Renting Vs Buying a Home - The Real Math

0:00The median house in Vegas is 500 grand. If you put 5% down, like a lot of Americans would in that range. You know, your mortgage is gonna be like 3,500 a month. And the rent is 2,000 to 2,500. Like why in the world would you own that home? What do you think is gonna happen to the real estate market in the next 12 months? What's your prediction? Nothing. Guys that are strictly wholesaling and trying to do it, yeah, they run these. Be us models of, I'm gonna try to wholesale all over the country and all that kind of stuff. I think that is just a colossal waste of time. I think it's just one of the dumbest things I've ever seen. Most people that are going into an exit do not realize that you're bringing a knife to a gunfight. These guys, certainly on the private equity side, are sharks like you can't even imagine. I mean, I witnessed a $70 million exit get knocked down to $40 million in the last week. So Ken, you've done over 10,000 real estate transactions in your career and you guys still do a bunch today, but you've had this evolution as you are saying,

1:01pre-show about just transitioning to more business and less real estate. Like, why is that? Look, I honestly, I think it's about, like you just said, the evolution of in any business, I would argue, because I've spent a lot of time working with a lot of very high-level CEOs that as you get a little bit older, and you start to figure out that grinding, the hustler mentality, right, is not, you can't do that forever. You've got to figure out how to actually turn it into a real business. Turn it into, in a business, it was always very simple to define, is just leave. If you can leave for a month, two months, three months, and there's more money in your bank account than when you left, then you probably own a business. Anything short of that, you own a job. So I think that it's been something I've been preaching for years, and it's kind of been, like you said, my evolution and figuring out that, man,

2:02anything that needs me day in, day out for me to drop the hammer over and over is, that's not freedom. Like, that's a job. And it could be a really high-paying job, but it's still a job. And so as I become passionate about it, I just look at the world doing very different lens. Like, if I have to do something, in order to get paid, that is, like, I'm allergic to that. I don't want to do that. Do you think that real estate's just harder as a vehicle to transition to that? Because it's like so operator-dependent? I think it depends on the operator. I mean, obviously, I spent my career working with every kind of operator, but certainly the last eight years, the highest level operators, and I can tell you, they still struggle with it. Like, man, I'm the best real estate operator. Yeah, the best real estate operators. Right? I've got guys in the boardroom that are, you know, each clearing $5, $10 million a year, but if they take their foot off the gas, the business is going to suffer, right?

3:03And so they're trying to make that transition. They're trying to turn it into a real business and put the C suite in, put all the SOPs in, put all of the, put the moat around it, where it's totally defensible. And it's not, I don't think it's a real estate thing. I think it's a, quite frankly, I think it's a founder operator thing. It is not an easy thing to do, because, you know, you gotta think these guys' brains have been trained a very specific way. And it is, if I exert force, if I put in this effort, I know exactly what the outcome's gonna be. I know exactly how I'm gonna get paid. I know exactly what, you know, I know, they've proven it to themselves. Right? Here, after year, after year, after year. And so now they're trying to break that and say, well, how can I get the same output, if not more, but I'm not necessarily doing anything. And that is a really, really hard transition to make. Yeah. To slow down, put all the processes to give up control,

4:05put the right people in place, train the right people, hold the right people accountable, get all the right KPIs, you know, like, that does not come naturally. The brain immediately wants to be like, no, let me just jump in and do it. Yeah. I'm not sure if it's a real estate thing. It's a real estate thing from my experience, but I think it's the more I've gotten out there and own a lot of different businesses now. I realize it, you know, anybody that's built something from the ground up, it is not easy to transition to basically hand over control. And it comes naturally to some people, it does not come natural to most. Right? So you, you know, you've got one of the largest masterminds in the country, the boardroom. And so you've got a lot of diversity of business owners. It was probably like more real estate focused when you were like more real estate focused. And now it's pretty diverse. Yep. And with that, would you say that these other businesses that you're starting to get equity in and consult and everything else, are they so like market dependent? Because like real estate, the last bunch of years

5:07been really hard because of the market. Yeah. And then I look at these other industries that we have on the show, like home services and other stuff. And it's like, kiddo matter what's going on. These guys just do great all the time. Then you look at these recurring revenue business. I have a tax firm and it's like, it don't matter what's happening. People do have to do their taxes. It's all good. You know, my golf business is like, these guys paid a golf. It don't matter what's going on. Right. But then real estate's just really, really hard. Well, I'll, you know, real estate's such a broad term. I'll even go one step further. Yeah. That is not true in all of real estate. Yeah. Right. You go talk to the guys that own RV parks right now. They're murdering it, right? You go guys that are in a lot of industrial, they're murdering it. Triple net leases are murdering it right now. So self storage, absolutely killing it right now. Now, there's no doubt when you get into single family or multifamily that it's, they've had some choppy waters for sure. But I think it's, yeah, I like the businesses

6:11that are pretty agnostic, right? Whether it's marketing, recruiting, accounting, you know, those types of things that kind of can live and breathe across multiple industries. Yeah. Obviously, those are the ones that you want to try to get your, get your claws into and really try to help grow because it's your point, the blue ocean. It's everything out there. Right. So like, I'm seeing a lot of people quit the wholesale business. I see a lot of, I don't know that I would say quit. I see a lot of, I've always encouraged people. It's a great question. I'll tell you the way I think about that. I encourage people that if you are in real estate and you are house flipping, for instance, or you are doing any kind of short-term rental to turn your expenses into income. And what I mean by that is that, look, if you're running a very successful or reasonably successful fixed and flipped business, a natural byproduct of that is that you are creating

7:11leads and opportunities that don't fit. And I 100% believe you should be wholesaling those things off. Because that cash makes all these choppy waters a lot easier to manage, right? You've got, do you know you're turning your trash into cash and creating another 50 to 100 grand a month? That's the lifeblood of business when you get into, you know, rough stuff. With that said, guys that are strictly wholesaling and trying to do it, you know, they run these. Be us models of, I'm going to try to hold sell all the country and all that kind of stuff. I think that is just a colossal waste of time. I think it's just one of the dumbest things I've ever seen. Why? Because you have to be, to be graded anything, you have to be, and certainly to be able to scale anything, you have to be able to create a process that others can run, right? And so the more markets you are in,

8:13and certainly if you're creating leads across any market in the United States because you're advertising nationally, you have no market expertise. You have no buyer expertise. You have no relationships with the buyer. So you're constantly being reactive. You can't systematize being reactive. And so if you're organo-holso, I tell people, you should be focused on one market and you should and get great at it. I've had multiple wholesalers over the years come at me and try to convince me that their markets tapped out. And then it takes about three minutes today to go and access any number of different data systems and prove that completely wrong. I just had this happen a few months ago where I was like, I'm completely tapped out in Dallas. I'm doing 120 deals a year, and then you're doing, okay, so what are you trying to do? I want to get to 240, okay. And you go and look in the data, and in Dallas for worth, there were 15,000 cash transactions, single family in the last 180 days.

