In this Creating Wealth podcast episode, Jason Hartman hosts Fernando as they talk about the economy and real estate. They talk about Trump’s pledge to ease restrictions on Community Banks and the three dimensions of real estate. Fernando also asks what he should do about one of his properties – should he sell or refi it? They also discuss how income properties offer multiple strategies for staying ahead of the market.
Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
Announcer 0:13
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 on now. here’s your host, Jason Hartman with the complete solution. For real estate investors,
Jason Hartman 1:02
Welcome to the creating wealth Show episode number 804 804. This is your host, Jason Hartman, thank you so much for joining me today. And we so much appreciate you tuning in three times a week, every Monday, Wednesday and flashback Friday. And we are going to talk with Fernando. He’s been on the show many times before and we’re going to talk about a variety of things. We’re going to talk about some current events, some articles in the news, some predictions about what to expect with the new presidential administration. We’re going to talk about Real Estate Software a bit some of his best practices for managing his portfolio. Maybe a little recap on the venture Alliance weekend because Fernando was there, and still variety of things. So Fernando, welcome. How are you? I’m doing great, Jason. Thanks for having a podcast again. Yeah, it’s good to have you back. You’ve been on many, many times before. Wow. First of all, one of the articles I just shared with you about Yeah, I mean, this is great news. And interestingly, this article is from Jeff Bezos newspaper and Jeff Bezos hates Donald Trump. Okay. You need to know that the founder of Amazon and now owner of The Washington Post is a Trump hater. But this article says Trump budget is expected to seek historic contraction, historic contraction of the Federal workforce. And, you know, look at you, you know, I think this is wonderful news. I think you think it’s pretty good news, too. And Fernando, you know, you don’t talk much about politics really, or anything, you’re you’re kind of really quiet about that. But it would be interesting to hear your thoughts in the context of being a person who’s who grew up in Brazil, and saw a lot of changes in government there and you know, what that meant to the economy and and that kind of stuff and Then, you know, let’s dive in and talk specifically real estate and some best practices on managing properties and stuff. But, you know, I don’t think you’ve been on since the election maybe or we, at least, if you’ve been on, we haven’t talked about what you think of the new Trump administration and what’s going to happen and so forth.
Fernando 3:17
What do you think? Yeah, I think you’re right. I think I haven’t been on since since the election. Well, overall, I think it’s it could be a positive Yes, change for the country in general. I, I have this feeling that the direct the overall direction that America is going towards is probably negative in the way that there’s just too much integrated more of a libertarian, you know, similar to the way you think, but I think there’s just too much entitlement that is out there, and in the overall ownership and response ability for the individual is is not being kept up. I think there’s just too much of that going on and having a president that is business oriented that, as you said wants to contract the federal workforce is is definitely a positive. I’ve seen this in more bureaucratic societies and societies that have legal or sorry, illegal corruption such as Brazil, Brazil is having a tough time now with lots of issues with corruption, which have impeach the president and having lots of mayors being ousted in any prison. And that’s all positive. It’s showing it showing the rule of law. And, you know, in the US, you know, we have these legal corruption, which is, you know, the entire lobbying perspective which is, which is not much different than then you know, you want to call that corruption. The politicians will cater to What what these special groups want? As long as there’s money involved? I mean that that is corruption in, you know, in another definition. Right. Right.
Jason Hartman 5:09
You know that, you know, just to comment on that for a minute. So first, your first sort of major theme of what you said, talking about entitlement and individual responsibility, the concept of self reliance, which is really, you know, look, I’m not a historian on any other country, not even on America, or anything for that matter. But it is an interesting topic to me. But that that whole idea of like rugged individualism and self reliance, those are pretty like the wall, they used to be pretty ingrained in the American ideal, and certainly they have fallen apart and I think that is a bad I agree.
