Jason Hartman sits down one on one with his audience to talk about a couple of important things in the real estate market. He talks about why creative real estate investing is not beneficial to his clients, he also talks about Merrill Lynch’s annual report on retirees, California’s drought problem and why it matters to the rest of the US, and much more on today’s Creating Wealth show.
1:10 – Can you believe we’re almost at our 500 episodes?
5:00 – Jason shares his story about a creative real estate ‘guru’ and why creative real estate is not practical for his clients.
5:05 – Big corporations must have a budget just to pay government fines.
20:20 – Jason touches on the subject of the water problem in California.
27:05 – Jason breaks down how much water it takes to grow a single vegetable, nut, and fruit.
31:30 – Zillow came out with four interesting statistics about the United States real estate market.
39:10 – Remember to sign up to Jason Hartman’s Memphis tour at JasonHartman.com
Mentioned In This Episode:
The Water Secret by Howard Murad
Diet for a New America by John Robbins
Irrational Exuberance Part Two by Robert Shiller
Welcome to the Creating Wealth show. This is your host Jason Hartman. This is episode number 496. 496. We’re almost at the big magic 500 episode number people. Can you believe it? I know some of you have been with me through everyone of those episodes. In fact, I know some of you have been with me for everyone of those episodes more than one time. I really appreciate that. I can’t imagine I’m actually interesting enough for that, but hey, I’m not going to complain if you’re listening. So, thank you for listening, much, much appreciated and thank you for telling your friends about the show too. So, hey, this is episode 496 and gosh, I just kind of got some different items I want to talk with you about. You know my kind of stream of consciousness shows, which this won’t exactly be one because I want to hit on 5 separate topics here, okay.
The first one is creative real estate investing. Creating real estate investing. Now, that can mean so many different things to so many different people and we’ve certainty talked about it on past episodes, you know, that’s really how I became interested in real estate, because I remember I watched this guy on TV and he was talking about how you can buy property with nothing down and I was 16 years old and I didn’t have anything to put down, so I thought, okay, that’s interesting. It made me pay attention. Little did I know back at my gullible age that, you know, most of these people are generally kind of con artists and are hype masters. They tell you all kinds of things that maybe that can’t really be done.
So, when it comes to creative real estate financing. I just kind of to review and reinvigorate my interests. Over the years I have been to a zillion creative real estate seminars and read a zillion books on the topic and no, that zillion isn’t an exact number, but it’s still a lot whatever that number is. I don’t know. What these guys teach you how to do and they’re mostly guys, because women wouldn’t engage in such stuff, but they’re mostly guys. What they teach you how to do is something that is, you know, in the real world, it is possible, I mean, the ones that are telling you to do something that is truly impossible, they usually get caught and, you know, maybe 20% slip through the cracks and the authorities never get them, but the federal trade commission usually catches up with these guys and some way or another. You know, if they’re bad people they might just get busted for something else or you know, sued for something else or whatever it is, right. So, you know, 80% of them they get nailed at some point, but 20% of them are still out there spewing their garbage and they don’t get away with it.
Now, here’s the thing, I don’t want to say, you know, some of this education is really pretty good and you can certainty do creative things with real estate and mostly when you talk about creative real estate investing, it is really all about the financing. Now, there are other elements to creative real estate investing, but it’s mostly about the financing. It’s mostly about the idea of buying with nothing down and these things can be done, alright.
So, I don’t want to say by any means that they’re not possible and I remember at one of my mastermind meetings I was in Florida and this was just a couple of months ago. I remember we had a speaker come up who was an old guy who has been around forever who is a creative real estate guy and he was by the way was one of the legit guys out there teaching creative investing and creative financing and he got up and spoke to the group.
It was interesting. He definitely looked the part. He had shorts on and terrible shoes and a coffee stain on his white shirt. He was kind of unkempt, but probably a really, really rich dude nonetheless and you can be fooled by appearances, because usually people that have some real wealth, you know, they don’t feel compelled to show it off, right. They are usually a little more modest in their wealth, but I don’t know. That can go either way obviously. Some are, some aren’t. Everybody is different, right.
