Housing inventory finally broke under 2022 levels last week. To give you an idea how different this year is from last year, last week in 2022, active listings grew 30,940 while this year they only grew 5,848. Mortgage rates rose last week after the better-than-anticipated jobless claims data but even with higher rates, we also had a third week of positive purchase application data.

Here’s a quick rundown of last week:

  • Active inventory grew by a disappointing 5,848 weekly 
  • Mortgage rates went above 7% again after better labor data 
  • Purchase application data showed 3% growth week to week

Weekly housing inventory

On May 15, I went on CNBC and talked about how inventory growth in 2023 resembled a zombie from the show The Walking Dead, slowly trying to rise from the grave. Since May 15, that trend has continued to the point that inventory in America is now negative year over year.

We have often discussed that the housing market dynamics changed starting Nov. 9, 2022, and today you can see the final result of that dynamic shift as inventory is now negative versus the 2022 data — all before July 4th. I recently recapped this crazy period on the HousingWire Daily podcast, going into detail about what happened in housing over the last year.

  • Weekly inventory change (June 23-30): Inventory rose from 459,907-465,755
  • Same week last year (June 24-July 1): Inventory rose from 441,106 to 472,046
  • The inventory bottom for 2022 was 240,194
  • The inventory peak for 2023 so far is 472,688
  • For context, active listings for this week in 2015 were 1,183,390

Seeing negative year-over-year inventory before July 4 would be a big deal if last year wasn’t so crazy. However, I need to put some context into what happened in 2022. In March of 2022 we had the lowest inventory levels ever recorded in history. Then in a short amount time, we had the biggest and fastest mortgage rate spike in history, which facilitated the biggest one-year crash in home sales in history, which helped inventory grow faster than normal in 2022. 

So the fact that housing demand stabilized and inventory is now negative year over year needs the context that 2022 was a once-in-a-lifetime event. As you can see in the chart below, 2023 inventory growth is very slow compared to 2022.

The other big story with housing inventory is that new listing data has been trending negative year over year since the end of June 2022. A traditional seller is also a traditional buyer, and certain homeowners have refused to buy their next home with mortgage rates above 6%.

We had new listings growth from 2021 to 2022, but that’s not the case this year. This is another variable contributing to slow inventory growth, which has now turned negative in the weekly listings.

Compare the new listings data last week to the same week in recent years:

  • 2023: 62,466
  • 2022: 91,530
  • 2021: 80,289

My concern lately is that we have seen four straight weeks of mild declines and are about to head into the seasonal decline period of new listings. This is one data line I will track like a hawk because it will be a negative for the housing market if this data line makes a noticeable year-over-year decline trend in the second half of 2023.

The 10-year yield and mortgage rates

For those who have followed the weekly Housing Market Tracker articles, I always focus on jobless claims data as it’s the critical data line at this point of the economic cycle for me and my forecast in 2023 for mortgage rates.

Last week we had a big move in the 10-year yield because jobless claims came in better than anticipated, and bond traders were caught off guard selling bonds on the news and sending mortgage rates above 7% again. As you can see in the chart below, that big spike was really about jobless claims getting better.

The following day, the PCE inflation data showed a cooling down in headline inflation year over year. Core PCE inflation is a bit more sticky than headline inflation, however, bond yields fell after that report and bounced back at the end of the day.

In my 2023 forecast, I wrote that if the economy stays firm, the 10-year yield range should be between 3.21% and 4.25%, equating to mortgage rates between 5.75% and 7.25%. As long as jobless claims trend below 323,000 on the four-week moving average, the labor market stays firm, which means the economy remains healthy. Jobless claims have stayed below this range all year, and job openings are still at 10 million. 

I have also stressed that the 10-year level between 3.37% and 3.42% would be hard to break lower. I call it the Gandalf line in the sand: You shall not pass. The setup for the 10-year yield to stay in the range is intact.

The counter to my 10-year yield range would be if the economy here or worldwide starts to accelerate higher; that would be a valid premise to get the 10-year yield above 4.25%.  Considering our economy this year, the 10-year yield and mortgage rates look about right to me.

Now the one thing that has changed in 2023 is that since the banking crisis, the spreads between the 10-year and mortgage rates have worsened, making mortgage rates higher than I anticipated versus the 10-year yield, which is not a positive for the housing market.

We haven’t seen anything in the data showing that it’s been improving recently. This is a big deal as we have seen housing inventory not get much traction with higher rates and hopefully in the future, lower rates can entice some sellers to move.

On jobless claims data, I always stress using the four-week moving average with this data line because we do have times when this data line can get hectic week to week. Therefore, I only believe the low jobless claims print once I see weeks of this data line improving. So, it will be critical over the next two weeks to see if this decline was a one-time blip in the data, which we have seen from time to time. As you can see below, that was a significant drop week to week, which looks abnormal to me.

Purchase application data

Purchase application data has surprised people with three weeks in a row of growth, while mortgage rates have been near 7% during this period. This now makes the positive count since Nov. 9, 2022, 20 positive prints vs. 11 negative prints. The year-to-date numbers are 13 positive vs. 11 negatives after making some holiday adjustments to the data line.

What do these numbers mean? They just mean that housing data has stabilized; nothing in the data shows decent growth after that first good move from November to February. However, the fact that housing demand has stabilized is a big deal because last year, we did have a waterfall collapse in the data, as shown in the chart below. The only downside to this is that we haven’t had the housing inventory growth I would like.

Now the year-over-year decline was down to -21%, which was the lowest since Aug. 24, 2022. However, we all have to remember that the second half of 2023 will have much easier comps, so even if demand stayed the same the rest of the year we will have some positive year-over-year data at some point. 

Be careful in reading too much into the better year-over-year data we will see in the future. The most recent pending home sales print came in as a miss from estimates, but the existing home sales data is still trending in the range I thought it would be in since I believed that first big print we had a few months ago was going to be the peak for year. When demand is coming back in a big way, purchase apps will be positive for a majority of the weeks as we are working from such low levels today historically.

The week ahead: Jobs, jobs and jobs data

Yes, it’s jobs week once again and with four labor reports coming up on this short holiday week, we’ll be able to see if the Federal Reserve is getting what it wants — a softer labor market. Recently, Fed Chair Powell once again stressed that the labor market is too tight and that softer labor is the way to get inflation down to the Fed’s 2% core PCE target.

Well, we have four reports this week: the job openings data (JOLTS), the ADP jobs report, jobless claims and the big one on Friday — the BLS job report — so we’ll see what happens.

So much of my COVID-19 recovery model was based on the labor dynamics being much different now, since I was the only person talking about job openings getting to 10 million in this recovery. Today as I write this, we are still at 10 million job openings, as the chart below shows.


I have a firm belief that the Fed doesn’t fear a big job-loss recession as long as job openings are this high. What they have enjoyed seeing is wage growth cooling down, as shown in the BLS job reports for 18 months now. So, for this week, we always focus on jobless claims data over everything else, but be mindful of the job openings data since the Fed wants to see this go down, and the wage growth in the BLS jobs report data.
 



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Brandon Turner is back! That’s right, live from the Sea Shed are your beloved BiggerPockets hosts, Brandon and David! Can you feel the bromance brewing through your speakers, or is it just us? David flew out to attend one of Brandon’s recent events and conduct a two-part interview with one of the most popular property investors on the planet! And boy, oh boy, has Brandon been busy!

In this episode, David puts Brandon in the hot seat, going through a fire round of top-asked questions to get Brandon’s input on not just real estate but life. You’ll hear Brandon talk about housing market crash prophecies and whether or not he thinks they’ll come true, the struggles he’s facing with today’s intense competition, an unflattering tattoo that may or may not be part of a bet gone wrong, and why humiliation is one of the BEST ways to get you in the zone to WIN.

But that’s not all; you’ll hear about how Brandon used social media to build his entire real estate business, why NOW is the time to lock down good debt (and invest!), and why you need to STOP trying to survive and start looking to thrive! Tune in as we take a nostalgic walk down metaphor lane with Brandon and David!

David:
This is the BiggerPockets Podcast Show 786.

Brandon:
Oftentimes, we look at moving the wall, we look at some big project like, “I got to do this big thing. I got to get good at real estate. I got to build financial freedom,” and it’s a big wall. It’s a lot of rocks there. It looks heavy. But the fact is, it’s not heavy. It’s 20-pound rocks. Anybody can do it. So, maybe people need to focus a little bit less on the wall and more on the rock. So, what’s the next rock in front of you? What’s the 20-pound rock? It’s not light, 20 pounds is still a little lift, but anybody can do it. A kid could do it. You just move the rock across the field, before you know it, you got a wall over there, you got a new fence.

David:
What’s going on everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast here today with a special Seeing Greene episode for you. If you haven’t listened to one of these before, these are episodes where we take questions from you, our listener base, our fan base, the people that are trying to build wealth through real estate, and I answer them for you based on my experience or the perspective that I have with real estate. Well, sometimes I bring in help, and today is one of those shows.
I’ve got my best friend, Brandon Turner with me, former host of this same podcast you’re listening to right now, that really helped me get started in the space. And he’s going to help me tackle the questions that our listeners have asked. This is going to be a fascinating show. I’m excited to bring it to you guys today. Now, I don’t want to give away any secrets from today’s show because it was really fun, but I will tell you, I’m about to teleport myself to Hawaii and bring this show to you live from the Sea Shed. So, I’ll see you in a minute.
From flannel to full-time flip-flops, DIYer to visionary, hot chocolate only to coffee connoisseur. He’s traded cold climates and ice cream every night for sun, surfing, and triathlons. Please welcome none other than my brother from another mother and best friend, Tandon Burner.

Brandon:
That was the most ridiculous introduction I’ve ever had. I loved it. Thank you.

David:
It’s not bad.

Brandon:
That’s really good. Did you write that or did Eric write that?

David:
Eric wrote that, absolutely.

Brandon:
Did Eric write that or did AI write that?

David:
That’s a better question, which we probably shouldn’t get into on this episode right now because we’ll talk about it for the whole time. Brandon and I are staunchly opposed on opposite ends of the AI spectrum. He loves it. I hate it. He thinks that it’s going to be cute and fun. I think it’s going to be the Terminator that takes over the world.

Brandon:
No, I think both.

David:
Skynet is Genesis. You heard it here first.

Brandon:
Take over. Take over, man.

David:
So, before we get into the show, can I tell you a funny story? I don’t know if I’ve already told you this, but we’re going to do it on the podcast.

Brandon:
Okay.

David:
Somebody DMed me asking for marriage advice because he was going through a divorce, and he wanted to know, “How can I make sure that my wife doesn’t get all the assets?” And I’m like, “Eh, it’s not really a question I’m going to answer for you, buddy. You need a lawyer, and I don’t feel comfortable telling you how to screw over your ex-wife.” So, instead, I said, “Well, what can you do to save the marriage? Let’s talk about that. That might be a little bit better.” Marriage is sort of under attack in our country, and I’d rather see couples stay together than get divorced.
And he didn’t want to get into that conversation, but I’m like, “Well, I’ve been through a rough breakup, and I thought at the time that I could handle it. It was actually much harder than what I thought. You might want to really think about this because sometimes when you’re frustrated, you’re emotional in your mind you see a situation working out differently than how it actually works.” Have you ever quit a job based on impulse? Probably not you, but people have, and they wake up the next day like, “Why did I do that? I don’t have another job. There’s nothing lined up.”
And his reply was so not like I would expect this guy to answer that. I asked him, “Did you send that from ChatGPT?” And the answer was yes. He gave me a computer-generated answer about me pouring my heart out in an Instagram DM. And I’m like, “This is why I do not like AI.” Because that’s what people are going to do. They’re like, “Okay, how do I say something to my wife on our anniversary that’s going to really make her happy?” And you’re going to go to ChatGPT and say, “Say something really sweet for my wife.” And then you’re going to hand it to her.

Brandon:
I may or may not have done that recently on our, what was it? My wife’s birthday. And I needed a nice birthday message for her on Facebook to be like, “Hey, this is my wife.” So, I went on to ChatGPT, and I put in all my thoughts, and I said, “Can you make this sound better?” And it made it sound better.

David:
At least you put your thoughts in. I’ll give you that. Other people are using it to save time, so they don’t have to think, which is what scares me. And it’s a sickness of the highest order. I don’t like it at all.

Brandon:
Well, why don’t we not talk about it then, man? Because you don’t want to talk about it, so…

David:
No, I want to talk about you. Well, where we’re back in Hawaii, we’re doing our thing, I’ve got my AI disclaimer out of the way. So, there will come a point where you and I will be pitted against each other, like Celebrity Deathmatch on MTV over this AI thing, and we’ll see how that works out. But in today’s episode, Brandon Turner and I have, what’s the word I’m looking for when you come back in contact with someone? Reconnected.

Brandon:
Reconnected.

David:
That’s not the word I was looking for.

Brandon:
I don’t know. We’ll call it that.

David:
Sorry.

Brandon:
It’s a joyful reunion.

David:
Yeah, something like that. It’s a reunion.

Brandon:
ChatGPT and OpenAI, what is another word for, watch this, what is another word for reunion? Another word for reunion is gathering more. Here are some more, meeting, get-together, gathering, rendezvous, assembly, and homecoming. Thank you, ChatGPT. Did you see how fast that was?

David:
Yeah, well, it probably was as fast as we could have just figured it out without having to type. But until ChatGPT is inside of our brains through a Neuralink, we still have to think a little bit.

Brandon:
Give it a year or two.

David:
So, I’m back with Brandon in the Sea Shed and we are talking, in today’s episode, we are going to get into a fire round of questions that people want to know about us.

Brandon:
That sounds good.

David:
We are going to get into, as an ode to the old BP style, a fire round where I’m going to fire questions at you, many of them from some of our listener base, and see what you have to say. So, question number one-

Brandon:
That should be the sound effect, should be like, “Fire out, pew, pew, pew, pew, pew, pew.”

David:
It was something like that, but it was like explosions.

Brandon:
Yeah, But I’m thinking I like that the little pew, pew pews.

David:
I don’t know that that’s still cool, brother. I think that’s like a nine-year-old meme. It was very funny at the time though, especially working in law enforcement. There was pew memes going around all over the place. Question for you.

Brandon:
Okay, here we go.

David:
What happens when you fart in church?

Brandon:
Oh geez. What?

David:
Yeah.

Brandon:
Is that a joke or is that a question?

David:
No, that’s a joke.

Brandon:
Oh, okay. What happens?

David:
They make you sit in the pew. All right, getting into our [inaudible 00:05:57].

Brandon:
Did you make that up or did you hear that?

David:
I heard it sometime a long time ago, but you brought it back.

Brandon:
That’s a good joke.

David:
With your pews. I’m going to list off the types of my boats in my armada. What is your favorite and how would you rank them in order of importance? You’ve got the friendship, the relationship, and the partnership.

Brandon:
Friendship, meaning what do I care more about? Friendship, relationship?

David:
Which is most influential in someone’s life, friendship, relationship, or partnership?

Brandon:
How are they different?

David:
Well, I don’t know. You explain to me. I would think they’re different. Are you…

Brandon:
I’m best friends with my wife. I have a relationship with my wife and my wife’s my partner. You and I are friends, we’re in a relationship, we’re partners, business partners.

David:
Okay, so this would be a romantic relationship.

Brandon:
Okay, so romantic relationship.

David:
Friendship, partnership, and business partnership.

Brandon:
Okay, so business partnership, romantic relationship, and friendship, bromance.

David:
Yes. Most influential in someone’s life. What’s the big rock they want to get right first?