9:16Mine. So that's 30,000 a year. There's 30,000 a year, and you're trying to get an extra 120. That's 10 a month. You're not even close to being tapped out. So guys convinced themselves that they've got to go and when the reality is, is there's such a better opportunity to just get better at it, be a better marketer, get closer to the seller, do what you've got to do to it. So if you're going to be a wholesaler, you're going to be a grocery store, go deep, be very good at it, and be very good at the marketing, be very good at the creation of the opportunity, and monetize those opportunities in a systematic way. If you're not willing to do that, then it's a hustle. Would you say if someone's listening to this and they make like six figures in real estate, if you were to go back and do it again, would you transition into general business earlier, or do you think they should try to scale to seven figures, and then switch to different businesses? I would not change one thing that, well, move the traces.

10:16I've said this in the past, I only have one regret in my career, okay? And that regret was that when I started getting into the education space, it was a really, it's a different time than now. Back then, you had all these sales floors out in Utah that were doing very high-pressure sales, everything was a product of the info-mersials that were run in every night, that was a product of the TV shows that were going. And so I'm talking masses of people coming into this industry every year, I mean, millions. And there's a lot of money being made, and the FTC and the attorney generals, and they really clamp down on that. And so it's the industry that I came in. So when I came in, I took it very, very seriously, and that I never wanted to be any part of any of that. So you have to run a very tight ship to never land on anybody's bad side.

11:16And so I kind of stopped real estate investing to just focus on the education side, and that's the only regret that I have. In the end, it all came around full circle, right? Because the bigger my authority became, and then the boardroom, and the, you know, I was accumulating businesses and really making things happen that ultimately landed me in a place to where today, right, any opportunity that I would have wanted, certainly, on the real estate side, is not in private equity. Kind of, it come at me every week, right? But I would have probably accumulated a lot more real estate if I was very focused on it and was my core tenant the whole time I was doing it. But I had to be so focused on this, because I never wanted to get in the crosshairs of anybody that could make us love that. I never wanted anybody to be able to have the opportunity to go on the internet and say one thing that my kids would have to read that would be negative, right? And that was kind of my guiding principles. So we were always going to do the right thing. And when you have to have that kind of extreme focus,

12:18it's really hard to be two places at one time, right? And, but I would have, you know, anybody that, you know, wholesaling back to your question, and wholesaling is not bill estate investor. That's not what, you know, so anybody that's wholesaling, even if you're making a lot of money, my vice would be start investing in the assets, start actually, you know, getting into assets that do produce over time, play the long game. You much rather be my age, 56, and own a bunch, you know, portfolio of cash flowing assets than 20 years down the line, you still got a million to million dollar income stream. But you haven't done anything with it, except spend it. That's, that would be, wholesaling is a way to make great money, really get your foot in, really understand the business, but it is not real estate investing. Do you think they should buy single family rentals? Depends on the market. Okay. A better way to say it is, you should be buying stuff that cash flows day one.

13:19And if you can't make it cash flow day one, then it is not, you know, do not play the appreciation game, do not play, just invest in stuff that's going to cash flow and invest in stuff that is going to be passive to you. People con themselves into thinking of their self-managing properties that somehow pass it. That's not pass. They don't always run great performers to where by the time they actually look up at the end of the year, and they realize they lost money on the deal, right? Like I'm talking, you run it bulletproof, quality performer hands off. If it makes money in that scenario, then yeah, single family else, that's what we're really hard to do right now. Yeah. There's a lot of other stuff that you can invest in with very high level operators. Like a lot of our guys do this today. Like I got guys that literally run very active businesses or they generate a lot of cash, but then they're taking that and deploying it with other operators that they now know inside, like they're running RV parks that are running,

14:21very successful multi-family businesses in spite of all the horror stories out there. They're running successful triple net lease type situations so they can get in those deals and not really have to be the operator of the deal. Yeah. It's just a thing. It's like you were telling us earlier, you have 100 plus single family rentals that you still own. And the cash flow, because you've owned them a long time now. And many of them are paid off and everything else. And it's like, can that advice still work today with prices and rates and everything where they are? Because like I have a lot of buddies who they bought a ton of rentals back in 2010. And it was like, man, yeah, day one in 2010, like anything you bought cash flowed and was a great price and was below replacement cost. And it was just like, you didn't even need a good deal. You had to just pretty much bought anything. And then today you look at the same house. And it's like that house in Vegas anyways was 100 grand.

15:21And it rented for 1,200 bucks. Like you were gonna be good. And then today that same house is 500 grand. That's right. And it rents for $2,500. That's right. And you're like, same exact house. It's just there's a 15 year difference. And it's like, you just can't even buy that house anymore. You'll lose it. You'll lose your butt. That's right. Now there are markets, you know, in the Midwest, where the demand isn't anywhere near like it is in other markets. And look, those, you know, I'm very familiar that there are, that situation does exist. It's in pockets. Yeah. But without a good operator on the ground, and especially if you're doing it from a different state, then it's kind of a move point. It's an easy way to lose money too. If you're not, you don't have your arms around it. But there are people that are still investing, certainly again, back in the Midwest and are still able to get, make all the math work. It's just not like it used to be. That's for sure. Right. I mean, if you're talking to somebody today, right? So it's like there's two sides of the coin.

16:22There's building a business like we're talking about, where you could one day leave for a month, and it still operates, and you still make more money than you spend and whatever, right? And that's going to be your active income. And then you think about, man, how do I take all that active income and put it with these other operators? Yeah, whatever you're talking about. Like what is your advice for somebody who's making money actively and they want to start putting it away? Where would you be putting it away today? Hey, I hope you're enjoying this episode, but how would you like to be the one that I'm interviewing on this show? I'm looking for entrepreneurs who've got a great message to share, who have an inspiring story, and who can add value to the audience. So submit by going to Wealthyway.com. I mean, I still think the right real estate asset class is one of the best places to put it away. If you would have asked me, probably the last time we sat down and talked, I had zero exposure to self-storage or RB Parks.

17:25None. Once changed in the last three years, as being around guys that are actually doing it, and you see the math and you see it, and you understand to understand the business model, I would be, look, we live in an amazing age. It is not that hard today to go use Clawed or OpenAI or whatever and do a little bit of research and find what are the actual real estate asset classes that are working right now, that are cash flowing. And because it's not a blood bath everywhere. Now, but for guys like us, then getting close to those operators is fairly simple. The average guy off the street may not be, right? But I would highly recommend getting into groups or organizations or align themselves with people that allow, give them that opportunity to get to those operators, because there are exceptional people out there right now that are doing extremely well in very specific asset classes that are actively letting investors come in and play.

18:27And I'm not talking about, I'm not talking about the game that you and I and everybody else witnessed back in the day when everybody in their brother a few years ago was coming off and saying that they were a multi-family syndicator. I'm talking about guys that have a serious track record. They've done this for 12, 15, 20 years. They have a portfolio of 20 RV parks and you can look at the PNLs and don't allow you to come in at 100, 200 grand and play right along with them. Right. You know it's going to cash flow every month. You're going to get a check every month. I mean, that's the perfect place. What do you think about that versus investing and say stocks or businesses? I think that I've never been, I was saying, sure far away to watch a stock go down is have me buy it. I definitely have a lot of money in the market but it's never been anything that I have any kind of, I'm not educated enough on it to know anything except just hold it.

