Creating Wealth #9 - Where is the U.S. Real Estate Marketing Going? Where Are the Bubbles?
Jason Hartman speaks with David J. Decker, author of Cash in on the Coming Real Estate Crash, about areas of the nation that are at risk for a crash. Caution!
Announcer:
Welcome to Creating Wealth with Jason Hartman, President of Platinum Properties Investor Network in Costa Mesa, California. During this program, Jason is going to tell you some really exciting things that you probably havesn’t thought of before and a new slant on investing, fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible.
Jason is a genuine self-made multimillionaire, who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom. You really can do it. And now, here’s your host, Jason Hartman, with the complete solution for real estate investors.
Jason Hartman:
Hello and welcome wealth creators and real estate investors. This is Jason Hartman. I’m glad you’re with us today. I’d like to welcome our terrific guest today, David J. Decker. He is author of two fantastic books. One is Cash in on the Coming Real Estate Crash and the other one is The Complete Idiot’s Guide to Real Estate Investing Basics. David, welcome to the show.
David J. Decker:
Hi, Jason.
Jason Hartman:
Glad to have you here. Tell us, where do you see the real estate market going in the United States as a whole?
David J. Decker:
Well, not to spoil the ending for anybody, Jason, but I don’t see a nationwide real estate crash. We haven’t seen that since the Depression. We’re not going to see that now, but there are some areas of the country that are headed for trouble and I think that your listeners will be interested in that.
Jason Hartman:
Great. Well, we can’t wait to hear what those are so we can act accordingly. So you say you don’t see a nationwide crash and that’s good news. We hear so many people, Dave, talking about the real estate bubble and talking about certain bubble markets and bubble pockets. Define crash for us.
David J. Decker:
Sure. The way folks buy real estate today you really can’t afford to have a reversal in prices of more than just a few percentage points before people’s entire equity will be wiped out. You know that some folks are buying a home with just as little as 5 percent down, so that means a 5 percent reversal in prices translates to 100 percent loss in terms of that person’s equity. And of course, you’ve got some transaction costs in there, so it does not take much of a reversal to generate a crash. And we’ve seen some terrible calamities in some regions of the country with bubbles bursting in the past and we’ll probably get to that here in our conversation at some point.
Jason Hartman:
Okay, so what about – I mean we’re in Southern California. You are in Wisconsin, right?
David J. Decker:
That’s correct.
Jason Hartman:
Now, what about Southern California? I’ll ask you about Wisconsin next, but I’m more concerned about my market frankly.
David J. Decker:
Well, sure, and I understand that, and Jason, as I identified in the Cash In on the Coming Real Estate Crash as the one area of the country where I have the most concern is in Southern California and we’re beginning to see some kind of concerning data and statistics in regard to Southern California that really would give us pause, and just as you guys sit on a fault line and we can say that we know that the earthquake is going to come, we just don’t know when, in the same way, we can say we’ve got a real estate cycle here that does experience those booms and busts and we’re just not quite sure when. But we know that it’s not a question of if, but more a question of when.
Jason Hartman:
Well, I agree, Dave, and that’s why we at Platinum Properties Investor Network have basically been helping people reposition their equities so that they’re in less risky markets with a much greater possible upside. So if the question is “when,” not “if,” which I think is what you’re saying, right?
David J. Decker:
That’s correct.
Jason Hartman:
“When,” not “if,” okay. So what are we looking at and what are some of the fundamentals that we need to be aware of as prudent real estate investors, especially when we’re talking about the overheated, over-appreciated Southern California market?
David J. Decker:
There’s two things that you really need to key in and the first is the realization that every time you’ve experienced a real estate crash in the past – and we can look at the history; you know it’s happened before in Southern California in the early ‘90s, the oil patch states in the ‘80s, and Boston and some of the East Coast areas in the ‘90s also experiencing a real estate crash. In each of these crashes, it was a wave of unemployment that triggered the problems. So that’s one of the key areas you have to watch. That’s why we can say that even now, as overheated as things might be, you can still have a soft landing if you don’t get the corresponding loss in employment.