Brandon:
The romantic all day long. You cannot grow beyond, maybe you can, but it’s exceptionally hard to grow beyond the person you picked to spend your life with. If that’s wrong, there’s a great quote. Who said that I’m going to, oh no. Pete Vargas. He’s a speaking coach guy, has a big company. He once told me that his dad would always say, was it Pete? I think it was Pete that said this. I’m going to give him credit anyway, it might have been-

David:
I’m just glad you’re giving credit to someone else for a thing you’re about to say.

Brandon:
A wise man once said, it might actually might have been Daniel Grothe, who wrote a great book called The Power of Place, but either way, the quote was they were together that’s why the three of us were together when I heard this. They said, “When everything’s right at 123 Main Street,” their house, “everything’s right.” When everything’s right at home, everything else is right. When everything’s wrong at home, everything else is wrong. Therefore, romantic partner, number one, most important thing, get that right pick the right person.

David:
That takes up so much real estate in your head, right?

Brandon:
It takes up so much real estate. When things are wrong in your relationship, you’re not working out, you’re not thinking about real estate, you’re not doing a lot of things.

David:
You’re in survival mode.

Brandon:
You’re in survival mode. That’s it.

David:
Good point.

Brandon:
Yeah. So, that’s where I go.

David:
That’s really good. Jay Papasan at your BetterLife Conference seconded that when he was talking about, “I am a husband first, then a father, then a businessperson.” If I get those first two right, all the other dominoes tend to fall in line. So, that’s very good. After romantic relationship, friendships, or business partnerships, most influential.

Brandon:
I can’t separate them, I don’t have friends that aren’t business partners.

David:
You are that way actually, your friends become your business partners and your business life are your friends. That’s a great point.

Brandon:
I’m not sure I have any friends that I don’t do some kind of business with. No, I’m sure I do. There’s some people from church, for example.

David:
It’s thought, man, I’ve never thought about that.

Brandon:
Do you have a lot of friends that aren’t business related? I have a hard time, I mean, let’s be real. I have a hard time connecting with people that aren’t in my world of business. Doesn’t mean they do what I do, but they’re at the same mind-

David:
Because your business is so tied to your mission, that’s why. For you to have a friend outside of your business means they’re also outside of your mission in life, that’s so important to you.

Brandon:
Yeah. When you get around people and you’ve been around people that are like, “Man, my bosses won’t give me that raise and I’ve been working 40 hours a week,” and they’re like, “They’re not giving me a raise. It’s so stupid.” How do I even resonate with that? I can’t. We’re operating at very different frequencies, and I don’t want to be in that frequency. So, I almost don’t want to be around. Now there are people I’m friends with, I guess that I’m not in any kind of business thing. However, they are in some kind of business thing usually. So, they’re operating at a similar frequency. We’re all running on the same frequency.

David:
Yeah, that’s a great point. All right. Our first question is going to come from the new co-hosts, Rob Abasolo in the H.

Brandon:
What does the H mean?

David:
This is what the new people in Houston refer to, it used to be called H Town. They thought they were cool to call it that, H Town became cheesy. So, now they call it the H.

Brandon:
Rob lives in Houston?

David:
Yeah.

Brandon:
How did I not know that? I thought he was in California.

David:
He used to be in LA for a time, but he’s in Houston. He’s one of those guys that bounces around wherever he’s investing. He wants to go live there. But he’s in Houston now.

Brandon:
He’s investing in Houston?

David:
I believe he is.

Brandon:
I’m buying.

David:
You are too.

Brandon:
I got two huge apartments right now that I’m buying.

David:
Yeah. So, Rob, if you ever need a place to live, [inaudible 00:09:58] on that rent. Yeah. Rob’s question. How has raising funds in the recent months changed for you? What are some tips that you may have for vetting operators?

Brandon:
It is the hardest time in the history of me being in real estate in 20 years almost of raising money, raising capital. And I would include that being in ’07. Not that I was doing a lot in ’07, ’08, but man, it is tough. It is tough right now.

David:
What makes it tough?

Brandon:
A couple of things. Number one, the news makes things tough, right? Consumer confidence is what drives a lot of this. The news has made it very scary, “Recession coming, recession coming, the real estate’s going to crash,” even though there’s almost no data that supports the real estate’s going to crash. But the news likes, likes to say that there’s very little that…

David:
Why’s it going to crash? Because it happened before.

Brandon:
Yeah, exactly. People cannot think outside of what happened before. That’s all they can think is, did this before. Humans need patterns, right? Because our brains-

David:
To feel safe.

Brandon:
To feel safe, they need patterns. So, the way that we-

David:
Especially when 80% of the real estate in our brain is not safe.

Brandon:
Yes.

David:
We look for the comfort and the pattern. And we miss what is actually happening.

Brandon:
Yeah. There’s a whole, I mean, books have been written on this topic of humans having to categorize things and find patterns and find meaning in things.

David:
Oh, for sure. Have you ever dated somebody who their father left their family when they were younger? I guess not because you’ve only dated one person your entire life. But this will come up with somebody who… Another one of my best friends, Kyle, he lost a job out of nowhere. He just got married. He started a job with another coach. That coach committed a moral indiscretion and was fired from the job, which meant Kyle was fired with him even though he did nothing wrong. And it set this pattern in his life of you can’t ever feel safe. At any minute, the hammer’s going to drop on you.
Or someone who was left by a romantic partner. They were left by a parent. They have this belief that people always leave. And what’s crazy is they now find a way to make that a self-fulfilling prophecy. They push people away to say, “Well, I wanted to hurt you before you hurt me,” or “I wanted to leave you before you left me.” And then they end up using that as confirmation bias to support a, see everyone leaves. See, you’ll never… That person won’t commit to a job. That’s not the case in Kyle’s case, but that’s because we’ve talked about it a ton. He easily could have been in, “I’m going to quit this job before I lose it.”
And I think the same thing happens with the real estate stuff. People are like, “It happened before it’s going to happen again.” And so, they don’t go invest in real estate. Meanwhile, when I look at the market, I don’t know if you think the same, but we very well could be going into a recession. I think we’re probably in a recession, but inflation masks that a lot of the time. But all the money’s flooding into real estate. It is the safest place to put your money right now.

Brandon:
Yeah. Let’s also remember, because again, people have bad memories and maybe they don’t know the data, but I think it’s like seven out of the last eight recessions real estate went up. It was only the ’07, ’08, ’09-

David:
Because that recession was based upon-

Brandon:
That was the real estate recess.

David:
Yes.

Brandon:
So, when people think recession, they think real estate recession.

David:
Yes. Because that’s the most recent-

Brandon:
Because that’s in their memory and that’s all we can remember.

David:
Such a good point.

Brandon:
So, most recessions, almost all of them in American history have been good for real estate investors. That said, I love the point you made. I’m going to bring it even broader, sometimes if you focus so much on that like you said, the self-fulfilling prophecy comes through. We could see a real estate recession and we’re going to make it happen to ourselves because we’re all freaked out now. I don’t believe that’s going to happen because I think there’s so many people waiting right now because of the BiggerPockets effect. I mean, we changed America in terms of real estate. There are millions of people looking for deals. The second there’s a deal, people are going to fill that gap. And so, we’ve got a long time before I think we are going to see a collapse.

David:
So, there’s two points I’d make there. It is very true that it could happen because we do it to ourselves. And that makes me think about, well, if it does happen, it won’t last forever, right? Makes me think about, there are times where just by pure, sheer force, you can hold a beach ball underneath the ocean, but at a certain point, your arms get tired. What happens when you let go? Shooting right back up and the further down you pushed it, the faster and the higher it comes right back up.

Brandon:
We need an analogy button, just boom.

David:
Boom.

Brandon:
Bing.

David:
Yeah. So, when you do see something like all the investors get scared, and so they all sell their real estate, and that floods the market with supply like what we saw in 2010. Yes, that can happen, but at some point, people, investors realize, “Oh my God, this thing cash flows so easy, let’s go buy it.” It turns around just as fast as it went bad, it goes shooting right back up. The other thing, my opinion, I can’t prove this, but I think real estate has always been, from a financial perspective, not from an easy perspective it’s probably a more difficult asset class to invest in compared to stocks or other things you can just go buy. But it’s always been the best.
And it reminds me of jiu-jitsu. Jiu-jitsu was always around. Karate was always around. Sumo wrestling was always around, wrestling was always around. Taekwondo was always around, but you didn’t know which one was the best because whoever you talked to was a sensei in that thing and they always thought theirs was the best. And then the Ultimate Fighting Championship came around and we actually pitted all of the different martial arts against each other. And it became very clear that this little guy doing jiu-jitsu was beating all of the big guys doing other things. And we had objective evidence to see it was better. And then the popularity of jiu-jitsu exploded.
BiggerPockets sort of functions like the UFC. We started to see everyone’s learning this tool now, everyone’s learning jiu-jitsu, it’s going all over the place. And then as they start comparing their investing vehicle versus the other people’s, real estate’s blowing everyone away. Now everyone wants to train in jiu-jitsu. It used to be a secret If you knew that you could beat up the big guy. Well, now the big guy knows it too. And Blackstone in this case is the big guy who’s going to go in there and buy it all up.
So, what I’ve been telling people is, I am more worried that you will not take action, that there’s not enough urgency about how valuable buying real estate is, and you will miss out on an opportunity to buy it, period, while they’re waiting for this huge crash that’s going to come so that they can get it even better. I don’t want to get too far off our questions, but do you think that I am being a little too greedy in my perspective that real estate is more likely to become too expensive for people to buy than it is to crash and become more affordable and people should wait to jump in?

Brandon:
[inaudible 00:15:32]No, I agree. I think given a long enough horizon, real estate’s always going to be more expensive. And so, now I also think rents are going to go up. I mean, you made the brilliant point this weekend we were talking that 30 years ago a house was 20 grand in some areas, and now it’s 200 grand. So, that means today if it’s 200 grand, it might be 2 million in 30 years.

David:
Logically it would be.

Brandon:
Or even more because of all the money-

David:
Because we’ve printed more money.

Brandon:
So, at the same time, rents that were $200 a month are now $2,000 a month, and they’re going to be $20,000 a month potentially. And so, it flows together. It’s like grandpa’s like, “When I was a kid you could buy a house for $12 and a pack of smokes.” It’s like, “Yep.” And everyone thought that was crazy that houses would be $1,000.

David:
[inaudible 00:16:13], “When I was a kid you could buy a house for $200,000.”

Brandon:
Exactly, exactly. And so, the more we can lock in debt today, the more we can lock in good debt, even at seven or 8%, I don’t care, as long as you can lock in good debt.

David:
It’s good stuff though. Yeah. It’s really going to be thinking that way. You notice in our position as people who are teaching real estate and have to pay attention to it, there’s certain facts that people like to grab ahold of, and there’s other ones that are uncomfortable and they dismiss it. So, you’ll often hear it said cash flow is guaranteed, but appreciation is just icing on the cake, it’s probably not going to happen. But you look back over 30 years, was appreciation just, it happened to happen or was it pretty predictable?

Brandon:
Exactly.

David:
And then when you try to live off your cash flow as someone like us that’s done it before, it’s actually wildly unpredictable. You never know when the thing’s going to break, the tenant’s going to leave, the problem’s going to occur. And then everyone accepts that appreciation could happen for the price, but we never think about the fact that it happens for rents too. Appreciation applies to rent. Rents go up over time while the mortgage stays the same. That’s what makes real estate make sense.
Your loan balance stays the same. Your value of your home goes up. Your mortgage stays the same, your rent goes up, over time this always happens yet there’s this consistent message of, “Well, don’t bank on that. Don’t bet on that.” And we’re not telling people to go out there and get yourself in the whole two grand a month buying a property that you can’t afford. No one would say that, but just let’s quit pretending appreciation in rents and prices and stuff is an accident that just happened like it’s not predictable that that’s going to continue.

Brandon:
Yeah. Agreed man. Agreed. But to continue the topic really quickly about raising capital, yes, it’s hard right now, but this is where my mind goes with that. Let’s just say half as many people are willing to invest in, let’s say Open Door Capital right now, we’re doing a big raise right now. Let’s say half as many people are interested. And out of those people, let’s say they’re only investing half as much. So, now it’s literally four times harder to raise capital than it was before, which is probably about where we’re at. Okay. So, we have two options, you can shut down and you can say, “I’m not going to raise as much capital. I’m going to lower my goals.” My buddy in high school, Corey would always say, “If you can’t reach your goals, lower your standards.” You can do that, not good advice.

David:
That’s funny.

Brandon:
Yeah. He was talking about that in terms of hitting on girls.

David:
I had a friend that had the same thing with hitting on girls, and he used to say, what did he always say? He said something like, “Lower your standards, raise your average.” The same thing.

Brandon:
Yeah. So, you can choose to do that if you want to, but instead, I just asked the question, “How do I get in front of four times as many people?” And so, we started advertising on Facebook and Google and YouTube, and I went, and I started going on more podcasts and instead, I took a problem, identified the problem, and then I asked, “How do I overcome that problem? Let’s really look at it and dissect it that way.” And so, if somebody’s trying to raise capital right now, whether it’s you’re trying to find one hard moneylender to fund your flip and there’s half as many hard moneylenders and they’re turning you down twice as much, it’s four times harder to get hard money.
Okay. Apply for four times as many hard money loans. If you are trying to raise money from family or friends or you’re trying to get a bank to finance your deal or an FHA loan to house hack, I don’t care. And it’s harder, don’t wish you were easier wish you were better, right? That’s a famous quote as well.

David:
Weights get lighter when you lift them.

Brandon:
Yeah. No, no. Well, wait, what?

David:
They feel lighter, but the weights aren’t actually becoming lighter, you’re becoming stronger.

Brandon:
Yes. That’s it. So, raising capital right now that’s important. On the LP side, let me just speak to those people who have money right now and are thinking about investing it. But you’re nervous because it’s a scary time, quote-unquote, right now. First of all, it’s always a scary time. There has never been a time, even when it was easier to raise capital, everyone’s like, “Oh, we have it. A recession’s coming anytime.” They’ve been saying that for eight years. You remember a podcast, we interviewed a guy years ago, not to call him out, I won’t even say his name, but years ago who, I mean, this is 2011 maybe.
And he was talking about musical chairs and he’s like, “Look, we’re going to go into another recession probably I don’t need it.” It’s like, the real estate’s a game of musical chairs and everyone’s dancing and having a good time right now. But you know what? Chairs are being pulled away and the music’s just going, but there’s fewer and fewer chairs. So, you know what? I don’t have to be the last one to get a chair. I’m going to sit down right now and I’m going to just watch people dance. And then the melody’s going to come on. The music’s going to stop. Everyone’s going to scramble for a chair and a bunch of people are going to lose. But I’m going to just sit down and watch. That was 2011. What did this guy miss out on? We didn’t see a double dip. He missed out on 10 years. Maybe he got back into it. I don’t even know the story.

David:
No, but theoretically if he followed his own advice, he missed out on the biggest run we’ve ever seen in housing prices because of all the money that was printed.

Brandon:
Correct. So, again, we make the best decisions with the data that we have, I understand that. But there is never going to be a time that you are going to feel good about investing in real estate. There’s never going to be a time that there’s not a question of fear coming around the corner.

David:
Oh, 100%.

Brandon:
Right. It’s always something scary coming around the corner. Always. I’ve been in this since 2007. There’s always been somebody shouting from the rooftop, usually Robert Kiyosaki, that the world’s going to fall. Right. That it’s going to collapse.

David:
And it’s comforting to hear that because it affirms our fear.

Brandon:
Yes. Yeah. But the reality is we don’t know. So, the best you can do is you can find a good horse and bet on the best jockey and the best horse you can find. And maybe spread the risk a little bit among multiple deals or multiple people.

