Jason Hartman and Investment Counselor Carrie talk about a few prime markets where first time buyers are looking to buy. They discuss which ones are in the network and some of the properties they are selling. After they respond to some listener questions before sharing news about the upcoming Meet the Masters event.
Investor 0:00
Well, I like real estate just because I like the benefit of being able to have a mortgage pay off real estate over time so that when I retire, I have something I like the fact that it’s boring. I want to be able to be entertained and travel and do a lot of things in my retirement. And that boring investment of real estate allows me to do that.
Announcer 0:25
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions, this program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:15
Welcome to Episode 1219 1219. Thanks for joining us today. And we are going to talk about a few things today. Number one, where are the first time buyers looking to buy their first home? And what does that mean to us as income property investors? What is the first time buyer interest mean to us? Also, we asked you all when you signed up for meet the Masters, to tell us something interesting about yourself. And you know, we didn’t have time to talk about this before. But we were reading the comments today and we thought they were so well, just delightful. So we want to share a few of those with you and I’ve got our investment council carry with us here. She’s been on the show before. Carrie. Welcome back.
Carrie 2:03
Hey, Jason, thanks for having me.
Jason Hartman 2:05
So first time buyers. Well, this is not where they’re looking, by the way, we should clarify that. This is where first American title that has a big RESEARCH DIVISION where they think first time buyers should look, because these areas, and we’re in several of these markets have very good housing affordability, don’t they?
Carrie 2:28
Yeah, that’s right. Jason, it’s surprising that several of these markets are good for retail, but mostly for investors to for being affordable.
Jason Hartman 2:36
Yeah. So you mean retail, like a first time buyer would buy a retail home versus an investor purchase? Right,
Carrie 2:42
right. Yeah, the single family. newlyweds might be buying their first home. But these are ideal for more for investors, I would say.
Jason Hartman 2:50
Yeah, yeah. So some of the markets you looked at this list of 10 and then you created a little bit of a like a little cheat sheet on it, which I thought was great. You You just picked like three of the markets that we happen to be in. We’re not in all of these markets. And I think for good reason in some cases. So for example, Memphis, tell us a little bit about Memphis. Memphis is potentially our second longest running market, by the way, if anybody wants to know, and it’s not on this list coincidentally, but that doesn’t mean it’s not good. It’s still very good. Our longest running market that we have consistently recommended and been in since my appearance in this investor only industry back in 2004. Is drumroll please. Indianapolis. That’s our longest running market. Now. Many of the other markets we’ve been in and out of over time, because we’re area agnostic, and when the prices go up too much, and the rents don’t keep up, we stop recommending them. So yeah, the first one you profiled was Memphis with your cheat. Tell us a little bit about that.
Carrie 4:02
So Memphis along with Indianapolis, like you said, and Cincinnati is on this list. So Dayton is pretty close there in the Ohio market. So those are some of the markets that you’ll see the single families, a few multi families might come up, the price range will be around 60,200 40,000 for your purchase of the property, your RV ratio, the rent to value ratio will be around 1%, maybe a little bit higher 1.2%. So you could get $100,000 property, and it’ll rent at $1,000 a month. So that’s your 1% rv. The years built, Ohio will be a little bit older. Memphis, Indianapolis will be somewhat in the mid 90s. But you’re looking at an overall 1900 new belt. We do have some new belts in the Memphis and Mississippi markets. So
Jason Hartman 4:53
one of the things I want to say so basically what you did is you compared Memphis that was the most recent Terrible, I guess to Indianapolis and northern Indiana, which is not Indianapolis. That’s another market we have. And then York, Pennsylvania, our newest market. So good. I think that’s a good analysis. cash flow between $175 a month and $250 per month with normal financing. So yeah, that’s a good comparison. I think that’s very accurate. One thing I want to say, Carrie, is that it is important what we all call things so we can agree on the terms. And a funny trend has happened over the past. I don’t know, I’ll just say several years that people are calling multifamily. You know, duplexes, triplexes and for plexes, and when it’s four units and under a four Plex and under, that’s considered a residential property. You know, you still get the normal residential, the really good desirable financing on those verses if it’s five units or more. That’s considered a commercial property and the financing is not nearly as good. But investors. I want to all try and agree on a term here. And what I mean by that is this. I don’t think we should call duplexes triplexes. And for Plexus multifamily, yes, technically they are. I think those should be called plexes. And then one unit is obviously a single family home Well, unless it’s a condo, see, this is a little complicated and multifamily when most people hear that out in the broader world outside of our little world, right, multifamily is considered like an apartment complex, you know, that might have 25 units or might have 125 units. Okay, so I just sold a multifamily apartment complex that is 139 units that I own with one of our clients. By the way, Carrie, when the time comes, which won’t be long. I can’t wait to tell you about story of how I made like over $1.4 million on that deal by procrastinating that story’s coming up. I can’t tell you yet because we’re just getting through the inspections now and the deals not done. Okay. I’m gonna tell you later.