19:29Invest, I've always had this kind of theory that if I'm doing business with the company then I probably should own their stock. So Netflix, Google, Apple, Amazon, everything shows up in my household every month. I own their stock. Facebook should give them so much money every year so I might as well get something out of it. But that's the way I get them a lot of money. Yes. That's the same. And then on the, you know, I own a little bit of crypto, nothing crazy. But I definitely find that investing in businesses, I know how to run businesses and I know how to get the most out of it. I know how to build enterprise value. It's me and my team. So the vast majority of what I own is definitely investing in businesses, investing in operators. You know, it's a byproduct of the model that I've created, right? I naturally run into these businesses. I spend a lot of time coaching very high level CEOs and when you get behind the curtains and you're bigger out that,

20:32hey man, you're just one lever here, one lever there from this whole thing exploding. I think we can do something to make that happen. Those kinds of opportunities are very interesting to me. And so that's where I spend a lot of my time. Are you, when you know, when you invest in businesses, I mean, people have different strategies, but are you looking at it more like, hey, you know, I think this is going to be a great cash flow vehicle for me and I'm going to take distributions now that I'm an owner or are you looking at every single one like, hey, we're building this thing to exit and we want to get a big multiple and, you know, we want to make sure that we're typically door number two. Yeah. I have learned just like I did in real estate that we definitely structure our deals now to where there is, there's absolutely going to be a distribution along the way. Yeah, right? We're not working for free. We're not just playing the equity game. We're betting on the come down the line. There's four sure going to be distributions along the way. And we are going to have the ability to exert some control over that outcome.

21:34We're not just going to be sitting on the sidelines and along for the right. We're going to drive with you. And, you know, those situations, I would tell you the vast majority of work, great. We've had a couple that figure out real quick, you get behind the scenes and you're like, okay, the thing when I thought it was. The operator is nowhere near. It's typically the operator, right? Financials look good, operators, you know, lost his mind and you're like, we're out. Like, we're not doing this. We've got to buy something and get us out. But that's only happened a couple of times. Yeah, that's the thing I've been thinking about lately is like, you know, I could build a real estate portfolio and it's really hard and, you know, it just pays down over time and that's it makes it valuable and ideally it appreciates. But like, and there's not really like this big multiple on it. Like, right, you know, a business can have. Right, I'm looking at it like, okay. But I'd be better surf focusing on a few different businesses and really doing what I do well with sales and marketing. Yeah, exerting that influence and then getting a disproportionate multiple.

22:35Right. I, there would be no question in my mind of what you should be doing. Right. Like, you have the ability with your, you know, authority, you have the ability to drive revenue right to the front door. And I'm assuming your team has the ability to help operators, you know, create efficiencies where they don't, I can't always see it. You know, like, for instance, in my world, you know, if we take equity in a company, it's all hands on deck. Yeah, my CEO, my CFO, we're going, everybody's going to play out full out here. We're going to step in and help get your team the way it needs to be and, you know, either they're going, either they're going to rise to the occasion or they're going to be out the door. Like we're going to, this is going to work. And, but that's what we're being brought in to do. I can certainly drive the revenue. That's not, but, you know, you can drive as much revenue as you can. If operationally you can't handle it in a custom, then it's my reputation. It's my integrity that will suffer

23:36because I'm the one that pushed. And so we've definitely learned that we've kind of got to make sure that all the right pieces are in place and if they're not, help them get them there. So what are some minimums that you're looking for when you're evaluating an opportunity, right? Current revenue, you know, minimum exit potential, you know, what do you got to see in these operators to vet and prop to great question. So I'd love to tell you I had a magic formula, but it's been an evolution for sure. We wanted to be doing, you know, minimum seven figures a year in top line revenue, right? Ideally they're taking 30 to 50% to the bottom line because they're still lean. Yeah, they're small at that point. They're small, right? And we know that we can clearly see that there's demand for the service. And so we've figured out that we can drive that demand and that operationally we just need to help them put a handful of key hires in place and get their SOPs

24:39all dialed in because you know, any company that's going to exit, it is exactly like real estate, right? I've gone through a few of these now. Most people that are going into an exit do not realize that you're bringing a knife to a gunfight, right? These guys certainly on the private equity side are sharks, like you can't even imagine. They do this for a living. You're just one of a hundred this year, right? And so what we've learned is that one, the revenue has got to be predictable. It has got to be like they are looking for that predictability. It is happening year every year, three years in a row. It's always grown. We know we can do it. And all that revenue is not dependent upon any one source, right? No high concentration. Two, got an unbelievable leadership team in place that really understands how to run the play, which leads me to the next one, which is, is there a playbook? So if the founder walks out,

25:40does this team know exactly the place to run to keep this business going? Say you protect the multiple. And the last thing they're always looking for, it's not always there, is there kind of, is there some defensible moat around the business, where whether it's IP, whatever it is, like there's that we have a unique way of doing this, right? When you've got those four elements in place, then the multiple typically doesn't get discounted. It's no different, like if you go buy a house and you get an inspection, and then inspection comes back and says, all the systems are failing, foundations cracked, Groove needs to be replaced, what are you doing? You're going in immediately discounting price, right? So they do the exact same thing. They're looking for these things. And when they find them, they typically wait until about the 11th hour and reveal, like we found all this stuff. And now you're seven multiple, eight multiple, we're now down to four or five. Right. And they've got, you've already put all this time in. They're so excited to be honest. Like I just, dang. Take it. Yeah.

26:41And so they wear you down. You got your tickets to Hawaii or what's like that? They're about to head out the door. They're like, hey, they're calling real quick. I mean, I witnessed a $70 million exit, get knocked down to $40 million in the last week. Dang. And a 40 million was still a lot of money. A lot of money. Yeah. But you, I mean, it's a $30 million savings for them. Okay. And they got it right at the last minute. They couldn't, couldn't say no. Still got the 40 million. These freaking, dang. They need a backup offer. That is so aggressive. Right. And then you just bring on like two people at once. You have to have two really good team around you to go, to go through that process. Really good. That really understands it. We've got some good guys that we lean on for that. But getting the business in that place and the first place is how you make sure that there's nothing to find. Yeah. Like you got to get it there. And so that's what we're focused on. Getting it there to maximize the multiple, right? Because if you think about what a multiple is, I try to explain this to you know, to some

27:42of my guys all the time. Like, you know, somebody is giving you a five multiple in EBITDA. They're basically saying, hey, we're willing to front you five years of profit. Why would they do that? It was because they believe they can get 10. Yeah. That's all it is. Right. I'm going to give you the first five. I'm going to take the next five. And hopefully a lot more. And so everything I just stress on is how they get that, how they feel really confident. They can get that done. We have the right leadership team. They're tied up. Right. We're a great business. The service isn't going anywhere. Demand isn't going. We're not counting on one customer. Everything is documented. All the processes are there. Everybody knows how to run the play. So if you don't have those things, that's how you get clipped and you really get clipped. So we're looking at stuff that, you know, if we can't get five to seven years, you know, on a multiple, then probably not worth it for us. Right. You better off just keep it in the cash flow. Yeah. No. I mean, you own an ATM. Just keep it. Right. How many have you sold with sold three so far?