So, anyway, he’s giving this presentation on creative investing and we’re listening to him with bated breathe and kind of wanna hear what he’s going to say and most of us in the room have been around the block a couple of times. It’s not our first rodeo, okay Jason, dispense with the cliches, but we’ve seen it, done it, been there, done that, right. So, as he’s talking my friend sitting next to me, we look over at each other and we think, really? I mean, you know, we kind of whisper to each other that we don’t have time for this stuff, you know, basically what he was describing at the time that we started whispering between each other and I know that’s bad manners by the way, but I don’t think the speaker really noticed us doing, so we got away with it. We said, how could we possibly have time to do this and here’s what he was describing and here’s why creative real estate investing is possible it’s just not even close to practical most of the time!
He was talking about this deal he did. He bought a house and keep in mind, these are sometimes relatively small profits for a lot of effort and, you know, in finding the deal and orchestrating the deal and a lot of these never go through because they’re so complex and there are so many moving parts, blah blah blah, right? So, he’s describing this deal and he says to the owner, he says, if you sell the house, what are you going to do with the money? And he says, well, I’m really going to just pay off medical bills. I can’t remember if the owner or the owner’s spouse was sick, but there was some medical bills in the family, right, that they had to pay.
The owner says, well, I’m going to pay off the medical bills and then the creative real estate investor who was speaking to our group, he says, well, how much are the medical bills? The guy says, I think he said it was like $40,000 or some number like that and he said, oh okay, well what if I can figure out a way for you to not have to worry about it, says the creative real estate investor. He says, well, yeah, I mean, I guess that’ll be okay, I mean, I don’t care. My whole point was I’d sell the house and pay off the medical bills and the creative real estate investor says, well, I think I might have a solution for you. You know, being the good creative guy, right.
He says, let me get back to you. He gets up, leaves the kitchen table where he’s talking to the guy and can you imagine the endless number of meetings and presentations you’d have to have to make these deals happen? It’s just, I mean, I’ve known people that have done this for many, many – for decades and I know what they go through, you know, and he says, well, listen, let me, before I go, let me you have your contact, you know, of the company that you owe the medical bills to.
So the owner says, eh, sure, what can I lose, you know, here’s all the information. He goes over the next day, he contacts the company to which the owner of that property is paying the medical bills and you probably know what I’m going to say here, right? You know, a lot of you listening already know what I’m going to say. He says, well, you know, with that company, he, the creative investor tries to number one renegotiate the debt, okay.
So, maybe the term is longer, the interest rate is lower, he basically tries to do a loan modification. You know, we’ve talked about loan modifications many times. He tries to renegotiate the and if he can’t renegotiate the debt., he tries to substitute the burrower or substitute the collateral. This is known as a substitution of collateral, okay, and he says to the company that’s collecting the medical bills, look, if I pay you rather than John Doe who has this house that I want to buy pays you, is that okay? The company will say, you know, maybe, maybe not, but this company he said agreed to it. So, they drew up some paper work and then, you know, the creative real investor took on the obligation and he bought the house and blah blah, you know, like assumed the underline mortgage, bought the house, the owner’s equity instead of giving the owner money, he took on the debt of his medical bills.
Look, like I said, this can be done, but really, I mean, just I think I know who I am talking to, because I know most of you who are listening who are actually clients of ours, you wouldn’t have time for this kind of silliness in a million years. Our client, our client is not the type of person who is running around to lenders to renegotiate debts of owners and getting told no most of the time, by the way, and you know, 2% of the time they get a yes and the deal actually goes forward and 98% of the time they hear, no, we can’t do that, and the deal never happens, right. You’re not the kind of person either who’s picking up a hammer and putting on old overalls with paint stains on them and paying houses on the weekend.
