I mean one of the bigger like underlying points of what we’re starting to see a lot now in
the United States is what are we actually really finding out right is we’re finding out is that wages are stagnant inflation is actually much
higher than anybody is actually talking about all you got to do is walk to Walmart or go to McDonald’s and see that your dollar drink is now a $150 inside
of like a year right and and then you start looking at that say well the wages aren’t going up
and nobody’s there’s no real like relief on any of that front so now all of a sudden you know, we’re actually the
majority of America now is like much poorer and we have other and then there’s ma massive problems that are
happening where like the United States had a slip in its credit rating globally is now having problems being able to
maintain itself as a world reserve currency. So the the ability to be able to essentially tax the world by being a
world reserve currency and channel all that money to us is also going away. Um, and I think people are actually, you
know, they might not know about all of those downstream economic impacts, right? But what they are feeling is I
think is like a sense of hopelessness that they actually can really change anything anymore. And then that’s where
you get this kind of behavior of who can you blame? Well, who can you go after? And it’s like, well, the only people to go after are
corporations. Whoever whoever I identify as the head of the corporation seems to be the ones that people are like, if I
attack that person, then that’s the person that makes the most quote unquote sense to go after as the one that is
responsible. Yeah. Sometimes it’s people with manifestos
and absolutely we could call them the crazies. But I think what we’re starting to see
are the upsurgence of those people who are
feeling it inside their homes. Whether they’ve been denied health care, whether
they’ve had a home foreclosed, whether they feel out of control. And none of
this behavior is right. But what do you do when you feel absolutely hopeless and
powerless and you controlling the narrative? That was
a great phrase because that’s exactly what it is. We are putting these people
the 1% on a pedestal and they’re controlling the narrative.
So if you don’t have any control, you’re going to go after who does, aren’t you?
Yep. And somehow we’ve got to bring our nation back to where it’s a
nation of finding solutions rather than seeking exits. I guess you know
just uh this just in I guess he was aiming to shoot NFL officials in the
same building and so this was just a byproduct. So he wasn’t some no one
was after him. But it makes you think though like Blackstone, you know, they’re kind of
the big bad, you know, fund affecting real estate um
buying up single family homes, turning them into rentals. Um they used to have
a rent to own program um through home partners, which is kind of a direct
competitor with what I do. They actually just backed out of the the market at the beginning beginning easy for me to say
beginning of the year. Um I’ve got some speculations about why um I know there
was a lot of upset people with that specific program. Um there’s whole
Facebook group uh targeting them and they’re unhappy been kicked out of their
homes or whatever. A guy or a woman like this could be a target, you know. So,
you know, we’re aren’t going to solve the healthc care crisis today. But if this really was a situation of CTE, then
again, that’s a neglected health issue. Yeah. And if people can’t get good healthcare,
what are you going to do, right? Yeah. I just saw Anthem uh was shutting down like most of their
programs in Colorado where I am. They were leaving a couple. So, somebody’s
going to get affected by that. Yeah. And I’d be careful about like looking at what people are using as
defense points for like what truth is. Right? When we talk about like a CTE for example, that’s a criminal defense thing
that I’d raise like as an attorney to say like my client’s client’s crazy because he got knocked on the head too many times. So you can’t really hold him
as accountable for shooting all of those people, right? But the the reality might be really different, right? About
where’s the truth? What’s what’s actually like happening, right? You know, well then how do we know that?
Yeah. You can’t you who who’s going to know that that’s actually whatever it is, right? It’s obviously something a lawyer made up, you know, and that then
that they run with. But it’s um, you know, there’s there it’s it’s
interesting, you know, because like with highlighting withdrawals without something that somebody who’s as powerful as Blackstone to have a huge
amount of withdrawals happening like that, like it makes me wonder about if there’s like some type of like systematic fragility inside of like the
REIT pieces anyway, right? To say like, well, it’s just one guy. We all know
corporations hot swap people out. You know, is it just a short-term spook because you had a lot of faith in the
one guy even or is it, you know, some type of other other issue that’s, you
know, um, you know, causing people to, uh, you know, spook like that? But, you know, who knows? No, that’s a great point because one
thing we do know is that as you get later into a real estate market, your REITs struggle to continue to perform as
well as they have early. So there could very well have been a bunch of people dissatisfied
with the earnings at this part of the market cycle. So what are they going to do? Look for an excuse to exit.
Yeah. You know the sky’s is falling. Let me help. Yeah. Yeah. Could just be timing, not just that executive, right? And Blackstone’s
huge. They’re in all sorts of stuff. Real estate and Blackstone like some of the one of the
most powerful entities like in the country. Yeah. In the world. Yeah. Yeah. And like definitely like in the
world, right? Like Yeah. They’re like in charge. Yeah. Stuff, you know, really if we go off air in five seconds, we’ll
know. Yeah. So, yeah. I think I like Dave’s
point to that, though. It’s like maybe it’s just an excuse to exit and it actually doesn’t mean much besides just another example of people trying to find
a reason to weasel out. Yep. Yeah. Let’s go to our next one. Milwaukee Journal Sentinel. Feds charge
Milwaukee businessman with securities violations, defrauding investors.
Um, Joseph Nantoma allegedly defrauded investors through
three companies that raised 1.9 million from 30 individuals,
including nine in Wisconsin. Let’s see. Um, he allegedly spent at least 80% of
investor funds on personal expenses. Uh there’s that’s that’s not good. Um and
then he misrepresented here’s the big one. He misrepresented his portfolio
claiming 23 million in assets while the ownership records only showed like a
million. So he was he was defrauding them for sure. And it
makes me wonder, it says many of the victims were members of the Nigerian American community.
Um, and his last name, Nantom.
He was he’s from Africa somewhere. Um, but I’m wondering if he’s like defraing his own people, right? Like that’s
that’s not nice. It’s not nice to defraud anybody, but his own countrymen maybe. I don’t know.
Um I suppose if you’re trying to gain confidence, that’s where you’re going to
go is to people who know you the best. Yeah, that’s the easiest route. Um you know, my initial reaction just
wants to be this is another case of it’s easy to say there ought to be a law,
but the law already exists. And the real question in my mind is if you’re what
about these investors? What level of due diligence were they doing?
Yep. It’s awfully easy to to give money to someone because you don’t want to go
through the due diligence and then something happens that’s a bad event and
it’s not your fault. And I mean, if the guy’s living high on the hog and doing all that stuff, yeah,
throw the book at him. But there’s ways to do that. Yeah. But people should also take some
personal responsibility. If it’s all in one little area, how many people are going to look at those houses and
wondering why the deed didn’t show his name on it or wondering how come repairs haven’t
started on this house. I mean, there’s a whole lot more to this story than it appears, but the guy was
obviously a bad actor. Yeah. Yeah. I didn’t dig into it to see if it was, you know, 506b or C
syndication. Like you said, there’s there’s rules around all that stuff. And so maybe he
wasn’t even doing that. He was doing like some kind of JV thing just where he
wasn’t, you know, under the thumb of the SEC. So
yeah, but if they’re just private investors that aren’t accredited,
of course they’re they’re not going to know the questions to ask those due diligence kind of questions, but they
should. I think like highlights a lot of too is like the um there’s just not a lot of education. I think especially
when you’re looking at minority and immigrant communities that there’s there’s not really any anybody that really reaches out and
teaches anybody about finance as much. You know, especially as something like I work with uh you know the average client
that we work with in my company is typically making somewhere between like 300k to like 1.5 million a year. And
then what I find is that they don’t actually really truly understand syndications and like limited
partnership interests, much less how to do like due diligence in that area. Like most people are actually just
throwing money at the wall with stuff that they saw for marketing and like a good sales call and a slide deck, but
they don’t have like a lot of background. And these are I mean these are people, you know, talking about like
rich white dudes, you know, and then that’s as good as they’re doing a lot of the time, right? I think like like they
probably I mean maybe it’s not in the same vein same vein of like how risky it is to just invest with your Nigerian
buddy who lives on the street that’s in your when you’re in a Nigerian community like maybe but it’s um you know that the
education isn’t there like there’s not the outreach and education on the financial side of things for people that are in that those kind of communities
and those kind of income brackets. It also doesn’t really exist all that well for the the vast scope of actually what
we would consider people that are supposed to be educated that are making these types of investments anyway. And
um you know I would I I you know if we if we had all believed that there’s
going to be troubles in the stock market like coming going forward with the way things are like shaping up on the
economic uh side of side of things that I think you’re going to end up with like a whole very potentially like a whole
problem of like the emperor has no clothes. all the like a ton of deals are going to pop because they had
assumptions not based upon like that those types of economic and financial conditions coming up and then this
question that we have here is like how could anybody have done this how could you have invested in this and we’ll be
looking at each other saying oh well I guess we all we all got got well and I’ll add a demographic to to
what you just said the youth in America as well we are not bringing up our young
people to be financially literate it and that it’s going to have just as big an
impact for decades going on. And but they’re very susceptible to I love the
dart throwing analogy, right? Every Tik Tocker and influencer that comes along has a different idea on how you can make
money or what happens when you put Mentos in Diet Coke.