Jason Hartman:
Well, I agree with you there. I mean I was in the real estate business starting back in the mid-‘80s and in 1990, Southern California had this just huge wave of defense contractors. Thank you to Reagan for ending the Cold War, but there was a hangover from that and there were so many layoffs at McDonald-Douglas and all the aerospace companies. We have a much more diversified economy now, though.
David J. Decker:
Right and you know to the extent that your economy is more diversified, you’re more likely to weather a problem. But here’s a scenario that people should consider that maybe people haven’t. I haven’t seen a lot of press on it, so here’s an idea that folks should be considering is that this economy, right now, has been driven by the real estate industry. Typically, real estate lags the rest of the economy. If you’ve got a strong economy, real estate goes along and does fine, too. But in this economy, there’s been so much new construction, so many transactionally dependent jobs that have been added in, mortgage origination, real estate broker, those types of folks, that you’re just not going to be able to sustain that level of employment.
Let me give you just an anecdotal example. In Venice, Florida, there are more real estate agents than there are properties available for sale. That’s just not sustainable.
Jason Hartman:
Dave, I’ve got to interrupt you for just a moment on that. An article that just came out about two weeks ago on “In the News,” which is the largest real estate news organization – you’ve probably heard of them I’m sure.
David J. Decker:
Sure.
Jason Hartman:
They said that one out of 52 adults in the state of California now has a real estate license. Isn’t that unbelievable?
David J. Decker:
I’m going to apply for mine.
Jason Hartman:
Yeah, it’s incredible. It’s just everybody. I mean there are more real estate licenses than drivers licenses, I feel like sometimes. Anyway, go ahead.
David J. Decker:
Well, you do have a level of employment that is transactionally dependent. You’re going to see transaction volumes of real estate decline. We’ve just been not only at historically high prices, but also at historically high transaction volumes and some of that’s going to decline. And you also see the impact of the internet and the computers and that’s to say that we don’t need the same kind of head count that we needed in the past to do the same number of deals. We’ve got a couple of trends that are going to result in some loss of employment, and if we have a drop off in employment in construction, I mean you could actually have the real estate industry be the industry that triggers the wave of unemployment that kind of becomes a snowballing effect and causing a larger crisis in a local economy.
Jason Hartman:
Well, you know Dave, I gotta tell you. I think you’re right about that and I think that is the big concern of a double whammy in Southern California.
David J. Decker:
And what you really need to think about, Jason, is that throughout the nation, 70 percent of the population owns its own home, but that’s an average and in places like Southern California, only about 54 percent of the population owns its own home because housing is so expensive. We’ll talk a little bit about how the median income can only afford just a few percentage points of the homes available for sale. But with so many people renting, it’s very easy for those folks to just pick up and leave in the face of a calamity.
Jason Hartman:
Sure. So if their mortgage job, if their escrow job, title company job, construction job – we’ve got so many developers here in Southern California. We have a large real estate economy here and you’re right. I have not seen much press on this. Just a little bit about it, but believe me, it’s in our minds, too. So those people can go. So what are the affordability numbers and what’s your take on them?
David J. Decker:
Well, right now, throughout Los Angeles, Orange County, San Diego, there’s only 7 percent of the housing stock that can be afforded by the median income. If you do get a situation where you have a lot of people, for whatever reason, have decided to sell, whose going to be able to buy at that price point that exists today? That’s what you have to be asking yourself.
Jason Hartman:
I agree with you, but let me take issue with one thing. For years and years, I’ve looked at the housing affordability index, Dave, and I agree with you it’s a terrific indicator. The big difference today, though, is immigration. In California – and I’m not talking about immigration from Mexico where people can’t afford to buy houses; I’m talking about –
David J. Decker:
You’re talking about emigration from other states.
Jason Hartman:
Well, and I’m talking about from other countries. I’m talking about Middle Eastern and Asian immigration to California. You know this is a very big hub for that and these people aren’t considered in the housing affordability index.
David J. Decker:
Are you saying that these folks are coming in and they have net assets that really make the income kind of a moot point?
Jason Hartman:
Well, yes. I mean the housing affordability index matters, but these groups of people do have large assets and they put huge down payments, some of them just pay cash right when they get here. It’s amazing.