28:43And that's like a part of probably a dozen. What's your like biggest exit? I personally was a part of there was a $77 million luxury vacation rental business. They were the property management company and that we owned a piece of it. And they were bought by Vakasa, who was playing with private equity money. They were coming in and buying up every property management company that they could and then they went public and then basically blew it all and all got, you know, that whole thing blew up. But in the end, they got, we got most of the money on the front. We got paid out over three years and the only thing that happened is when they went in the bankruptcy, we missed the last payment. So we got a 95% of what it was.

29:43What's like the best business deals you've done in the worst? Oh, God. Yeah. I'm sorry, what's the worst? Like what's the, what business have you bought where you're like, this was stupid or it failed or without mentioning names? I mean, I kind of alluded to that. Yeah. We definitely busted in a business a few years ago and it was a services business. Their main client base was basically feeding off of the board of members, right? And we believed very much so in the, in the operators. They was two partners. One of the partners was really the hands on guy doing everything. The other one thought he had been ordained the second coming of Christ here and thought he was great and was the CEO and long story short, you know, once we really got into a couple years of operations with them, we figured out that with this guy running the business, the guy that thought he was great.

30:45Yeah. And he wasn't, by the way, when he was close, not only was the business, he was just making some wild, wild moves blowing through a lot of money. We run into actually, you know, put more money into the business over and over and over again, being told, oh, it's going to go profitable in next quarter, next quarter, nothing ever materialized. Ah, damn. And so it was one of those who was like, all right, we're chasing good money after bad here. We got to go. So we could all losses converted into all the debt moved on. It's not, wasn't a huge clip, but it was definitely a very good learning lesson in that, you know, everything can look like cupcakes and roses and sunshine and you get the wrong, you can have a really, really bright individual running a business. But if they get a little too far out over their skis and think they're a little bit better than they are and start kind of getting in their own head and, and they have the ability,

31:45I've seen this several times, by the way. There's some guys that are extremely charismatic and they're really good at raising money. And they can, you know, it's a very dangerous combination to be able to be really good at raising capital and a really bad operator. Yeah. Right. And we got him caught up in it a little bit, right? These guys are, they were able to raise a lot of money and suddenly they were acting like they were, are he was acting like, you know, he was some kind of tech startup. You know, go raise a few million dollars and, you know, just do silly, silly stuff and never really try to run a profitable business. So our, our, you know, M O now is, we're here to make a profit. Yeah. But what's like the minimum exit I guess you're looking for now? Like, hey, man, we can't make, you know, we personally can't make 10 million on your shares on our shares. It's probably not worth a gross. Yeah.

32:46Well, we'll do the hard stuff for getting an, an X out of 10 million in the next three to five years. For sure. That's what I see that's kind of my point. It's like, I'm kind of thinking the same way with like anything I want to do. And it's like, I can't really buy a piece of real estate that's going to net me 10 million dollars in the next three years. Well, I mean, that would be a big deal. You're in a real, you're in a, yeah, we were talking about it earlier. Like, you're in a very similar situation, but at a younger age, you know, that I'm in. And that is, you've got a great team around you. You've got to, this is not a, I mean, this is a, you know, I'm going to say, I'm going to say, this is a big business, right? And turning how, figuring out how to turn your expenses into income, like, I got a hefty payroll here. I got, but I have a lot of knowledge, a lot of wisdom, a lot of, a lot of authority. How do I point that? All those resources in a direction to where that 10 million dollar is actually possible. Yeah. And that's kind of what we started looking at. It's like, we have a machine here.

33:46How do we, you know, hermosies don't have fantastic job with this. Right. And I think that's the point that machine at a very specific target and create an outcome in conjunction with someone else, right? Or you're not having to actually do the operations, but you're definitely a force behind getting their operations right. Right. So you've mentioned the boardroom a few times. And, you know, for those who don't know, just explain like what exactly it is and then how you're like, you know, meeting these operators and things to do these different deals you're talking about. Yeah. I mean, we started it back in 2012 and it was, again, a product of coming up through the industry that I came up in the education. You always, you know, you always had people that were buying your products and services and training and then, you know, all the money was being made if you could get them into working with you in a coaching program or a mastermind or something else on the

34:47back. And so that's why I started it. And I quickly figured out that it was the business. It's not, it's not an afterthought. It's the actual thing that lights me up personally, you know, certain people that get lit up by educating the masses. I'm just not one of them, right? I had 60,000 students. I was like, man, this is, and you know, people calling you up and your customer service department didn't fill, filled up with calls about, you know, what's my log in? How do I start an LLC? What do you think of this logo? You know, I mean, not saying there's not a time and a place for that, but I just reached that point where that was not, yeah, I wanted to be doing it. And so I, you know, sold off the education company, sold off the software company, focused everything on the boardroom because what I'd realized is that I'd reached a season in my life, this is in my late 40s, where I was like, this is what actually makes me happy. I actually like to be around this group of people.

35:49We had done a, we had done a good job of figuring out how to get people in that room. We had not done a great job of it. That particular, the start was figuring out how to filter out the, you know, people that didn't need to be there, right? And so once we solve that problem and really kind of changed our standards and changed and really defined what we wanted it to be. Like we want this to be the highest level people, right? And we want this to be hard to get into. We're not going to lower our state. I mean, I've said this many, many times. The boardroom would be the easiest business I own to scale, easiest. We have, we get roughly about 2400 applications a year. We accept about 100 new members a year. And so we have roughly about a 4% acceptance rate here to take three to five percent's better way to say it. I want to scale it just lower my standards, right? I mean, the demand's there. Really easy. But what we figured out is that by holding really toe in the line and like, hey, we really

36:52want to be around high level people and really thinking about business, kind of the way you and I are talking, right? Like, not trying to solve little problems, trying to solve multi million dollar problems. People are trying to figure out how to preserve their wealth. People are trying to figure out how to be a present father, a present mother and balance all this stuff. That stuff that likes me up and that's the conversation that I want to have. And so, really got dialed in on it. Really got our marketing dialed in on it. Really got our membership dialed in. And now it's just turned into like, it's done here at least like the gift that keeps on giving. Like, I'm surrounded by amazing people and I actually look forward to going and hanging out with them multiple times a year and look forward to their conversations and know that every one of them are trying to achieve something, you know, extraordinary in their own way, which is a cool place to be. Not somebody who's trying to figure out, you know, I'm not sure of this really work. Can you really flip houses? Yeah. I don't want to have that conversation anymore. Right. So, you say it's the most valuable asset you own now without a question.

37:57Not even close. It will be my legacy. Yeah. If you plan to try to build it to sell one day or you're just going to keep it forever because of all the other benefits, I mean, it's a great question. I would say that both are true. We sold 7% of the company back to our members this year. Oh, wow. The only one out there that we are a member owned community, right? And part of the reason I did that is my legacy, right? I want to make sure that, you know, it has become such a valuable asset to our members' lives that they really want to make sure that if something were to ever happen to me, that it doesn't go anywhere. And so they wanted to be a part of it. And so there was an entire board of directors that helps guide the thing, a lot of the fulfillment, the planning. I mean, our members are very active in this whole thing, right? And so that makes me feel great knowing that whatever I choose, it's going to keep going,

38:57right? But in all fairness, we've had a lot of private equity come at us. There's sniffing around these groups now. And I'm not going to lie. Somebody wants to write a really big chat. And all of our investors and members agreed that this was the best thing to do. Then, you know, everybody's got a price. We probably do it. Had somebody, it would be, it would be a, either they would buy the entire thing or they would have to buy them on a new orderly share. Yeah. Because if I'm going to be involved, I'm going to be in control. Right. So it's kind of one of those, it's a weird spot to be. Yeah. Meaning most of the, most of the private equity companies don't want anything to do with not, they want you to stay. They want to buy 51% and they tell you what to do. And they ride your backs and then like, that will never happen.