Fernando 5:46
When I was a kid, you know, go back to growing up in Brazil. That’s how that’s the view of America, that you would come here to make America that was you come here to take from it right. You’d come to make it Yeah, right. You would make it you wouldn’t You know, live that American dream, which is just full of entrepreneurship and responsibility and, you know, working hard for what you want. And this has shifted, you see a lot of what you know, you know how the media is mostly liberal. But you see a lot of that on TV. The title Mint is the main is the main theme. It’s not the the inspiration. And I think that’s not it’s really not the norm. You know, it’s it’s, it’s really troublesome. So, I am happy to see a president that has more of the business mentality and a intrapreneurship mentality and a smaller government. I think that’s all positive. I do have some concerns with Trump. You know, he did say quite a few things prior to being elected, that I thought especially on immigration, for example, and other things that I thought were
Jason Hartman 6:52
being an immigrant,
Fernando 6:54
being an immigrant and for other reasons as well, but I thought that they were just talking You know, for him to get attention, and he wouldn’t necessarily follow through to the degree that he’s already, you know, felt fall fallen through, in, in the in the maybes executive orders, which are pretty controversial. Side effects and you know, even though maybe they the intent overall might be an interesting intent. So I, I think overall I am optimist with Trump coming in, but I am a little cautious on on how exactly he’s implementing what he what he promised during the during the, you know, prior to the election. And what I mean by that is, is I thought that most of his controversial ideas especially on immigration and and other things were more to get traction in gain more attention for him to get elected in once he was in the office, he would scale back and not, not not raise the bar on on his strong stance. But, but he has continued and if anything he has, he’s the same guy as he was before.
Jason Hartman 8:23
Well, I you know, I don’t know if I totally agree with that, because it looked at his first address to Congress. Right? He was pretty presidential there and I thought he was pretty even keel. Now, granted, it’s one thing to say something and another thing to do different things. And we’ll see about that. I think the jury’s out on that one. But, you know, he said, Look, I’m not representing the world. I’m representing America. And you know, I think the Obama kind of doctrine of acting like he’s representing the world and literally campaigning for president in Europe. That was the weirdest thing ever. I don’t think that’s ever happened before. It’s a conflict of interest, you know, it’s like a lawyer can’t isn’t supposed to represent both sides in the case. Right, right. That is a conflict of interest. You know, you’re either representing the US or you’re representing somebody else. Right. You know, so
Fernando 9:13
it’s, the thing is, is he’s unpredictable. You know, people try to read him, just like we’re doing now. You know, we’re trying to figure out what is good is a bit. It’s hard to tell. The the one concern, the one thing that comes up is, I always wanted to see a businessman running a country because I think there’s a lot of learnings that you can have as an entrepreneur as a business person that translating to running an efficient government. Sure. I think that’s definitely, you know, a positive. The concern is that the government has so many I guess, individuals that can create troubles, you know, that the whole judiciary, you know, brings to the government. Obviously, there is a There’s a reason for it it has three legs but the holder judiciary as an example can create impediments that as a as a CEO you might not have in it could be a different challenge but to a large degree you can easiest decree you know what you want to see happening and you can have more more freedom in many ways being in the corporate world
Jason Hartman 10:24
oh yeah of course of course nope no question about that thankfully it’s that way so that’s good you know because we can have a dictator Yeah,
Fernando 10:31
yeah and but but he might get in trouble because there’s might be some learning there I’m not even want to use trouble but he just has to go through some huge huge adjustments no question you have just a question. And overall we I’m still positive that we might come out of this with a stronger America more focus America, in a lot of the people that maybe now are criticizing him. You know, my my turnaround in if there is if there is better effects and actual increase economic increase and in making a making the country, more responsible country in order for the individual to be more entrepreneurial and see more opportunities. I think that has a very powerful way to change people’s attitudes towards somebody, you know, regardless of how they think of him personally.