David J. Decker:
Well, then you’re becoming a market that’s much like Florida where Florida is largely immune from the booms and busts of the economy because you’ve got such a huge bank of retirees there that are asset rich. They may not have a great deal of income, but they’ve just got huge net assets. And that does, to the extent that that condition exists, that does change the dynamics. But you still have a situation where if only 54 percent of the population owns their own home, there’s still a huge segment of the population that would probably like to own that can’t afford to own, and affordability is still an issue and you’re still vulnerable to some of these situations because I do think that these folks, if you see eroding prices, they’ll go elsewhere as well.
Jason Hartman:
Okay, so in your book, Cash in on the Coming Real Estate Crash, do you talk specifically about markets and if so, what other markets are you predicting are crash potential markets?
David J. Decker:
Well, we are concerned about Florida and the East Coast, Manhattan, Boston, some of those areas, but what we really try to do in Cash in on the Coming Real Estate Crash is to equip the reader to go to some websites, gather some data, and really make his own forecast. You’ll find that the data changes very quickly and you do want to be looking at data that’s unique to your area. It would be impossible for me or anyone else to give you an accurate forecast for every portion of the country, for every little village or town throughout the entire United States. It would be impossible for me to do that for you, particularly when I’ve never been to some of these areas. But for someone who’s perhaps lived their entire live in a particular locale, they can read the book, they can go to the internet, they can look at some data, and make some assessments for their own neighborhoods, which is really a big part of the book. It’s just to try to equip people to make their own forecast.
Jason Hartman:
That’s a great thing. So you’re really empowering the reader rather than just telling them something or making a prediction. Can you tell us – give us some of those websites, Dave.
David J. Decker:
Well, you know the Census Bureau is a great website.
Jason Hartman:
Too much data. I’ve been there many times. It’s just too big.
David J. Decker:
Well, the book really helps sort through that. I mean the book literally writes out the convoluted internet sites, so it takes you right to the page that you want to be. I agree. I mean I spent hours just wading through that mess, but the Census is a great source. The Office of Federal Housing Enterprise Oversight is a great source.
Jason Hartman:
Oh, yeah, that’s a good one.
David J. Decker:
The National Association of Realtors website is another great source and again, the book has a listing of internet sites that will be advantageous to folks.
Jason Hartman:
Excellent, excellent. So in a nutshell then, what indicators should a homebuyer or a homeowner or investor be watching most closely?
David J. Decker:
Well, we talked about the affordability index. That’s an important index. That tells you the health of the market at any point in time. The other thing that you should be looking at in terms of a forecasting tool are days on the market, the average days on the market for a home sale, the month of supply of home inventory, and mortgage applications in order to get a feel for the direction of the market. There’s folks that argue about what constitutes a healthy market. People will say a three to five month supply of homes available for sale is still a healthy market. And as much as you might debate that, really it’s the direction of the indicator that’s more important.
Jason Hartman:
The inventory.
David J. Decker:
Hey, ten months of supply could be great news if it used to be 12.
Jason Hartman:
Right, right, exactly. So if inventory is increasing, then be concerned. If inventory is declining, then don’t be quite as concerned.
David J. Decker:
Right. The wonderful thing about this, Jason, is it’s really common sense. It doesn’t require rocket science. With a little bit of direction, you can really start to have some intelligent assessments of what’s going on in the marketplace.
Jason Hartman:
Excellent, Dave. We’re up against a break. We will be right back in just about 90 seconds. Hang on.
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Jason Hartman:
Welcome back to Creating Wealth. This is Jason Hartman here with David Decker, author of Cash in on the Coming Real Estate Crash. Dave, welcome back.
David J. Decker:
Thanks.
Jason Hartman:
Tell us some of the undervalued markets around the country. What are you seeing out there and which markets are – where are the deals?
David J. Decker:
Well, you know, first, Jason, we probably should talk about how we got to this stuff just to disclose to listeners how we’re making these calls.
Jason Hartman:
Give us your methodology. That sounds great.
David J. Decker:
I’m a real estate guy just like you are and I’m not a data service organization, nor am I – I don’t have the resources personally. What we did is we studied the studies. We put together some criteria for what makes a reasonable study and so we pulled the studies out of business magazines, we’ve got something from the Census, we’ve got things out of newspapers, credible sources, and we just did a spreadsheet. How many times was this city named by a credible source as being either too hot or undervalued and what have you? And that’s really kind of how we came up with our list.