No, you’re not that type of person, right. I don’t think you are. You’re not the do it yourselfer. You are the busy person, maybe a busy professionally, maybe a busy entrepreneur, maybe a busy soccer mom, I don’t know, I know you guys all do different stuff, because we see you at our events and talk to you when you’re buying properties through us and you don’t have time to do all of this stuff yourself. So, when people ask me, Jason, you know, I get this occasional thing, why don’t you talk more about creative investing? Well, this is why! Because, you know, that’s just not our clientele.
Our clientele, they want to usually leave their corporate job or have more financial freedom or have as Fernando said on the show, financial independence day and they already are usually successful in their business or their career and they have some money to invest and they just want to get a really, really good return on that money and they want to be in control of their future. They don’t want to trust it to some scumbag criminal on Wall Street or some financial advisor who is going to rip them off or at least if not rip them off, give them really low crummy returns on their investment, okay. So, that’s our client. End of discussion, right? That’s our client. So, I’m speaking to our client, at least I hope I am, if I’m not go to JasonHartman.com, click on the leave voice mail button and tell me what I fool I am, okay and tell me what you wanna hear and give me more suggestions for the show.
A couple of other things I want to talk to you about. That’s the creative financing, creative thing. Here is interesting, now, years ago, by the way I gotta get some updated statistics on this, because I am sure it’s even rolling as a snowball rolls down the hill. The idea is the snowball gets bigger, right. A rolling stone gathers no moss. I’m full of cliches today, aren’t I? Well, this, I used to say years ago that in, when I would do the creating wealth seminar within five years 26 million Americans will hit retirement age and, of course, I’m referring to the baby boomers and they’re rapid succession into their 60s, right, and what do they want? When people get older and they become more free in terms of they can actually choose where they want to live rather than have to live in a place by necessity, rather than have to live there because of a job, because of kids in school, because of whatever, they can actually make choice, they can make a choice out of free will and they can go and live where they want, right.
So, interesting article by Carol Ellis recently. It talks about a Merrill Lynch report and you know how I hate Merrill Lynch, right, but none the line, you know, all these companies spend a bunch of money on research, they put out lots of reports, gives them lots of press release and lots of PR so that they can get people to invest with them and give them lousy returns or even worse. Isn’t it funny how Merrill Lynch is at the center of all these scandals whether it be the Orange County bankruptcy back in 1994-1995.
It’s just unbelievable and it’s not, listen, I don’t need to just pick on Merrill Lynch, they’re all at the center of all these scandals it seems like, these big financial firms. You know, they’ll pay the government a couple hundred million dollars in fine and then go on their way and, you know, few years later, you hear them doing something else like that again, right? It almost seems, doesn’t it seem like it’s part of their business plan that they must set aside in their corporate budget a reserve fund to pay for fines and litigation, yeah, you know, they probably do. It’s probably just part of the business plan. I know I’m making assumptions here, but anyway, that’s my opinion. I could be wrong, but I doubt it.
Okay, so, I’m just going to read you a little bit of this, When it comes to home ownership, the magic number may be a little bit farther away than you thought, according to a new study from Merrill Lynch. Not until people reach the age of 61 years old do they truly free to choose where they most want to live. Merrill Lynch analysis pinpointed 61 years of age as the “freedom threshold” for homeowners. Meaning that these individuals tend to say that their choices in homes are determined by their personal preferences instead of their employment. Indeed 2/3rds of retirees surveyed said they are now living in the best home of their lives. The researcher reports.
So, why do they wait so long for this, right? So we know it’s the issue of, you know, they own a business, they’ve got a job or their spouse has a business or a job and they need to stay in a city that they don’t necessarily want to live in so what I used to say just to bring this point home, because once again many years, I mean, this is quite literally 11 years after I was saying this, I see an article about it. So, what I used to say is that in fives years 26 million people hit retirement and what do they have in common in terms of their housing choices? Well, they want to live the first biggest thing, they generally want to live in warmer climates. So, the migration is southward. It’s too southern states.