And we somehow got to far the truth out and start to educate people. Yep. And actually, this is going to be
interesting because I think there’s a couple other news stories coming up that we’re going to talk about that speak to this exact thing.
Yep. Yeah. Yeah. That’s our mission here, you know, with this show and our the United States real estate investor
platform is educate people. They’re not getting this kind of stuff in school.
So, we believe like you guys, it’s it’s needed. So in the chat somebody said uh
I know a Nigerian guy and he said that that country is absolutely loaded with
scammers which is a big reason he left the country. So I mean we’ve all probably gotten the Nigerian prince
emails right like they’re kind of known for for targeting us. So that guy
actually left his own country. So, you would think that these Nigerian investors would already be kind of on
the alert because they’re aware of kind of that. Yeah. I mean, that’s like getting like like hustled by your like brother-in-law
or something, though. You know, you’re like, “Oh, you know.” Yeah. You don’t you don’t think that way when it’s somebody you know.
Yeah. You know, when it’s somebody you know, you’re like, “Oh, like generally people are like this, but this guy’s
different.” You know, right? Yeah. Family. Yeah. You know, well, so this Oh, go ahead. No, no, I’m
just kidding. I like Yeah, it could be your wife. It could be anybody, you know. But I was like, I was just making like a jaded 40-year-old joke. Don’t
worry about it. He’s such a young pup.
Just a baby. You’re not supposed to be so sad yet. Just wait.
[Music] So, in the beginning of the show, I mentioned our astute investor ebook. So
if you go to acceleratemycap.com that talks about ways to do due diligence. So if you’re looking at
investing with somebody follow that uh that guide. So um let’s
see let’s go to the next article from WTOC1.
United States government sues Richmond Hill real estate developer for destroying Native American artifacts and
human remains. So it said that more than 80,000
artifacts were mishandled and 3,000 were lost or discarded while human remains
were misplaced or improperly treated.
I don’t know what went on there, but so I don’t hopefully Are you hearing all
the noise in the background? Yeah, a little bit. Is that Blackstone knocking on your door? Yeah.
Yeah, dude. You got the NFL? What’s up, bro? Yeah. Just put put a couple rounds to the door
and then I’m sure everybody will quiet down. Yeah.
I’m not saying it will come with other problems, but it’ll definitely get you quiet.
Oh my goodness. So, I got to tell you, I’ve got some sympathy for that developer. Yeah.
Because the longest year of my life was the three days after my road crews dug
up a body building a road in our in one of our subdivisions. Oh.
And I the pain is real because the very first thing that happens everything’s shut down.
Mhm. And then it starts sorting out. And our project was located right on the Oregon
Trail um near a city. So it could have been anybody, anything. But the Native
American tribes get involved, the government gets involved, the FBI gets
involved, the state bureau of investigation gets involved, the local community gets involved, the
architectural um historical uh entities get involved and you are
very seriously in danger of losing all of your work and the land in that
project. It’s a real fear. Now, fortunately for us, 3 days later, the
state ar the state archaeologist came out, spent 5 minutes, and said, “Oh, yeah, it’s a settler.” How do you know?
Because there were coffin nails around the skeleton. Oh, interesting. Yeah, that was the only way to tell. So,
we knew that it had been buried in a coffin. So, it was not Native American. So, we were free to go ahead. Yeah. But
when you look at the mass of bad things and contradictory
advice and laws, how’s that developer supposed to proceed? I mean, I heard I
heard from tons of people saying, “Dude, get the bulldozer going again and make sure that never happened.”
Well, that’s equally wrong as well, isn’t it? So, he’s torn between those voices in his ear and the voices have
shut it down. Give us the land. It’s a burial ground. so mishandled
according to what laws and statutes. It’s, you know, again, it’s one of those things where I get the sentiment and we
want to preserve culture, but sometimes there’s an overount of legislation and overstep that it
provides causes real harm. Yeah. To you as the developer. Yeah. I where I got all the gray hair, every bit
of it. Yeah. Yeah. Yeah, I can’t imagine like some of these big projects how much money you’re bleeding every hour, right?
But when you’re working on thin margins, it could just Yeah. You’re done. Your whole company goes up. It’s not just
that project even, right? Like interesting. Well, that that’s cool. I’m
glad Well, I’m not glad that you went through that pain, but I’m glad you had some feedback on that for the show.
Yeah, that one hit close to home. That was amazing. Yeah. Yeah. All right. Well, Scott, did
you want to add something to that before we take Yeah, I just I think what they should do is have some something that’s other than
the court system to be able to or some type of like streamline legislation. You know, you need some type of expedited
legislation to be able to handle um any of these type of like tribal issues, I think, with artifacts or mishandling the
remains because yeah, it’s balancing the interest, right? that you need something set aside. If you’re going to say that
like that we’re going to show the respect to the Native Americans or or to those people or any people about how
we’re going to treat like the remains and we’re going to say cool as a society we’re going to stand behind that. We’re going to offer some level of respect,
you know, to that then also make it like workable by uh creating stuff that allows us to more expeditiously like
move through the process if that pops up than saying we need a multi-year court battle, right? Um, I think it of
anything what ends up happening more often than not is that a lot of the legislation actually gets created as
like a feel-good and like of a should that we should do, but it doesn’t actually get worked on enough to make it
really functional. So, we’re we’re caught in like the place of of uh people did enough so that they
wouldn’t feel bad, but they didn’t do enough so that way it would actually work well.
[Music] Interesting.
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wealth with alternative investments. Okay, we’re back
from CNBC. What the end of Energy Star could mean for commercial real estate.
Looks like there’s potential elimination of the whole Energy Star program. It’s part of the EPA budget cuts. Um, I don’t
really know anything about how that all works. Do you guys?
Well, energy start crosses across real estate um into all sorts of things, things like appliances and equipment and
stuff. There’s all energy store and much of that as well. So, it’s really all about
energy efficiency. Um, I’m wondering, I’m not that deep into it myself, but
the whole lead certification, green building, and the attempt to quantify that is
what’s going to become difficult because you’re going to have a builder now who’s going to say, “Well, my building that
I’m going to sell to you is this efficient.” And it could be the Wild West again
without standards. What does that mean from them? So, you know, again, it’s one of those
things where honestly in a very free and flexible market, it’ll sort itself out.
You know, the builders are not going to be allowed. They’re not going to sell bad buildings that are leaking energy
for very long before they’re caught. But we keep coming back to this theme of
layer upon layer of legislation and control and regulation and it’s just
sometimes it’s best to let the market go, sort the bad actors out, get rid of them.
Yeah, you hadn’t thought about that. like that they’re it’s not like they’re being
forced to implement all these things, but it’s a guideline to help them build
value into their commercial properties both for operational efficiencies as
well as when they go to sell. That’s there’s they can So why is it my responsibility
to pay taxes so you can build equity in the building that you’re going
to sell? You know, I kind of actually I mean it’s the wild west, but you got to love what
Trump’s doing. Taking percentages of a company if you know exchange for
allowing them to produce or sell in certain markets. Hey, why not? If you’re
gonna make money off of it, maybe the American people get a piece of it. No,
but to pay that kind of money for a program that was solely voluntary and
for their benefit doesn’t seem very wise. Is that what we really want? I mean I
mean to that point though, I mean I know this a little offshoot of like for for Energy Star, right? But like Dave, you brought up the point about saying like,
hey, you know, they get like a piece of the company, right? Like they got like a a chunk of it, right? And like to me
like it’s it’s it’s an interesting argument. I was a Hillsdale graduate, right? So I don’t know if you guys know about Hillsdale College, but it’s
probably one of the most conservative colleges in the United States. Like we take you go in there taking like Eastern
and Western heritage classes. You have a whole semester on just on the Constitution, political science, like
those types of things, right? And I always wonder about the fact as as it seems to me like and it’s like um you
know if you went to like libertarian and conservative you it’s tough to beat like the hard lines that Hillsdale runs right
and I was always under the impression that like the GOP and and Republican sector of like thinking was always about
like really small government right and it’s to me it’s a really a big shift
right uh because like from what D the the the line that Dave is saying like, “Hey, why not, right? Why not why not
get a piece or whatever?” Because that’s actually the opposite of what small government is. That’s actually socialism.
Absolutely. Socialism is what runs when it says the government is going to also or communism also own all of the industries.
And it’s wild to me actually to hear from my like GOP friends like in here,
right, that are like, “Oh, no. We like that that that Trump did that.” It’s like, okay, that’s really wild because I
thought you were also against these other these other ideologies about like a government that’s super controlling.
Um, and I think there’s like a big there’s like a flip that’s happening ideologically that I actually don’t know where to place about who’s going to
believe what anymore. I have no idea how to predict who what’s going to come the next thing that’s going to come out of
anybody’s mouth because it’s like scattershot to the wind of it. So I mean I guess my question to is is this the
country we really want to move forward with where the people that are making the rules and the regulatory rules are
also able to come in and tell companies that like hey you need to give give us some ownership of your company and if
they don’t agree to it then what? Well, here’s where the flame mail starts
because take that one step further and say, well, the reason why, what’s the
reason why this is all being done? Because then the more dollars channel
through the government and the few people that are controlling that, so
then they have access and the ability to direct that money as well. So, that was
a rhetorical why not, Scott. I’m with you, brother. Smaller is better. And no,
you’re right. It’s a step towards socialism. But I honestly think we need to go back. And I thought we started to
make a start on it, but it’s fizzled out. We’ve got to go back and dig out the further roots because socialism
doesn’t happen in one legislative session. Socialism happens slowly with a thousand
little cuts at a time. Um, but part of that is when someone says, back to the
Energy Star, hey, would you spend government money to create this program
so that I can sell my product for more? That’s not small government either.