Jason Hartman 11:24
Yeah, absolutely. Well, okay, so then that kind of begs the next question. What do you think about real estate? You know, there’s another article I shared with you. While So first of all, reducing the size of the federal work workforce. I think that’s great news, because to dovetail on some of your comments, the bigger the government, the bigger the corruption, the smaller the government, the smaller the corruption. You know, it’s a proportionate issue, right. The bigger government gets, the more chances there are for corruption and influence peddling and so forth. But you know, he is going to ease restrictions on community banks. We were just looking at that article together. I mean, you know, look, even if interest rates go up with Dodd Frank being softened or repealed, easing restrictions on community banks, the money’s gonna flow under a Trump administration and that’s gonna be good for real estate. Yeah. What are your thoughts?
Fernando 12:16
I agree. I agree. I’m seeing, you know, we share these articles and I agree with you, I there’s some talk of the agencies, Fannie and Freddie, you know, opening up more slots for real estate investors to be able to, to have more loans, more number of loans to be increased. And then also
Jason Hartman 12:38
so just to just to put that in context, for those who don’t know, right now, each person can have up to 10 Fannie Freddie loans, and these are the really attractive, you know, what’s considered conventional financing or agency loans. And if you’re married and both spouses can qualify, which means both have to have income and you know, credit report on their own, then you could get 10 Each but the talk is that it’ll it will increase to 25 loans per person. And if that happens, look out investors. I mean, is you we think we have an inventory shortage now Fernando with the company. I mean, we’re a shortage,
Fernando 13:19
it is a problem in some ways. It’s a good problem too as a
Jason Hartman 13:22
problem, no question. So, yeah, yeah, I mean, that’s gonna change everything and that’s gonna, that’s gonna push prices up. And investors who already have their properties that they purchased and have them stabilize, they’re gonna love that it’s gonna be wonderful.
Fernando 13:36
But then it’s a it’s a there’s there’s two, two aspects of this. One of them is you mentioned that he wants to ease regulation in community banks is trying to soften Dodd Frank, all of this should have the effect of allowing banks to do more loans. Right. That’s that’s kind of the idea behind that. Well, I think that that we’ve swung too far. To restrict the number of laws that people can have, I think that the lessons from the recession in 2008, and a few years after that, have created an environment where, to some degree, it’s harder to get loans, you know, being banks or being too conservative, in obviously, the regulations play a role there and the regulations that they have to follow for follow for their underwriting. So this has a huge potential to to really make a difference. Now, the question comes back to you, if, if now, there’s a lot of money available with it. So easy to borrow money. You know, now there’s, there’s two, two aspects of that point of view, which is, you know, the interest rates are supposed to be going up because of the infrastructure and some of the borrowing that that Trump wants to do even for the military. So that’s going up and in the interest rates going up and then supply might be constrained because A lot of the inventory has dried up. There’s a couple states where it’s still, it’s still out there like Florida. And I think in the norm, I still have quite a bit because there are judicial states. But well, how do you see that in here?
Jason Hartman 15:14
Wee, I definitely see constraints on the inventory. But remember, when money loosens, it doesn’t just listen for buyers to go out and buy existing inventory of properties. It also loosens for people who want to construct new properties. So the developers get sharing that money, both small and large. And they’re then building more homes for people to buy, either as homeowners or investors or about and so the inventory ultimately does increase. The only question is, you know, does it increase too much does it increase not enough, you know, inventory and or overall, some housing supply needs to relate with population growth, and the population has certainly grown in the past. Many years, really, I’d say, you know, 2006. And on, we had this area where we had massive increases really in the population but paltry increases in the supply of housing. Because remember, it’s not just is there new housing versus population, it’s new housing to replace obsolete, housing. And you know, houses get old and people aren’t as interested in the older ones as the newer ones, usually. And so they’re all you know, there’s an obsolescence also some inventory that needs to be taken out. And that’s, that’s what happens. So, and then there’s each geography right, you know, where, where is the population increasing? Is it increasing in Atlanta or Memphis or Los Angeles or Miami, versus the amount of housing stock? And then where do you have good rent to value ratios and business friendly climates and the landlord friendly climates and you know that these are all complex questions that we delve into intensely on 803% episodes. But I think
Fernando 17:02
Overall I you know that it’s pretty obvious that if you have ease of regulations and you have more money available in last regulation overall for the banks and just a better climate, that it can’t be bad for real estate investors, it could be a tremendous boon certainly will not be bad.