But getting back directly to your question then, those areas that might be a little bit undervalued, think of Atlanta, Austin, Texas, South Carolina in Greenville.
Jason Hartman:
You like Dallas I know.
David J. Decker:
Yes, Dallas, the Dallas-Plano alley, Raleigh, Durham, North Carolina. Even some areas of Oklahoma; Oklahoma City, Tulsa, Oklahoma, some terrific areas where, particularly you guys coming out of Southern California, you’re going to think, hey, the whole place is for sale at $.10 on the dollar.
Jason Hartman:
I agree. One of the things we tell our investors in our seminars, Dave, is be very careful taking your California brain into some of these other markets because everything looks like it’s free.
David J. Decker:
Yeah, absolutely because the rents are $.10 on the dollar, too, sometimes, so it’s all relative.
Jason Hartman:
Yeah, yeah, you’ve got to be careful and keep things in perspective and watch out for relativity there. What do you think about Utah? We sell a lot in Salt Lake City now.
David J. Decker:
Yes, that is another area. I think that there’s been some price increases there recently, but I don’t know that that has finished yet. So I think that’s an area with potential as well.
Jason Hartman:
I agree with you. How about Charlotte, North Carolina?
David J. Decker:
That is one where I am particularly interested in myself. Raleigh, Charlotte, two areas in North Carolina that you’ve got such an attractive climate there. There’s an entire phenomenon called the Halfbacks.
Jason Hartman:
That’s funny you mentioned that. Yes.
David J. Decker:
People that move to Florida, for whatever reason they don’t like it, so they came from out East, they came from New York, Boston. They don’t want to go all the way back to that climate, but they want to experience the change of the seasons again, and for whatever reason, there is that phenomenon called the Halfbacks, where they’re winding up in places like North Carolina. Some in South Carolina, too, but –
Jason Hartman:
They go down and come halfway back.
David J. Decker:
Exactly, exactly.
Jason Hartman:
How about Alabama? Are you looking at those markets there at all?
David J. Decker:
I think we were talking about Birmingham during the break and I think that’s another area where there’s going to be some potential.
Jason Hartman:
Good. Good stuff. Yeah, I think there’s some great, undervalued markets out there and what we do is we always look at what I call the RV ratio, the rent-to-value ratio. And in these markets that you mentioned and talk about in your book as undervalued, not only from a price perspective are they good, but the rent-to-value ratios or the RV ratios are terrific.
David J. Decker:
Yes.
Jason Hartman:
Yeah, so that’s –
David J. Decker:
You’re finding you just can’t build into those markets at the present rental points and that just means that the existing stock is going to really – it’s going to have to appreciate in order to meet the demand in those market circumstances.
Jason Hartman:
Something we were talking about, Dave, before the show is the foreclosure phenomenon and this is really something that I’ve struggled trying to understand and figure out. Why is it that foreclosure rates are high in some of these markets that we’re all considering undervalued? I mean many of our clients ask us and it seems to be like a contrary phenomenon. Can you address that?
David J. Decker:
Sure. Isn’t that so neat, just the opportunity that exists, that not only are these markets undervalued, but you’ve got some foreclosures to pick from in them as well. That’s where you’re seeing the foreclosure spikes. What a phenomenal opportunity. But to answer your question, think of what’s happened. It’s not really as contrary as you think because in these areas that have not experienced the price appreciation, if a guy loses his job, he’s got no cushion. He’s got nowhere else to go or he’s got no stakes, so he’ll just walk away. He doesn’t have the big run up in price that he can sell his property and get out for what he paid for it or certainly more than what he paid for it. These folks have got nowhere else to go and so ironically, you do see a spike in foreclosures, not in the hot markets, but in the cold markets.
Jason Hartman:
Interesting, interesting. I’ve heard that referred to in Texas as the Texas Midnight Move-out.
David J. Decker:
Yeah, I have not heard that, but that – what an excellent way to summarize it.
Jason Hartman:
So in other words, when the homeowner gets into financial trouble, as invariably people do, they just walk away because largely they have nothing at stake. They have no equity to protect or nothing to lose except their credit. So the motivation to do something about it is much lower then. That’s one of the things you’re saying.