Yeah. Like there’s there’s no doubt in the history of like the way that this whole system is set up right now that
corporations are able to essentially get handouts from the government that benefit the corporations. That the whole
system is predicated on this which is why the corporations actually fund all of the politicians. That’s why we have
things like the Citizen United case that allows them to do this. They actually created the legal architecture to allow
themselves to funnel money to the government and then get kickbacks inside of legislation that allows them that
basically hands them money, right? To be able to um oil companies have done this. This is now like energy and real estate
sector that we’re talking about now. It’s fundamental the way that the US economy is actually like predicated on
working. It’s why a lot of people will talk about say, “Well, we’re trying to figure out what what is really real about the way the economy works and the
way that the the political system works and says,”Well, if you scratch too far below the surface, as as Dave is getting
into, you might find out that it’s actually a corportocracy that all there ever was is like a few companies and
power holds that control most of the money that ends up flowing through to be able to get the the kickbacks that they
want to into the right spaces for their own business interests.” Right? And with that, we just entered the
matrix. Scary, isn’t it? I I don’t think it’s so far down. I
think it’s actually just one scratch below the surface. Follow the money. Because if that’s is that right, if you
just said one little rule is like, do you believe people are motivated by how much money they make in America at
whatever level of wealth they are, they seem to be pretty freaking motivated by how much money they’re going to make,
right? Say, great. And if you were in this position and you were trying to make as much money as you possibly
could, would you what would you do given this layout? And anybody would be like,
“Oh, yeah. Well, I would just give the money to this guy so he’ll give me back a bunch of money.” Like it’s not that
complicated. Yeah. And you don’t even need collusion. Like
there’s a whole thing about like people are like, “Ah, it’s like it like what about the conspiracy?” And I was like, “You don’t need like George Carlin said
it best. You don’t actually need people talking to each other to collude as long as all of their interests aligned.
You don’t need a big meeting. All you have to do is have the same playing field and everybody comes to the same
conclusion that says, “Yeah, we’ll go do that.” Yeah,
George Carlin. I know. I miss that bastard.
He He knew how to poke the bear. Yeah, dude. He was great. He was great. So, what do you guys think
about um privatizing Energy Star? I mean,
commercial real estate developers could just put some money behind a privatized
version of that if it’s benefiting them, right? I think privatize it. I don’t think you
actually need as many like nearly as many like public national good stuff,
you know, like at all. like why why why have this stuff be subsidized?
Yeah. Yeah. I mean you um yeah privatization
sometimes is a misnomer. Um look at Moody’s. Moody’s was a supposedly
private rating company but yet they were totally in bed with the investment banks
all the way up to the federal government. So they were the ones that were rating all of that junk bonds and
the mortgage back securities in 2007 as AAA. So
buyer beware or do we just maybe let the market play
out? That’s a tough one. the you know there’s like a there’s a
balance in here right Dave about like that people are actually pretty uneducated
that comes back to that doesn’t it right is that like we we live like in a a culture or society I mean I’m running
into like I mean I can’t I I keep bringing this up as to me because it’s mind-blowing about like how we cannot
assume that because people are making a lot of money or have a lot of money are successful in their careers that they
have a freaking clue about how all the other stuff works. right? That they know this segment, but
it doesn’t mean they’re actually that skilled in the rest of it, you know? So, I think the problem that we’re running
into is that you’re um people are fairly
fairly uneducated. There’s no real desire to get super educated. A lot of
everything seems to be way complicated for anybody to to stay on top of it. How do you even know what to pay attention
to? And then after all of that, like how do you even know what’s real or not even like saying like relative realness? What
about if that’s just slanted and they omitted facts, which is the majority of all of the news that we get from any any
major outlet unless you’re looking at competitive information sources about what it is and who’s doing that much
work really, right? So, I mean, there’s a there’s a place in here, too, where
it’s like, well, we need something that’s going to uh make our lives easy about not having to consume tons of
amounts of information all of the time just so that we don’t get bit. I don’t want to live like that, you know. Um,
and at the same time, you know, uh, I also don’t want it like where I got, uh,
you know, the strong hand of like government coming in to create so many like regulations and programs and whatnot that just turn out to be overly
cumbersome, i.e. the the what we just talked about with like the Native American artifacts. Right.
Right. You know, when the when the snake oil salesman rolled his wagon into town
in the 1800s, he didn’t last very long because he had to perform
in front of the people. He was living there. They knew him. Now, what did he do? Then when they wrote him out of
town, he went to another town. But at least they got to see him. That’s that
level of education. If we can look behind the curtain that far, and I don’t
know what the answer is, but Scott, you’re absolutely right, but if we can educate that much so that we can
recognize and then let the free markets do what they do, bad actors are not
going to last. But as long as they’re protected in this whole layer upon layer
of secrecy that some of which is government sponsored, what are you going to do?
Yeah. Yeah. Well, hey, let’s go to the next
article. I’ve been waiting for this one from the Guardian. Trump signs order to
allow crypto and real estate investments in retirement plans.
You know, first of all, from the Guardian, really, we’re going to pull that as our as our source of integrity.
Scott, you deal with with the retirement accounts all the time. What do you think about that? Well, we were already able to do
investments in crypto and real estate with inside of 401ks, self-creed. Yeah. Yeah. With like solo 401ks and stuff
like that, right? And like people we’ve we set those up all the time for people to be able to manage those types of
investments directly on real estate, invest in REITs, do whatever they want to, you know, push money into crypto. So, you know, here like um you know,
what does this what does this really change, right? I think it makes it really where it’s like people it uh more
likely what this is actually really allowing to happen is that the financial advisors that are dealing with people are going to be able to recommend those
assets, right? And that’s huge, you know, and and that’ll make a monster difference, right? And
how they’re going to uh I think that that’s where you’ll end up like a ton of asset flow. I mean,
honestly, like I’ve ever since the more the one thing I know is you got more cash flowing into it, a direction that
increases market prices, right? simple like supply and demand. So, I mean, whatever my under underlying feelings
are about certain asset classes, sometimes I just like don’t care. I’m just like, that’s great. I’m gonna buy a
bunch of Bitcoin and Ethereum because they’re top three on crypto if we have
this much money that’ll likely be flowing into that sector. That sounds awesome. Especially when we like look at
underlying fundamentals like uh that the dollar slipping as like the world reserve currency, right? which tells us
like the weakening dollar uh is actually going to be a big a big problem for
people as like a storehouse of wealth. Like the according to some projections when you look at a combined like they
look at a combined inflation plus the dollar weakening and and this is I’m
talking about like today right where we’re saying like that’s about an 8% loss of value of how strong your dollar
is in terms of purchasing power inside of a year. We haven’t even hit what’s gonna happen when all of the Trump’s
tariffs kick in. When when all of the tariff stuff actually really starts to come into sway here in the next few months, like you
can clip me out for this is like my grand prediction. You’re going to have people freaking out about like what is
actually happening the price of goods and then and then where are people going to go to, right? If they see the
weakening dollar as a storehouse of value, then all of a sudden they’re say, “Well, I’m gonna store my money inside
of crypto because crypto isn’t gonna have the same type of weakening dollar issue
that we’re having on that front because it’s not just inflation. It’s also the relative purchasing power of the dollar
internationally.” And that’s a piece that I don’t think anybody is talking about. That is really the big one.
There’s a lot. Oh, go ahead, Dave. Well, I was just going to say the we are
Scott’s absolutely right. We’ve always had the ability to invest in these assets in certain qualified retirement
accounts. Those typical requirement accounts, I’m going to venture out on a limb and make
a generalization, were held and opened by more
sophisticated investors. folks that had an understanding of what
was possible. Then they reached out to learn how to do it and then they performed it. All this bill is going to
do is open the door for who? The unsophisticated
to invest in things they don’t understand. And yeah, I love my financial advisor. I
love financial adviserss. But always recognize they advise because
they get paid. And my worry, my absolute fear is that we
are going to see a nation’s generational wealth disappear
because of bad advice from financial advisors putting people into things that
they shouldn’t be in either because they’re paid or because they don’t understand them. Right? And let me take that one more
step. And the other bad event is going to be that when that happens, all of
those unsophisticated investors are going to say, “Well, it wasn’t my fault.
That advisor should have advised me.” And then we’re going to see the lawsuit start to happen. Which was why all of
this framework of the sophisticated and accredited investor came about
because that’s going to start to happen. Well, when that happens, what’s Fidelity going to do and all the other big firms?
They’re going to reign in their salesman. They’re going to say, “You are not allowed.” So, I really kind of
question whether this is going to do anything. So, you think like a Fidelity will kind of self-pol like they’re
they’re brand new financial planners might be like limited like, “Okay, you
guys don’t know what you’re doing. Maybe they’ll have specialists that do know more about crypto or real estate.