David:
Yeah. But if you’re going to invest in something, I like investing in real estate the most because if my stock portfolio dips, if my crypto dips, if my NFTs dip, if whatever I put my money in goes down, I’m not getting rent paid, they can weather that storm so that I can bounce back. Real estate ends up being the best offensively and defensively when you look at it.

Brandon:
It does. Yeah. And what I like about real estate is it’s not going to go to zero. I mean, almost for sure not going to go zero. And so, business could, stocks could, you invest in your brother-in-law’s startup, it’s going to go to zero almost for sure. All this can go to zero. But real estate is as long as you can hold it long enough. So, this is the final tip I have for everybody in this economy right now, whether you’re raising capital, whether you’re thinking about investing in somebody else’s deal, whatever, the debt matters now more than ever before, that’s where you’re going to lose is with bad debt.
And then really, it’s that it’s any market. The way you lose is bad debt. And what I mean by bad debt, I mean is loans that are maybe riskier, that are adjustable rate at a level you can’t handle that are short term. There’s going to be a massive problem in the coming years. This is a whole different conversation. But with all the bridge debt, which is short-term debt that went on commercial real estate over the past five, six years, it’s all coming due, those people can’t refinance. They’re in trouble. The debt is what’s going to sink people. Dave Ramsey has been preaching this for years now. His answer is no debt. Mine is to be very cognizant of the debt that you’re doing or that the investor that you’re investing with is doing.
So, yeah, pay attention to the length of time. The more time you have, the less risky it is. You get a 30-year loan, it’s really hard to screw that up. You get a 30-year loan with some cash flow, it’s really hard to screw that up.

David:
Avoid a cocaine addiction and you’re probably going to be okay.

Brandon:
Yeah, you’re going to be fine. Yeah. So, given enough time, you’re going to be fine. In fact, we just recently changed our whole model at Open Door Capital where almost every deal we do now is what we call a generational wealth fund. Because we were looking at the market, we’re like, “I don’t like the risk.” Let’s just pull back and say, “Every deal we buy now,” generally speaking, we will do some one-offs that aren’t this way, “we’re going to hold forever.” Forever, there’s no end date, there’s no end date. And we just tell our investors, “Hey, invest with us. You get all the cash flow, all the cash flow until you get 100% of your money back through refinances.”
At that point, we split everything, not 50/50. We give them more than we usually give 70/30. So, they get 70%. So, in other words, you get all the cash flow until we refinance it someday until you get your money back, and then you stay in the deal for the rest of your life, forever. We don’t sell, we don’t plan, infinite return at that point. And we get the longest debt we can get. We can try to get 30-year debt all day long. It just takes all the risk down. And is the return less than if we were to go flip apartments every six months? Sure.
If we wanted to flip apartments, get really risky, low debt, or really risky high leverage debt that we have one year to get a property and turn around and flip it, you’re going to get a better return, guaranteed. And so, there are people doing that. If that’s your game, go do it. What I want is I want consistency. I want low-risk. So, I want really good, solid, stable debt for the long haul. And that’s my advice for anybody in real estate right now is look for the long play, the long game.

David:
All right. Next question here, Brendan, you’re an expert and relentless marketer, podcast video content all around you and you help build a foundation of what BiggerPockets is today. You also grew your own brand and several social accounts along the way. What is the status of the competition that you had with Investor Girl Britt to get to 300,000 followers? Is there a winner? Have debts been paid and are there new bets to be made?

Brandon:
Great question. So, by the way, Investor Girl Britt and I raced to 100,000 originally, she won. Then we raced to 200,000. She won. And then we set the bet, but we didn’t set it at 300 actually. So, the bet is 500,000. We wanted more time to build up here and I don’t want to lose again. So, this time she is at 259,000 followers. And I am at more than that 330, or something like that, 330.

David:
But you didn’t win because you didn’t set the milestone at 300, you said it at 500.

Brandon:
Correct.

David:
Which you thought would be an advantage and actually [inaudible 00:25:31] against you.

Brandon:
So, what’s the $300,000 milestone in your life, David? That you should be setting instead? You were afraid and so you…

David:
I don’t track shallow metrics like followers, so I don’t know. I would track them if I was good at it. I’m at like 150, half of you.

Brandon:
There you go. Well, let’s talk about this for a minute. I think this is a very interesting point you just brought up shallow metric.

David:
Doors, number of doors.

Brandon:
Well, no, that’s not where I was going, but maybe that is. People might think social media is a vanity metric, followers is a vanity metric.

David:
Oh, I see. It’s not in our business.

Brandon:
It is very tied to how much capital I can raise, is the number of people who know, like, and trust me, how does somebody know, like, and trust me? They have to see you over and over and over. That’s why people [inaudible 00:26:13].

David:
And they have to see patterns of consistency in your message and in your life.

Brandon:
Yeah. Over and over and over. So, show me a way to do that at scale other than social media and I’ll go do that, but it doesn’t exist. Social media, TV, that’s it. But we own-

David:
The currency of the future is attention, it’s even more important than dollars because dollars can be inflated. It’s very difficult to inflate attention.

Brandon:
Yeah. I don’t know if I had to guess I spend half a million dollars a year on my team, the team members that run everything from video to social to all that stuff. We probably spend a good chunk of money on that. Why? Because I’m trying to buy $10 billion of real estate. By the time this episode airs in a week, I’ll be just on the edge of a billion dollars of real estate. I got 10 times more to go. So, what does that mean? I need 10 times more people to know, like, and trust me. I need to consistently find good deals.
And this is the other thing with social media, actually, the number one reason to have social media is not to raise capital, it’s to raise people. The best people I have, all my top people, I’m a who, not how guy. All my top people came from social media, they followed me, they found me. I mean, they listened to the podcast, which I would include in social media, but they found me on the podcast, or they read my book maybe. But then they followed me on social media. They saw a pattern over time and now they are working for me.
Now people might be saying like, “Yeah, that’s easy when you have 330.” I didn’t, five years ago, I didn’t 10 years ago. I started with zero. Just like you would, just like everyone does. We all start with zero. And I’ve been working on it for a long time. And so, it goes back to the idea that Jordan Harbinger told us on the podcast when we interviewed him back a few years ago. I don’t remember what episode that was, but he used that line, “Dig your well before you’re thirsty.” Look, I don’t care if you’re raising capital right now, but someday you may want to raise capital, someday you may want to bring an employee, someday you may want to whatever. Maybe now is the time to start focusing a little bit more on your social media.

David:
Well, I’m glad you’re focusing on it because my best people come from you. So, please continue. Now remind me, what was the bet that you had with Brittany? What does the loser have to do?

Brandon:
Oh, man. Nickelback tattoo on the lower back.

David:
Now, was it a coincidence that you look like the Nickelback guy? So, Brittany’s going to have to get a tattoo that looks like you.

Brandon:
This is how you remind me.

David:
You sound like him too.

Brandon:
I do sound like him.

David:
We’ve talked about this before. Might as well do it on the podcast. Is Nickelback as bad as the reputation?

Brandon:
No, dude. Okay. So, I was working out with Jerry back like a year ago.

David:
Yeah, he’s our jiu-jitsu instructor.

Brandon:
And we’re working out and he’s like, “What music do you want to listen to today?” I was like, “Let’s put on Nickelback. That’ll be funny, right?” So, we play it and we’re working out. And I’m like, “This song’s awesome.” I was like, “I forgot about this song.” And then the next song comes on and we’re like, “This song’s great.” The next song came out for an hour and a half, didn’t repeat just song after song. Everyone was a freaking hit, and everyone was amazing. It’s like the Taylor Swift of Rock. And I’m like, “Do we hate them because they’re bad or do we hate them because they’re good?”

David:
That’s deep. So, what’s the Nickelback in your life?

Brandon:
What’s the Nickelback in your life? Who are you looking down on because they’re more successful because, at the end of the day, you are jealous? Whether you want to admit it or not, you’re jealous of their success. So, you’re looking down on them. Is anybody out there listening to this going, “I don’t really like Brandon.”? Probably. Maybe you don’t like my beard. Maybe you don’t like my voice. That’s very possible. But I know that for me when I look at people and I don’t like them, it’s almost always rooted in an a-

David:
It exposes something about you.

Brandon:
It exposes something, a hole in me that makes me feel like the bad guy. And a wise man once said, “No one wants to be the villain in their own story.”

David:
Or what opinions have you formed because everybody else was saying it and you were lazy [inaudible 00:29:32] listen to it yourself?

Brandon:
There you go. Yep. Dude, that’s a question right there. Like, “Oh, this doesn’t work, BRRRR doesn’t work, house-hacking doesn’t work, subject-to doesn’t work.” Or subject-to works, BRRRR works. Or how-

David:
There’s going to going to be another recession [inaudible 00:29:42].

Brandon:
There’s going to be another recession. Yeah. We love to take these shortcuts. It’s easier just to rip on Nickelback because yeah, Nickelback is an incredible band.

David:
I was a little scared to say that out loud because I thought there might be the answer for why everybody hates them, but I couldn’t understand why they’re so hated. Paramore was another one. People were just ripping on Paramore and how bad their music was. And I’m not a huge that type of music fan, but they don’t sound bad to me when I hear it. There is one small thing that has been known to plague you from early on in life about personal hygiene. Can you share what that is and if you have found a solution for it yet?

Brandon:
Oh my gosh. Bringing back from a long time ago, I had a youth pastor when I was in sixth grade, Jodi de Young, shout out to Jodi. She said, “Hey guys, you realize that nobody ever cleans the middle of their back?” And I was like… Because you can’t reach, there’s like a one-inch spot in the middle of your back you can’t reach.

David:
It’s like on the windshield, the little triangle that the windshield wipers…

Brandon:
Yes. Yes, that’s exactly, there’s this little triangle-angled spot on the back of you as well that has never seen soap a day in its life.

David:
Even with your arms. You’re Mr. Fantastic [inaudible 00:30:47].

Brandon:
Yes. I got some arms, but I can not reach that one little spot right there. I mean, yeah, you could let the soap drip down. You can take a towel and maybe do this, but none of us do, instead we’re all just gross. And don’t let anybody lick your back. It’s disgusting.

David:
At least not that spot.

Brandon:
Not that spot. Lick at the rest of it.

David:
I wonder if massage therapists know that and they avoid it, they just take a detour around it every single time they get there?

Brandon:
Yeah. The question I have for you though is what is that little spot in your life? Where in your real estate have you just been avoiding?

David:
Again, if you guys have ever wanted to know what it’s like to be best friends with Brandon Turner, it’s that question on repeat every single time that you try to talk.

Brandon:
Listen man, in your business, there is something that you just… You’ve been doing everything. You have these patterns in your life. You do the same thing every time you get in and you just do your thing. But there’s one thing you’ve been avoiding and that’s the part that’s starting to stink, man. It’s the part that you need to focus on because right now is the time to focus on that spot on your back.

David:
The bacterial dilemma.

Brandon:
The Bacterial Dilemma by David Greene. It’s the new book.

David:
All right.

Brandon:
Well, we’ve got nowhere in this show.

David:
I hope you guys are enjoying the nowhere run that we’re on. I mean, Seinfeld was a show about nothing, and it did really well. Right?

Brandon:
This is a show about nothing too. But I guarantee you by the end of the show, you will be financially free or your money back.

David:
That’s exactly right. All that money that you paid us, you’ll get it at [inaudible 00:31:57].

Brandon:
All that money you paid us today to listen to this show.

David:
Next question, where did our obsession with jiu-jitsu, which we’ve already mentioned once unfortunately, begin, and who was responsible for the hundreds of mentions that our audience now has to endure?

Brandon:
So, episode number 365. I like that. Jocko was on episode 365, and I’ve listened to Joe Rogan, I’ve listened to other people talking about jiu-jitsu, Tim Kennedy, and others. And it was always one of those, “Yeah, that’s a cool, neat thing, that’d be fun.” And they say there’s a lot of reasons to jiu-jitsu and Jocko did it and I like Jocko. And he gets on the podcast, and I said to him, “Yeah, man, I would love to someday-”

David:
Big mistake.

Brandon:
… “Do jiu-jitsu.” And as any good friend does, not that I can call Jocko a friend though.

David:
He was a friend to you.

Brandon:
He was a friend to me.

David:
He who is my neighbor in the story of the Good Samaritan is, who do you choose to be a neighbor to?

Brandon:
Yeah. Do you know why? Because he said to me, “Someday? What day?” I’m like…

David:
Yeah, Brandon Turnered you is what he did. And I got to watch it in real-time.

Brandon:
I’m like, “I’m going to go Monday.” He’s like, “Okay, here’s what I want you to do. I want you to go on Monday. I want you to text me on Tuesday and let me know that you went.” So, I show up on Monday, I’ve told this story before I’m going to tell it real briefly now, I show up on Monday. I Googled. I’m like, “Okay, I know there’s one in my town. I Googled jiu-jitsu in Kihei and there’s a place. I go, “Okay, great.” So, I drive over there during the day to go check it out and it’s out of business. And I’m like, “Oh no.” So, I go back home, I Google again, where’s another one? It’s 40 minutes from my house. I’m like, “Shoot.” So, I go there and I’m late that night because it was Monday. So, I go there and I’m late.

David:
Nothing better than being the white guy in Hawaii that walks in late on their first day of a jiu-jitsu class.

Brandon:
And this was in Wailuku, this is the local area, meaning this is not where tall, inky, Brandon shows up to jiu-jitsu five minutes late.

David:
You’re walking in the wolf’s den.

Brandon:
Oh. And everyone’s in a gi and I’m not, and I walk in there and I’m five minutes late and there’s a woman at the front desk sitting there and there’s 30 men looking strong and talking and doing some warmup stuff. And they’re on the mat. And I’m like, “Hi.” And she’s like, “Can I help you?” And I’m like, “Yeah, I’d like to do jiu-jitsu.” And she goes, “Today?” Like “Yeah.” She goes, “Here?” And I was like, “Yeah.” And she goes, “What’d you Google it or something?” And I’m like, “Yeah.”
She looks at me and she’s like, “You want to do this?” And I’m like, “Yes.” “Well, I don’t… I mean, just go sit over there.” And she points to this bench. And on this bench is three six-year-old kids, maybe five or six-year-old kids. And they’re all just sitting there playing video games on their iPads. She’s like, “Just go sit over there.” So, I literally walk over there, all six foot five of me, and I sit down on this little kid’s bench. There’s one kid to my left, two kids to my right.

David:
Never heard the detail of this story.

Brandon:
And I sit there for an hour and a half, and I just watch these guys roll.

David:
The bench of shame.