Jason Hartman 17:21
No, yeah, no, it’s good news overall. Now, one thing we didn’t mention is we didn’t really talk yet about the concept of the three dimensions of real estate which, if you want to hear more about that, just go to Jason Hartman calm and use the little search engine there and type in three dimensions of real estate. There’s really more than three but I just call it that. And that is that as you see money loosening, maybe up to 25 Fannie Mae Freddie Mac loans per investor, and, you know, they they will create more supply of rental housing. So ultimately, that causes a softening in the rental market. But as all that money is flowing into the purchase market, it drives prices up. So this is why investors need to constantly always be mindful of adjusting their strategy. And this is why it’s, it’s great to invest in income property, because you have the option to invest your strategy to adjust your strategy. If you if you buy stocks, then you only have one strategy, maybe two, okay, if it’s a dividend paying stock, but usually it’s only one strategy, capital gains, you have markets either up or down, and you either won or lost. And that’s it. It’s really a very simple, non multi dimensional asset class. And with with real estate, you can adjust so you can ride up the wave of capital gains. You can get tenants in your properties and do what we call stabilizing those properties, meaning you have tenants in them, the tenants tend to not want to move once they’re there. So that’s good for you as the owner, and then you just slowly raise rental prices over over time. But new investors coming into the market, if it’s now years hence, after the money has flown and flowing out, I should say. And the population maybe an increase in supply of rental properties increased faster than population of renter’s grew, then then the rental market softens for those new owners, and this precisely happened, really in several markets. But the best example I can think of is Charlotte, North Carolina, a market that we’ve been in and out of many times over the years and this was the bf era that before Fernando era,
Fernando 19:39
a very important distinction.
Jason Hartman 19:41
Yes, it’s, it’s either bf or a half after Fernando before Fernando. It’s not the pre Sara era. Sarah, Sarah was here back then. You know, that market was a great example of this market. That was great prices were appreciating. And then every investor just flocked toward it, and they, they softened the rents. And so we stopped recommending Charlotte, even though we could have made a lot more money there. Because people would have kept flowing in and they did with other other promoters, but we stopped recommending it. And our investors who were there already were fine and including myself because I was there in owning property. We already had our tenants and they were stabilized and then the game just becomes tenant retention. And so you keep your tenants there, you don’t get too aggressive on the rent increases, because you look around and you know, by then there’s a zillion investors in there and there’s for rent signs everywhere, and you don’t want to lose your tenant and so then it becomes a game of retention versus, but but you’ve enjoyed a lot of capital appreciation, maybe you can even refi till you die already right refi till you die strategy, you can already do that. Or if you want to, you can just 1031 exchange out of the market entirely, and then go into the less expensive market, which I also did myself. Charlotte, and I bought two in Memphis. And then I did the same thing in Houston and bought two in Memphis from one in Houston. There’s always a strategy.
Fernando 21:09
Yeah, it’s interesting. We were talking prior to the interview, we were talking about the latest things that I’m going through and and that’s exactly what I am faced with. Now with one of my properties in Florida, where it has appreciated quite a bit, and the, you know, the estimate for the rent or the market rent is a lot higher than what I’m getting from my current tenant. And I need to look at, does it make sense to, you know, sell this property or refi this property and, and put the money to work elsewhere? Because I can probably get a better yield. If you’re not paying attention to to what’s going on in using these different aspects or real estate then you leaving money on the table. So that’s that’s very, very important. And I would certainly would, would second that make sure that the investors are always paying attention. Maybe looking at doing refinance, I have a few loans that that are commercial loans that are due a year from now. And just last week, I went through some numbers in a spreadsheet to see if it makes sense to lock in a better rate for for these loans prior to the expiration date. You know, all these strategic work, never, never, never don’t moment.