Carrie 7:16
Did you start this whole process like two years ago, three years ago, so I am anxious to hear what happened
Jason Hartman 7:22
will Oh, no, I didn’t know it wasn’t that much procrastination. This basically involved. The first offer came in and my partner Steve, who’s our client, you know, you’ve heard me talk about him before and probably met him. He wanted to do that first deal. And I kind of dilly dallying around. I was busy with other things and I didn’t sign the offer. I didn’t accept it. And then another offer came in. So, so procrastination can be a very lucrative habit. Sometimes. It’s usually not but once in a while, it works for you. Anyway. So multifamily is over five units and over. Okay, let’s agree that’s what it’s called plexes are two to four units. Okay, so anyway, a lot of you are saying multifamily, and I think we should distinguish that. So anyway, minor thing, call it whatever you want. That’s just my opinion, I could be wrong. Okay, next one carry?
Carrie 8:17
Well on that I mean, several of our local market specialists call it units or call it plexes. Call it flats, call it you know, so it’s also depends on the market of what the terminology is.
Jason Hartman 8:28
Exactly. That’s a really good point. Because geographically it varies. I remember when we were recommending another market that we’re not recommending right now, because again, you know, the dynamics just don’t continue to work. And what I mean by that, if you’re new to the show, if you’re already in the market, and you’ve got a stabilized property, just keep your property and write out the appreciation, congratulations, you know, good for you. And at some point, consider doing a two for one or a three for one exchange using 1031 exchange. And I’ve done that myself many times and talked about it On the show in this market they called it a four family or a three family or a two family you know meaning a duplex triplex or four Plex. So they do call it different things it’s regional. Yeah Good point.
Carrie 9:11
Yep. So another market on this list going back to the most affordable cities is Tampa Florida, which we’re starting to look at a little bit more markets within the Florida
Jason Hartman 9:23
Yeah, I’m I’m a big fan of Tampa. It’s great, but it just got too expensive. We did have some properties on the outskirts of Tampa and even they got a little too expensive. So Carrie, when you told me that you were working on onboarding a new local market specialist in the in the greater Tampa area I was really excited
Carrie 9:41
Yeah, it’ll be some good stuff there some good new construction quality home so that’ll be really good for investors
Jason Hartman 9:47
if we can get it. You know, is the old saying goes my mom always said Jason. Don’t count your chickens before they hatch. Okay.
Carrie 9:58
But another market in for I would be the Jacksonville and Dallas, Texas, they kind of compare AS FAR AS numbers. You’ll see single family, you’ll see multiplexes. So am I calling it multi Plexus? Is that right? I just call them plexus. But sure. And then some short term rentals as well. So those price points will be a little bit higher, you’ll be in the 140s to 350s. even higher for short term rentals, the RV ratio will be lower, you’ll be at around 2.7 to 1%. So just under because the higher you go in the price of the property, the lower you’re going to go on the rental value ratio.