Number two, they want to live in areas with natural beauty, recreational opportunities, they want to live in areas with diverse age groups rather than living in a gated community of old people, right. I think that is very legit. In fact it’s very interesting. It’s always been interesting to me the migration trend of older people and retirees and by the way, older is a moving target, you’ve heard me talk about that before. If you want to know more about that, listen to my newest hottest show called the longevity show. The Longevity and Biohacking show and I’m going to tell you about some of the content from that in just a moment by the way.
So, older is really a moving target. I mean, 61 is not old anymore, okay, but it’s that moving target, right, but they want to live in college towns and I just always thought that was pretty interesting like what would people that age want to have to do with college towns. Well, you know, college towns besides all the hassle of the drunk kids and stupidity and little bit of crime problems usually too that come with all of that, you know, there’s a certain stimulation about it. There’s a certain vibe. There’s a certain intellectual stimulation, all of that stuff.
So, that’s always kind of fascinated me, but natural beauty, recreational opportunities, warm climate, biggest. That’s the biggest problem probably. Low cost of living, that’s another big one, and then the other thing is, you know, most people who as they go on in life, they realize that leftist political ideologies don’t work. Why do they realize that, well, because they don’t! Hey, my opinion again. They usually want to get away from these big government places with high taxes and government intrusion in their lives.
So, guess what, have you happened to notice that the vast majority of markets we recommend are in areas like that. It’s no coinkydink, oh, coincidence, anyway. It’s no coinkydink that that’s where the vast majority of our markets are, in those areas with warm climates, natural beauty, low cost of living, less government, you know, good health care is of course very important.
So, as I was saying in 2004, it’s now 2015 and someone finally wrote an article about it. They probably did a lot sooner I just didn’t catch it. Can’t read every article unfortunately. Are you just so looking forward to the date when you can download all news and all stuff into your brain with like a USB, I can’t wait, but then the government would probably download all kinds of, you know, big brother kind of thoughts into our brains too, so that won’t be good.
Anyway, so water, water, water, wow. No, I don’t need a drink of water right now, but the state of California sure does. This is an interesting article in the leftist magazine, see I like to balance m reading out, this is Mother Jones magazine, okay. Mother Jones, right. A very interesting article in Mother Jones about California’s drought and what a significant disaster is.
We sometimes forget, I mean, I certainty forget because I don’t always think of California this, but it is like the breadbasket of the United States and other parts of the world as well. It is literally amazing. It’s like an agricultural power house and that’s why this drought in California affects a lot more than California, but I think things like this and the earth quake problem and obviously all the other issues with California and there are many, that’s my home state, of course. Really could ultimately have some pretty negative effects on the real estate market there and of course, it’s a cyclical market that we do not recommend.
It’s just, you know, cash flow doesn’t work in California, pretty much anywhere in California. It doesn’t even, it’s amazing, we keep trying to make that work. I keep saying to my area coordinator who is responsible for finding local market specialists, hey, can you find anybody in Bakersfield. Can we open up Bakersfield, can you try Riverside and San Bernardino again. Can you try Imperial County, can you try Fresno even. I mean, just anything! Is there anything we can do in California. No. We just can’t make it work. The numbers just do not work. Good markets, bad markets, they get better in bad markets, but still, you just can’t make it work in California. I would love to recommend some of the areas there, but anyway, maybe it’s a good idea that it’s never worked, because boy, this is significant.
So, let me share with you a couple of amazing eye-popping stats here. Did you know, okay, and this is how the California drought affects the whole country, that have the entire country’s production of these items, here’s how much comes from California alone. Almonds, do you like almonds? I do. I love almond milk by the way. I don’t know why anybody would drink cow juice. Isn’t cow juice just disgusting? I mean, real milk, ick, gross, but almond milk is fantastic and I think it’s healthy at least. Certainty better than soy or rice milk or any of those. Almond milk is my favorite choice, okay.