David J. Decker:
That’s right and you know, I think there’s been a certain phenomenon where people have been of a mind that, hey, you can buy any real estate anywhere and do well. And that’s part of the reason for writing the book is to tell people, not necessarily that the sky is going to fall on their heads, but real estate, you need to be smart. We’ve gone through a period here where maybe you could get away with just buying anything and being successful, and folks that did that and weren’t in one of those areas that were taking off, they maybe got hurt. They were reading in the newspaper, a national newspaper or USA Today or something like that, about how everyone’s making money in real estate and they thought they could be as fortunate, and some people were just, I guess, unlucky.
Jason Hartman:
Yeah, I agree with you and we’ve been on this bull market in real estate for five to seven years now and some people – one of the things I’ve heard is in a bull market everybody’s a genius.
David J. Decker:
Yeah, yeah.
Jason Hartman:
And I think it was Rockefeller who, right before the Great Depression, said that he got very worried when his shoeshine boy started giving him stock tips.
David J. Decker:
Yes.
Jason Hartman:
So you gotta watch out for that and to be a good, prudent real estate investor, of course people should read your books, No. 1, but also, I think just the sort of simple, easy way to make sure you’re in good shape is look at the undervalued markets that you point out in your book, that we point out in our seminars, and diversify, diversify, diversify. Would you agree with that?
David J. Decker:
Sure. I mean you don’t want to have all your eggs in one basket. That applies whether you’re investing in stocks or you’re investing in real estate. Remember there is no national real estate market. It is a fiercely local business, so you can even see locations within a city where one location certainly does better than another and that’s – I’m not talking about some kind of foreign concept for people. I think as people consider that, they’ll say hey, yeah, that’s certainly happening in my town.
Jason Hartman:
Right, right, yeah, exactly. So you take the best asset class, real estate, the best investment, but diversify among the geographies and into the very localized markets and you do well when you do it that way.
David J. Decker:
Sure. I can’t imagine. I’ve looked at cap rates at things in Southern California. I just think it just makes no sense.
Jason Hartman:
Nothing makes sense here anymore.
David J. Decker:
But you can look at other – you can take that big run-up in equity that you’ve had and go into some of these other areas and really do well. And not only that, I’m sure you – perhaps it’s cooled off a little bit now, but certainly, in the past, we’ve had an auction environment to try to buy quality real estate. Imagine instead being able to go through the foreclosure process. Maybe we should talk about that if we still have a little bit of time, but there’s going to be some opportunities in foreclosures. We already started to talk about some of the recent increases that we’ve seen in foreclosures.
Jason Hartman:
I agree with you there, but here’s my question, Dave. I have a lot of clients ask and we’ve just got a couple of minutes left here, should they sell now if they’re talking about their own home or if they’re talking about their rental properties? Should they sell now and try to buy them back later, after the crash? How does that dynamic play out?
David J. Decker:
Let’s talk about what you do in case you’re worried about your own home getting wiped out in a real estate crash or reversal. And really, you cannot time the market in such a way that you’re going to be able to sell, buy back in after a crash, and protect your equity and then buy back in at a bargain. It’s not going to happen. It would only happen for a few people who get incredibly lucky. In the meantime, most people that try that are going to get burned. People have been advocating that type of advice for years. Jason, tell me, what would have happened had somebody followed that advice two years ago.
Jason Hartman:
Yeah, it wouldn’t have been good advice, especially in the overheated, hot markets.
David J. Decker:
Yeah, you would’ve missed out on some of the most highest appreciation that we’ve seen in this country in perhaps any kind of recent history.
Jason Hartman:
Dave, we are out of time and I’m sorry we’ve got to end here, but give us your website where people can buy the books and get additional information.
David J. Decker:
Thanks for that. Davidjdecker.com and it’s a link to Amazon.com, so you can certainly order with confidence, and we love to help people out by going to that link.
Jason Hartman:
Fantastic. Dave, thank you so much for being on the show. Great information, and listeners, we will look forward to talking with you next week. Signing out and happy investing.