Brandon:
The bench of shame. And I was so mortified every second. But you know what? That’s what accountability does. I was so scared to walk in. I was so scared to go there. New place didn’t know what was going on, out of place, didn’t know what jiu-jitsu was, didn’t have my gi, didn’t know what a gi was. And I’m sitting on the bench feeling like a moron. But I knew I was going to have to report back to Jocko. That’s why I’m such a fanatical about accountability because when I tell something to myself, I will lie to myself all day long. When I tell something to somebody, I respect that I’m going to do something I am going to do that thing.
And this is why in the BetterLife tribe, we have pods, right? GoBundance has the same thing, pods. Hold each other accountable in a pod, whether you’re in my group, whether you’re in David’s group because you got accountability, I got accountability. Build accountability in your life if you want to see tremendous growth. So, the story goes on, I leave quickly as soon as it ends, I ran out and I was like, “That was terrible.” But now I have at least done a little bit. It’s like the newbie going into real estate. And you go in and you’re like, “Hey, I’m going to look like a moron.” And you make an offer on a property that’s completely stupid, or maybe you go to an open house, and you don’t even know what you’re doing.
And you walk out and you’re like, “That was dumb. I’m never going to do it again.” And most people never go back. But I got home and I’m like, “All right, can’t be worse than that.” So, I Google it again, I find another place. I was like, “I’m going to go to that one anymore. That was too awkward.” So, I go to the other place, I Google it, and two days later I go to that one. I walk in. This time I walked in a little early. There’s four guys standing around, I’m like, “Hey, what’s up everyone?” And they looked at me and they’re like, “Can we help you?” And I’m like, “Yeah, I was hoping to do some jiu-jitsu.” And they’re like literally said, “What’d you Google it or something?” And I’m like, “Yes. I Googled it.”
I’m like, “What do I do?” And I’m not kidding. The instructor points to the bench and he says, “Yeah, just go sit over there.” And I go sit down again. And I watched the entire thing and I just sat there and watched. But at some point, at the very end, he’s like, “Yeah, come over here and stretch with us.” And at the very end, I went and str did the ending stretch with them. And I showed up the next day. And that time I got to do the beginning stretch. And then I got to watch them roll. And the next time I did a little more. And next time I did a little more. And before long I was in jiu-jitsu.
So, long story short, there’s such a great metaphor for life here in terms of real estate. People want to get into real estate, and they get scared, and they don’t show up, or they get scared, and they do show up and they do something stupid, or they make a mistake and then they quit. But as Tony Horton from P90X fame would say at the end of every single episode of P90X, every single video, he’d say, “Hey, just keep pushing and play. No matter what you feel, no matter what you’re doing, you show up tomorrow and just press play.” And that’s my advice for people today trying [inaudible 00:37:28].

David:
Even Brandon Turner did not eat the whole thing in one bite. You had to split into several small bites and kept showing up and went through some embarrassment, went through some shame, went through some humiliation, which is funny because they didn’t directly humiliate you. But being told to sit on a bench with a bunch of six-year-olds while you watch everybody else get to be cool. And then the real embarrassment starts when you actually go out there and start having to do it, right?

Brandon:
Yes. Then you really get embarrassed. But then you’re on the mat, then you’re there. I’ll give you one more, actually two more quick, very quick stories. I know people are tired of jiu-jitsu analogies. I’m walking through Costco, and I’ve told this on the show before, but I’m walking through Costco, and I meet this guy who recognizes me from BiggerPockets. What up? Shout out to you if you’re listening right now. And he says, “Hey man, I heard you’re doing jiu-jitsu. I’m a black belt.”
And I’m like, “Oh, cool man. Yeah, I’ve been doing it for about six months now. I’m just a white belt.” And he stops me. He goes, “Hey man, you’re not just a white belt. You’re not just a white belt.” He said, “You know what? The white belt is the hardest belt to get.” Now for those who don’t know, the white belt is the one they give you for showing up. That’s the beginner belt. And he said, “99% of people will never earn their white belt,” earn their white belt.

David:
Good point.

Brandon:
They give you the white belt, but you have got to show up.

David:
Oh, yeah. How many of the people listening to this are looking at you, the black belt investor, I’m going to own a billion dollars of real estate. And they’re comparing themselves to you. And they’re like, it’s how we feel when we look at a black belt, “I will never ever, ever, ever be them.”

Brandon:
Be there.

David:
And you know what the next thought is? “So, why show up? Why even try? Because I can’t be them.” Versus looking backward and saying, “Look at all the people who don’t know anything about real estate, who have no money saved up, who are actually in massive debt, who don’t know any path out of where they are, other than just working that same job and hoping something external just magically finds them and changes their life that have no plan to find financial freedom.” But they’re listening to this podcast and that’s starting to be developed.
There’s some people that are listening like you on the bench with the six-year-olds that are watching what it looks like to do jiu-jitsu. And the neurons are being rearranged in their brain as they’re starting to figure out what this thing looks like. That is progress. You don’t have to be buying 700 doors a year for it to be considered progress.

Brandon:
There’s a man in Ireland back in the day who wanted to move a rock fence. Have you ever been to Ireland? They have these rock fences. They’re like, not mortared or anything, just piles of rocks, and then make the whole fence. And he had to move the fence from this side of the field to another side of the field. And so, he goes over there, and he grabs a rock, but probably 20 pounds let’s say. And he takes the rock, and he walks across the field, and he sets the rock down. Then he walks back, grabs another rock, moves across the field, sets it down.
And each of these rocks, let’s say weigh 20 pounds. And over the course of the day, he moves, we’ll call it 10 rocks. Did that man move 200 pounds? Yes. Did he move 200 pounds at one time? No, he never had to move more than 20 pounds. And so, oftentimes we look at moving the wall, we look at this big project, like, “I got to do this big thing. I got to get good at real estate. I got to build financial freedom.” Let’s take it back to the ff. I got to build this financial freedom. And it’s a big wall. It’s a lot of rocks there.
It looks heavy, but the fact is it’s not heavy. It’s 20-pound rocks. Anybody can do it. So, maybe people need to focus a little bit less on the wall and more on the rock. What’s the next rock in front of you? What’s a 20-pound rock? It’s not, it’s not light. 20 pounds is still a little lift, but anybody can do it. A kid could do it. You just move the rock across the field, before you know it, you got a wall over there, you got a new fence.

David:
That’s a great example.

Brandon:
Thanks, man.

David:
You’re not too bad at those.

Brandon:
Thanks, man.

David:
Next question. We know that time with your family has always been a driving motivator. What’s something else that real estate has afforded you?

Brandon:
Oh, real estate has afforded me a luxury, ridiculously nice property where I live. I talk a lot about these 10 categories of life. It’s your spirituality, your finance, your career, your relationship. But one of them, out of a 10, and we do like this little project, the Wheel of Life, but one of them I call environment. The environment is the physical world around you. It’s the car you drive, the house you live in, the office you go to work to every day. It’s the physical world, the things you touch, see, hear, feel all that, every single day.
And now happiness is not derived purely from your environment. You can be happy and living in the middle of nowhere in a terrible house and driving a terrible car and be perfectly happy. However, the more of your life categories that are on a scale of one to 10, closer to 10, the general better happiness I feel, the more fulfilled I feel. So, real estate has allowed me to maximize my environment in a way that allows me more, again, doesn’t just alone bring me happiness, but my environment brings me a lot of peace and enjoyment. I’m able to host people here all the time, and I’m able to take my kids in the pool. I’m able to do a lot of things that I could not do when I lived in the rain of Grays Harbor because of real estate investing.
And I’m not talking about the money of real estate. I’m talking about, I’m house-hacking this house. I’m living in Hawaii for cheaper than people live in Ohio. And that’s the fact of the matter. I’m living in a $4 million house in Hawaii cheaper than people live in Ohio because of real estate investing. So, hashtag house-hacking.

David:
That’s a great point. I loved it because you asked the question, how do I do it? Not can I do it.

Brandon:
Technically you asked the question, how can you do it? And then I answered to you.

David:
But you already knew it.

Brandon:
Yeah. But you helped me understand that again, the power of accountability and friends that challenge you. So, thank you. You pushed me to buy this house.

David:
My pleasure, man. Thanks for putting me in the position where I was able to talk to you. You wouldn’t be on the podcast right now, even having those real estate conversations if it wasn’t for you. And again, I’m also enjoying this $4 million house in Maui that I don’t own myself. So, please keep doing what you’re doing because it definitely benefits me.

Brandon:
I feel like we’re shutting down, but we still have the Famous Four, aren’t we? Is that still a thing?

David:
Yeah, we’re heading to that.

Brandon:
Oh, okay. Good.

Speaker 1:
Famous Four.

David:
All right. Famous Four. I get to ask you these questions. Question number one, what is your current favorite real estate book that is not your own?

Brandon:
All right. This is a book, and I know you ask the business book one next, but it’s a business book, but there’s a chapter on real estate. The book is called, shoot, Keith Cunningham, The Road Less Stupid and I’ve been told by multiple people to read it. Chapter 10 in The Road Less Stupid is probably the single greatest chapter of any book I’ve ever read in terms of real estate, because-

David:
You read a lot of books too.

Brandon:
I read a lot of books. Here’s what happened. He went bankrupt back in the ’80s, the whole real estate thing, just like Dave Ramsey had the trouble, that whole world of real estate changed in the late ’80s and a lot of people went bankrupt. So, him and all his buddies who were all millionaires, that all went bankrupt, sat down, and said, “Let’s make a list of every single lesson we learned.” And they just wrote a list. He just took that list and the whole chapter is simply a hundred lessons of somebody who had come just out of a collapse. And so, reading this, I was taking a pen and [inaudible 00:43:57]every single line. I underlined I was like, “Oh, I need to know this. This is great.”

David:
It’s concentrated wisdom.

Brandon:
Concentrated wisdom from multiple people in real estate. It was fantastic. And it’s all commonsense stuff, but it’s stuff that you need to hear. Just stuff about being greedy, going too fast.

David:
But that’s what fundamentals are.

Brandon:
Yeah, it’s fundamentals.

David:
And you have to be reminded of fundamentals all the time.

Brandon:
Yeah. Yeah. It was a really good chapter. I read at a really good time.

David:
Something I like about you is that you put the fun in fundamentals.

Brandon:
I put the fun.

David:
Because you’re entertaining.

Brandon:
I would say I put the fun in fund.

David:
Yes, you do.

Brandon:
Open Door Capital, we put the fun in fund.

David:
All right. Question number two, what is your favorite business book?

Brandon:
Business book. Man. Favorite’s a hard one. I’m going to go with, I think I will go with The One Thing I really like The One Thing I’ve been hanging out with you and Jay Papasan here in Hawaii because he was a keynote for the BetterLife Real Estate Investment Summit. But I really like The One Thing. When I read that book, I don’t know if I’ve talked about this, I probably have. But when I read that book, first of all, it was the only book I’ve ever read where I finished page whatever, 250, whatever the last page is. And then I went and turned back to page one, and I read it again. I read it twice in a row.
And then I had this epiphany. I said, the idea of The One Thing is what’s the one thing you can do that if you just did that, everything else becomes easier, not needed, basically. And I said, “If I could just get this concept and the concept in this book into my thick skull if I could just really internalize this, my life would be completely different.” Everything else would be easier. In fact, the book, The One Thing is the one thing. And so, I said, instead of reading 20 books this year, or 30 books this year, I’m going to read one book 20 times. And I went and read The One Thing, I think 20 times.
I put it on Audible and just for the rest of the year, the whole year, that’s pretty much all I read was The One Thing. I’d go for walks, it was when I was running a lot. So, I just go for a run and I just listened to an hour of The One Thing every day and I just kept listening over and over and over. I told that to Jay and he probably thought I was a stalker. And then I look at where I’m at today, and I’m like, “It’s so many of the lessons in that book.” In fact, just sitting with Jay at a table this weekend, I was like talking, we were just BSing and telling stories.
And there were three different times where I was like, “Wait, I think that story was in The One Thing.” And he’d laugh and went, “Yeah.” So, so much of what I do and say, and teach just came from that book. So, The One Thing, Jay Papasan, and Gary Keller.

David:
There’s a verse in the Bible that talks about that same principle about read the Word, meditate on the Word, drill it into your forehead, make it so it’s so ingrained in who you are that you don’t have to think to try to remember. It is a part of you. That sounds like exactly what you did with The One Thing. And when it comes to wisdom, that is a really good idea. It acts as a compass that guides you when you feel lost. When you get confused, you’re less likely to stray away from the path, so to speak, when you’ve got that software downloaded into you.

Brandon:
There’s a great quote from Bruce Lee that says, “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”

David:
That quote is in BRRRR.

Brandon:
Is it?

David:
Yep.

Brandon:
What does that mean to you?

David:
It’s repetition. It creates mastery. That’s the way that I use it, it’s why I talked about Bruce Lee so many times. You don’t get good at anything doing it once or twice a year or once every three or four years, which is how most people buy real estate. You have to do it a lot if you want to be good at it, just like anything else. And so, there’s always a new, shiny thing. It’s nice to say, “I know 10,000 different kicks, look what I can do.” But to do one kick 10,000 times is how you become a master of it, which makes you a more feared opponent.

Brandon:
Moving on.

David:
Question number three. What is one habit or trait you have picked up lately?

Brandon:
That’s like my question and I don’t even know, tennis. I’m going to go tennis. And I’ve actually stopped the last few months as I got into the gym instead. But for the last year, I did a lot, I got a tennis membership, and I started playing tennis. Why? Because I wanted something I could do with my wife. And she had friends that were playing tennis. So, I said, “Okay, let’s do tennis.” So, we started playing together and it was fun. We were having a good time. I’m going to likely switch over to Pickleball and try that. I’ve not played yet.

David:
Such a follower.

Brandon:
I know people just say… Here’s my problem with Pickleball. It’s always been, I never saw somebody have a sweat playing Pickleball. No one has a sweat playing Pickleball. It’s always like… Right? But then I met an actual professional Pickleball player and he’s like-

David:
Pickleballer?

Brandon:
Pickleballer. I met a professional Pickleballer and he’s super in shape and he is like, “Dude, no, Pickleball is intense. It’s like racquetball, but you can play it outside anywhere you want.” I mean all over the place. And that’s what convinced me because I’m a racquetball player through and through. I love racquetball with all my heart, soul, and mind. I love it.

David:
Yeah. You’ve always loved it.

Brandon:
Always loved it. There’s just one place on the island to do it. In fact, I’m going to build a co-working spot in Maui, we’re actually working on it right now. We’re going to buy land; we’re going to build a big co-working spot. I’m going to put a Pickleball, I mean I’m going to put a racquetball court in it because there’s nothing else. So, I’m going to house-hack my racquetball court. And if you’re a member of the co-working spot, you can therefore use the racquetball court.
And this will interest you, you know how racquetball courts are made up of all those four by eight panels all over it, the bottom whole level I’m going to have on hinges that swing up and inside will be mats, and you can roll them out and you have a jiu-jitsu gym as well. So, I can rent it out to jiu-jitsu academies or have one hosted there. And then we can just roll it back up and back to the racquetball courts. You can reserve the court for either racquetball or jiu-jitsu, martial arts.

David:
Brandon Turner idea right there.

Brandon:
Yeah. I’m going to literally house-hacking an office because I need an office. I need a better studio than this. And I’m like, “I don’t want to pay for it.” So, I’m doing a $16 million development project right now and we’re going to raise capital for it. We’re going to do the whole thing and it’s going to be so I can have an office, but the returns are actually stupid because there’s a big need for that here.

David:
Awesome man. Very cool to hear that.

Brandon:
Anyway, that is what I’m working on.

David:
All right, question number four. What is one of your favorite things about me?

Brandon:
About you? That is not a question.

David:
What the producer put in there.

Brandon:
Okay. Your analogies are pretty great. You show up when I ask you to. And when I ask for a favor, you have never said no, ever. You encourage me a lot, and other people, you’re very good at encouraging. That is maybe a gift you have, which is you see the best in people and then you call it out on them. But you also see room for improvement and call that out on them. And that’s what a true friend does, so…

David:
Thanks, man.

Brandon:
Not bad at all.

David:
Appreciate that. Not my hair, huh?

Brandon:
Going to say the beard’s looking pretty nice, but hey,

David:
Dude, it’s harder to grow longer than I thought. I just thought it would sprout right out. It got to this point and then stopped.

Brandon:
You got to eat more carrots or something.

David:
Okay, we’ve got to talk about that. I was wondering if it was like a beard oil thing. Question number five, tell us where people can find out more about you.

Brandon:
I am an Instagram nerd. So, BeardyBrandon, beard with a Y, Beardy. But notice how I said BeardyBrandon beard with a Y. People are like, “Okay, that’s B-Y-R-D. I’m like, “beard Y.” Think Spanish like beard E Brandon. It’s like beard and Brandon, BeardyBrandon on Instagram, TikTok, all that stuff. The podcast is A Better Life with Brandon Turner. We hit number 40 of all podcasts in the world when we launched.