39:58I can tell you for sure, that deal will never happen. Right. But if somebody wanted to, you know, kind of take our playbook and take our leadership team and back me out of it and everybody would be happy with that deal. And we'd consider it. Right. That makes sense. So where do you see like this world of education and networking and peer to peer stuff going? Because even in the education space a long time, like you said, I mean, you came from high pressure sales world of 20 years ago and you know, these guys all get popped. And then like the way I see it is, you had that era and then you had this era of like social media guys coming on the scene and selling digitally and you know, this stuff. And now we're kind of like entering a new era where AI is here and people can just learn easily with YouTube and AI and everything else. And like I kind of look at it like man, I mean, back in 20 years ago, people were getting 40 grand to teach somebody, you know, things they could go learn in a book.

41:00No doubt. You know, and now people don't value that stuff as much and rightfully so it's free. Yeah. I think that I think that you nailed it, bro. I think it's dead. Yeah. I think it's dead on arrival. You know, I have a 12 year old. She walks around with the world in her pocket. She can talk, ask any question. I mean, what I'm so old, I can remember having encyclopedias in the house. Okay. And then of course the internet and then I mean now it's just a completely different world. If you want to know something, you can find out right now instantaneous. And so trying to monetize that, I'm not saying that it was a big difference between information and insight. The information is free. It's everywhere now. Insight, you know, having somebody take you by the hand and actually walk you on a property and take you out there and show you how to do this and show you. That's a little, I don't know that that I think that I think there's always a place for having a personal mentor in your life, in whatever you're doing.

42:05But I definitely think the days of, you know, going out and selling big courses and big coaching programs, I think those days are very much numbered. But I, you know, it's interesting. I had a conversation with a private equity firm a couple of weeks ago that was talking to us. Hi, we asked them specifically why are you looking at us? And they're, they answered your question. They were like, in the day of AI right now, this age of AI, we don't think you'll ever be able to replace the peer to peer. Yeah. Like there's nothing like being able to get around very, very highly qualified people and have a shared experience. Like, if you want the, you know this, I know this, you know this. The fastest way to get a result in record time is go tapping to somebody else's wisdom right now. Go, if I wanted to know how to be, if I want to know how to go become great at pickleball,

43:07right, well, go hire a great pickleball coach and you'll be the faster the most, right? Or whatever it is. And so, I mean, that's absolutely true in business is when you can get around people that are sharing information in real time. Yeah. Not talking about hypothetical stuff like, hey, man, I'm going through this today and what have you done to solve this? And that guy's got 20 years on in this resource, this contact, this banking relationship. This is extremely powerful. And AI doesn't know that. AI doesn't know that. And it can't get that down into the weeds with you like you can in that peer to peer environment. So I think there's, you know, I think there's reason to believe that peer to peer environment is not going anywhere for a while. And it's still, and look, I think it's also your provenant in your golf mastermind is that it is baked into our DNA as a species that we are all looking for a place where we belong. We're all looking for our tribe. We're all looking for commonalities, right?

44:08And so the reason why people go to church, they're reason why they join these groups, like, you're just, hey, if you're a successful business owner and you love playing golf, and suddenly there's hundreds of people that have found their tribe. They didn't even know it existed, right? Or did exist before. Now they found something. And so I just think that because that's kind of baked into us, you're never going to be able to just sit on the sidelines and be a solo pernure and not, not become the best version of yourself. You've got to get around people that make you better. Yeah. That's kind of my thesis being in the education space for, you know, seven, eight years now. I heard, I wasn't around when, you know, those guys were all doing all the crazy stuff in Utah, but I heard the story. Oh, yeah. And I came around in the social media era and now I've just seen it slowly dying on the information side. And I'm like, okay, where does all this go? And you know, I started M19 with an idea that had never been done before. I'm like, okay, let's just see.

45:08And then the demand was insane. Yeah. You know, and I was like, wow, it's because there's a lot of people still. I'm afraid that connection, right? Right. They still, and hey, I was not going to replace that. No, no, I can't ever replace going to Pebble Beach and playing around a golf with 30 other guys. You guys know, I love the game of golf. And that is why I started M19. It is a golf mastermind for entrepreneurs who are doing over seven figures in their business and who want to go on bucket list golf trips together. We already have hundreds of members all across the country. And we've been to some of the best courses in the world, places like Pebble Beach, Pinehurst, Indian Dunes, and many others. The course is the best place to do deals, make great relationships, and have fun. So go to mastermind19.com today. You know, what's incredible about it is if you think about it, because it's the same way when, you know, I was telling you earlier, one of our things that we do in my group is we have two trips a year where we do this kind of experiential thing. And the reason I did that is because I'm a big travel guy. I love traveling the world.

46:09I love creating these cool experiences. And if you ask me about any amazing trip that I was on, I can tell you exactly who was there. I can tell you what we laughed about. I can tell you all these funny stories about it. Like, that's a really cool emotion when you think about it. And now when you think about what you're creating, you're literally creating that. Right. Where the guys are going to be looking back and like, man, I remember we were Tory Pines and we were out on the patio, we were smoking a cigar and, you know, whatever it was, like, that's, I just don't see that going anywhere. I mean, people are always going to crave that. Yeah. Then that's been my, and they won't create it themselves unless somebody like you steps in and creates the opportunity for that to happen. Yeah. And I've just seen it too with my own preferences of like, as you evolve in business, you're like, okay, I just want to get around people who understand me. Yep. And what I'm going through and who also want to do the things I like doing. I'll tell you something that's a little unique is that, you know, when the people

47:13on the outside looking in, I've noticed this, like they think it is, oh, this is just a bunch of guys that have got it all figured out. They got successful businesses and they're just going and doing golf trips or whatever together. Right. I think it's important that people understand that even if you're successful in business, it may look like you've got it all figured out from the outside, not even close. Yeah. Not even close. Yeah. And we still need a place to go. We need people to check on us. We need people to let that we can go get around and actually feel comfortable being vulnerable and say, Hey, man, I'm struggling with this either personally or professionally. Hey, you know, can you point me in a direction? And I think that's the biggest thing, you know, with groups like this in my experience has been realizing that, man. It is not, it may look like a good old boys club from the outside. That is not what is going on. Yeah. What's going on is you got some people that, you know, they need to get around people that,

48:16like you said, understand their challenges, understand the problems that they feel comfortable to have in conversations with and that can really help each other. Right. Yeah. Super important. Nobody knows what you're going through unless they've been through it now and whether it's running a big business, whether it's a marriage problems, whether it's faith crisis, kids problems, like there's so many different things that, unless you've gone through it, you just don't really know what to do. And unfortunately, what most guys do in my experience is that anytime you're running something successful in business, you think you have to keep it all together. Like I'm providing for my family. I'm providing for my network. I'm providing for my employees. I'm doing all that. I'm got all, it's really challenging to create a space where you can actually sit back and say, hey, man, I need help. I need help. Right. Like I'm not there. I've got to be strong for everybody else, but I need a chance to talk to somebody.