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I’m here with a previous guest, Randy, and we are excited today to announce a new joint venture, a new seminar that we are offering for pre-retirees and retirees, entitled, “Fatten Your Golden Goose.” Now, I kinda think we should call that the Platinum Goose, but we’re going to call it “Fatten Your Golden Goose – Real Estate Strategies for Seniors and Pre-retirees.” Randy, tell us more about this exciting new seminar.
Randy:
Jason, thank you. Yeah, we’re very excited about this opportunity to talk to people that are about to retire. They’re in that area, maybe five or ten years at the most away from retirement, or they just entered retirement, and they’re looking at all of these opportunities, or I should say stresses, in their life of what to do in terms of making sure that they’re minimizing their taxes, that they have enough money to last their retirement. They’re looking at things like the IRAs and the 401ks that they put together over these years and they’re wondering, what’s really the best way to plan and use that money effectively as they go into retirement.
So what better to do is utilize real estate strategies to help these people minimize the taxes, increase their safety and liquidity, and help them to increase their income that they’ll have when they get into retirement?
Jason Hartman:
Excellent and this is on May 27. It’s a Tuesday evening here at our office in Costa Mesa and it’s from 5:30 – 9:00 p.m. What else can you tell us about this event?
Randy:
Well, aside from the ideas that we just mentioned, I think a big thing that people need to understand is that 2010 is going to be a very special year. In that, it’s going to be an opportunity for people to convert their regular IRAs or 401ks into Roth IRAs. And you know the benefit of a Roth IRA is that the money can continue to grow income tax deferred. But now, because it’s in a Roth, you can pull that income tax-free. The challenge is how do you move it from your traditional IRA or your rollover IRA to the Roth IRA without paying a bunch of taxes, and we’re going to give the people that attend this seminar some strategies to help them potentially eliminate 100 percent of that tax.
Jason Hartman:
And you know, Randy, that is a great strategy and folks listening, this is a big deal, a very unique strategy Randy has come up with and I think you’ll really like hearing more about it. So be sure to join us on May 27. We will look forward to seeing you there. Go to www.jasonhartman.com to get registered. Thanks, Randy.
Randy:
All right, Jason.
Jason Hartman:
I’m here with Nancy and wanted to talk to you about two of our fantastic markets. One is our tried and true market that we’ll talk about in a moment that is strengthening and has gotten better. And one is a newer market. Nancy, welcome.
Nancy:
Thank you.
Jason Hartman:
Tell us about Gulfport/Biloxi area and Long Beach area. That’s Long Beach, Mississippi, not California. We were there a few weeks ago. What’s the scoop?
Nancy:
Yeah, we had a great trip. Jason always talks about out of a disaster comes an opportunity and I really believe that’s what’s happening in Biloxi. The economy there via the casinos and the major boom on the ocean, they are now allowed to build on land. Biloxi is now the third largest gaming revenue area in the country, behind Atlantic City and Las Vegas.
Jason Hartman:
So what you’re saying is that before, the casinos had to be built on barges.
Nancy:
That’s right.
Jason Hartman:
And when Katrina came along and wiped them out, the city said, hey, let’s let them build on land. Let’s change the law. And that made the casinos so much more substantial. They’re huge now. They’re like 50 – 60 percent the size of a big glamorous Vegas casino.
Nancy:
Right and there are 11 casinos currently up and running and they’re employing about 17,000 people. That’s about 2,000 more than all the casinos that were open pre-Katrina.
Jason Hartman:
Tell us some of the big corporate names in the gaming business who are in Biloxi. I mean it’s amazing.
Nancy:
Yeah, Harrah’s is there right now with the Grand Casino in Biloxi and they’re also building a $700 million resort with Jimmy Buffet, the new Margaritaville Casino that will be open in 2010. MGM Mirage is there with the Beau Rivage, which is the sister casino to the Bellagio in Las Vegas.
Jason Hartman:
These are all big corporate names and those casinos, we were there on that trip, and they are unbelievable how swanky and glamorous they are.
Nancy:
The Hard Rock is there. Interesting tidbit about the Hard Rock: it was there before Katrina. The whole casino got destroyed. The guitar remained standing. It was the only thing on the beach that remained standing.
Jason Hartman:
Long live rock and roll.
Nancy:
And they are – they have rebuilt the Hard Rock and it’s just amazing inside there.