Jason Hartman 10:36
Right, right. And that’s probably even a little better than that for a short term rental. But remember something a short term rental is more of a business and less of an investment. Okay, because it requires a little more attention. And also, you know, like I’ve said, I’ve warned you about that I even registered a domain name related to this. And my prediction, the short term rentals Just remember when the economy swings, be prepared. There’s a lot of supply of those out there. I think they’re fine. I just want you to look at the performer. And I want you to say to yourself and do the math based on Well, what if the overall income on that property declined by 20%? If that happened, would I still be happy with it? And with these particular properties, I think you would be happy with it because the numbers are still quite good. But there’s a lot of froth out there. people buying million dollar short term rental properties $2 million short term rental properties, and wow, the next big recessionary swing. I don’t know. I think they’re gonna be in trouble. Exactly.
Carrie 11:47
Yeah. You got to look at it. Is it going to be now good now as a short term rental getting 1300 a month, and it’s 510 years is going to be good. The same thing at 1300 a month, not just or all week. I’m sorry. 1300 a week, you know?
Jason Hartman 12:02
Well, in you know, I think that I mean, you have some definite benefits in the short term rental thing, because it allows you to play in a more cyclical type segment of the market where you have, you know, if you can only do 10, Fannie Mae and Freddie Mac loans, you’ve got a bigger loan balance working for you. So you’ve got more leverage. So, I mean, there’s definitely some benefits. Okay, no question about it. I just want you to be prepared. And to say, I don’t think that kind of income is going to last forever, you know, vacations are optional. And when a recession hits, they cut down on them and yes, people might be nearby vacationers. Right. They might be staycation or is that just go rent a short term rental within driving distance. That’s all possible. I’m just being my conservative self. You know, I want to always always be that way. So Okay, go ahead. Tell us more. Yeah, the cheat sheet.
Carrie 12:56
So the last one we have on the cheat sheet for one of our top markets is Jackson, Mississippi, this would be one of our highest cash flowing markets, I would say, are you, you know, around 250 to 300 a month, they will be older properties as well. 1920s to 1990s 1% plus RV ratio, and they’re going to be the lower end price range 60,200 hundred 15,000. Mostly, pretty much all of ours will be single families as well. In Of course, you know, you do have all the other maintenance issues of older homes as well. But, you know, you find that nice property in the nice neighborhood and you’re going to be cash flowing pretty well. Yeah.
Jason Hartman 13:38
Hey, the cash flow is great. And we have had some problems with one of our providers there. So you know, we have options and our investment counselors will counsel you through the right properties in the right markets. One of the things we do here is not just investment counseling, but investment therapy. And so in our investment therapy practice, we try and match the investor up a little bit based on temperament. And based on what they want with the right local market specialist and the right market. Because, you know, some people, they’re willing to like dig in a little more and be more engaged and more involved in some people. They just don’t want to bother with it, and they’re going to be annoyed. So we try and help you match all that up. So that’s a big part of what we do, but, but good stuff. That’s, that’s good. Those affordable markets are what we want. Those are the good linear markets, where they follow commandment number five, which is Thou shalt not gamble. The property must make sense the day you buy it, or you don’t buy it. Okay, so good. Thanks for sharing that Carrie. Yep. Do you want to go to some of these comments or you know what, right now, let’s come back. With that. Let’s go to let’s take a quick break. And let’s play one of our blog cast. Now these are handpicked for you. And you can also get these on your in a better state quietly,
Carrie 15:06
or Alexa device.
Jason Hartman 15:09
So if you have an Amazon Echo and you have E Ll
Carrie 15:13
e x and
Jason Hartman 15:14
you can subscribe to Jason Hartman’s real estate update there, and you can get them every day. But here’s one for you right now, and we’ll be back right after this.
Carrie 15:24
Here is today’s podcast.