Well, even even now they’ve all got senior analyst teams. Sure. You’re not allowed to recommend something inside a firm unless that’s
been vetted by their analyst. So, right there, there’s already a limiting factor on that. Will they try
to expand that? Sure. But I think they’re going to be incredibly slow and incredibly conservative because the
potential backlash from remember it’s not that long ago how
many people started suing for predatory mortgage issues. So this is the this has the
potential to be the exact same thing. You should not have allowed me to invest in that.
Now yeah this is interesting.
Uh it was it one of our investors in one of our real estate deals, rent
own investing deals came to me. He was a friend of mine and he’s got a whole team financial
planners. And when I said, “Hey, I’ve got this opportunity. You want to invest?” He’s like, “Well, let me It
sounds great, but let me run it by my financial planner team.” And I was like, “Well, that’s that’s going to get killed
because they they can’t recommend real estate and they don’t make money off of it.” So then he came back and then his
like, “Yeah, they they’re all about it.” They said, “Go for it.” But also, they
as financial planners, they can’t re couldn’t recommend real estate, but they
are investors themselves. They get the power of it. And they had done some deals with my friend. And so he had
enough money where like they’re still making their money and they said go for it. So he’s he’s been my our biggest
investor actually multiple deals. So this well living in the world at the 1031
exchange. This happens all the time. Someone’s getting ready to sell a piece of property and there’s a substantial
tax bill. Well, they can save that tax and add that to their return if they
want doing a 1031 exchange, but they’ll talk to their financial advisor. They’ll say, “Not just sell it
and pay the tax. I can make you more in the market.” Yeah. Of course.
All of the money. They have their motivations, right? Yeah. Yeah. Yeah. You probably deal with
that all the time, huh? Interesting.
Uh, anything else you guys wanted to add to that before we go to our next?
I’m good on that one. All right, cool. From BuzzFeed via Yahoo Finance, this
frustrated real estate agents rant about the real cause of the housing crisis is
so spoton. Zachary Faustst, Delaware agent, turned
a viral Tik Tok voice, delivered a fiery rant about the housing
crisis. arguing that decades of policy shifts, Wall Street power, and institutional investors have overpriced
ordinary Americans out of home home ownership. Um, I guess I I didn’t watch that video,
but it sounds like you really did go on a rant. Um,
I mean, I feel like it’s like you’re I’m I’m curious about like actually like what’s like what’s really happening with
with this, right? because you find that there’s the major institutional buyers are the ones that are scooping up like
all of the housing and making it where it’s now unaffordable, right? So, it’s so they’re they’re buying up huge
tranches of underlying assets. You got to ask yourself like why, right? Like what why why and a lot of it
seems to have to do with some of the the potentially some of the tax advantages that they get from owning the real
estate are really attractive to them. Um, and but the the flip side of it is
by if you have institutional investors that are scooping up a lot of those houses too, it also helps stabilize what
would otherwise potentially be like a distressed housing market, right? Like that the institutional investors are
actually able are paying higher prices than the alternative which would be like what the younger people could afford. So
what does that actually equate to is that you have an artificially inflated housing price.
So the net result of that is actually you have the appearance of a stronger economy
because you actually you end up having because of what’s happening there. Right? So you know there’s there’s something to be
said for that too is like what is the interplay you know that is that’s really going on behind the scenes here between big corporations and governments um
potentially all laden around like tax benefits. The government says, “Cool, we’ll kick we’ll create this tax
incentive so you corporations will then come through and then buy up all of the housing so that way it’ll give us
appearance of a stronger economy because if we look like we have a weaker economy, our administration isn’t doing
so good.” And so we want that kind of stability. [Music] But on a on a micro level though, all of
those same benefits are available to Main Street.
Yep. They’re available to mom and pop that have two rentals. And actually, I
think we’re seeing a lot of that percentage. I don’t have the numbers in front of me, but a a much larger
percentage than you would think are investors with fewer than 50 homes. Yeah, I actually looked that up because
I’d heard that before. So, yeah. um 27% of the homes sold in Q1 were to
investors, but when you break it down, um 20% are mom and pop main street
investors, like you said, have just a couple only two to two to 4% are the
institutional investors. So, it’s it’s not the black rocks that are just like taking over, you know, that’s a pretty
small percentage. Yeah. And and here’s why. because there’s always going to be a a a come and go, a give and take. We
give the tax benefits now, but when they sell, those tax benefits are recaptured.
And when those are recaptured, that’s going to generate. And so throughout, I’ve seen this in the aircraft industry as well. If the accountants get involved
and they say, “We need to stop owning assets. Let’s lease the planes.” and
somebody else says, “Fine, I’ll buy the planes and I’ll lease them to you.” And a few years later, those same
accountants say, “We need more tax writeoffs. Let’s start buying the planes instead of leasing them.” It’s going to
be ineb flow there. But what interested me about this guy, and I didn’t listen
to it, I just read the transcript. But no, a lot of what he’s complaining about is
stuff that just happens in a market. And if you’re not prepared, you can’t take
advantage of it. There was a huge complaint. He said, “People can’t afford to buy a house without co-ousing.”
And I don’t know about you guys, I’m the old guy in the in the room, but 40 years ago, if we if I wanted to buy a house
coming out of college, I had to take a roommate. Sure. That just is what it is. All of a
sudden, we’ve created a a narrative where everybody deserves their own house. No, you work your way up to it.
You get a roommate in rent. You get three roommates. You kick them out. You buy a house. You get paying roommates.
There are ways that you can build yourself up in this economy. Complaining
about them and ranting about them isn’t one of them. Yeah.
I wonder if like what it is that everybody’s really complaining about though is actually like something they feel but not something they’re thinking
about. I think what because to like elaborate on that like I I think what people are actually feeling is like why
is my you got everybody’s like grandpa and they’re like and it’s like oh grandpa you’re a bluecollar worker and
you could buy a house and raise a family and all all these other young people today there are saying like nope that’s
not possible I can’t buy a house and raise a family until when is everybody
able to make enough money so they can actually go do that you know if you if you start crunching through like how
much have real wages effective to prices? Have those actually really gone up in the last 30 years? Or has
everybody actually systematically been getting poorer? And that was what they’re really reacting to is this this
thing that’s happening that says like, well, it looked like in the past everybody was able to go do this stuff,
buy a house, have a have a job, and raise a family. And those opportunities don’t look like they’re really there and
and anymore in that same way, right? where it used to be like, of course, everybody’s going to be able to do that.
And now it’s almost nobody that’s younger seems to be able to do that. I’m speaking in gross generalities of
course, but and all I’m really trying to do is just like I don’t is just point like the finger at saying like you know
this can be about um something that’s not logical but that that that’s felt
around what used to be available and how like they seems to be a lot among the
young people that they like think that a lot of us us and people that are older than us really what we did is we skewed
everything to try to make us rich or maybe this is even the boomers more than it is us. That’s as cool that like they
made it great, but then there’s no more opportunity for the rest of us. I appreciate you saying the boomers and
us,
you know, but you’re right though, perceived versus reality. It doesn’t matter which it is, it’s
still felt. And there is a huge there is a vast
income gap that has definitely gotten worse and gotten worse and we exacerbate
it with every Tik Tok that goes out. We emphasize that
have the fundamentals really changed? Is it no longer? See, I don’t know. The old
guy in me says there’s still ways to do it. And I see young people doing it, but it
takes sacrifice. It takes hard work. And honestly, Instagram isn’t going to show the hard
work that it takes to do something. So, I’m real sympathetic, too, Scott. I
don’t know how much of it’s real, how much of it’s felt, but I know it or is is perceived, but it’s definitely felt.
But does that come back to education again? That’s the theme of today’s show
is can we produce education that helps people transition so they can become
successful on their own? Or are we simply going to follow the public education system which was designed to
create good factory workers?
Yeah, we like designed a system of education to create good factory workers and then we shipped off all of our factory workers out to the rest of the
world. Oh my gosh, that’s right. The whole school bell thing,
the whole alarm at every hour that was to train them so that they would know
when their shift was over. Oh. Mhm. I mean, there was a lot of deliberateness that went into this and
now you’re right, we don’t have any more of those jobs. Yeah. Those like jobs don’t exist anymore, you know? So,
and like where is the the ability to be like solid like you know this this idea
that we can then like take all these kids and then make entrepreneurs about them that they’re going to figure stuff out. I I work with people every day and
like some of like the business coaching staffs that I work with and these are like smart smart people work really hard
struggling like you wouldn’t freaking believe trying to figure out how to make a business work so that way they can make more money then they can break out
of the wage because they might be able to say cool I can make 50 to $60,000 a year making 2530 bucks an hour right
which is uh the majority of people are in like that bracket of under $30 an
hour and under and how much they get paid Right. So like but at those kinds
of wages, if you look at where are people at in terms of real wages, could they actually afford any of the assets
to be able to make the life that we think is the good life, which in America is typically saying nuclear family, own
your home, have a car? Like how can I get there? Because that’s what our idea of like essentially a good life is,
right? Well, can you actually do that on the average wages anymore for for most people? No. Okay. Well, how about
building a business? Building a business is absolutely lights out and difficult compared to what these people know how
to do and create coming out of the education system that exists because of all of like the research and the
execution and organization, all these skills that never got taught to them, right? They’re out there having to
figure it out on their own. And so I think that we’re in a lot of places we’re in a bad bad space because you end
up with unskilled people that aren’t skilled enough to actually go create new opportunities, which is actually what
I’d really love for them to be able to go do, right? And you have an education system that’s antiquated that doesn’t
serve what the reality is inside of the economic marketplace anymore. And then
you’ve and then on top of that like you have like the amount of wages that trickle down from the top 1% who have
whose weight you know where all the money is is flying to the top of the pyramid that money doesn’t like make it
back down to the the people at the bottom. Like since like 1979 I was just doing some quick just to pull out some
quick numbers but if we looked at like how things have grown since like 1979 the top 1% real wages and real earnings
have increased over 138%. And for the wages for the bottom 90%. So
like 90% of the country real wages since 1979 has only grown 15%.