49:18What industries are you excited about? I mean, look, I think the services right now are, it's a pretty exciting time, whether it's roofing, HVAC, electricians, all those, I mean, it's crazy what is going on right now with those particular businesses, how they're getting rolled up into private equity, faster than, faster than, quite frankly, I've seen in any other industries. It could be, you know, pull service companies. I mean, you think about these guys that have just been grinding for years and suddenly, they're shown up at their doorstep now. Like you've got a pull service company, you've got a hundred accounts and you're doing a million dollars a year, suddenly somebody's walking through your door and saying, we want to consolidate you with 10 other cool companies here in the area and we're going to roll it all up. I mean, that's, I've never seen anything like that before. Like, guys that are actually getting a break and it's pretty exciting.

50:21I mean, I've got a lot of guys in my world that are, whether it's in roofing, whether it's in solar, whether it's in, you know, HVAC, whatever and to suddenly see them winning at that level is pretty cool. What industries do you see are in trouble? Deonification space. Yeah. Yeah. I would say that, I would say that, you know, look, I would say that, I would say that anything that where AI has it, well, just think about your, I'll just, I'll frame it this way. Today, right, whether it is a contract, whether it is something legal going on, whether it is some kind, I'm routinely handy, my attorneys. Here's an entire set of contracts. I've had Claude review this. Here's the edits. What I would use to pay five, 10, 15, 20,000 dollars to an attorney to put together is

51:25now basically, I'm going to pay you $500 to review this. Yeah. He's already reviewed by Claude. Because I've been reviewed by Claude, right? Yeah. I've been created by Claude. I've watched the accounting side of businesses where, you know, used to pay thousands of dollars to have an unbelievably, unbelievably well done pro forma put together, right? On a project or on a business or whatever, being done in minutes now, watching chief operating officers spend our director of office spending months putting together SOPs and playbooks, being done in a matter of an afternoon now. So I think jobs where jobs like that are getting marginalized, businesses like that are getting marginalized very quickly. With people that if you truly understand how to use the tools that are at your disposal, especially if you're, you know, entrepreneur trying to move quickly, man, a lot of that white collar stuff is really in trouble in my opinion.

52:28You know, some crazy, they just opened a McDonald's by my house. Okay. And there are no cashiers. When you walk in, there's no, no one is in the front. It's just machines. Wow. Yeah. I was like, damn, this crazy. Where's time I've ever walked into a McDonald's and not seen an employee there? Yeah. I think that yeah, there's, it's, it's one of the coolest times I've ever seen. I mean, we, we move faster now. We were just talking about this last week. We're moving faster as an organization than we have where we literally have to stop and have our entire leadership team sit down and like, we're, we're, we're able to produce so much, so fast that we would, we would, we would thoughtically have stuff that we'd be rolling out. Okay. This is how we're going to do this procedure now. This is how we're going to do this now. This is like, but now it's like suddenly, yeah, 20 things are getting done in the, what would normally we get to?

53:29Well, it's funny is like, you know, the M19 app I showed you, we're launching it today. And it's like, how much money and time would that have taken to just help us? That, bro. Bro, to take in like, probably millions to get it to where it is in years and it's like, Doug is a few months and one guy. Yeah. Yeah. And it's great. Yeah. I mean, you're just like, we had the same thing, but we literally had the same thing with our app, very similar experience, right? Yeah. Well, we had paid a third party for years to host this. And then instead of, we just recreated the whole thing like, or I don't know if you've seen this, but some of these companies that, I mean, you can create an entire beautiful CRM. I think about what you paid for CRMs in the past. Like, well, there was sales force or a spot or well, I mean, you create the entire thing in a week. I know. So that's companies are getting, they're getting crushed by the stock. Really? All that legacy stuff like that is pretty scary. They're in trouble too. There's a lot of people in trouble, bro. Yeah. Because you can just, I mean, it's like I said, it's one of the most incredible times

54:32I've ever been around. Like, I'm just speaking from my own personal experience. I know how efficient I have become. I would use to count on people to do things. And I'm like, I'm just going to go into cloud. I'll get this done and give me 20 minutes. Yeah. Like, hold my beer. I'll be right back. Yeah. You know, it's funny. You mentioned McDonald's thing. So like Shake Shack has like a similar thing at the one I was at in downtown Somerlin. And I ended up seeing this real the other day of a going viral because. Oh, I saw this. Yeah. They're automatic tip on it. It was like 20% for fast food with no one. There's not a person. Like, who are you tipping? The vet. Yeah. Like, what? It was like, and then if you tried to unclick the tip, it like adjusted the price. Longing the prices up. Yeah, it made them more expensive. Dang. But 599 and you can add your tip. And everybody just say no tip. Now it's 699. Wow. Yeah, dude. That's interesting. Wow. I'm like, how in what world? Like our first boss tipping on fast food is already like a questionable thing.

55:34No. Especially here in Vegas. Everywhere I go after tip is on. Like I want to be generous, but then I'm like, wait a minute. You know, I'm tipping the waiter 20 plus percent that's like actually providing me a service at a restaurant. And you want me to pay this cashier 20% to the standard tip for doing just taking the order. I know. In one minute, this literally just happened to me. I landed here in Vegas. And as I'm walking out of the airport, like, let me just come here and get a bottle water. Grab a bottle water and go up there. Cashier tip. Cashier tip. That's a Vegas thing. I walked it from the counter to here and I scanned it. I know. Yeah. But like, at least there's a human there that you're like, okay, I guess this goes to this human at the shake shake. There's no one there. You're like, use this going to. Yeah. It's crazy. The crazy part too about the McDonald's is there is a place where you could put in check. There was like a coin machine, a dollar machine, and a check machine. Yeah. That's probably for food stamps. Yeah. Yeah.

56:35I was just shocked. I was like, not one cashier here. Like it even, it was even built differently. Like, you know how a normal McDonald's is built. Like you walk in, there's like a countertop, cashiers, all that stuff. This was just like a closed room. How do you do your food? Where does it go? There's like a little place where someone from the back will just put your food right there. Wow. Yeah. That's new. It is, it is very new. It almost be turned into like a humanless, like if they get the food to start with. The food can make food too. Yeah. I mean, it's, say what? We live in a fascinating time. Yeah. Stuff's changing quick, real quick. Yeah. Even car washes, you're starting to see car washes with no employees or just one employee. I've been to several car washes where there's one person running a huge facility. Well, look at the, that's a business that I would love to own. Car washes. Or the same way. They have one employee. One employee. Yeah.

57:35Managing 500 units. Yeah. That's all out of me. Yeah. Literally. I mean, let's put them the locks of the most labor, some labor intensive thing, overlock a non-payment. That's it. Right. All the maintenance is done by a third party. All the, everything else is just all through an app. How do you think AI has got to disrupt real estate? I hope it would hurry up and get here. I think, I mean, utopia to me when real estate has finally arrived is when you can, and then people are going to hate me for saying this, but just buy a home. Yeah. Seriously, where it is offer online. That would be cool because I hate realtor buy home. I am so crazy to me. You get all your deals from realtors. I know, but that's why I hate realtor's are less of a friction point for me, but the title stuff to me is ridiculous.