Carrie 15:29
The millennial struggle, house and home. If you participate in social media, you’ve likely seen the memes that put millennials into the microscope. statements like they’re on committed or they spend too much time indoors, have a way of downplaying the types of jobs and job market they’re being presented with. Then again, social media has a way of taking everything to one extreme or another. In actuality millennials do change jobs a lot, but it isn’t because their perpetual job hoppers without the ability to see anything through instead their career minded individuals with An eye for the future. When they’re moving jobs, they’re doing it for about 25% more money every time and what to do with this extra money? Well, Jason Hartman recommends investing in real estate. But moving from job to job, Millennials are developing a diverse skill set that will serve them well in the future. The reality of the job market has been that it is difficult to immediately get a high paying job out of college. So Millennials are taking lower paying jobs for shorter periods of time. And education simply isn’t enough. Employers are seeking employees with demonstrated on the job skills, even if that job doesn’t require a college degree. wages have stagnated across the board increasing only in health care. There are pay cuts everywhere and annual pay is about $10,000 less than what we saw 10 years ago. It’s causing millennials to stick with jobs when they’re able to switch when they’ve developed the skills and when an opportunity opens up. Because of this growth requires them to switch jobs if they hope to advance. Baby Boomers had pensions that encouraged them to stay with one particular company for a long time or even a lifetime. Now, we aren’t seeing that and millennials risk becoming more financially at risk and their parents were years ago. And there are ways to combat this becoming financially literate exploring investment opportunities saving, but the risk is real. Overall, Millennials are more educated than generations before them, but they’re more likely to live in poverty and be unemployed. Some attribute this to their need to find a job that corresponds with what they are passionate about. But it has more to do with the massive student loan debt they’ve been saddled with. So we’re seeing millennials who despite popular opinion, are focusing less on passions and more on the money they’re struggling to make. As the job market begins to turn around and hiring is on the rise, Millennials are also increasing a drop in unemployment numbers. There are and not just among millennials, more people changing jobs, which is a positive sign for the job market. For millennials who wish to develop their skill set by moving jobs, there are a few things to keep in mind. First changing companies to Frequently can inhibit growth because it doesn’t allow employees to develop connections and meaningful relationships with colleagues. If you leave before you have time to complete a large project, you may not have as good of a reference, making it more difficult for you to move up in your career. As a sort of compromise, you can always ask to push back your start date a month or so. It gives you time to wrap up any projects you might be working on all allowing you to develop a new set of skills. Before you assume that millennials are only moving from different jobs because they’re restless or in search of the perfect passion project. Remember that many desire permanency? After all, they’ve got some massive debt to deal with.
Carrie 18:38
The millennial struggle to find housing home, or more accurately, a place to live in a place to work. It’s hard to choose a city anyway and it’s even more difficult when you’re on the lookout for a job. The problem is that the best cities for jobs seem to be the most expensive to live in. Sure there are a few that rate highly for both housing affordability and upward mobility and unemployment, but not Everyone wants to live in Salt Lake City, Utah. in Dayton, Ohio, you’ll be able to find a nice place to live. In San Francisco, you’ll be lucky to find any place to live. Guess which is easier to find employment in. cities like San Jose offer a lot of opportunities for millennials and in a shorter amount of time, there’s a much better chance you’ll advance your career more quickly in these types of cities. Ultimately, it is the great struggle of achieving the American dream. Young people go to college, get jobs getting married, buy houses, raise children. But that’s difficult in areas where the job market remains relatively stagnant and wages do not increase. The American Dream is getting harder to come by because Millennials are being asked to choose. Studies have shown that the American Dream is alive in some cities, but completely obsolete or at least dying and others. we’re choosing cities based on short term reasons related to our suffering finances. Jason Hartman doesn’t particularly like California, having lived there himself, and that’s in part because of the real estate market. There, it just isn’t affordable. It’s easier to make more money in the West and in the northeast, but housing prices in those large cities reflect this ease. Sure, there are outliers, but it is a growing conundrum for the millennial generation. The three cities in the US with at least half of available houses being affordable to middle class millennials, and the high score for employment mobility are Pittsburgh, Minneapolis and Salt Lake City. What do you think? Would you be willing to live in any of those cities? It is certainly hard to say but it is worth thinking about. Before blaming millennials who tend to be extremely motivated, tech savvy and educated, removing jobs or making less money, it is important to acknowledge the specific hand they’ve been dealt. Instead of fighting on social media about the value of each generation. Let’s embrace the particular quirks of each and figure out how we develop a stable growing economy with enough jobs for everyone.