Jason Hartman 22:35
Right, exactly. Well, that’s why you have an investment counselor at our firm. And that’s why you have the podcast. So keep on listening all the way along, but yeah, very, very good points there. So talk to us, Fernando for a moment about you know, any best practices that you’re using lately. You know, you’ve spoken or meet the Masters event. You shared some ideas over the weekend at our venture Alliance event we just had here in Las Vegas. What’s the latest? Some greatest, you know, anything’s you can think of that the listeners should know and be mindful of
Fernando 23:04
Well, very recently I’ve decided to change out property managers in St. Louis Missouri. And that’s an interesting discussion on on always keep keep an eye on how things are going and in the in this particular case, what I can share with the with the listeners is, is that if you if you start out well with a property manager and looking at the statements and making sure that any suspicious transactions are well explain or maybe there’s typos there or there’s items that were not handled correctly, it’s always a good idea to to scrub through the statements and and ask questions. They know that you’re paying attention and you’re the type of client that that wants to be on top of everything. That sets it sets out this tone of expectations with the Property Manager, which is a very, very good thing to do. So I did that with the the property manager there. And it worked out well for many months. But over the period of and I mean, I’ve been with this particular property manager for over two years, almost three, but over the, the the time, they’ve had some challenges and the service has become worse, it has progressively been getting worse. And what I would make sure people do what clients do is if, if you’re not seeing the direction, that the property management is a company’s going towards being the correct one, you should reevaluate and look to see if there’s a better alternative because what happens it’s the IRS that seeing the death by 1000 cuts You know, maybe every month there is one more little thing one more little thing that doesn’t go quite right. Or they promised to do this thing, but they didn’t didn’t do it. They forgot to notify the tenant about this increase, they forgot to give your credit about something you discussed a month ago. These are not necessarily big ticket items, but they they will add up over time. And if the property management gets, you know, lazy might not be the right word, but they just they just they get complacent, you know? Yeah.
Jason Hartman 25:32
How many how many properties did you have in St. Louis? How many properties with that manager?
Fernando 25:37
Oh, I’ve had I have over eight.
Jason Hartman 25:40
A price how many doors? Seven doors. You think with that manager? I’ll be 20 doors. Okay, so 20 doors with this manager. And they’re getting complacent. You know, this is the problem. These managers it’s just human nature folks. We all have by our nature. We take things for granted. You know And I try to always keep myself in check. I think that’s maybe one of the benefits of growing up poor, uh, you know, I wake up every day and be grateful for what I have and work hard for it. But you know, look, face it, it’s human nature, you know, you’re in a relationship, you take each other for granted. You know, whatever it is, you take customers for granted, sometimes. I mean, it’s just all up. It’s human nature, it’s not a good thing. But we got to always keep that in check. And so managers do that, too. And so now you’re taking 20 doors away from this manager? And it sounds like you’re going to another manager and you’re not going to self manage these. I’m curious as to why
Fernando 26:35
No, these are Class C type tenants. These are Lord antennas, you know that the rent price for these apartments are probably 500 600 you know, maybe some a little more than but
Jason Hartman 26:50
and they’re pretty much for plexes are three three plexes and for plexes right duplexes are for plexes Okay,
Fernando 26:56
yeah, yep. And so it’s a lot more challenging. There’s just a lot more More turnover, you need to be on top of them a lot more they don’t go on, they’re not self reliant, mostly. So it’s better to have a manager that that is that is on top of things that are going, I shared this with clients doing meet the masters and probably on podcasts as well. Where I, I have a half hour weekly call with a property manager. And I go over, you know, all the issues at once I try to make it as as as efficient as possible, both from my time in from the managers time. And that works out really well. And here’s here’s an interesting fact that you know, going back to the reasons why I decided to switch managers in one of these calls the the owner of the property management company, he was kind of letting off some steam and just letting me know that he just spent two hours on the phone with another investor that had only one building with him, okay. And he was complaining that, you know, the investor took two hours away from him to solve, you know, to try to work out problems with with this with this building. And he was, you know, he telling me that he he didn’t like to spend time with me on the phone neither he thought that that was that was unnecessary and that, you know, we can just work out through emails and you know, some some other system. And you know, after thinking about that conversation for a while, two things came to mind. So number one, I, I told him I gave him the feedback that the problem might not be that he actually spent two hours with this particular client on the phone. The problem is, why did they need to talk for two hours, right,
Jason Hartman 28:53
because they were probably arguing about something that he should have handled.