David:
That’s nice.

Brandon:
That was awesome. It’s not there now, but was, we have a traveling podcast. So, I travel around the country, and I record people and that’s been a wild adventure to do that. We’ll fly into a city and record seven podcasts at one time over a three-day period with no sleep. And we go out with the guests afterward and it’s been an adventure. But man, it’s been fun. So, that’s it. A Better Life with Brandon Turner, go to listen to the podcast and you were on it. So, go listen to that episode everyone.
I heard multiple people say that when you and I were chatting on, we did a live podcast recording, then we followed it up with a little interview after. But when we did the live one, almost everybody I talked to said that was the best part of the entire conference that I held and that it was the best thing that you and I have done together. People thought it was one of the best things for you and I. Now I think this interview was pretty darn awesome but go listen.

David:
All right. You got a lot going on, man. You’ve not been resting on your laurels, that’s for sure. Very cool to see this and cool to see that the vision is still firing even faster than it was when we were doing our stuff together. That’s right. Thanks for joining us, everybody. Please go check out Brandon all over the place and send him a message. Let him know what you thought about this show. Let you get out of here because you’ve been sitting down for a long time. This is David Greene for Beardy, pew, pew Brandon, signing off.
All right. That was the first half of my conversation with Brandon Turner. We’re about to get into another conversation that isn’t Seeing Greene style, but it’s still going to be fascinating. We’re going to talk about the five episodes on BiggerPockets that had the biggest impact on both of us. You don’t want to miss it. So, check out that episode next.

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.



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Chicago-based Guaranteed Rate, a top 10 U.S. mortgage lender, acquired Sirva’s shares at Premia Relocation Mortgage and now has full ownership of the business, the companies announced on Friday. The financial terms of the transaction were not disclosed. 

Premia, which provides a relocation mortgage service for employees moving across the country or to other countries, has a digital platform called DigitalMove. According to the mortgage data company Modex, Michigan-based Premia has three branches, 21 active loan officers, and originated about $670 million in mortgages in the last 12 months. 

“With this change in place, we can provide our customers with an even wider range of products and specialized services,” Victor Ciardelli, Guaranteed Rate’s founder and CEO, said in a statement. “The increased investment in technology and additional resources GRI brings will enhance and strengthen an already established foundation.”

Premia‘s production represents a small share of G-Rate’s origination volume, which reached $7 billion in the first three months of 2023. It fell 58.8% compared to the same period of last year but was enough to give Guaranteed Rate the sixth position among the largest mortgage lenders in the country, according to Inside Mortgage Finance (IMF). 

Guaranteed Rate inherited Premia, a joint venture with Sirva, when it acquired multi-channel lender Stearns Holdings for an undisclosed sum in January 2021, bringing in a $20 billion lender that gave the company direct access to the wholesale channel, a network of talented underwriters and compliance specialists and several highly profitable joint ventures.

One year after the acquisition, G-Rate closed Stearns wholesale channel and laid off hundreds of employees. In a letter to brokers about shutting down the Stearns wholesale channel, Ciardelli wrote that the company had decided to focus on leveraging its “industry-leading purchase platform augmented by the best loan officers in the business.”

In May 2023, G-Rate adopted the technology company Gateless‘s Smart Underwrite solution, which aims to significantly reduce the time and effort involved in the origination process, potentially leading to faster, if not instant, borrower approvals.

Before that, the company expanded its program to approve loans within 24 hours nationwide. Dubbed the “Same Day Mortgage,” it aimed at giving a competitive edge to first-time buyers who are competing against the all-cash buyers who make up 28% of home purchases, the lender said. 



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Mortgage rates little changed this week as investors assessed Federal Reserve Chairman Jerome Powell’s latest comments on rate hikes. To sum it up: a very strong labor market remains the main driver behind the Fed’s rate setting decisions and more tightening is still to come.

The Freddie Mac’s Primary Mortgage Market Survey, which focuses on conventional and conforming loans with a 20% down payment, shows the 30-year fixed rate averaged 6.71% as of June 29, up marginally from last week’s 6.67%. By contrast, the 30-year was at 5.70% a year ago at this time. 

Other mortgage indexes also show rates slightly rising. 

The 30-year fixed rate for conventional loans was 6.91% at Mortgage News Daily on Thursday morning, up one basis points from the previous week. HousingWire’s Mortgage Rates Center showed Optimal Blue’s 30-year fixed rate for conventional loans at 6.69% on Wednesday, compared to 6.66% the previous week.

“Mortgage rates have hovered in the 6% to 7% range for over six months and, despite affordability headwinds, homebuyers have adjusted and driven new home sales to its highest level in more than a year,” said Sam Khater, Freddie Mac’s chief economist in a statement. “New home sales have rebounded more robustly than the resale market due to a marginally greater supply of new construction. The improved demand has led to a firming of prices, which have now increased for several months in a row.”

This week’s consumer confidence and new home sales came strong but investors are still watching the Federal Reserve to understand its next moves after the rate hike pause in June. The central bank’s future decision will indicate what to expect for the remainder of 2023.

At a banking conference in Europe on Thursday, Federal Reserve Chair Jerome Powell said that inflation remains well above the Fed’s longer-run goal of 2%.

“Since early last year, we have raised our policy rate by 5 percentage points. We see the effects of our policy tightening on demand in the most interest rate–sensitive sectors of the economy, particularly housing and investment. It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation,” Powell said in his speech. 

“With the Fed taking a breather from monetary tightening until its July meeting, capital markets are assessing the outlook for the second half of 2023,” said George Ratiu, chief economist of Keeping Current Matters

The economy and job markets are still expanding, allowing housing to stabilize, remarks Ratiu.

On the downside, the Federal Reserve has been clear that inflation is still hotter than desired, and additional rate hikes are on the table. Based on the central bank’s forward guidance, most economists expect two more rate increases in the months ahead. The Fed still sees the strong jobs market as an obstacle to taming inflation. It intends to put a bigger dent in payrolls, Ratiu expects, risking to damage consumer confidence and push the economy into a recession.

Even with weekly fluctuations, the 10-year Treasury has been hovering around 3.7% since mid-May, running in a steady 100-basis point range, Ratiu noted. “Investors are welcoming signs of economic resilience at the midpoint of the year following a 12-month period dominated by recession worries. This week’s signs of strength came from consumer confidence numbers which hit a 17-month high, and the jump in new home sales.”

Jiayi Xu, an economist with Realtor.com, said that while the Fed’s rate hikes “may pose near-term upward pressure on interest rates, including for mortgage rates, we expect a gradual decline that could bring rates near 6.0% by year-end.”

In addition to persistently high mortgage rates and housing prices, the shortage of housing supply has worsened the conditions faced by first-time home buyers. 

“Thankfully, builders are taking note of the market need and are making efforts to catch up to demand through new construction, especially of homes at lower price tiers. After dropping below 10% in 2022, the proportion of new homes sold that are priced under $300,000 is on an upward trajectory,” said Xu. 



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Want to make over a million dollars a year? Real estate may be the best way to get there. Just follow the same steps Dean Rogers took. In just a decade, Dean went from making $65,000 per year to over a million dollars; but the payoff wasn’t instantaneous. After being put in a position that most people would kill to be in, Dean left behind a seven-figure salary, glitz, glamor, fame, and a childhood dream to do something that fulfilled him. He had to start over entirely while his peers made more money than most of us could imagine.

Dean took over a ninety-percent pay cut just to enter the tireless, W2 working world that he thought he would excel in. After realizing that hard work and continuous overachieving gets you nothing but a meager pay raise, he knew he had to go in another direction. He stumbled upon a real estate podcast, started investing with no money (seriously!), and grew a small side hustle into a full-on business that pays him as much as only professional athletes make.

Dean’s story goes from riches to rags to riches again as he left his dangerous yet high-paying career to live paycheck to paycheck doing something that he knew would pay off Now, he rakes in more money in one year than most Americans make in a decade, controlling his own life, putting his health and family first, and helping new investors, like you, along the way. Want to make your millions? Tune in! 

David:
This is the BiggerPockets Podcast, show 785.

Dean:
I just take insane action. And I had to fill in a lot of the blanks because it wasn’t like, “Do this, do this, do this.” So I had to kind of fill in the blanks, but I took action and within three months I did my first deal. And just when the wire hit, I was like… I jumped up and I was like, “Woo.” I gave a woo, you know? And I was like, “This is real. This is cool. I can see where this can go.”

David:
What’s going on everyone? This is David Greene, your host of the BiggerPockets real estate podcast, coming to your day from Maui, Hawaii, with my co-host and good friend, Rob Abasolo coming to you from H-Town, as he likes to call it when he’s trying to sound cool.

Rob:
The H?

David:
The H, yeah. Is that a new one? I haven’t heard of “The H” before.

Rob:
It is not. It is in fact a very old one. But let me ask you, since you’re also in one of the H’s of the world, have you had a rainbow snow cone yet?

David:
I have not had a rainbow snow cone. I actually ate pretty good. I’m here at Brandon Turner’s event and they fed us pretty well, so I’ve been eating healthy and working out.

Rob:
Man. Yeah, so you got to get the… It’s like a rainbow snow cone and they put the cream on it. They’re everywhere. It’s really, really good. I think there’s a specific name for it. I can’t believe I can’t remember it. But go have a snow cone, man. You’ve been eating healthy, you’ve been working out, you deserve this.

David:
You’re trying to live vicariously through me because you’re waking up at five o’clock every day to work out in this fitness competition you have with Tony Robbins, aren’t you?

Rob:
That’s true. Which I’m handedly losing, because Tony is training for a bodybuilding competition, but that’s fine. All I really wanted was a little accountability and a text buddy that I could text every morning when I wake up and say, “Hey, you working out? I am too, bud. I’m thinking about you.” And it really helps, a little accountability like that helps.

David:
And you got that. That’s what community can do. So if you’re having trouble in your real estate business with your goals, like fitness or relationships, whatever they are, find another person that likes that stuff and jump on the journey with them. And it just does lighten the load quite a bit. In today’s episode, Rob and I are interviewing Dean Rogers, a former NFL player who is now a real estate investor and crushing it in this space, has done over 600 deals in only a few years and has an incredible story, a great approach, and an uplifting delivery. This was really good, Rob. What’d you like about today’s show?

Rob:
It was really nice because it just showed me what my life could have been had I pursued being in the NFL and then going into real estate. But it’s really cool because we talk about Dean’s seven-figure journey into the NFL, leaving that and making far, far, far, far less. And then really ascending the real estate food chain, if you will. So it’s kind of like a riches to rags back up to riches. It’s kind of cool. It’s cool to see the trajectory and how he crushed it. He made some pretty big mistakes that he details really quite in depth in the podcast. Doesn’t hold back. I’m always really… not flattered, but I’m always very happy to hear a guest be vulnerable with us like that when we’re sharing it to the whole platform because I think it just normalizes like, “Hey, failure happens but you can recover from it.” You know?

David:
Absolutely. And then the path for recovery, exactly what he did, how he made alliances and allegiances, where he gets his deals from. This is a great show that he really lays out a blueprint a lot of people can follow. Before we bring in Dean, today’s quick tip, make that extra phone call. You will hear why this is so important in today’s show, but do not stop short. And bonus, treat every deal like you’re using your grandparents’ money. That is fantastic advice and you will hear why as you listen all the way to the end of today’s show. So without further ado, let’s bring in Dean.
Dean Rogers, welcome to the BiggerPockets Podcast. How are you today?

Dean:
I’m good, man. Thanks for having me.

David:
Yeah, we are excited. So for those who are unfamiliar with Dean, his portfolio currently consists of 65 units in Central California. He’s been investing in real estate for a total of 10 years. He’s done a hundred deals a year for the past three years with over 600 total, and has a net worth in his real estate portfolio of almost $10 million. Very impressive, Dean. But that’s not even where your accomplishments start. You also played in the NFL for a while. So tell us how the heck did you become the man we’re talking to today?

Dean:
Yeah. So almost like a childhood dream, man. Grew up always dreaming of playing professional sports, and kind of flash forward through all the stories of how I got there. I didn’t go to a big time football school in college. I always felt like I was kind of underlooked and recruited at each level, from high school to college, then to the NFL. But, hey, once I was in college, NFL teams started to look at me. I was never the biggest. I was never the fastest. I was never the strongest. I was never the most athletic, but I was a good football player and I stayed in the game. I was fortunate not to be injured too much and I was consistent. I was good. I was just that gritty, hardworking guy. And it just played out to where right time, right place people that were looking at me.
There’s about 11, 12 teams that were looking to draft me, and then the moment came. It was crazy, dude. It was the craziest thing. So it was the year of the lockout that I got signed to the NFL. And when the lockout lifted, the Chargers called me and said, “You got your bags packed? Because you’re flying out tomorrow morning.” And like a school girl, I was jumping around the living room. I fly out the next morning and it felt so surreal, because overnight you’re instantly famous, you’re instantly important.
The whole experience, from day one, was kind of like you see in the movies. They roll me in a red carpet, they got the black Escalade outside at the airport to pick me up. They roll me in. I go right up to the owner’s office, I meet Dean Spanos, shake his hand. I sign a three-year deal with the Chargers and here we go.

Rob:
That’s amazing, man. Yeah, and I’ll just tell you, man, I can relate because I used to throw around the pig skin myself. I was never the biggest, strongest or fastest either. I had to actually end my career in the 10th grade because I got demoted to the B team, second string. But that’s neither here nor there, Dean. Tell us a little bit about the NFL. You go into this and obviously this is the dream career for you. Going into it were you like, “This is it, this is what I’m going to do forever”?

Dean:
Oh yeah, yeah. No, it’s kind of what I had planned my whole life for at that point. And I went to UC Davis in college, got a good degree, knew there would be life after football. But I’m here. This is what I’ve spent my whole life for. I’ve been dedicated. I was the guy who wasn’t out late partying throughout the week and on the weekends in high school and college because I took this serious. I was passionate about this and I was willing to put in the hard work. And so here I am. I’m here, and the NFL was insane. It was the combination, if you’ve seen both HBO shows, it was the combination of Hard Knocks and Ballers. So you had the intense cutthroat business side of it, and then you also had the glitz and glamour Hollywood side of it where you’ve got supermodels literally around at almost all times, you’ve got red carpet events, you’ve fan screaming your names and you’re like, “Who am I? I’m not Philip Rivers on the team.”
But still, people are clawing and wanting to get your attention. Your phone’s blowing up all the time, people wanting to get your time, wanting to come to games. It was just nuts. I’d say it was super cool. And for me, my experience playing, what was, I’d say, so fulfilling, was not only making it there, but also getting the validation while I was there that I belong here. And just from the very first play, I roll up, through to while I was there, I had Norv Turner telling me over and over that I was going to have a long career. And now games were actually easy compared to practice. The big thing for me, just to not make my story about the NFL too long, we’ll dive into real estate of course, but the big catch for me was although I was playing great, was living the dream and Norv Turner telling me I’m going to have a long career and I’m here, I’m doing it, the big catch was I got moved from tight end, which is a position I love, and I got an appreciation for blocking and got a pride for blocking. But the other half of the time, you’re catching touchdowns, you’re catching passes.
I love to have the ball in my hands as much as possible, love to score touchdowns. But I got moved from tight end to fullback. And at fullback, dude, you’re a crash test dummy. You are having the biggest collisions on the field, because instead of at tight end, or most of the other positions being one or two yards away from the guy that you’re going to hit, you’re now 10 plus yards, running full speed. You got the biggest, fastest, strongest people in the world, and you’re just trying to kill each other.
And when you’re running at fullback and Iso play up the middle, and in between the guards and tackles is like this narrow, you’re not leading with your shoulder. And if you do, you look weak and you probably aren’t going to make a good block. You got to run full speed, head on to blow that guy up, and that’s what I was doing and was having good success. But I was instantly feeling the repercussions in my head. For the first time, I had to start icing my head in the first time in my life. That’s a problem, you know?