58:36Yeah. Like, everything is online. Why can't you have, why can't you buy a house and when 24 hours the title search has been done, it's all clean, you know, whatever. Why does this have to be such a still a manual process anyway? Like, one of my lenders, we just sold a deal. And I saw him requesting what title is like, hey, can you just do the digital notary or whatever it is? Yeah. It's legal. Like, no, I know. We just need to meet you in a lot of time and do a hundred paper stack and bro, I have I have I have I renew my passport without talking to you. Yeah, I know another country. Yeah. No, you want to hear some worse. So I have a $64 lean right now on one of my properties that I can't get off unless I go to the city of Los Angeles and pay the lean with a check in person in person. And I'm just like, they're never going to get it. They can't get your. They're never going to get it. It's so it's so dumb to me that this is like the last.

59:39That's how like H.O.A. companies are too. Oh, yeah, you got to like deliver a check. I like that. You guys are for sure money laundering. Oh, for sure. Like, there's no reason that this exists. Yes. Yes. I went through that last year. I think I bought a house and the previous owners changed the rocks without getting it approved. And then they lean my property after I already owned it. So I had to go in there, try to pay. They're like, you need to come back with a check. I went, came back with a check. They're like, you also need to grab three rocks from the front of the yard and bring it back in here. And I was like, are you serious? And they're like, yeah. And it sucks because like earlier that day, I was asking God for more patience. And then that happened. And I was like, he's never going to, yeah, I was like, I'm never going to pray for patients again. Like I'm never going to ask for that again. But yeah, bring me three samples of the rocks, the smoothest ones you got. Oh, my God. Yeah, it was that serious, too. And I came back. I was like, here you go. You did it. Yes, I had to.

1:00:40Oh, yeah. I literally had to. They lean my property. And I was in escrow to sell. So I was like, damn, like they kind of have me right now. That's a cool. I'm going to drive it equity companies in the last minute. Oh, yeah. Yeah. Yeah, I think that, I mean, I would love, I can't wait for that to happen. Yeah. When, I mean, we're the whole transaction can take place. And yeah, really don't have to get anybody else involved. Yeah. That's utopia because it's so arcade. What do you guys think is going to happen to realtors? You saw a compass just bought remax, I think. No, real bot remax. Real bot remax. Yeah. Compass bought other stuff. Yeah. Yeah. Like it's no different than anything else, man. You've got private equity. It's just consolidating down these. I mean, they're basically just big tech plays at this point. And they're all trying to get their own private platforms at this point. Yeah. I saw that too. They're all trying to silo each other off and compete against Zillow. I mean, I think that, I mean, depending on your business, realtors are either, you know,

1:01:41necessary or they're not, right? If you're in control of your own marketing, you don't really need them. But they're always going to be a great source. I think it kind of comes back to the same thing I was saying earlier, there's always going to be this comfort level of having somebody help you to go and sell your house, sell your house or buy house, whatever. But I think once that line has been crossed and techno, you know, the reason the technology hasn't moved is because the lobbies are, you know, the realtor lobby is so big and so powerful. They're fighting every and so on. They're fighting to keep it from being like the taxi cabs. Yeah. They don't want the tech because Zillow doesn't want the tech or the realtors. The realtors don't love the tech. The realtors. I don't know why Zillow can't just have people sell their own, like if Zillow had an option where they'll represent me, I would do it right now and not use a realtor. They actually rented out my last house for me and it was way better than any property management company I've ever worked with.

1:02:42Yeah. Zillow rentals. They did the whole thing. And all the docks are in there. Yes. They did everything. They showed it. They literally it was awesome. They do everything. Well, then they're going to sell. I mean, if they do rentals, then selling is the next thing. Yeah. And so that's, you know, you've got these very powerful lobbies that are going back and forth. Yeah. Well, what do you think about it? Right? Like Zillow in their first inception was just selling leads. You know, so they sell leads to realtors. Then they go into the Zillow flex because they're like, dude, these leads are way more valuable. Like, let's just partner with realtors and take profit share. And so, you know, they profit share with these realtors. And they make even more money. And then the last step is like, okay, we got data on how they use these leads. We'll just do it ourselves. Well, it's the reason why Compass has done what it's done. And it's the reason why Redfin, you know, did their consolidation, why real, why, like, it's just going to be these Goliaths all trying to fight against Zillow, right? Zillow became the under 800 pound gorilla and had all the power.

1:03:44Yeah. And now they're like, no, we're going to have just as much power as you. Yeah. And so in that process, I mean, in the end, what really needs to happen is that Zillow needs to just buy them all. Yeah. Basically, there has to be somebody that says tech is the way yet. Somebody's going to consolidate all of them. And they're all trying to make this play like they're tech friendly while also being agent friendly. I understand it. But they make their money from the agents. Yeah. Very, they're taking a rip. If you can solve for how to take care of everybody along the way without, you know, putting a bunch of people out on the street, which nobody's ever really, nobody has an interest to do that. Yeah. There's no, there's no motivation to do that. It's just going to have to come from the consumers demanding that we want to be able to buy and sell our house in a very systematic way and be able to go to the title and not have to go and pay all these exorbit fees. Yeah. Until that gets to that place, there's no motivation to do it. I think what ends up happening is literally what you described with the lawyer where, yeah,

1:04:47you used to cost 10 grand to go do this thing. A commission was 3%. Yeah. And then eventually it gets so automated that, yeah, you still want a real to review and make sure you're getting a good deal and that it's negotiated well and whatever. But they're getting 1%. Instead of $300. Or $500. Whatever. It could be a key. But like because 95% of the legwork will be done, you just really want them to verify. Yeah. It won't be the 3%. I just don't see how Zillow cannot say, hey, Mr. Seller, they could book on the platform. You could approve it once they show up and look at it. Here's the, they're going to write an offer. Here's the price that repairs to this to that. Yeah, but you don't approve it. These people don't have experiences and negotiator. That's the problem. That's what they're paying for. Yeah, but I feel like most realtors suck at negotiating anyways. Yeah, but it does feel better that you're coming out of them and from somebody in the industry right? Yeah. Yeah. The average person goes through that transaction three times in their lifetime.

1:05:50Yeah. Yeah. They have no idea about repair request and low appraisals. Yeah. All the things. And they, you know, closing dates. But Zillow could hire one TC that could manage 30 to 50 transactions. I'm sure they're doing this, but Zillow's AI could be a virtual agent. Yeah. And basically do all of this for you. Yeah. Hey, you need to not take these repairs. This is not good. This is good. Yeah, that's true too. But, you know, again, they're, they're, Zillow's the only one that has an incentive to, and it's the reason why they're looked at as being combated against the realtors. Yeah. They're, you know what? You know what? We're thought of how we should never even consider it. So you said that. Yeah, basically like the way I see it now is Zillow really has almost a monopoly on attention for buying houses. Yeah. And the realtors have essentially been running a monopoly for the last hundred years. Right. And now their monopoly is basically done.