Fernando 28:56
Exactly. Yeah, right. He wasn’t doing his job. Just like you know, for for my properties, and that’s why you spend two hours if if there is no issues the call was very quickly, very smoothly or if they’re a minor issue, they go very quick and very smoothly. So, the lesson here is, is this you can’t automate a system. Okay? If the manual process isn’t being done at all in many cases, in other words, if there are many issues and they’re just just simply not getting to them because of lack of management one on one of actually, you know, making sure that they follow through this this to do list or agreed upon items, doing a call if they eat, you know, put an email system or some ticketing system on top of that, it won’t necessarily make any difference if they are not doing their job, you know, so pay attention to that. It’s a you can create a lot of noise in pretend things are are being handled but tickets can be ignored just as much as, as your you know, your agreed upon items during a phone call.
Jason Hartman 30:08
Yeah, no question about it. There’s the good old Stephen Covey quadrant two, you know, vital but not urgent, right. And so usually the reason things become urgent is because they weren’t handled when they were vital. And so that’s that’s true. One other thing I want to mention to our listeners, and, you know, we kind of started off our talk today about this, but is just another concept in the loosening of money idea. And I don’t know that this has anything to do under under Trump. But it’s interesting because most people view the world in a very simplistic manner, manner thinking, Well, you know, if they’re talking about monetary policy, they talk about well, you know, the Federal Reserve has this much money in circulation. You know, according to the Treasury, this is m one m two, they don’t do m three anymore, and all these money supply things But they don’t look at the credit supply. And they don’t really I couldn’t believe it during the Great Recession, how few people really address that. And just, you know, very schooled economists just didn’t really, you know, hey, they talked about him, they talked about money, but they didn’t talk about see the amount of credit out there. And so the money supply was being massively increased, but the credit supply was constricting at the same time. Well, this is another concept of that, because now people are talking about how well you know, interest rates look like they’re on their way up, and is that going to cause the real estate market to come crashing down? And look, you know what, I think right listeners, regular listeners, at least, I think the cyclical markets in the high end areas are very, very risky. Now, I would not be buying a house on the California coastline or anywhere in the Pacific Northwest or in South Florida, or you know, the Northeast, okay, because those markets are just Way overvalued in my opinion. But just so you know, that doesn’t mean it can’t go on for a couple more years either, okay? Because you just don’t know when. But here’s another example of a loosening of the credit supply and this is kind of a very tangential one that most people wouldn’t notice. But for us, fortunately, listeners, you have some very bright people on this podcast, so you will stay informed. And this is a wall street journal article, Fernando, I know you probably read this because you read the journal all the time. It’s good old paper format.
Fernando 32:37
Yes, like I love that paper.
Jason Hartman 32:40
I miss it myself. But But this article says credit reports to exclude certain negative information, boosting FICO scores, and the subtitle changes could improve credit scores for millions of consumers and make Pose risk to lenders. Right? So here we go. This is all about how you know and this is from March 12. Okay. It says many tax liens and civil judgments will soon be taken off of people’s credit reports. The latest move to omit negative information from the powerful financial scorecards the decision by the three, all three of them. The three major credit reporting firms, Equifax, Experian, and TransUnion could help boost the scores of millions of US consumers.
Fernando 33:32
Interesting. I missed that article because I was going to meet the Masters to visualize me.