Right? So you end up with this also this other piece that’s happening where most of the wealth is getting consolidated up
into the top which I don’t think is actually mind-blowingly uh wild thing to say of what we how most people generally
believe things are happening. And what you’re getting is this level of frustration that’s happening with the
younger people that are actually saying, I think what they’re trying to tell us in these videos is we don’t believe
there’s a way out. I don’t have the education to be successful in what you’re doing. I don’t believe that if I just go work and I work hard and I do
the right things that I’m actually going to get to where I want to. So, how can you possibly tell me that I shouldn’t have this dystopian view of what’s going
on? Well, and it’s hopelessness. That’s the word. They’re hopeless. They feel
hopeless. But the solution to hopelessness is never to simply commiserate and say, “You’re right.” The
rant does nothing. Instead, let’s rant about solutions to
that. I love business coaching that you’re starting to develop, Scott. Let’s start
teaching people. Let’s not talk about how bad it is in a crazy rant. Let’s
work with people. Let’s find ways to give them hope. On a one-on-one scale, dude, I’m with
you, right? I’m over here preaching the gospel about let’s get after it. Let’s go create the lives that we want and whatnot, right?
It’s like, of course, of course we need to be doing that, right? But it’s I think it’s the only point I was I was
trying to get as is like it’s um it’s I don’t even know exactly what the
right analogy for this is, but you know you’re you’re whatever is the course of
action that you’re going to recommend that somebody take if that’s their belief system and worldview.
You’re asking them to take actions based upon a faith that they have and whoever is telling it to them that life is
actually going to get better if they do it. The perception of their worldview though is bleak and stark and it looks
like it’s systemically like that right. So most of the time what ends up
happening is that people say I actually don’t believe any of what you would say is the normal course of what you think
is a reasonable solution to this hard work. Do your research. put your nose to the grindstoneone and then you’re going
to make it. I say, I don’t really believe the reality of that. Like a lot of people try that and maybe I’ve tried
that and it actually doesn’t work that way for me and I can’t um can’t actually get there. And I and the the end result
of that I think is where you have more and more people that are trying to do like home run stuff like I’ll just
become an influencer. And it’s like every time I hear somebody talk to me about that I was like back in my day
that was everybody trying to say like I’m just trying to figure out this rap game. Oh my god, I’m gonna become I’m gonna become a rapper. That’s my vision
for the future because every other course of action seemed unbelievably dark, right? And you only had this one
kind of fantasy land that you could play in. And I if you talk to the kids these days that are like in the that 18 16 to
25 age bracket when you talk or even younger if you go down to the middle school and you talk to the teachers that are down there I’ve been reading
articles on this recently that everybody in those age brackets all believe they’re going to make $200,000 a year
and they’re all going to do it by being a Tik Tok influencer or Instagram or or YouTube influencer. There’s zero
connection to how the real world actually like functions and any ability to think that the real world, the quote
unquote real world is ever going to give you what it is you’re really looking for. Well, I’m going to say it’s because the
real world is not that they’re exposed to is not the real world. They’re
exposed to a media that is very narrowly biased and is only promoting. We talked
about this at the very beginning, didn’t we, James? Nobody loves good news. So, what are we going to promote on
media? The bad stuff that’s happening. So, okay. I totally
Scott, you sound so cheated and I’m so cheated. I’m right with you.
But I would say the one thing if I could if I could do it would be to grab
anybody that I can and shut the phone off for a day and just talk as
individuals because I don’t think the rants are going to help. You can complain all you
want, but the idea is let’s sit down together and let’s see if we can find a
way. Whether that’s in a coffee shop, in a classroom, in some other form of
alternative education, but it’s face-toface talk that’s going to give people hope.
Yeah, I agree. I I think Dave, I think you’re 100% right. I think at this point with where
things are looking at, the only thing that I found that works at all is actually one-on-one and small group
mentorship with people. It comes down to like all of us having to take care of ourselves. Absolutely.
And then just be like, great, the system is so big and so intertwined at this
point. I don’t know actually how we even correct course on it. It looks like the way things are playing out are actually
just how they play out. And they play out really differently than how anybody ever thought they would play out, right?
when everybody voted or whenever they did whatever, right? So, all of us are really bad at predicting the future.
We’re terrible at it, right? So, like the only thing that really exists in my mind and to to Dave’s point here is
saying like uh the only thing that’s actually really ever true is that like I as an individual can then go sit with
some other a few other people and help them and for the sake of just saying like that’s actually the best I’m going
to be able to do. like pick up the starfish that washed up on the shore and chuck it back into the ocean even though
there’s a million of them and just be like cool that’s just what I’m gonna do. And I think, you know, people talk a lot
about like the the patriarchy and like white men, you know, and as like here’s all like the power and advantages that
like white men have. And I and I can sit with them and I say, “Look, I 100% agree with you. As a white, well educated man,
I am blessed with tons of advantages inside of like this country and system.” And with that, I accept a small amount
of responsibility for myself. Not that I put it on anybody else, but for myself, I accept a small amount of that responsibility and say, “Well, it’s my
job then to give back because I’ve actually been blessed with being able to be in an advantageous position. I wasn’t
I wasn’t born in a dis an extremely disadvantageous position. I had my own challenges, right? But like I can feel
that like inside of myself and say, “Cool, we should get back.” So, I’d encourage, you know, to Dave’s point, I
think we all have an opportunity to be able to say, “Great, who can I extend
mentorship to and and the circle of influence that I have and say, that’s what I can actually do
and that’s what’s actually real.” Here, love that. Yep. Yep.
That was good. Uh, let’s keep things moving and go to our next article from
Fox 2, KTVU. office vacancies down in San Francisco. Gold rush for commercial real estate
says um vacancies fell below 35%
um a return back to preandemic levels. So
looking good. And they say um part of that is driven by tech companies uh
cleaner streets in San Francisco because guess they’re cleaning them up. and a surge of AI firms. So that makes sense,
right? Like a tech heavy area just taking it to the next level
with AI. So So here’s my question. Do you think that this news bit is a trailing or a leading
indicator of what’s happening in the do economy? Because we’re hearing on the street
there’s a.com bubble everywhere, right? Mhm. But we’re seeing it not play out in
terms of staffing levels and on-site work levels within that industry. So, is
San Francisco showing us what’s going to happen or is San Francisco doing that while the
emperor has no clothes? [Music]
Yeah. I don’t I mean it’s a it’s a I don’t know man like I like it is is
talking about in the article here too that a lot of this is is uh because of like AI firms that are driving like this
the surge in leasing right and like boost in foot traffic. Yeah. So like there could be like a
boost in in foot traffic just because of like tourism and events and um I mean AI
firms blowing up could be could be great but it also could be um you know burst
just like we had do bubbles bursting up but you like I I think it also
referenced in here too that you’re only seeing that this surge is actually happening where we have like high-tech
infrastructure. So legacy and old infrastructure is uh you know not
getting the the benefit of that. I would say it’s a to Dave’s point I would say
it’s a I think it’s a leading indicator of how you’ll see more and more commercial buildings that will be
needing to uh outfit for high like much higher tech infrastructure to be uh
leasable in the future. um as we have growing needs for
um what essentially is going to be like I guess the same model that we’re starting to see play out in San Francisco that will likely eventually
trickle out to all of the other uh tech cities across the US. Yeah, they’ll just be doing it without
an Energy Star rating. How will we ever survive without that?
You know, you know, it’s beautiful. you you see these things and it just reminds you
that real estate is absolutely cyclical. I can’t time when it’s going to happen,
but I can tell you exactly what’s going to happen. And this is something that’s come around. San Francisco exited and
followed that guy named Elon to Austin and now it’s coming back. And every
sector’s got its time and its place. And I think my takeaway from that article is
we’re starting to see transition in commercial real estate and sectors. And I love your thoughts, Scott, about
finding purpose purposable buildings that can be upgraded to accommodate the
increasing powerful tech structure that they’ll need. That that could be the next value
ad project sector. I mean, we got to think that um we’re
going to need to get hopefully we can actually get really serious about that like as a country. You have like China,
for example, as has significantly outpaced us and their ability for energy infrastructure as well as AI computing,
right? So, they’re they seem to be on the fundamentals of things. They seem to be pretty far ahead of us there. So, we
really need to uh take it seriously. Uh hopefully we can get um focused you know
on that you know like like a AI should be I mean should be displacing much of
like the existent and the establishment uh media um power in our country. Um and
you know you start looking at you know what are what are what are things going to happen that are going to be able to increase like our efficiencies around
even like going to McDonald’s. I had a friend of mine that owns like a bunch of McDonald’s franchises and he let go. he had 55 employees and he let go of 50 of
them went with like this with the installation of the AI architecture that
he was able to to put in place. So, so it’s it’s it’s massively disrupting
and unless we get really serious about embracing how disrupting it’s going to be uh and putting the infrastructure in
place to do that, it it will only mean the more we resist that that other
countries will like outpace us that are more ruthless about saying we’re going to eat the pain. You know, we need to
eat the pain of change.