David:
For a non-football follower, what you’re describing is you were basically moved to be a human battering ram to make space for running backs to come behind you in the area you developed?

Dean:
Exactly.

David:
And you’re not just running into normal wooden doors, you are running into missiles of human beings that have been created to blow through things. And there’s this massive… What’s that old saying that goes when a unstoppable force meets an immovable object type of a situation? And you’re doing this all with your head.

Dean:
Yeah. These human beings are handcrafted by God himself with a chisel, chipping away at this granite, and you’re now running into these immovable objects. The impacts were insane. They were huge and massive. And my body was holding up. I felt indestructible myself. I had the best nutrition, the best sports trainers, the best workout plans. I was indestructible myself. But the one thing you couldn’t avoid was hitting your head, and that just started to go, started to go fast.

David:
So you’re icing your head, which I’ve never heard a human being.

Dean:
Same. Same. I didn’t think it was a thing too. I kind of weird. I was like, “I’m going to put the ice here because I need it.” Like, “What the heck, dude?”

Rob:
Well, the good news is you said the big catch about this, right? That I think that’s the name of your upcoming memoir. So we can get that penned pretty soon here. But it’s all going well, you’re doing it. You start icing your head. At some point you’re like, “I can’t do this,” or… What actually made you step away from the team?

Dean:
That was it. I mean, everything else was quote, unquote, “perfect”. Was living out the dream and that was everything I’d hoped and dreamed of. And the other thing that was so surreal, that was so cool, was overnight… It’s just like when you join… in our world now, just when you join a mastermind. You’re now a part of the club, right? By getting signed by the team, you’re a part of the club. And overnight now I am buddies with Philip Rivers, I’m buddies with Antonio Gates.
Philip Rivers is calling me Deno, and he’s got a Southern drawl to his accent. We’re trading stories and talking about stories with Antonio Gates and how he actually spent time in Visalia, my hometown where I grew up, going to a junior college there, and how Kent State showed up at his door the day before he was going to go to Fresno State. He ended up going to Kent State, playing basketball, going to the NFL.
It was just all these cool relationships being built, and it felt like just like us talking now, just guys sitting across from each other having a conversation.

Rob:
Okay, so what was that… It sounds like you were doing pretty well financially being a football player, right? And so, is that something you had to weight the pros and cons on, stepping away? Because I imagine if you break contract or you walk away, it’s not like you get to just keep the salary that was promised to you, right?

Dean:
Exactly. That’s a good way to put it. And I think part of my story that I like to share to bring it back to reality is I walked away from the seven-figure contract. I didn’t walk away with it. I didn’t walk away with a ton of money. And so that was what I had to weigh, is the pros and cons of, “I can live this out. I can get through it, make this money, but what good is it going to be if I’m knocking that many years off my life?” I mean, because, dude, when you’re there, and I had a concussion when I was there with the Chargers, you don’t go run to the trainers and say, “Hey, I got a boo-boo, take me out.” You’re like, “No, I’m not telling anybody about this. I’m going to stay in because I don’t want the next guy to take my spot,” because it’s that cutthroat. You know what I mean? So it just got to the point where I knew that I was going to do serious damage if I kept playing and I had to walk away.

Rob:
Wow. Wow. Were you like, “Okay, I’m walking away from this seven-figure salary, but I’ve already identified how to make seven figures again”? Because I imagine that’s… You’re walking away from millions of dollars, let’s just put it out there. So what was the contingency plan?

Dean:
Yeah, you’re walking away from millions and millions of dollars, and status, and you’re at the pinnacle of everything. Professional athletes, singers and songwriters, they’re kind of held in this pedestal. They’re on this pedestal, so to walk away from that is kind of insane in itself. But I had no plan. There was no backup, there was no rich uncle. There was no connections to what was next. But I just knew I had to leave and I couldn’t look back. I just had to move forward.

David:
And you’re not just walking away from the money, though I would imagine the money’s probably the first thing on your mind. You’re walking away from status, you’re walking away from an investment. You’ve put how much time on the field, in the weight room, like you mentioned, nutrition, and an identity, right? There’s no man in the world that is upset about being identified in the top one of one of one percent of all the other men. And you’ve worked so hard to get there. You’re leaving all that behind too. Was that depressing? Was there a battle going on in ut mind between the angel on one shoulder and the demon on the other? What was that experience like?

Dean:
Yeah, that that’s actually probably the biggest point to make when it comes to athletes and when they retire or whatever happens in their career, they get injured, something like that. The status and money is one thing, but the identity is probably the biggest thing. And I think that’s why so many professional athletes struggle transitioning into life after sports, is because they’ve spent their whole life working to that point. All of their friends, all of their relationships, everybody recognizes them as that premier superior athlete, and then who are you now? Right? I bet even the Michael Jordans and the LeBron James’ and the Tom Bradys. I mean, a lot of those guys stuck around for a long time because that’s their identity. Who else are they? Even if they’ve made all the money in the world, they still want to be that person. So that was hard.
Now, I don’t know what it was, but I’m thankful that I didn’t spend a lot of time thinking about it. I just thought I have to move forward. But I think back to it, I think a lot of my early days in my career after football, I missed huge opportunities when it comes to building relationships and networking because that identity was gone and I knew I needed to create a new one. I needed to become that incredible, awesome person again some other way. And I kind of put my head down and didn’t go out and network like I should have because I was insecure about who I was at that point.

Rob:
Sure. Sure. So by the way, when was this? When did you decide to step away from the Chargers?

Dean:
This was 2012. So 2011/12.

Rob:
Okay. And once you made that decision to leave, what came next?

Dean:
So what came next, I was fortunate to have a good buddy I played college football with. He gave me a call. He said, “Hey, I know you’re done. I got an opportunity for you.” And he basically walked me right in the front door, past all the red tape, to an incredible opportunity at a tech company in the San Francisco Bay Area. And they were pre-IPO, already had 1000 employees at that point and were already… They were about to go into the stratosphere. And he basically walked me past all the interviews, all that stuff, took me right to the hiring manager, got me the job.
Now, based on what he described it literally was the perfect kind of thing of what I thought life after real estate would look like, the type of company, business, type of things I would be doing. The funny part was I went from the seven figure salary to now a $65,000 salary in the San Francisco Bay Area, which as you guys know, is a negative salary. You know what I mean?

Rob:
65,000 per month?

Dean:
No, definitely not.

Rob:
Hey, that’s crazy. Did you have the opportunity to get raises? Were you on a base or a commission or anything like that?

Dean:
That’s what I imagined. That’s what I dreamt of. “Hey, I’m coming in. This is what it is. This is the position. It’s entry level. It’s a good opportunity to get my foot in the door. Don’t be picky. You’re going to show your worth. You’re going to show how good you are.” Now, even though I don’t have any, in perspective of life now, I don’t have any real life skills except football. Don’t have any transferable skills except hard work and good discipline and work ethic, having a lot of energy, all that kind of stuff. I’m going to show my worth and get a pay raise quickly. So I’m working my butt off within that first year and nobody’s running to me saying I’m going to get a pay raise. Nobody’s rushing at me. It ends up becoming about 14 months into the job and I’m kind of talking to my hiring manager about what’s next, where’s the next step from here?
And as you can imagine, living in the San Francisco Bay Area, not having made all the money that I thought I was going to make in the NFL because I had that be a lot shorter than planned, money started to dry up really fast, really fast. And so I’m thinking to myself, “All right, I’m going to get my big pay raise. They saw how hard I worked this first year. I’m busting my butt.” And the big whopping pay raise was a $2000 pay raise, from 65 to 67. I was sick to my stomach, dude. I was so sick to my stomach because I’m thinking, “Dude, at least I’m going to get to six figures now.” Because I keep hearing about all these college kids that come out, go to the Bay Area, get these tech jobs. They’re making six figures, multiple six figures.
I mean clearly, I got skills and talents, they’re going to reward me somehow. But, dude, my stomach almost fell out of my body. I was so sick, and thought to myself, “This is not going to be it. This is getting nowhere fast.”

Rob:
Yeah, unfortunately, in Corporate America… I mean this is very common with millennials. I think back in the day it was a little different. You’d stay at a company, you’d work your way up. And I feel like millennials and the younger generation now, it’s a very common place to just jump around jobs every year or two, because that’s the only way that you can get a real raise these days. That’s how it feels. And so I remember jumping around advertising agencies every couple years and my parents are like, “Son, what are you doing? Are you not good at working? Why are you moving around?” I’m like, “It’s the only way to get more money is you have to just threaten to leave and do that kind of thing.” It’s very frustrating that that is how corporate is sort of built.

Dean:
Yeah, you almost have to leave and come back to make more money.

Rob:
Exactly. The boomerangs.

David:
I mean, as a side note, before we move on into the real estate side, I will say, Rob, you had a great point. It used to just be longevity. You were rewarded for loyalty and staying somewhere. In today’s market, you are rewarded for what you produce and the skills you can build. And so I think people should lean more towards learning new skills, getting good at whatever it is they’re doing, and making sure that the skills they’re building are useful, right? It wouldn’t be super great to learn how to be a great salesperson at Blockbuster. Even though you’re building skills, those are not useful skills. You want to be building skills in a area that are valuable in today’s society.
And unfortunately, you have to pay a lot of attention to what… You can’t just put yourself in cruise control and drive down the highway at a comfortable pace and know I’m going to end up at a destination that I like. You really do have to pay a lot of attention, which is I think why real estate investing and real estate in general has become so interesting to people, because they’re already always thinking about, “What’s the next move? Where’s the next opportunity? Where’s the next… How do I add value in some way?” Those skills translate pretty well into the world of real estate. So Dean, for you, how did real estate enter into your picture?

Dean:
So I just remember that moment was such a big impactful moment for me that I left going back home thinking to myself, “Okay, so I literally just saw what life could be like in the NFL. What else had that potential?” Because it clearly seems that I got to take things into my own hands and write my own story here, because they’re not going to do it for me at this corporate job. So what could get me back to that dream life and live life on my own terms? Because that was a childhood dream. I’m going to put the team on my back. I’m going to get the whole family their own houses. I’m going to financially take care of everybody. That was kind of the dream. And I saw that that was possible with the NFL.
So, I went back home in my 424 square foot studio in San Francisco that I was paying way too much for and thought to myself, “What else do I like?” And again, at 25 years old, you don’t know what you really like. I mean, some people are fortunate to know what their passion is, but, dude, what do I know about the world outside of football in terms of what I like and what my passions are? Only thing I can think of, literally the only thing I can think of, is watching the HGTV shows with my parents, Love It or List It, and the late night Dean Graziosi infomercials about getting started in real estate investing.
That was all I could think of. It was completely blank up there. And I just thought to myself, “Well, maybe I want to be like a realtor, some sort of investor?” I didn’t even know what that looked like. I had no prior experience. My parents owned some rentals growing up, but not… It wasn’t a full-time thing. They were entrepreneurs with their own business in the software space. But I didn’t know what that looked like. I just got on Google. I typed in, “how to get started in real estate”, and lo and behold, what popped up at the search results, at the very top, was Sean Terry, his Flip2Freedom podcast, a free podcast just like BiggerPockets. I was like, “Okay, what’s this?” So I click on it. He comes on, he’s talking about how you can get started in real estate with little to no money.
That sounded great to me because I had little to no money at that point. Money was drying up. And I thought, “What’s the catch? Let me listen a little bit more.” And from the first episode I listened to, I just got so excited about what I was hearing, how I could do certain types of marketing strategies to find properties. And then I didn’t even have to buy them using my own money, I could sell that property to someone else and it was called wholesaling. And I thought to myself, “This sounds like too good to be true. Is this real?” And he is talking about how the pest control guy, who was making $20,000 a year salary, is making multiple six figures. I’m like, “Okay, let me just try this out.”
So, I just take insane action on this free podcast and start following step-by-step what he was saying. And I had to fill in a lot of the blanks, because it wasn’t like, “Do this, do this, do this.” I had to fill in the blanks, but I took action. And within three months, I did my first deal. It was a deal that I got on a contract and I couldn’t wholesale it. What makes this story even more fun is it was in Arizona because Sean Terry was talking about his strategies. I didn’t know anything about San Francisco real estate and I didn’t really have money to market other places, so I just followed his strategies in Phoenix, Arizona.
Got a property in a contract, couldn’t sell it and then I contacted his company by going to his website, filling out his online form like I was a seller. And then his team called me and then I was like, “Well, this is really what’s happening. You think you guys could help me?” And he’s like, “Oh, yeah, no worries. I’ll put you in contact with Sean.” So Sean calls me from his car, gets the scoop and he’s like, “Yeah, we can help you sell it.” He got it sold for 12 grand within like 48 hours. We split it 50-50. I made six grand. I remember sitting in the office in San Francisco and just when the wire hit, I was like… I jumped up and I was like, “Woo.” I gave a woo, you know? And I was like, “This is real. This is cool. I can see where this can go.” And that was proof of concept.

Rob:
See, and what I thought you were going to say… And that’s a really cool origin story too. I really don’t want to gloss over that. I just thought you were going to say that you saw David Greene on an episode of House Hunters, on the one episode that he did, and that’s what caused you to go all in.

Dean:
I wish it was that. I wish it was that. But at the time, that was what popped up. There was amount of information out there in those days, but just grasping on it and taking action and getting that proof of concept, I knew, “All right, I could do this. I can see that there’s potential in this. I’m going to go hard on this.”

David:
It’s a beautiful moment when you get that moment of clarity. I’m sort of at a point in my life right now where I’m struggling. It feels like you’re just in the ocean and you’re getting pulled underneath and you get up to get a breath and then you get sucked back down again. I’m sure that’s what it was in that corporate job of, “I know there’s more, and I know I can be successful. I believe in myself, but oh, man, I just can’t see the way out of this. I don’t know what the path is.” And you’re just pounding forward hoping something opens up and it’s not. Those moments are a part of life and they’re tough. They’re very, very tough. I’m sure you had times, Dean, where you’re like, “Why the hell did I leave the NFL? What was I thinking? Now I’m out here making 65 grand a year.” You’re basically living paycheck to paycheck in this tiny studio.
I mean, you’re a big dude. The bed probably couldn’t… it wasn’t big enough for you, you got the feet hanging off the edge. It’s like the healthy food you want to eat is just really expensive and you feel bad about… It’s a tough, tough life. And then you get that moment where that light from Heaven shines on you an, “Oh, I get it. I see it.” And it’s like the best feeling because your heart explodes with joy. You get all excited and you’re like, “I will run through a brick wall to make this happen now that I know where I’m running.”
I’m waiting for the next stage of what my own development’s going to be like, and I’m in that same place. Do you remember where you were sitting or what kind of thoughts were going through your head that you can describe what that moment was like when you got that clarity?

Dean:
Yeah. I want to touch real quick what you said about those tough moments, because I got a lot of tough moments in my journey, aside from just the beginning. But specifically about the beginning, just to paint a picture for people and why I think this is relatable and I think people’s ears will perk up to this and it will feel real to them, dude, think about that whole identity crisis of shifting, of being in the limelight, to starting over, to living paycheck to paycheck. I remember vividly feeling like a failure because there was a period of time there towards the end, before I did my first deal and started doing deals after that, where our credit cards were starting to get maxed out and there was a month or so where in order to get groceries, I kid you not, we had to use our Target credit card that we had recently got to go buy groceries at Target because the other credit cards were maxed out.
The month-to-month paycheck was real. There wasn’t an abundance or an overflow of money. I had to buy groceries, my wife and I, at Target with our Target credit card and that’s what got us by for a little bit.