Jason Hartman:
I mean that Hard Rock Casino is gigantic, five, six levels of parking outside. I remember going through that parking garage. It was packed. I mean it’s just huge inside. It’s amazing how much money they have dumped into this area.
Nancy:
Right. They have actually inked about $1.3 billion in casino revenues last year. Prior to Katrina, the gaming revenues were about $800 million. So they’ve just almost doubled the revenues in just a couple years. They’re also, because of the casinos and the tourism, they do $100 million in golf each year. There’s 20 golf courses there. This industry is just spurring all kinds of job growth, not just from the casino workers, but also construction workers to build these places. There is a major military installation there with Keesler Air Force Base, the CB naval base, a couple Army and Navy National Guard installations and also the Stennis Space Center, which is NASA’s backup space shuttle installation. So there’s just a ton of activity there that we really think is going to make this one of our booming higher appreciation areas, and we’re very excited about that.
Jason Hartman:
And a shortage of housing because we had to look around a lot for that, Nancy. That’s excellent. Tell us real quickly about one of our tried and true markets, the market where I own and the market where many, many of our clients have invested, and it’s actually improving in terms of the rental market being very, very strong. Stronger than before, and this has just been a real dependable market. What’s the name of it? Everybody’s wondering.
Nancy:
This is Kansas City, Missouri, and Kansas City is the 13th largest metro in the U.S. The statistics in Kansas City are just excellent. This is a strong, stable rental market. We talk a lot about our rent-to-value ratios and it’s .7 percent being ideal. All of the properties that we have in Kansas City, we get at least a .8 percent RV ratio.
Jason Hartman:
On my property, my four-plex in Kansas City, I’m getting about a .82 percent RV ratio, so it’s phenomenal. It’s just a great property.
Nancy:
There are some positive cash flow opportunities in Kansas City, which we haven’t seen for a few years. So if you’re looking for a market with some positive cash each month and a .8 rent-to-value ratio, Kansas City is your market.
Jason Hartman:
Excellent. Thank you, Nancy.
Hey, I just wanted to announce a couple of quick things for you. If you are able to come to one of our live events, we would love to see you and meet you in person. We’ve had people fly in from all over the U.S. for them. So hopefully you can join us for some of those events.
I wanted to mention to you that we have a new offering, a free CD, a free audio CD, that you will really, really like. We’ve had so many people that have given us really good comments about them, and you can go to our website at www.jasonhartman.com and just fill out a little quick web form and you can either download it or you can have the physical CD mailed to you in the postal mail. But get the free CD, especially if you are a new listener. You need this. And if you are a regular listener and you’ve listened to all the other old shows, you don’t need the CD so much, but it will be a nice review for you either way. But if you’re a new listener, you definitely want to go to www.jasonhartman.com and request the free CD.
Remember that Platinum Properties Investor Network has moved. We are in our beautiful new office in Costa Mesa, California, 555 Anton, Suite 150, in Costa Mesa, California, 92626, and we’re right by world-famous South Coast Plaza. So come in for a visit and a little shopping.
Also, we just uploaded another video podcast and I’d highly recommend that you subscribe to that. There’s some stuff that just lends itself better to video than audio. If you want to see what’s on that, subscribe to it, you can go to www.jasonhartman.com. If you use iTunes or an iPod and you’re an Apple person, then you can go to the iTunes Store, type in Jason Hartman, and two podcasts will come up, the video podcast and the audio podcast. And you’re probably already, if you’re listening, a subscriber to the audio podcast, so make sure you get yourself a free subscription to the video podcast as well.
And this particular one that we just loaded in the video podcast is about Naked Short Sales and what goes on with this short sale and manipulation of the stock market. It’s a very interesting report from Bloomberg News and I think you’ll really learn a lot from that. So be sure to tune in and watch that.
Be sure to see appropriate disclaimers and disclosures on our website at www.jasonhartman.com. Remember that we are not tax or legal advisors.
Anyway, we’ll talk to you next week. Thanks for listening.
This material is the copyrighted creative work of either Jason Hartman, the Hartman Media Company, Platinum Properties Investor Network, Incorporated or the J. Hartman Company, all rights reserved.
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Duration: 36 minutes