I’d be interested to see what he did with that McDonald’s franchise. I know they put kiosks in a lot of
these, you know, but as far as AI be interesting to
Yeah, you can there even like AI like and machine ready food prep. I mean,
it’s like it’s wild. It’s so much more than just even the order taking stuff that’s going on right now. Yeah. So like a way a lot of the stuff
is scaling is that it seems to be that AI actually isn’t it’s not fully displacing workforces. What it is is
like it’s saying like we’re going to take like the top 10% of your workforce and we’ll make them superhuman to the extent that it can displace the rest of
your workforce that actually was less efficient and less effective. Right? So hypothetically, what you
should be able to do is have people more focus into their zone of genius. So that
way they fit into that top 10% and then those people are then greater empowered
by AI tools. But it’s never fully AI. AI is only scaling in the capabilities like
of a person that’s providing oversight because the AIs are actually kind of crazy right now. They do like they’ll
just make up facts, make up citations. They’ll make up So, you actually need human oversight in there to to
check and verify. Yeah. I actually got a call the other day from a potential client saying, “I
read this on Chat GPT.” And I said, “Well, it’s wrong.” Well, but it was on
Chat GPT. And I actually went and traced it back and found the source article
that had written that. Anytime all you’re doing is accumulating
a body of information, there’s still going to be the opportunity for fallacies inside of that. It’s going to
get better, but we have to realize it’s not the be all end all now. And we’ve
all seen the robots, the robot fail videos. Those are kind of fun.
Yeah, those are those are pretty good. I I actually think it’s worse than that, though, too, Dave. I think it’s it’s worse than um like a aggregation of data
being put into chat GBT. My understanding of um you know if you look
at like the most recent release that what they specifically like highlighted in the most recent release is what they
would call is like um they have several different terms they’ll use for it but it’s what they’ll essentially say is that it’s AI hallucinations.
So the AI will actually hallucinate data and will hallucinate sources and and
we’ll actually mischaracterize information, right? So what that means is that it’s not just aggregated data
that’s being pulled together and maybe the source is wrong. There’s whole opportunities in here for AI to actually
the AI systems to actually just fabricate information that fills the narrative that the AI is trying to
create. And it so it’s uh it’s much much worse and everybody who I’m talking to
like you Dave will site chat GPT as if it’s a source right
yes so until we can get to a place and this this problem I think is one that we’re going to actually have as an
increasingly difficult problem because what we should be running into is that chat GBT is hallucinating information.
So we’d say well cool now we can’t really believe our AI structures. Now we say cool well well how can we
actually get back to the source material knowing if the source material itself was actually accurate even if I did look
at the source because now images videos and content are now also being produced
by like AI systems so now I’m shaky about even if I did the thing that we’re
saying is the good thing to do how will I even know that that information is is accurate and true and cont like was an
article or research generated contemporaneously with the events that I can even rely on it. And what I see
happening right now is we’re actually starting to see this more and more um with with assets, but also with just
pure information that we’re now starting to encode information into blockchains.
And it’s only because the information is encoded into a blockchain that we can know that it’s actually true. So what
that looks like is saying that like you you see this in like um intellectual property uh cases right now inside of
the law but we’ll start seeing this more and more as it’s becoming more expansive as it says well how do you know this
image was actually your image and he says well because I encoded into the blockchain five years ago otherwise we’d
have no idea about how to corroborate in a in a digital era that image when it
was created etc because all of that could have been fabricated except for the fact that it’s located on on a
blockchain. So contracts, assets, and information we should all expect to be
uh all blockchain related moving forward and to actually say we have reliable information. So the the um just to bring
it all back full circle. Yeah. Well, you guys went to college when Wikipedia
was specifically prohibited as a source for papers, right?
Oh, I didn’t realize that. Yeah. Oh, yeah. Yeah. You could never, if you’re writing a scholarly paper, you
could not use Wikipedia as a source. I think we’ve just evolved to the next
transition. People are saying you can’t trust Chat Gyt. Now, I don’t know that you can trust Wikipedia still anymore,
but there’s evolutions and we just have to keep our eyes on those. That’s really
interesting about blockchain for intellectual property that
even even real estate and everything like that. Like I think you’ll actually eventually you’ll start to see all of everything everything will shift to
blockchain uh chain transactions with smart contracts like over time, right? So that
we’re still trying to figure out like how to make all of that happen. Um but I think it’s going to be really disruptive.
I we can’t stop like the the the power of the technology will start to push things fast enough where you should
expect huge amounts of displacement. Yeah. Um, Antonio put in the chat, quote
from a gal at uh, OpenAI, GPT5 has been trained to recognize when a task can’t
be finished, avoid speculation, and can explain limitations more clearly, which
reduces unsupported claims compared to our prior models. So, yeah, they’ll they’ll continue to do
that, right? But I think that that because it’s a law a language based like model on the way that it’s like set up,
I think you’ll fundamentally have these kinds of problems. I don’t know if they’ll be able to totally eliminate them at any point.
Yeah. Yeah. But that’s what they say. It’s like we can reduce unsupported claims compared to the prior models. Like can’t
absolutely eliminate them. No. Anchors in the dam, you know.
Yeah. Well, let’s uh take a break for another our next partner. We’ll come
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magic. Okay, back to the show. Our final
section from Yahoo Sports. Show Otani
agent sued after allegedly sabotaging $240 million real estate project in
Hawaii. This is Los Angeles Dodgers star Show, I guess. Yeah, that’s how you say
it. Otani and his agent Nez Balleo are facing a lawsuit from developer Kevin
Hayes and broker Tomokco Matsu Mooto uh who
claimed they were forced out of a $240 million Hawaii luxury project due to
escalating demands and alleged threats from Belo. So, they were using his
celebrity to um I guess attract investors is my uh my
take on that. And then they try to push him out. Is that what you guys read out of that?
He’s a heck of a ball player. That’s where I stop.
Yeah. I don’t have a clue what’s going on there. Yeah. Yeah. I mean, like, if you’re like
investing around celebrities, like what do you expect, you know? Yeah. What does what does he have
anything to do with the real estate, right? Just a face, right? Yeah. I mean, he’s just out there trying to play ball and live his life, man. So,
yeah. Well, let’s go to our next one from Business Insider. Why hedge fund icon
Ray Dallio says he shouldn’t invest in real estate in this economy. He said he’s warning investors to stay
away, citing high interest rates, heavy taxation, and the illquid illi liquidity
of property assets. We already know that that’s part of real
estate. Um, sometimes that’s the best part of real estate
because you can’t access the candy box.
I don’t know. You know, there’s been several really, really prominent
big players that have all said that same thing. You should never own a house. And
I’m not even going to mention who they are, we know. But it’s funny how every one of those people still invest in real
estate. Yeah. And I guess my take on this, one of my
mentors a long time ago said reminded me that there’s only two
classes of people that have always ruled the world. And the first one is the banker and the second is the landowner.
Mhm. And you want to be one or the other. And in my mind, there is never a bad time to
own real estate. There’s only bad ways to buy real estate.
in bad ways to bad timing to do it. But I
if all you do in America is buy a house and rent out the basement and raise your
family in the front in the top story and then sell that and take that profit
tax-free and do that four or five times in your life, you will have made a very
good living. And that’s what the tax code lets you do. No, at the very least,
um, heavy taxation, I don’t know, last time I looked, real estate taxes, they’re going up
marginally, but there’s also a new movement on the horizon, and Florida is leading that to reduce real estate
taxation at the state level and turn it more into a consumption
tax that’s more equitable for who’s doing it. I don’t know. I just when somebody says don’t do this I always
look at their motives and say why are you telling me that? Yeah. So he advises hedging portfolios,
diverse diversifying assets, and allocating up to 15% in gold or Bitcoin,
I’d say. And also real estate, like yeah, diversify. Sure, get into all
those, but don’t just eliminate real estate. Would you agree?