So 99.9% of all US almonds come from, you guessed it, California. 99% of all US walnuts. 98% of all pistachios. 95% of all the broccoli. Broccoli is quite likely the healthiest food on planet earth and 95% of it comes from California. 92% of all the strawberries 91% of all the grapes. 90% of all the tomatoes, don’t forget your lycopene, it’s good for your eyeballs. 74% of all the lettuce.
Now, the other interesting point in this Mother Jones article, there’s a little graphic here that’s kind of cool is how thirsty is your food and here’s where I want to give a little segue as I talk about my upcoming interview on the Longevity Show, you know, look, if you’re going to invest in real estate and create wealth through real estate, hopefully you’re planning to live a long healthy life, have along life span, and a long health span , so these two things definitely go together, right.
One of the things that it is critically important and I’ve known it and I think, you know, we’ve been drawn to it. I remember seeing a infomercial many years ago and I think it was with the late Jack LaLanne, who by the way I happened to meet one time at a restaurant in Morro Bay, California. Jack LaLanne, I think he was on the infomercial selling his juicer. It might have been Ron Popeil. He was the other big Ronco infomercial guru guy.
They were promoting the juicer and they said, look over on this table and the table had a bunch of fruits and vegetables and they were just so colorful and vibrant and beautiful looking that your eye is naturally drawn to them and then look over to the other table and that table had a bunch of meats and breads and guess what color that is, right. You could literally eat by color. I mean, that’s my philosophy is just trying eat by color and I’m not a vegetarian. I tried it for awhile, I didn’t like it. Definitely increasing your fruit and veggie intake is a good thing, you know, just like your mother told you years ago, right, we all know this, but one of the things that’s really interesting is I just finished Dr. Howard Murad’s book, I don’t have the title in front of me. I’ll look for it as I’m thinking and talking and trying to do ten things at once.
I just finished that book and it was really quite excellent I thought and I booked him on the Longevity show and the book is called The Water Secret and what he talks about is how water is really the basis for all life and it’s the basis for our health and our Longevity and he says that your health and your life and your life span is largely determined and I’m buying this theory by the way, is largely determined by the amount of water your cells can retain and process.
You know what, that makes a lot of sense to me and one of his things is you can keep drinking water all day long and basically drown yourself in water, but if your cells are not functioning properly to retain and process that water, it doesn’t work. You just get bloated by the water and you have water weight and so one of the ways he says that you really want to do this is you want to eat your water. You want to eat water rich foods.
Now, I don’t think this chart in Mother Jones is exactly the same as that idea, but I do think it’s close, because he talks about, well, in the Mother Jones article it talks about how thirsty is your food and to grow one head of broccoli it takes 5.4 gallons of water, one walnut, 4.9 gallons, one head of lettuce, 3.5 gallons, one tomato, 3.3 gallons of water, and a strawberry 0.4 gallons of water, okay, but that’s just one strawberry. It’s not one head of broccoli. It’s not as much food. I remember in a book I read years ago called Diet for a New America by John Robbins heir to the Baskin-Robbins fortune. He talked about how watermelon takes 42 gallons of water to grow one pound of edible watermelon, you know, it’s obviously very water rich and pretty much everybody likes to eat it, I sure do, because it’s quenching your thirst as you’re eating. So, I just wanted to share that little idea with you. The book is called The Water Secret by Howard Murad. I’m interviewing him for the longevity show at the end of the next month.
Okay, next topic. Enough of this none real estate stuff. Let’s get back to business here for a moment. I’m not going to do an expensive talk on this today, you know when you get me going it’s hard to shut me up right, so Doug, who has been on the show before, has got me kind of Zillow a lot more lately and, of course, this is a handy dandy real estate website. Most people in the industry, most people in real estate will tell you they don’t like Zillow and that Zillow is responsible for messing up a lot of their deals by misleading people as to the market values of properties regardless of what side of the table they’re on and so forth.