1:06:50That's right. Yeah. And so they're trying to hold on for dear life. And it's, and they'll like, they do it in consolidation and get up to where they're as powerful as a unit. It's like you're the oil company or you're, you know, Tesla saying, dude, that we don't need to use oil anymore. We have. Yes. And the oil companies have so much lobbying and I think what's part of it also is, is, you know, you've got to get homeowners that will age out. Yeah. Like they next generation, do you think about this generation that's coming up if you're in your 20s right now? I mean, everything in your life is easy. Yeah. I want food. I go to door dash. If I want a car, I get a doober. And I want like everything, I can literally do everything. Yeah. Talk to the doctor right now. The best doctor in the world. Right. Not one thing I cannot do from my phone. Yeah. Except this. Yeah. And they're going to just like, this has got to happen. And there's, they're not going to pay the fees. They're not going to. Yeah. And somebody will, they're just not going to do it.

1:07:52Now the challenge with it is that, that generation is also being, is less inclined to buy a house. Yeah. They're renters. Yeah. They're rental part of it easy. Yeah. What do you think is the future of home ownership? I mean, I think statistically, they're in the kind, the case is being made right in front of our eyes on why most people should be looking to rip. Because I mean, look, you just nailed it earlier that, hey, this house, I mean, it's very prevalent where I live, right? Not in the Hawaii, California. Very specifically where I'm at, the average house is probably, there's nothing that's less than a million bucks, not one thing. And it could be a tear down. Yeah. So it's probably somewhere in the two to three million dollar range, right? Yeah. Okay. So think about that. Let's just say it's three million bucks. Okay. I've got to have 750 grand. And then I'm going to pay one and a half percent property tax.

1:08:55And then I've got, you know, I'm going to basically my mortgage on it is going to be 20 grand a month. Yeah. I got catbacks. I got right. And I got everything, the exact same property, literally the exact same property, you can absolutely rent it right now for $12,000 a month. Yeah. Yeah. I see that in Vegas. It's like every day. Why would I do this? Yeah. I kind of look at my house and I'm like, damn, I should have just rented my house. Like I've been paying 20 grand a month for, and it won't rent for that. Yeah. And but it don't even have to be a luxury home. My point is the, it's the market, the median house in Vegas is 500 grand. The, if you put 5% down, like a lot of Americans would in that range, you know, your, your mortgage is going to be like 3500 a month. Right. Our Mario. And the rent is 2000 to 2500. Like why in the world would you own that home? That's right. There, it makes no sense. So the market is dictated. I mean, I don't, you can have your own, when we, I grew up in a generation where you wanted to own your house, but I can absolutely understand now. Yeah.

1:09:55Why you don't 100% understand that, that, that even if mortgage and rent were the same. Okay. Now it's like a decision of, hey, do I want to be locked into this house and, you know, just the pride of ownership and custom, but you still have way more expenses owning it. Yeah. And then take the math out of it for a second. And just I would, you know, I was literally taught coming up that this is an investment. Yeah. Like you're going, this is going to go up and, and all it still may ultimately be true. But I think people have figured out over the last 20 years through a couple of pretty hard cycles that sometimes that's, that's true. And sometimes that's not true. Yeah. Do you think real estate's going to be going up like the way that it has historically? Or are we about to reach a point where it kind of just plateaus or even goes down? I mean, I mean, I, we've been here in this since what, 2010, the shortage in houses that are being, you know, we're now for nothing in less than a little bit.

1:10:58We're five million housing units short in the United States right now. And the market's so slow. And, but what incentive is there to go like like it's the dynamics are so big against this that the only way a house would become affordable now is if an unbelievable amount of supply came onto the market and rates were favorable to go and make those acquisitions. And neither one of those things are happening for a while. And so as long as demand is still there at some level and supplies is restricted as it is right now, I mean, I just don't really see any reason for prices to really fall dramatically. I mean, they may kind of plateau to your point, but what economic force would make them go down, right? Let's tech can build houses for really cheap.

1:11:58That's the only thing I see. I didn't say in that. I said, you know, the only way this ever changes is if 3D printing or whatever the case is that allows people to build houses extremely fast and extremely cheap because land is cheap. You can go find cheap land in California an hour away from La Jolla. That's very cheap. You know, and so we don't have a land prop. People think we have a land problem. We don't like 90 plus percent of the earth is uninhabited. So there's no shortage of land. I can go right here outside of Vegas. How many minutes down the road? There's literally nothing on the state line from here to Cali. I go by land for zero. And then if you can build cheaply and quickly, I could go build a whole new community. It'll cost me nothing and I have an alternative now. If you go build those houses for 100 grand, there's a new alternative. That's the only thing I see. Yeah. Well, I mean, you can see what happened in Austin, right? Austin, they were planning on all this. Everybody was migrating there during COVID and everything.

1:12:59And now the market's collapsing because they got oversupply, right? All houses that were being sold for 500 grand back and are now $400,000. So it is a supply and demand thing. I mean, that's the way it actually works. Yeah. Is that if there's enough on the market, prices will fall. What do you think is going to have to be a builder? Why are you going to go build knowing you're going to oversupply it? And out out, you can't even get what you need. That's right. What do you think is going to happen to the real estate market in the next 12 months? What's your prediction? Nothing. Should go to stay the same. I mean, I have zero reason to believe anything would, you know, if you're in the lending side, everybody's talking about that you're always trying to sell. The rates are going to come down. I'm going to come down 10 year treasury doesn't say that right now. So to your point, I don't see there's no real incentive for people to be out there building a lot. I don't, there's just nothing to the shows to me that in the next 12 months, anything

1:14:04dramatically, which is, but do you think appreciation? Because something appreciation, something everyone has always assumed will happen, you know, over a long enough horizon. And I'm starting to become skeptical that that's really true. Do you think appreciation will still given a long enough horizon happen at the 3% increments or whatever that over a long enough time? Okay. I mean, I think that again, statistically, if you look at anything over a 20 year period, it goes up, right? Just because of inflation. Yeah. I mean, it's going to, it's going to play itself out. Now, do I think that, you know, Vegas went through it, South Florida went through it, you know, California, there's certainly markets that are appreciating faster than others. And there's certainly markets that historically, they have appreciated faster than they are right now. Right. I think that's slow in study that if you own something and it's probably going to double in value over the course of a 15 to 20 year period, yeah, I think that's very reasonable.

1:15:04Okay. Because of compounding effective, but I mean, I just, it's more of an effective inflation. It's an, I was just going to say, it has less to do with the at least, or it's a decent deviation. Do you value the dollar that's all is happening? Right. You know, you just simply can't get what you used to get. And that's, we know is almost, that's guaranteed. That's guaranteed. Yeah. We just know that the dollar is definitely not going to be worth what even five years from now, right? That makes sense. Well, dude, I know you got to catch a flight. So if anybody wants to connect with you on any of the things you're doing with boardroom and everything else, where can they go? I just find me on Instagram at Kent Clotheer or, you know, Kent clotheer.com or bordermastermind.com. Cool. Guys, we will link to all that down below in the YouTube description. If you enjoyed what Kent's talking about, you want to be around other high level people in the boardroom or get into some deals or everything else, go check them out. And we'll make sure to subscribe to this channel for more great episodes like this. Peace.