Rob:
Thank you so much for sharing. I actually do think a lot of people at home can totally relate. It’s really hard to make a living sometimes, especially when you’re first getting started. You might have student loans, you have rent, and there’s just a lot of things. So thanks for sharing, man. It seems like you’ve come a long way, which is really cool. It’s really cool to hear the story, the origin story, and then the next origin story, which is really cool. Now that you’ve been doing real estate for 10 years or so, I understand that your main strategies are wholesale, fix and flip in single family. And as you were learning about these strategies, were there any low points or learning moments along the way because it seemed like you were sort of taking on a lot there?

Dean:
Yeah. So the first year I’m wholesaling. And the second year I’m wholesaling now a couple properties in my local market in Central California. My now business partner had come to me at the time, I had wholesaled him a couple deals, he said, “Hey, you’re great at finding deals, you want to do some flips together?” And I’m thinking to myself, “That’s exactly what I want to do next. I want to fix and flip. That’s the next level after wholesaling. I’ll make a bunch more money. This will be great.”
Well, at the time, spare you all the details, he said the market was slowing down a bit in Central California. “You did some deals in Arizona, right? You want to do some flips there?” I said, “Well, I got some relationships there. We could find some deals, meet some contractors.” So we buy six houses in the first month. I was ready to keep buying and buying. He’s like, “Let’s slow down. Let’s see how these deals go.” Well, flash forward in that… literally my second year now, and I haven’t made a ton of money. I’ve made maybe 60, 70,000 dollars.

Rob:
Just your salary, by the way.

Dean:
No, on top of the salary.

Rob:
Okay. Wait, yeah, that’s a lot.

David:
You doubled your salary, basically.

Rob:
You doubled your salary, that’s crazy, man. That’s so cool.

Dean:
I did. But in all fairness, it wasn’t just sitting in the bank. I’m reinvesting it in the marketing. I’m doing the things that I should to grow.

David:
Those hair care products can’t be cheap, Dean.

Dean:
They can’t, yes. They get expensive.

Rob:
Thank you. Can confirm.

Dean:
We get into these flips. Mind you, he’s experienced. He’s always got the experience. He jokes to this day at that point he was saying everything he touched turned to gold. “What could go wrong? Let’s just do some more flips.” So everything goes wrong on these first flips. Everything goes wrong. Bad contractors where we had to redo the work. The comps that we took at face value from the realtors, they were good on one side of the street, but the side of the street ours were on were not apples to apples. Everything went wrong. We lost $100,000 on those flips. Four of them went good, two of them went bad and they went really bad. Lost $100,000. I was not in the position to lose $100,000.
And so that was a huge gut punch and a setback for me. The only way to get out of that was to go do more deals. It was the only way. I had to dig deep, fight my way through. Now, you said low points, I got a couple. That was the first one. The next one, which I feel like has got a lot more story to it and learning lessons, is I’m now on the up swing. I’m in the beginning of my hero’s journey. I transition into real estate. I get knocked down, I’m getting back up. I’m Rocky Balboa getting out of the trenches. And I’m about to have my first son. I’m thinking to myself, “Well, I’m living back in San Diego. I’d love to get in some deals in San Diego while I’m doing the stuff in Central California. Real estate’s sexy and hot out here in San Diego, I’d love to do some flips.”
Well, someone that was in my circle of trust, doing deals with other people, of other people I knew, kept presenting and kind of putting deals in front of me. And I didn’t listen to my gut. I knew this guy was kind of a little off in some areas, but at that point on my upwards journey, I really felt like I needed to do a good deal. Like a good deal, I need to make a good chunk of money. I’m about to have my firstborn son. I’ve been fighting out of the trenches, trying to make my way and have a big splash. I want to do a good deal.
He put this deal in front of me that was a new construction deal, something completely out of my area of expertise, nothing I’ve done before. And the thing that was making me feel comfortable about it was he was going to do the project right next door. It was two houses side by side. And I didn’t really listen to my gut. There were some read flags. The big lesson that I’ll tell up front, that is almost embarrassing, is that I didn’t verify any of the information. I literally just took everything he said at face value. I didn’t make the extra phone calls to verify anything. I didn’t do my own due diligence. I literally was just focused on doing that deal because I needed to do it. And I learned it’s better to do no deal than a bad deal.

David:
Okay, this is a great point we’re getting into because while everyone will listen to that and be like, “Man, what are you thinking? You didn’t do due diligence?” Everyone makes this mistake. Really successful people make this mistake. I don’t want to say any names, but I know people that have lost seven figures investing into syndications with very reputable people who were also investing in them, okay? We’re talking about the pinnacles of names in our industry were going in there, and then everyone else hears, “Oh, that’s guy’s investing? Yeah, I’ll put money into that thing.” And it does not seem, at the moment, that you’re doing something reckless. It does not feel wrong.
It’s kind of like… I don’t have a great analogy, but when you’re told the undertow of the ocean can be strong, but you’re looking at it and you’re like, “I’ve been in the ocean so many times, it’s not that bad.” And you just go out there, and 99 times out of 100, you’re fine. And then that one moment, the undertow grabs you and you come out and you’re like, “Guys, I can’t tell you how scary that was.” And we all hear this story like, “I’ve heard about undertow. Why don’t you know about the undertow?” It’s happened to me. It’s happened to people that have been on this podcast before.
It is very easy, when you start hearing about other people who are doing this deal, using these people, and you’re, “Oh, that guy vetted it and that person vetted it, and then I don’t have to vet it.” And then people hear you did it, and then they go do the same thing. And then next thing you know, we have this fantastic ripple effect of everyone that has skipped due diligence and we’re all relying on the due diligence that we think somebody else did. It’s like a phenomena that I see all the time in our world.

Dean:
I’m so glad you touched on that more, because that’s… Just making the extra phone call and doing the extra due diligence will save you so much pain and heartache on that one time where the deal goes wrong. And I think a lot of us are optimistic. We think, “Hey, we’re good people, so other people we’re around are going to be good people too. No one’s going to do wrong to me.” But all it takes is that one wolf in sheep’s clothing, like this person was, that can just totally blindside you. And that’s what happened. So I bought into the deal. I was promised day one, we were going to start moving dirt.
And part of the story that’s worth telling is the money that I borrowed to buy this deal was from my grandparents. These are my grandparents on my dad’s side of the family. They were immigrants from England. They grew up during World War II, where literally bombs were going off in their neighborhood and they had to go to shelters out in the farmland. My grandmom’s got stories of having fighter planes diving down into the fields and shooting at her and her having to dive in ditches. These are World War II survivors that emigrated to the States and were blue collar workers. They sold a house to move close to my parents and they had a little bit of money in savings.
This was not all their money, but it was pretty darn close. And we’re not talking a lot of money based on the type of deals that we do today, but it was a lot of money to them. And so that had a lot of weight to me, and the fact that I didn’t do my due diligence, and realizing this after the fact, was really just super hard on my heart. I just remember once it finally dropped and I finally realized that this person literally scammed me. It was basically a house of cards. All the plans that he was showing to me, all the construction financing that was in place, all these things, all of it was a house of cards.
I ended up making phone calls once I realized, “I need to do something here,” and found out the civil engineer hadn’t been paid. The plans and permits that said were approved, not anywhere close to it. The construction financing, there was hundreds of thousands of dollars that were already withdrawn based on fake receipts.

Rob:
Oh no!

Dean:
I mean, you want to talk about disaster.

David:
Really?

Dean:
Yes, dude. Just sick stuff. I spent the next year renegotiating with all these people, short of begging and pleading, making my case like, “Hey, I know you’re not going to get paid your full amount, but I’m losing hundreds of thousands of dollars here. Can you please do whatever you can to help me out? I’m just trying to see this through.” I had on the top of my mind, “I got to get my grandparents’ money back.” I just remember at the event of selling it, I had to sell some stock that I had got at the corporate job. I had to do whatever I could to get that money back as fast as possible.

Rob:
And did you?

Dean:
I did, yeah. Yeah, yeah. I didn’t get it all back day one. I did have to have additional money left over. I think I did about $100,000 up front and then I had some more money that were stuck in some of my flips, that I had to sell those through to then get the money and just pay them back. It just was an agonizing low point. And my firstborn son is now born and I’m literally living in this moment of being in this low point and not at my best and just feeling really down.
I’m like, “Dude, I made another mistake,” after my mistakes with flips. “Now I got to go fight again. I got to go fight again and find my way out of it.”

Rob:
Can I ask you something about that?

Dean:
Yeah.

Rob:
I’m curious, it sounds like it was a pretty disastrous time in your life, low point like you’re talking about, a lot of crazy things happening. If you could go back and push a button that saves young Dean from having gone through any of that, would you?

Dean:
Oh, my gosh. I would do it, yes. Even though those were good life lessons, I know that it was something that was so simple… I’m not joking, it was so simple. The construction financing that was in place and that was a lean on the property, I have have… and still to this day. I had the main person from that company, I had their cell phone in my phone. I could have sent them one text, “Hey, looks like I’m about to come in on this deal. You guys got everything good to go and ready, right?” And he would have said, “No. It’s all effed up.” It would have been one text message or phone call that would have saved me all the pain and heartache.

Rob:
Yeah. Well, that’s a lesson learned right there. Was there any other really big lesson from this entire scenario that you took away from it?

Dean:
I think the other biggest lesson, looking at the positive side, is I learned that I’m willing to fight no matter what. There were multiple times throughout my journey where my back was against the wall or I got knocked down. And I think with sports, what gave me… The most transferable thing was willing to put in the hard work, when no one’s looking either. Because are you eating the right things? Are you putting in the extra reps? Are you getting the proper sleep? Are you not partying? Are you taking care of your body? Same thing with sports.
Are you studying your playbook, are you prepared for the opportunity are what transferred over again. I wasn’t the biggest, the fastest, the strongest, the most athletic. I had to be consistently good at what I was doing to have that opportunity to play in the NFL. And now, being in the real world where there isn’t really that safety net, you can get scrapes and bruises and cuts, it was up to me to do the work. No one else was going to come save me. It’s for me to put my pants back on, get to work and figure out how to learn from that lesson.

Rob:
Yeah. How has that affected your borrowing strategy when you’re raising money from other people?

Dean:
Yeah. Well, it just helped solidify a belief that I had from day one. I mean, I think morally and who I am as a person is I’m huge, huge, huge on if you’re going to borrow someone else’s money, it is so much more important than your own, so much important than your own. And that needs to be reflected in your due diligence, a lesson that I learned really well. And it also needs to be with how you communicate with that private lender. It needs to be on how you treat it and be a steward of that. You need to be doing good deals.
And if something goes wrong… because that happens, that’s that’s part of the business. Things can go wrong even if you’re doing so many things right. There can be unforeseen things that happen. You got to do everything in your power to communicate well. And if you are in a situation where you have a loser, because I’ve had flips where I’ve lost some money, you got to make sure that they get all their money back, plus the interest day one of closing. If for some reason that’s not possible, you communicate a plan and strategy and make sure that they feel comfortable that you’ve got their best interest.

David:
I’m glad to hear that approach. I feel like in… probably not on this podcast, but in the real estate industry in general, especially in the influencers ecosystem, the common question you’ll get is, “Well, how do I invest in real estate without money?” And then knee-jerk response is, “Well borrow it from someone else. You can just go get their $120,000 and you can put it into the deal.” And for someone that doesn’t have $120,000, they’re like, “Oh, that makes a lot of sense.” They don’t really value that because they haven’t had to work for 17 years to save that money and plan on that being a big chunk of their retirement.
And you just throw it around like it’s nothing. And we’re saying this to people that are new, that don’t have experience investing in real estate, that are the ones most likely to screw it up and lose it and they don’t value it because it’s not theirs. And that becomes the standard bread and butter response to someone that doesn’t have money, which is probably the worst thing that you could tell somebody. You want someone that’s lost their own money a couple of times and understands how it works before they go start scaling and-

Rob:
And how much it hurts.

David:
Yeah. Does that just grind on you every time you hear someone say, “Oh, OPM, just go get it from someone else?”

Dean:
Yeah. No, I think that’s such a good point because if you don’t have the perspective of how hard it was to earn that money, then you probably don’t value it.

David:
It’s such a good point. I made this a comparison that we talk about moving money around, taxing these people and putting it over here, borrowing money from this person, using it in this way because money is very easy to move. But if we applied that logic to other things in life, we would immediately staunchly oppose it. So, Dean, you work out a lot. You’re really fit. Imagine a world where people said, “It is unfair that Dean looks like that and I’m over here with a dad bod, or I don’t have those good looks. It’s not fair. So we’re going to take some of dean’s muscles and put them on this other person and then Dean has to go work out again and earn it all over again.” That person, even if we did that, would not maintain the muscles that they were given from the work you did because they don’t understand the regimen, the hard work it takes to develop that. They’re not going to appreciate it. They’re going to let it fall apart.
Whereas, you, who understands how much work and sweat was put into building that, you’re going to value it more, right? That’s why people like you stay in good shape all the time, and people that are not in good shape usually don’t get in good shape, or if they do for a brief moment, they lose it because they didn’t have to understand the price they paid for it. And I just feel like money is a very similar thing. If you’re not a adopting the habits that build wealth, you just don’t get wealthy. If you don’t adopt the habits that make people physically fit or successful at something, you lose it. There’s no magic trick to just grab it from someone and stick it on someone else and be like, “Ha-ha, there you go. You have it.” Is this a thing? Because I know you’ve got a platform too, people are looking up to you. Do you see this problem with the people that follow you and want to get into the life that you’ve built?

Dean:
Yeah, dude, that’s such a trigger button for me, especially when you relate it to taxes. The thought that I’m going to dedicate my life seven days a week, whatever your work schedule is, however many extra hours you’re putting in, and the people who are clocking in or out, or not even going to work are going to take my money, oh my gosh, are you kidding me? This is insane. I’m putting in the extra work so I can have more. That’s fair, right? If you work more, you get more. If you add more value, you get more value. I don’t know, it’s crazy.

David:
Well, with everything else in life, we understand that. But when it comes to money, all of a sudden we just suspend that logic and now we make an argument why. Because money can be moved so easy. If we were taking fat off of people that were out of shape, from liposuction, and sticking it onto skinny people, there’d be an uproar about that. “This is not fair. I had to do a lot of work to try to get fit, and now I’m just taking on somebody else’s laziness.” So I appreciate you sharing the story.
But I staunchly believe before you ever touch a dollar of someone else’s money, you should be grinding away. You should be risking your money. You really want to appreciate the value of money before you start throwing around somebody else’s. Now you bounced back from that. You’re doing very, very well. Like we mentioned, you’ve done over 600 deals. In today’s market, what are you doing to find these things?