Jason Hartman 20:52
Thanks for listening to this audio blog and please see disclaimers and important information at the website. So one of the things we We did on the last meet the Masters is on the registration when people were buying their tickets, we added a little thing to the forum. And we said, Tell us something interesting about yourself. Some of these comments were awesome. And we didn’t do that right at the beginning. So I know you’re thinking, I didn’t see that when I registered for meet the masters. We did it, like few weeks into the registration process. So not all of you got to do this. But thanks to those of you who did, and we really enjoyed all of your comments. We can’t read them all on the air. But the first one is from Michael and what did he say? Carrie?
Carrie 21:38
Yeah, so Michael said for 21 years of my life home was on an island 20 miles by 30 miles.
Jason Hartman 21:44
Wow. I wonder what island that was. I wish Michael would have told us Michael, you got to go to Jason hartman.com. Slash ask and tell us what Island I’m dying of curiosity. Just a little tiny island. That must have been a really interesting life. There. Did you just decide you wanted to get off right away after 21 years? Does this have anything to do with your interest in real estate? You know by now, if you’ve been investing with us, you probably purchased that whole island.
Carrie 22:13
renting it out.
Jason Hartman 22:14
Yeah, absolutely. You could rent it out to your your former neighbors. Okay, so Robert said that he’s a full time investor. That’s really Robert and Anita, full time investor in multifamily. Now, I don’t know what that means. Does that mean big giant apartment complexes or triplexes? I’m not sure. Passionate about real estate, citizen of the world and has three different passports, just in case I love it. You know, my girlfriend Carmen has three different passports do? She has us? She was born in Venezuela and her family background is Spanish so she can travel in and out of Europe real easily and not that you’d want to go to Venezuela but she’s got three also I’m quite envious. I wish I had another passport. You know, just in ever need one? I don’t know why, but it sounds cool. Sounds like you’re an international man of mystery. So that’s good. Okay, this next comment is so cute. I love it. I love this next one, Gary. Yeah.
Carrie 23:12
So Sean said, I have only kissed one girl in my life who is his wife of 24 years.
Carrie 23:19
So cute.
Jason Hartman 23:21
So cute. So the only question is we got to ask John’s wife but I wonder, Is he good kisser? Okay. No, no. Okay. Kevin said I visited 37 countries 44 states within the US. And 24 of the US is national parks. Wow, that’s amazing. 44 states so you only got six more states to go to. And 37 countries you’re almost catching up with me. I’m an 83. Now, one of my problems. I Kevin, I tell you. I’m finding it really hard to get to 100 because I keep on Going back to the same countries over and over. Gotta just get to 100. That’s the goal anyway. Okay, good.
Carrie 24:06
What is the next comment? So James says that he is a seasoned musical theatre veteran with over 100 performances and production credits.