You know, I do think there’s a little something to that. Zillow is certainty far, far from perfect, but if you don’t expect it to be perfect and you understand that it has flaws and you can’t value property by a computer algorithm, you know, then I think it’s helpful. I think it deserve a fair chance. It’s certainty not everything, but one of the things where probably stands out exceptionally well is in aggregated data, okay, when you look at overall stats. I mean, I would much rather look at Zillow data than Case Shiller data, you know, the Case Shiller index.
By the way, I remember years ago reading one of professor Robert Shiller’s books. I think it was called Irrational Exuberance part two and instead of it being about the irrational exuberance that Alan Greenspan, our former fed Chairman. When Alan Greenspan talked about it, he was referring to the stock market in the late 90s, I think it was around the late 90s he made that famous statement, you know, remember these fed Chairs whether it be Ben Bernanke, Alan Greenspan, or Janet Yellen, they all speak in tongues, right, they have to speak in code, because it’s kind of like they have to tell you something and they have to report things to the public, but if they really tell you, then you’ll react and then that’ll ruin everything, so it’s like a rally stupid game and that’s why I think we shouldn’t even have central banks, but again, that’s another decision for another day.
So, the aggregation of data I think on Zillow is great. I think it’s far better than Case Shiller index and what you can do is, you know, if you’re thinking that you’re an investor and you’re investing in high-priced markets like Miami or anywhere in South Florida really or anywhere in the North East and those high-priced markets anywhere along the west cost and those overpriced markets, you know, you really can just go and look at the Zillow research and you can just know what’s going on almost instantly. It’s really quite easy to understand.
So, with that, let me share with you a couple of data points here and let’s look at a couple of markets. Let’s look at the United States overall, okay, there are always four stats here in this aggregated data from Zillow. One of these is the home value index and one is the home value index year over year, you know, whether it’s gone up and down in percentage points, and then there’s the Zillow rent index and then there’s the rent index year over year, okay. So, four simple states. Here’s how the entire country is, the United States of America. $178,700 is the, I guess these are average prices by the way. I do not actually know if that Zillow home price index is a median or an average and there is a difference as you will know that the median is just picking the middle, the average is adding them all up and dividing the number, you know that I’m sure.
Okay, so one 178 year over year prices have gone up 4.9%. Rent index is $1,355 and it’s up 3.4% year over year. Now, what always happens and this is one of my big theories on how you can predict whether a market is going to go up or down. You can do it with a Jason Hartman rent to value ratio, the RV ratio. You can really predict its direction by just looking at the RV ratios, okay, so here in the US we can see that the RV ratio is lower than 1%, but remember, that includes all the overpriced markets, which are waited too heavily because those markets have more transactions, because they have higher populations, right. Again, you gotta read between the lines on all of this stuff.
Okay, so that’s the United States, now let’s look at a couple of other markets. Let’s look at Atlanta, Georgia. I really like Atlanta, I’ve liked it for a long time and I still like it. I’m actually looking at buying a couple of properties there right now myself. The home value $154,900, year over year up 10%. 10% last year! I mean, isn’t that amazing? Can you imagine if you put 20% down on one of those properties that went up in value by 10% and let’s say you had just a $100 bucks a month positive cash flow and that’s lower than our typical pro forma which is probably right around, you know, depends on the property, but probably right around $200 per month, okay. You put 20% down, you’ve basically multiplied your down payment by 5 times. By 500%! So, because you have a 5 to 1 leverage ratio. That 10% now becomes 50%. 50%.
You know, that’s what just drives me crazy. People who don’t get it, who don’t understand why and how income property is the most historically proven asset class in the United States of America, if not the entire world, that’s why they don’t get it, because just looking at that simple one dimension of appreciation, you got a 50% return on your investment. Now, I understand that when you buy there are closing costs and when you sell there are closing costs. I get it. It’s a simplistic example, but you might have positive cash flow and you might have a tax benefit too, which makes it even better. So, when you go to JasonHartman.com and you look at the pro formas in the property section and you see project return on investment of 42% and you think, oh my gosh, this guy is full of it. I mean, this is just crazy. There’s no way you can make 42%. Well, sure you can. There’s an example, okay. 10% by the way is a lot of appreciation in a year. That’s uncommon.