I mean, I think like you like owning more real stuff is what I always tell people. like try to get to something
that’s going to be like own more real things like that you own more real things that provide value that you don’t ever have
to be forced into selling, you know, like the it’s the
it’s probably not even the people that are like even, you know, us or the people are listening to this that like would need to hear that message, you know, because like it it’s so many of
the people that have so much of their wealth like tied up into the stock market and it’s like, well, what
you you have like a super inflated stock market because everybody has all of their, you know, 401ks and their
retirement plans are invested inside index funds, right? So, they have so much money that’s pushed inside of index
funds and into direct investment into markets. Those kinds of capital flows mean that you end up with um it’s just
the economic pressure of having that much uh dollar, you know, flow into those markets. And I mean with uh I’d
say if you can get your money I’d advise everybody to get your money out of uh soft markets and start owning more like
hard stuff like gold bitcoin. Agree with uh Mr. Dalio there, right? So things
like Conan like getting finding the right buy on real estate that like cash flows especially in uh you know class
like B properties you know stuff that’s kind of weather economic you know issues like that that’s a great thing to have
as well too but owning directly owning more real stuff uh that’s outside of
just fictitious market numbers. Absolutely. And take that one step further. I think the real issue
that’s hampering people buying real estate today, it’s said time after time after time, interest rates are too high.
Well, what if that’s the barrier? Find ways to buy real estate with less
leverage. I went through the 2008 crisis
with a bunch of clients. We just call it the bad time. None of them who were not
leveraged too high. None of them that did not have to sell real estate to
survive went out of business. No. And today they’re worth multiples over
what they were. Those who were overleveraged all went out of business. No.
Every one of them. And that’s the lesson for us there. What happens though,
further to your point, um, Scott, is that it’s easy to invest in those index
funds because I can just do it with my cash. So, the cash goes in and it sits. So,
I’m not really tempted unless I got a margin account or something to get too crazy with it. With real estate,
there is the leverage component that’s there. And you got to manage that. You got to be respectful and fearful of it.
But I don’t think it has to stop you. Yeah. Right. Leverage is a beautiful thing and
it can turn on you, right? Just know what you’re getting into, right?
Yeah. I mean like so I mean with those people I’m usually recommending for people saying like try to see if you can get your debt like below 50%.
Like if if your real estate if you can get that then you can pretty much weather any storm as long as you can get like your debt low enough. and that this
is like an opportunity to say is I think you can make a bunch of money if you’re buying things like you’re buying Bitcoin, Ethereum, and like what are
your your top three like on your crypto? I think those are gonna like go up. I think gold is going to go up as the
dollar weakens too. Like we just know things that are like are happening and are going to happen. They’re not reversing course and like a a short-term
like whiplash. And then get your if you buy real estate, but try to see if you can buy stuff that where you’re going to
have a really light a really low debt service ratio, which means not having a lot of debt. And if you’re at 50% or
lower in their total amount of debt that you’re holding on a piece of property, you’re very likely going to be okay about not getting pinched. Um like as
Dave Dave was saying about saying, “I have to liquidate because and sell because I just can’t cover the debt debt
payments.” So
all right, our next one from Hogan Lobls. President Trump revokes executive order
on competition, rejects Biden administration’s whole of government approach to antitrust enforcement. It’s
a mouthful. Um Biden’s order had tasked multiple federal agents agencies. O man, I cannot
talk today. Multiple federal agencies with over 70 initiatives targeting
corporate consolidation across industries aiming to protect workers, consumers, and innovation.
And then they announced a new quote America first antirust unquote
philosophy emphasizing deregulation, market freedom, and targeted targeted
remedies. Yeah, help me. I can’t talk today.
My goodness. Um,
any thoughts on that?
Wow. At the same time, we’ll do that in exchange for you
selling a percentage of your company to the government. You just
with any legislation, I think it was Warren Buffett that said this, with any government legislation or initiative,
it’s going to be good for some and bad for some. And what you have to do is figure out who it’s good for and become
one of those people. Yeah, it’s a it’s a beautiful thing to say,
you know, but the question is is like to which people is it helping like right now, you know, like how do I be how do I
do that? Like what is my path to being able to be one of those people that this type of deregulation helps? Like I can’t
foresee that. Like this is a handful of like handful of people at the top. I think these types of actions like to me
like are who who actually are they helping right now? I don’t think it’s deregulation at all.
I think that’s a misnomer. I think that’s smoking mirrors. I think that in opening the markets up
they’re actually regulating them more heavily just on different levels.
Oh, I see. I thought doing is like allowing more deals to happen to like allow companies to consolidate that
otherwise wouldn’t be able to because of a regulation. Well, I think that’s what they’re doing, but I think
more regulation inside of that. In other words, that’s coming at a price and what
we don’t know is what price the federal government is charging for that. Does that make sense?
We don’t know what price the government’s charging to allow them to merge, right? You know, Trump’s Trump’s
promoting this as this big beautiful deregulation bill, right?
But I think that it’s actually just changing the regulation into something
that’s more fitting to what he wants to see. I just don’t know what that is yet.
Okay. See, I understand these things as saying there’s let laws either make it more restrictive or less restrictive for
businesses to be able to operate and that we say before you weren’t able to do this thing and then say well now you
are to that that’s generally what is referred to as deregulation is that there was it only couldn’t it only could
not have happened because there was a law that said they couldn’t do it and so now they’re able to do it which
means it has to be a deregulation. It’s things like percentage of business, right? It’s cross-pollinated boards of
directors. It’s all of those kinds of things that I think Trump was is eliminating in all those executive
orders. But let’s say we allow a cross-pollinated board of directors over
the percentage that normally would have been allowed. What does that create? I’m just looking further down the road
saying what does that create that actually gives the federal government the opportunity to create more draconian
control of the economy because they’re consolidating the economy.
I don’t know. I’m wellian you at this point. No, I mean that that’s funny because I didn’t expect I didn’t expect
you to take that turn with it, Dave, because like the that I would say like fundamentally,
right, you have it’s a consolidation of power issue, right, that we say like the more we allow companies to consolidate
with each other. Now more power more economic power is held into fewer hands
because that’s more power goes up to like the top of like that’s controlling more, right? So that actually supports
like an oligarchical system and to saying that’s how corportocracies actually gain more power and that the
people that own the stuff are consolidating power and that that
Yeah. And so you end up you end up with like a little bit of a um you know
that’s where the where I was getting I was looking to get to say is like you that those types of deregulations only
serve to be able to consolidate power into fewer hands and that fundamentally
is that the problem we think we’re having is the problems that we think we’re having in this country is because
that there’s not enough power into a few people’s hands. Oh I’m totally with you on that.
Absolutely. What I’m saying is I think the the the illustration used of all of these rules exist to funnel power to the
top. I’m just saying I’m not sure I trust
the title of this bill to really mean that it’s truly going to deregulate. Dude, I’m as li I bleed as
libertarian red as you could imagine. But I’m just not sure that this quote
deregulation isn’t just a fancy quiet way of still
funing power and control to the top. Just a different top.
Yeah. Which which top? I mean which top? Exactly. Which top is getting more power? I mean it I it seems to me I mean I don’t know
if you guys have a hot take on this or whatever but it seems to me like if we look at what are the moves that that
Trump has uh made or this administration I know know it’s necessarily all Trump right but at least in the administration
that like what we is that you see consolidation of power inside of both
areas that Trump is consolidating like a ton of political power um and exerting
much bigger uh reaches inside of like what is the executive authority which is i.e. Why is there so many court
cases is because he’s pushing on like what are the limits of the executive authority that he can um use to uh
expand the power of the executive and that also it’s who are the you know what
is the other leg of the stool right is it’s the people that have the money right the oligarchs still have power and
so I think you probably have a you have both hands like washing the other the
oligarchs will say we will support you and you doing what you want to do like over here, Mr. President. But we need
you to make it where we’re going to be able to do the type of work that we’re going to try that we want to do over
here that’s going to allow us to consolidate more power and make more money and control more of the monopoly and that there is no real adversarial
relationship. It’s actually like a small club where people are cutting deals with each other. Yeah. And I don’t disagree with with
doing this. Um cuz I I think we are really honestly if if we I think we
should be in in a nation where if you want to create a law you got to get rid of two just you know that’s really where I come
from. But I’m just concerned that this is really more about smoke and mirrors and a consolidation of power in a
different vein. And the laws of unintended consequences
could I just I don’t know where it’s where it could come from,
but these are the kinds of things we should approach very trepidiously.
Yeah. Yeah.
Good stuff, guys. You guys are awesome. Let’s hit our last article before the
extra fun one from Yale Insights. Doge’s lease cancellations are already hitting
the commercial real estate market. Says, um, Doge triggered the largest
wave of federal lease cancellations in US history. Um, once considered among
the safest investments, government leases are now viewed as risky after
Doge terminated hundreds of contracts. Said in Washington DC alone could lose
$575 million in property value and 50 million in tax revenue over five years.
So, are are you guys in commercial real estate in any capacity?