Jason Hartman 24:15
That’s going to be James that came to the venture alliance in Savannah, right as a guest. Yep, it is Jay. Oh, yeah. Yeah, that’s awesome. James is doing some great stuff with his theater company, and, you know, just really a great message behind it and all that stuff. So, good job. That’s, that’s awesome. Okay, so Nathan said that he just got his private pilot’s license. And that is so cool. Nathan, be careful. Okay. You know, I was close to getting my private pilot’s license. And I gotta tell you, I love aviation. I’m a big fan. I have 33 hours of flying experience and the hardest part well, I think it’s the hardest part of flying a plane is landing taking off is really quite easy. You know, the wind just picture right up. The landing is that’s, that’s hard. And I did land a couple of times when I was over in Hawaii, I took a lesson over there. And I find it to be a really cool thing when you go visit places, see if you can take a flying lesson there. And I did that in Canada. Once on the east coast of Canada, I did it in Hawaii. And I also did it in Iceland, which I thought was interesting. It’s it’s neat when you can just go take a private plane out and fly it but here’s what happened. I went to ground school to get my pilot’s license and this was about 15 years ago. And for once in my life, Gary, I actually listened to my mother. And guess what she said she she said, Jason, you are too busy to fly often. And if you don’t fly, often, you’re going to have an accident. And she said, take that up as where you decide to retire or take it easy in your life. Not when you’re really motivated and business and, you know, doing all this other stuff, do it when you can fly every week, and then you’ll be good at and you know what I think that was great advice. I never got my license because of that, you know, Mom Mom told me not to and I actually listened to her and I think she was right. You know, the big deal in flying is the 200 hour mark. If you get 200 hours under your belt, your insurance goes way down. You’re probably going to live, but until then you better be really careful. So Nathan, be careful. But congratulations. That’s awesome. I love that. All right, What’s the next one?
Carrie 26:34
Another James. He said he’s ran with the Bulls in Spain.
Jason Hartman 26:38
Wow. James, are you crazy?
Carrie 26:43
That something
Jason Hartman 26:46
scary. I’d love to hear more about that one. Wow.
Carrie 26:50
Yeah, he made it out. So that’s good,
Jason Hartman 26:52
but apparently he made it now. When you saw James at meet the master does he have any wounds or anything you know, like you Like a big gouge and in his chest from horns or anything, hopefully not.
Carrie 27:05
clean cut, clean cut.
Jason Hartman 27:06
Yeah, very good. Very good. Yeah, that’s awesome. Hey, these are awesome comments. Sorry, we couldn’t read them all. We had a whole bunch more, and they’re all great. So thank you for sharing an intimate look in your life, especially that you only get one girl. That’s cool. Thank you for that. And, Carrie, let’s wrap it up any closing thoughts, anything going on in the market, you want to share with our listeners questions that your clients are asking you as an investment counselor or anything in particular,
Carrie 27:35
you know, a lot of it is just which market to invest in what we just went over where to start, how to get going. So have a session with your investment counselor, we kind of covered some of the basics for which markets are good for appreciation, cash flow, but yeah, for the most part, it’s getting started or getting past that number 10 Mark, so working with a lot of clients on portfolio financing, and finishing up their conventional loans.
Jason Hartman 28:00
Right, and what do you mean by finishing up is getting them their first 10. And again, if you’re married, that’s each of you, right, each spouse can get 10 of those loans. As long as you know, both can qualify that under the normal qualifying requirements. But, but 10 conventional Fannie Mae, Freddie Mac style loans are available to each person. And then after that, you got to get a little more creative and we can certainly help you do it. It’s not going to be quite as good a deal is those conventional what they call agency loans, but still, there’s some very good non conventional financing out there and, and we have a lot of good sources for that so we can help you with that too. So great, good stuff. Carrie, thanks for joining me. Thank you to all of you who have been forwarding your spam to me at reviews at Jason Hartman calm please forward your real estate spam. And here’s what I mean by that is, there are some unscrupulous people out there who are spamming. And you know, we have people that have come to us and said, Hey, who is this person? Who is this company? I never signed up for their email and suddenly I’m getting emails from them. They’re spamming me. So yeah, we want to know about that because we want to clean up the industry clean it up. So can spam as they say, right? So yeah, forward your spam to reviews at Jason Hartman calm reviews at Jason Hartman calm and thank you to all of those of you who’ve done it so far, and keep it coming. We will see you tomorrow on the next episode. And until then, happy investing. Thank you so much for listening. Please be sure to subscribe so that you don’t miss
Jason Hartman 29:44
any episodes.
Jason Hartman 29:46
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