So, let’s look at some other ones. Let’s look at Los Angeles. In the socialist republic of California, Los Angeles, my home town where I grew up. So, home value index $533,700. That’s insanity, okay. Year over year, still appreciated 4.5%, but get this folks. You’re going to see right through this, I know it, because you are knowledgeable people because you get it! Okay, rent index $2,475. So, your RV ratio there is less than half. It’s worse than .5%. In Atlanta, your RV ratio wasn’t quite 1%, not as good as it used to be, right, and the rent in LA is up 5.1% year over year.
So, the uniformed person would read an article in the paper and they would say, oh my gosh, rents are sky rocketing in LA, they are on a terror, they’re up 5.1% and then they would go and they would look at the Atlanta market and say well, in Atlanta that must not be as good, because rents were only up 4.5% versus LAs 5.1%, but they would be really dumb. They wouldn’t get it, because rents are so far behind in Los Angeles as a ratio to value that of course, it’s much better to buy a property in Atlanta and those RV ratios, here’s the prediction thesis by the way, the prediction thesis is that when rent to value ratios become really out of whack and really anemic, that’s when you have a sign of a bubble.
A bubble getting bigger and bigger and about to burst and you know what? I’ve definitely seen that happen in the last couple of cycles. See, it’s so cool to get older in a way because you just, you’ve been there, you’ve done that, you have confidence, you know what’s going to happen. History does repeat itself, it really does, and it does that because of human psychology being so flawed, that’s why it repeats itself. Really just interesting stuff, so Memphis, you know, we’ve got a property tour coming in Memphis. Go register, a bunch of you have already for that tour. It’s coming up and you still got early bird pricing by the way on the member’s call. We had some really awesome prices. You can still get early bird pricing. Go to JasonHartman.com and register for the Memphis property tour and check this out, okay.
So, this market we think hasn’t seen very much of the hedge fund activity or very much of the private equity groups coming in. Very much the Wall Street stuff coming and bidding up the prices too much and that’s one of the reasons we like it, okay. So, home value index, $107,500, year over year appreciation a measly 1.9%. It’s fine with me and Zillow rent index, this is really good, you ready? You ready? This is the best one yet. $1,067 for $107,500 home value index and rents, get this, rents year over year are up 4.6%. So, if you like cash flow, this is your market. This is your market if you like cash flow. If you’re a speculator, it’s definitely not your market, okay. It is a cash flow market.
So, anyway, there are just some insights, we’ll explore that topic a lot more in a lot more detail and on a future show I’ll get into the predictor of appreciation or depreciation, what the signs of a wobble are and do that with you on a future episode, okay, but for today, I was going to have time to share a little article with you, because I thought I didn’t have much to talk about, but you know me, I always seem to get on this microphone and you just can’t shut me up, can you?
Okay, I want you to go register for the Memphis property tour right now before you do anything, go to JasonHartman.com, get your ticket for that. It’s going to be an awesome event. We’re staying at a very nice hotel and all of your meals are included on that trip. It’s a super deal. You won’t have to take out your wallet for your meals. We’ve got a bargain hotel rate and Memphis is quite a happening place at the time of that tour. It’s a big weekend in Memphis so it should be a lot of fun. Maybe we’ll even have Elvis sighting, who knows. So, do that and also thank you so much for reviewing the show on iTunes, Stitcher Radio or SoundCloud. We really appreciate your reviews, so thank you so much for doing that and until the next episode in just two days, happy investing. I’ll talk to ya in a couple of days.
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Episode: CW 496: The California Drought & Zillow's Newest Statistics on the United States Real Estate Market with Jason Hartman
Guest: Jason Hartman
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