Yeah, I do some self- storage stuff and like apartments. I do like apartments and self storage. Okay. But no, like commercial uh like
office buildings stuff like it. Yeah, I like I didn’t see this
one coming though. I don’t think anybody did. But I think like what this story to me is um only really interesting to the
extent that it’s it’s really getting at to the fundamental points about saying like we can’t you can’t rely on anything
that you thought was like bulletproof anymore regarding the government because the government uh is like wild carding
stuff a lot, you know, like they’re just yoloing their way through like how they’re going to manage things without
what whatever the unintended consequences are. um that seem to be around like uh short-term like political
points, right? Like who the hell gives an a about anything that Doge did. They didn’t save enough money for it to
actually matter when you can say like how much debt that we have that we take on all the time anyway. Them going
through all of this stuff as like an exercise causes a lot of like downstream like instability and that that and it’s
not even like one thing, right? Like I’m not trying to be like a Doge hater or or like any of um you know or like a Trump
administration hater or any of that, right? What I am focused on is saying like what allows us to be able to have
stability in markets, right? And the more uh unpredictable
things are in terms of governments, the less stability you end up having. So
this is a great example of how like a government interaction can um intervention that departs from like a
long history of how it normally operates like disrupts a market. Um you have the other things I was talking about earlier
around like how the you know the US is like downgraded by by credit agencies.
you have people that are having loss of confidence in the US dollar, which means really like a a loss of confidence in
like US leadership, right? And where where US leadership is um you know
guiding guiding the world and for them to to pivot off of that and you have more isolationism having on the US front
which actually means that the world is actually creating relationships with each other that is actually just leaving
the United States out will eventually leave the US behind. when you it’s not one thing that erodess every people’s
confidence, right? It’s like it’s a death by a thousand cuts, right? And that’s what this article to
me about what happens here on the real estate front is just another slice at
people saying like, you know what, I’m really just actually not confident. And one thing we know for sure is that if
people start losing confidence and the things they’re going to do with their money is actually when they start to
hoard money. And that will actually make economies collapse. If people start to hoard their
cash and not spend it, it’s called the velocity of money. And when velocity of money goes down, you have major economic
uh problems that are going to happen. If you combine the problem of people hoarding onto their money with a dollar
that is eroding both from inflation but as well as a weakening dollar uh in
comparison to like global currencies for their ability to acquire global goods on top of the increase in tariffs. Now you
have a massive problem because the problem you’re going to run into is that people not can’t afford to
buy the things they want to buy. They’re scared to do anything with the money that they do have and they’ve lost
confidence in what to do next. Yeah. At all. And so this can be like a recipe for uh what could be systemic problems.
And that’s why like over and over again I’m like you need to take your money, take it now, get out of dollars, get into hard assets. Uh and uh because the
world is is actually in a pretty pretty shaky uh situation. So it’s a good time
to to hunker down a little bit. Yeah. Yeah. Going back to that Ray Dallio
stance, I I have a lot of respect for him. I’m surprised he says just like no real estate. He’s smart enough to know
that it’s a hard asset. It’s got value. I think a lot of this stuff too is we got to take it tongue and cheek about
what any of these guys are saying is because like a statement like that, like no real estate’s stupid. Like that’s
something dumb people say, right? In the financial and investment world. To ever say a whole asset class is no good
really is just an incredibly unsophisticated view. Do we really believe Radalio has that kind of a view
about real estate? Or is it just the way that marketing messages have to get told to be able to tell a story? And so we
have to be smart about what we know to be true and then listening to other people and say, how does that inform
what I know is more likely true versus saying that soand so is right based upon an article.
Yeah. or the headline for an article which was just the clickbait that got you there. You’re absolutely right. The
context is anytime we go into an asset just as
people and we invest, we expect that to last forever. We want
it to last forever because why? Investing,
underwriting, vetting, figuring out where to place our money takes work. And
so anytime we go into it, we want that to be the best and lasting thing. I
heard this in 2005 all the time. The market has changed. It’s never going to
be the same. It’s never coming down. Because they wanted to believe that
because it was an easy way to invest in real estate. Here we are 20 years later.
Guess what? All I’m seeing is that this article, the do thing, it all just
illustrates that no matter what it is, investing in anything is cyclical.
It will have highs, it will have lows, it will have good times, I’m sorry, better times to invest in, better times
to exit. And if you’re simply throwing your money at the dart board and then
saying that’s it, it’s going to be good forever. you’re going to be sadly mistaken. I mean, and I’m sitting here
thinking, okay, my wheels are turning. If a chunk of Washington DC, which is
very close to all those seats of power, is going to be vacant, Scott, James,
let’s go grab a couple old post office plants and let’s upgrade them
and let’s turn them into AI research facilities. There’s going to be opportunities
that’ll come. There’s always losers. There’s always winners.
Yeah. That’s why you can never say like just no real estate, right? Exactly. All right. Yeah.
All right. Let’s go to our fun news item. Final news item. CNET. 11 things
you shouldn’t use chat GPT for and why you’ll regret it.
Yeah, this one is like one of those um things that it’s I think like going back to some of the stuff we were actually
talking about earlier. But my viewpoint on this is like of course in line with the article about you know um
uh not relying on it especially for like legal, medical or financial things and saying like okay this was going to tell
you. I I actually like to uh talk to people now about just saying like just assume that that anything you’re getting
off an AI is wrong, right? But it can help you get to the 80% of rightness,
you know, from there you need to take it over and like do the work to get it from like 80%
to like 100, but never to assume that it like never look at it as if it’s right,
you You know that I think that gets us to a big a big trap that people are wanting to be lazy and right and that
never works. You know, it can get you fast having you know it’ll expedite your research
but it’s not your research. Yeah. If it’s a matter of the heart or
relationship, don’t touch it. Relationships are supposed to be messy
and inconvenient and chatbt will never help you get to
that kind of level. Yeah. It’s like posting on like Reddit. It’s like, “Am I overreacting?”
There’s there’s like threads inside of like Reddit where it’s like, “Am I overreacting to like XYZ thing like my partner did?” And the first in there is
like a detailed like point by point about why you should break up. It will like the Reddit community will always
tell you about why you should leave your wife or like opposite, right? And like in chat GBT, what I found is that it’s
always trying to be my best friend. It’s trying to like promote engagement by always trying to tell me that I’m right and I’m brilliant and here’s all the
reasons why this is a good idea and blah blah blah. I even saw like on the South Park episode that like the episode three
that just aired, they even had one in there too that was like, “Tell me about how to make a salad out of French
fries.” And I was like, “That’s a that’s a brilliant idea. What a fusion of a concept. This brings like the savoriness
with the healthiness that everybody’s actually looking for. They’re like, “Oh my god.” And and it’s like, it really is
like that. Like no matter what you tell it, its job is to make you actually enjoy interacting with it. Its job is
not actually to help you get any better, right? Like that’s it. It’s it’s like
food. Like the restaurant’s job isn’t to make you healthy. The restaurant’s job is to make you addicted to the food. The
fact that you’re fat actually has is nothing that anybody cares about except for you. That was nobody else’s job.
Their job was actually just to get you to eat the food. Chad GD’s job is just to get you to continue to use it.
Good point. Interesting times with AI.
But I do say like with that though is that I find a ton of value using AI and helping me just get um throw a bunch of
crap up on the wall. Oh yeah. Like I’m looking for 10. My wife is pissed off at me. What are 10 things that I could do that would help her um
get unmad at me so that way I can get laid tonight. It’s going to be brilliant at that. It’ll give you at least 10 things. You pick two of them. It might
work, you know, which is a heck off better than your buddy who’s over there being like, “I don’t know, dude. Why don’t you just crack a beer and hang out
in the garage and let it blow over?” you know, it’s relative forms of like what advice are you gonna go to? And so for
those things, I’m like, probably Chad GBT might be better. Yeah. You know, I tend to think that
these things just make us lazy. You know, I literally got a text from my
son the other day who lives with me. We text because that’s more convenient, right? Want to go to a movie tonight?
Father, I appreciate our relationship so much. I’ve looked at my calendar and
unfortunately I will not be able to join you. Please feel free to reach out to me again in the future if my calendar is
more conducive. Yes, I busted him on it. Did you use chat GPT for that? Maybe.
That’s awesome. Was our relationship enhanced? I think not. Yeah. Yeah, for sure.
That’s awesome. Oh my goodness. Well guys, that covers the news portion
of the show for this month. Um, I’d like to thank our sponsors,
United States Real Estate Investor Advertising, Accelerated Capital at AccelerateMycap.com,
and Universe Media Publishing at Universe MediaPublishing.com.
And of course, thanks to you guys, our awesome guests. Great to have you both back. Uh Dave Foster, Scott Royal Smith.
Um why don’t you let people know how they can connect with you? We’ll start with
Dave. Best way to hook up with us is simply go to the1031investor.com.
All things 1031 exchange if you’re interested in not paying tax on real estate transactions.
Beautiful. Yeah, you can reach out uh to me and my company at royallegalssolutions.com
and um that’s for anybody who’s you know household incomes that are typically over 300k, people that are paying more
than $100,000 a year in tax. We typically are able to save people 30,000 plus in their first year with uh
advanced tax strategies and tax shelters. Fantastic.
Thanks, guys. Again, I’m your host, James Brown. Feel free to connect with me by going to linktree
partnerwithjames brown. And if you want help on your investing journey, book a time with me to see how we can work
together by going to james brown real estate.comcoaching.
Also, huge thanks as always to our founder and producer Antonio Homeman with United States Real Estate Investor.
Follow and subscribe to This Month in real estate investing at this month in real estateinvesting.com
or your favorite podcast app. If you run across any interesting news events or
have suggestions for expert guests like we had today, feel free to share by emailing Antoniorealestateinvestor.com.
And remember, when one door closes, another door opens to financial freedom.
See you next month.
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