Jason Hartman 33:38
That’s right. Yeah, you weren’t the venture Alliance, but you got better stuff there. Anyway. Fun. I saw you zip lining with us. Yeah, I saw I have the pictures. You haven’t even seen them yet. Looks like you were having a great time. There. It was. It was good. But but this is another way and I’m not making a judgment on whether this is good or bad. You know, it’s all a question of degree. Yeah, okay, and the pendulum swinging back and forth. But the fact is, if this stuff comes off of the credit reports of millions of consumers, it’s going to make it easier for them to qualify for financing. And that means they’re going to run out and buy stuff. Okay? And if they’re not buying real estate, that’s just going to be a boost to the economy in general, because any kind of velocity of money any kind of shopping is a boost to the economy. Now, overall, you can certainly argue that that’s not a good thing. You know, you got to have savings to create wealth in the long run. But in the short run, it’s, it’s like drinking coffee, right? It’s gonna give you a boost. But also with the housing market. These people are going to go out and now their their credit score is suddenly 3040 points higher as a result of just this little agreement. That’s something most people wouldn’t even notice or talk about. They’d be talking about. What is the Fed gonna raise Your interest rate, you know, there’s way more to it than that. And this is going to create upward pressure on prices. Okay? So there you go another, another sign. Okay, so here’s the signs. Number one, we’ve got Trump, our first real estate president. Number two, we’ve got Trump, our first real in a longtime business person, President. Number three, we’ve got Trump who’s specifically addressed, dismantling or softening the impact of Dodd Frank, terrible bill that has destroyed the real estate market that has put the government in the middle of every transaction when it comes to financing and it’s just stupid has tons of unintended consequences. Then we’ve got the general optimism in the financial markets and the economy as a whole under Trump. Okay. Then we’ve got on the negative side, then we’ve got the credit report issue that I just just talked about right boosting credit scores. On the negative side, we have two things. Okay, what are those two things? Well, they are the business cycle. That does concern me because we’ve been on a tear for a while, but I’ve talked about that before because the baseline was so low during the Great Recession, the worst economy in seven decades that I don’t think you can start the business cycle at the low point. Okay, because that was an anomaly. That low point it was too low, you got to really started a few years later. So I think we’ve got a little while longer to run and I’m not even saying I’m a total believer in the business cycle anyway, because there’s a lot more to it than that, okay. But the other danger these are the two danger things is increase in interest rates, right. But interest rates are so low even if they increase and if people have an easier time qualifying because of the credit card. Fourth thing I just mentioned, the negative items coming off. Dodd Frank, you know, Fannie Freddie up to 25 loans instead of 10. I mean, there’s a lot of reasons to be really bullish right now. And I only mean that for sensible, linear and maybe hybrid markets, but certainly not the cyclical crazy high priced markets with bad LTI or land to improvement ratio markets that, of course, the Hartman risk evaluator would tell you don’t even touch those markets. Anyway. Right. Fernando, any thoughts on that before we wrap it up?
Fernando 37:35
No, I, I just, I think the challenge is always with so many moving parts, this is very dynamic. And, you know, trying to make a big bet on a particular type of investment, you know, very specific, you know, you know, high high, high risk betting on water. What will happen with all of these policy changes could be very, very tricky and in prone to prone to making a mistake. So going with the more prudent investments, I like your your description of the types of markets that we invest in, you know, you you know that that those have all the all the the parameters that are needed for them to grow, are becoming better as the President makes the changes. So I like to adjust a little bit slowly, you know, to what I see changing with Trump. Again, a lot of the ideas that he has my have some some people going against, he has some more, some some more resistance, so you never know what actually is going to come through. So I think a little bit of caution is also
Fernando 38:58
interesting at this point. No I
Jason Hartman 39:00
always have some caution.
Fernando 39:02
Yeah, overall, I think if you’re too bad in America, I think it would be a good bat. But you know, just got to be careful with exactly where you put your money. And that’s just because he’s unpredictable. And everybody I think, I think there’s a more of a consensus on that then than anything else for from a Trump perspective.
Jason Hartman 39:22
Well, I would agree with you there. And that’s why you gotta follow commandment number five, the property must make sense the day you buy it or you don’t buy it. So if we were trying to base the some of this bullishness and optimism on you know, saying go out and speculate and buy a million dollar property that only rents for 4000 a month. Yeah, that would be crazy. But you know, for saying buy $100,000 property that rents for 1000 a month even if it doesn’t go up in value, who cares? You’re gonna get a great yield every year on that property. You know,
Fernando 39:55
so right yeah, going in by air except was very good buying this very expensive. piece of real estate thinking that the Dodd Frank regulations will help you you might. You might be very surprised on what exactly changes and how it affects you. So be a little careful.
Jason Hartman 40:12
Yeah, absolutely. Absolutely. Well, caution is always the watchword. Good stuff. Well, hey listeners, thank you for listening to us today. Go check out Jason hartman.com make sure you fill out one of the contact forms there and include your phone number, so that one of our investment counselors can contact you because on the website in the property section of Jason hartman.com you’re gonna see the inventory is pretty slim. And nowadays, what you really need to be doing is you need to be actively working with one of our investment counselors, so that they can find you a property the second it comes up because you got to you got to strike while the iron is hot nowadays, you know, properties just go really really fast. Are Memphis property tour one, you know one of the few places because we have New Construction some really good new construction here in Memphis, our Memphis property two are coming up that by the way is almost sold out. That is going to be a big tour. You know, we usually limit these tours to like 40 people we might do 50 at this one that’s almost sold out. So go to Jason Hartman, calm click on events, get your tickets. One final thing I wanted to mention, and Fernando just reminded me, check out real estate tools. com real estate tools.com. That’s the software company that Fernando and I own together. It has several iOS apps for iPad and iPhone, and then a great software as a service software called property tracker. That is getting a really nice looking update right now that Fernando and his team are leading, but we are looking to hire for that company. So if you have a background in customer service background in software development, you know any of these skills, reach out to us let us know go to Jason Hartman calm you know, if you just click on Contact, you can fill out some details there and say hey, I heard you on the podcast talking about this, and we will get in touch with you. We love to hire our listeners because they understand what we do they get it, you know, they are they’re usually long term thinkers like we are, we don’t attract the quick buck, you know, people that are that are dreamers, you know, our people are realistic and stable, conservative people. And that’s what we like to hire from what we need right now mostly as a customer service person who can, you know, deal with tech issues and things like that and help people through very easy to use software, but everybody gets stuck here and there, Fernando, is that all about all I need to say on that?
Fernando 42:35
Yeah, that’s a very good, Jason. Good, good description. Just to kind of round it up. We are seeing quite a bit of growth with property tracker. I’m very excited about the visual update that we’re doing with a property tracker. We’re testing it now. It’s looking really sharp. That will really give us a step up on on what the software is. Looks like today, but because of the growth and because of the anticipation of the of the visual update coming up, we will be getting more customers and which is a good problem to have. And therefore we need to increase our customer service capability. So, you know, as Jason mentioned, if you are a current user of property tracker and you have, you know, it’s probably a part time job for most people, maybe 20 hours a week or so. It this could be a very neat, interesting job, you’d certainly get to learn quite a bit on the software side and help other clients like yourself with questions, so please get in contact with us. Another way Jason that they can get in contact with us is send email to administrator at Real Estate tools calm administrator at Real Estate tools comm correct. So either one would work but
Jason Hartman 43:56
Yeah, good stuff or you can do it through the Contact Us form. Jason hartman.com so great, Fernando Well, thank you for joining me today and listeners, we always want to wish you happy investing. We’re here to help you or part of your investment team. We have thousands of clients. We’ve been doing this for a long, long time longer than I care to admit. You know, we just we just love this and, and we want to help people become financially independent, using the most historically proven asset class in the world income property. Let us know how we can help you contact us through the website and we are here for you to answer questions and just help you with all of your your investing needs. So thanks so much, and Fernando thanks for joining me and we will talk to you on the next episode.
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