Dean:
Yeah, so, man, when I first started out and I started paying money for marketing, it was just direct mail. That was all I was doing, direct mail, right in the beginning, 2013, for a handful of years, all I was doing for marketing. It went from a deal every other month, to then a deal a month and a couple deals a month, to about a handful of deals a month just from direct mail. At this point, with the way the market’s changed, the more information that’s out there and us doing more deals to get there, we’re doing TV ads, we’re doing radio, we’re doing PPC, which is Google pay-per-click. But, undeniably, the most exciting part of our business in terms of growth opportunity potential that gets me fired up is we get 40% of our deals from other wholesalers, other investors, other realtors, from other relationships.
It became a thing, to where I actually gave it a name. I put branding around it and I call it our Friends with Benefits program. It all started back with… 2020, I started a meetup. The whole concept behind the meetup was, as I said earlier on, I’d been kind of heads down, working on myself. I want to become somebody before I become back out into the world. I need to re-find this new identity, this new success, which was a limiting belief. But I need to be now getting in front of people. Now that we’ve done stuff, I need to get in front of people. Let’s start a meetup.
We start the meetup in February of 2020. We got about 100 people to show up. Great turnout. I’m like, “This is great. I want to add value to other people, the abundance mindset. I want to give value, the law of reciprocity. God will return that in one way, shape or form, and that’s the approach. That’s why we’re doing this.” Well, as you know, the world shut down and I thought to myself, “How else am I going to add value to people?” I quickly got into social media and started sharing about what we were doing. “Here’s what’s working. We’re still doing deals. Here’s the results we’re having.” And I thought to myself, “We’ve done deals with other people. I bet you we could help other people right now.”
So I started saying, “Hey, guys, if you got any deals that you need help with, we can help you on those deals. We can help you from… Literally, if you need help contacting the seller, negotiating the deal with the seller, going on the appointment, getting pictures, getting it under contracts, we’ll help you with all of that. Just bring a qualified lead, we’ll help you.” And slowly, that started to build momentum. Not overnight, but slowly started to build momentum and more and more people started bringing us deals. And then I started sharing on social media like, “Hey, look, we just closed this deal with so-and-so and we made $40,000. We split it 50/50, made 20 each.” This started to catch fire, and I thought, “I love sending friends money. Why don’t I call it Friends with Benefits?”
We made t-shirts with it and all that kind of stuff. Now 40% of our deals come from other people. We’re talking millions of dollars here that come from other people. And you can think of those as free deals for us, and maximized deals for the other people. We have new and experienced people bringing us these deals and we have a reputation for doing this really well. Now we’ll take somebody who’s new or doesn’t have the time to see that deal through, and instead of them kind of squandering the deal or even losing the deal, we’ll help turn that deal into 20, 40, 60. We’ve had even a truck driver bring us a deal that turned into $110,000 profit.
After we handled the cash for keys with the squatters and dealt with all that, it was 105 net profit. We wired him 53,500. I mean, that’s what it’s become and it just lights me on fire, dude. It’s super exciting.

Rob:
That’s amazing. And honestly, it’s very cool to hear you say this because it’s almost like this full circle moment for you where on the first deal ever, you reached out to the podcast and you were like, “I need help with my deal.” And then now you’re kind of saying, “Hey, reach out to me and I’m going to help you do your deal.” You’ve experienced this full circle transition. Do you feel like you’ve arrived? Have you done it? Have you conquered real estate?

Dean:
I do, yeah. I feel like my partner and I, we were just getting together. I was back in the community this past month and we were sitting down with some of our team members and we were telling them. Even though we spent the past 10 years getting to where we’re at now, and we’ve accomplished a lot of great things, the rental portfolio, we’re doing multiple seven figures a year in our active wholesaling and fix and flip business. Even though we’re doing that, I feel like we’re just barely getting started. This is the winning season. There’s been a lot of ups and down. And my success would have been here sooner had I not made those mistakes, in my belief.
But, apparently I needed to go through those life lessons, and I feel like we’re just barely getting started. So I’m insanely excited and I know what feels so good, what’s kind of crazy is I’m making NFL money now, and I’ve got my health. I’m making NFL money now. I’ve got over a million dollars in the bank, and we’re making that much more. It feels incredible. It feels fulfilling, but I know in my heart, because I’ve got these big goals and dreams, I’m just getting started.

Rob:
To be fair, I mean, you’re probably still putting bags of ice on your head because you are still in real estate, right?

David:
No, I was just thinking about comparing, making NFL money in the NFL, or making NFL money out of the NFL. I was kind of weighing very quickly the pros and cons. You make an NFL money in the NFL, it’s going to come with some of those other perks, like the red carpet experience, the craziness, the models that are going to be hanging around. Everywhere you go, you’re going to be recognized, so you’re probably going to get an ego that’s constantly fed. It’s also going to come with some downsides. The constant stress and worry, “What if I get hurt? What if I have a bad performance? What if they draft some stud who comes along behind me?” And then the hardest part for me would just be there is a timeline of how long you can do that for. Father time is undefeated, especially in professional sports.
You are not going to play football forever. I think the average career is probably what? Like three years or so, is that about right? And then you have a great career of seven years, now what do you do? It’s not like those skills transfer into something else. You either go be a coach or you end up coaching Pop Warner high school football, making half of the $65,000 that you were doing. Versus, making that money in real estate. You could theoretically do this as long as you have mental faculty rating. And like you said, this is just the beginning.
You have exponential opportunity to grow. New doors are going to open, new skills are going to be built, scaling opportunities are there. It’s just a superior financial option if you could choose between making that money in real estate, or making it in even a professional sport, which to most people is the pinnacle of achievement in America. You become a professional… honestly, there is nothing better that you could possibly do, and this is even better than that. It’s such a cool, cool story how things turned out. Do you even think about that?

Dean:
Oh yeah, all the time.

David:
That was a good answer. I wasn’t expecting it to be that quick. That was very nice.

Rob:
Yeah, that’s it. Short and sweet. I love it. Yeah, I do. I do.

David:
Side question, Dean, how often do you get told you look like Johnny Bravo?

Dean:
That’s a good one. Actually, not too often. One of my good buddies, he likes to call me Captain America, so that’s the one I probably get the most.

David:
There’s a little bit of that. You and Rob got the same hair, but yours is moving off to one side and his is moving off to the other side.

Rob:
And then your hair is also about two feet above mine in terms of where it actually sits altitude-wise on the planet, because you’re much taller than I’ve stood next to you. If anyone’s ever seen us stand next to each other, just remember I am 5’8″. That is the national average.

David:
That’s right, Rob. You’re very average in every way. And that needs to be acknowledged and recognized every single opportunity that we can get. Dean, any advice for people that are looking to follow the path that you took and where can they find out more about you?

Dean:
Yeah, I’d say the advice I always love to give is just you got to put in the work. No one’s going to do it for you, and you got to be willing to do that. If you don’t want that kind of life, there’s nothing wrong with living the nine-to-five life. But if you’re listening to this podcast, chances are you know there’s other opportunity, you know you have more potential, you’re looking for a better future. So if that’s you, then be ready to take action. Because if you don’t take action right away, you’re going to build the habits of not taking action, of procrastinating, of putting it off, of finding an excuse why you can’t do it and why it doesn’t work for you. But I can tell you right now, real estate, why I am in insanely passionate about it and why I love coaching students to this day, is because of the fact that anybody can do it.

Rob:
Boom, love it. Mic drop.

David:
Where can people find out more about you?

Dean:
Yeah, so I love connecting with people. That’s always the biggest call to action I say is to connect. If you listen to this, you felt like you received value, you feel like you resonate with some of the story. Dude, I’m a real person. I answer my DMs. You don’t have to go through three assistants. I want to connect with people. I always tell people, go to Instagram, Dean Rogers Real Estate, you can find me there. You can always find out more about me at deanrogers.com. You got all my social media stuff on there. You can learn about how I can help you get started in real estate through my coaching program too. I love connecting with people. It’s a passion of mine as well, and just love finding new opportunities through new relationships.

David:
Awesome, man. Rob, how about you?

Rob:
Well, I also handle my own DMs. I don’t necessarily handle them very quickly and I may never respond because there are a lot, but I do my best. Every day I go in and I respond to the ones that are short. So send me a DM over at Robuilt, and hit me up on Instagram as well at Robuilt as well, and be sure to write the lengthiest DM and send it on over to David.

David:
Thank you for that, Rob. Really appreciate it. So if you want real estate advice, message Dean. If you want football advice, message Rob. And if you want life advice, you want to talk about spiritual matters, you want to talk about overall financial stuff, you just want to vent about what’s going on in this crazy market, you can find me, @DavidGreene24. I’m on Instagram quite a bit. You can also go to DavidGreene24.com and you can check out the different ways that I put things together to help investors and connect with people. So please do. This is David Greene, for Dean, Blue Steel, Rogers and Rob, The National Average, Abasolo, signing out.

 

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Roughly 80% of real estate investors surveyed are selling single-family homes at or above asking price after fully renovating the properties to make them habitable, according to a report from real estate marketplace New Western.

“Investor sentiment is positive right now as they haven’t let the macroeconomic environment slow them down,” said Kurt Carlton, co-founder and president of New Western, one of largest real estate investment marketplaces in the U.S. “The U.S. is lacking about 320,000 listings valued at the affordable range for middle-income buyers. These investors see the housing shortage as an opportunity to deliver homes for buyers where the payoff is larger than the profits.”

From Q1 2023 to Q2 2023, the top five cities for New Western investors were Boston, MA (88% growth), Washington, D.C. (50%), Charlotte, NC (49%), Jacksonville, FL (48%) and Houston, TX (46%). Other notable markets that grew in the same period included popular Sunbelt investor havens Atlanta and Dallas.

New Western investor activity grew across these markets even though a recent Redfin report showed a 40% decrease in investor purchases. This illustrates how investors are determined to find opportunities despite negative market sentiment, New Western concluded. Approximately 55% of survey respondents said location/neighborhood is most important to their buyers. On average, homes purchased through New Western and later renovated sell for 31% less than new traditional homes for sale in the same market.

Independent rehabbers, according to the report, are stepping in to address “scalability” challenges and fill the gaps in individual markets, driven by demand. 

“Clearly, the survey shows that the housing dynamics have changed in the mind of some investors,” said Logan Mohtashami, Lead Analyst at HousingWire. “New listing data is trending at all-time lows; active inventory growth has been so slow in 2023 that we will see some negative year-over-year prints soon in the weekly inventory data. Also, housing demand stabilized from its waterfall collapse in 2022. In this environment, the opportunity to fill in the need due to the housing shortage is being tackled by investors. Also, this is all happening with higher rates; if rates fall in this environment, demand has nowhere to go but up from such low levels.”

For the remainder of 2023, investors are confident in the residential real estate market; about 70% of respondents plan to invest in one to three properties and 75% saw business growth from the second half of 2022 to date.

A little over 70% of respondents invest in the Southwest and Southeast regions of the U.S. Additionally, roughly 45% of respondents fund their investments through hard money or investment financing and about 30% through cash. 



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The easy choices have already been made: the low performers left many moons ago, the travel budgets have been slashed, and struggling branches have been sold to competitors or unceremoniously closed. 

For the mortgage industry, more often it’s about making the very hard choices these days – exiting a channel, deciding which star performer to let go, etc. After all, the average retail lender lost nearly $2,000 per loan in the first quarter, and I expect losses to be similar in Q2 and elevated in Q3.

One consequence of mortgage lenders – and LOs, for that matter – being on the ropes is the lack of investment back into their business. I get it! Money’s tight and lenders are plugging holes in the boat, not buying a new engine. 

In our quarterly HousingWire LenderPulse survey, we asked retail loan officers, branch managers, C-suite execs, brokers and others how they feel about the market, where they expect rates to be in Q3, and what they’re doing to reduce costs.

Interestingly, 57% of the 166 respondents said they do not plan to invest in tech, services or solutions in the third quarter. The rest of the surveyed pros were evaluating or still planning to purchase lead generation services and keep loan originations systems, customer relationship management (CRM) platforms and services that maximize repeat and referral business for lenders.

Cost-reduction-45-scale

While the respondents were split as to whether to invest or hold spending money in tech, when asked about what business cost reductions they plan to make in the future, 39% of surveyed mortgage professionals pointed to cutting their marketing spend/tools. Just under 25% of the respondents said they would cut down on production or origination-focused headcount, followed by operational software and solutions (18%); and originations software (8%). Other responses included cutting down excessive incentives, business trips, open houses and sponsorships.

Lender-biggest-challenge-1

Mortgage is famously an unforgiving, low-margin business. The lenders and LOs that saved their cash from the pandemic unicorn years and have been disciplined about maintaining their marketing strategy and investing in technology should see outsized returns in the years to come. 

After all, as the famous Warren Buffett saying goes, “Only when the tide goes out do you learn who’s been swimming naked.” 

James Kleimann
Managing Editor, HW Media

In our weekly DataDigest newsletter, HW Media Managing Editor James Kleimann breaks down the biggest stories in housing through a data lens. Sign up here! Have a subject in mind? Email him at james@hwmedia.com.



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New home sales are up 20% year over year, and existing home sales are down 20% year over year; this is something we don’t see very often. One group has the advantage here while the other doesn’t: The new home sales market is minuscule versus the existing one, and the builders sell their homes like a commodity. 

Last year a theme of mine was that new home sales are historically low, and the builders know how to move products when needed. This means they will cut prices, buy down rates, and do whatever it takes because they’re in business to make money. They have no emotional ties to houses and don’t need to sell a home to buy another one. They’re effective sellers and don’t want to create a backlog of completed units for sale because that would ruin their business model.

Case in point: Today we have 69,000 new homes completed and ready to sell, as shown below. The builders have managed their backlog nicely to ensure this data line doesn’t explode higher on them like we saw in 2008. An average number would be around 80,000 homes for sale, so we are returning to normal.

 

But a bigger story here is that the builders’ biggest competition isn’t other builders — it’s the number of existing homes on the market. Existing homes are cheaper and have a geographical advantage because they’re all over the map. In 2007, we had more than 4 million total active listings, which was too much supply for the builders to compete effectively. Today, the total number of active listings according to NAR is 1.080 million, and that number is down year over year.

NAR total active listings data going back to 1982:

This explains why the builders and new homes are doing better than the existing home sales market, which deals with higher mortgage rates and low active listings. Some people prefer something other than the current active existing inventory. This means new homes — with all the bells and whistles — can peel some buyers from the existing home sales market, especially if they pay down mortgage rates.

Now on to the report.

From Census:

New Home Sales: Sales of new single‐family houses in May 2023 were at a seasonally adjusted annual rate of 763,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.2 percent (±12.8 percent)* above the revised April rate of 680,000 and is 20.0 percent (±15.5 percent) above the May 2022 estimate of 636,000.

As we can see in the chart below, new home sales aren’t booming like what we saw at the peak of 2005 but are getting back to trend sales growth from the bottom we saw when rates got 5% in 2018. New home sales can be wild monthly, so if we see some negative revisions to this report, just remember: it’s the trend that matters, and it’s gotten much better here.

Also, in the chart below, we can all agree it isn’t housing 2005 or housing 2008 with new home sales.

For Sale Inventory and Months’ Supply: The seasonally‐adjusted estimate of new houses for sale at the end of May was 428,000. This represents a supply of 6.7 months at the current sales rate.

As home sales improve, the builders are winding down their monthly supply, which is good for the economy. I have a straightforward model for when the homebuilders will start issuing new permits with some kick. My rule of thumb for anticipating builder behavior is based on the three-month supply average. This has nothing to do with the existing home sales market — this monthly supply data only applies to the new home sales market and the current level of 6.7 months.

Housing permits will follow since this data line improves as new home sales keep growing. The model below has been my bread and butter for years:

  • When supply is 4.3 months and below, this is an excellent market for builders.
  • When supply is 4.4-6.4 months, this is just an OK market for builders. They will build as long as new home sales are growing.
  • When supply is 6.5 months and above, the builders will pull back on construction 

The current data has seen significant improvement, as the chart below shows. Also, the only bubble crash this year has been in cancellation rates, not existing home sales prices.


Also, it’s vital to break down the monthly supply data into different supply categories.

  • 1.1 months of the supply are homes completed and ready for sale, about 69,000 homes
  • 4.1 months of the supply are homes that are still under construction, about 259,000 homes
  • 1.6 months of the supply are homes that haven’t started yet, about 100,000 homes

This is a solid report today as the builders are moving products and making deals to get buyers in. I love it. 

Housing has always been used as an indicator of the economy. As the builder confidence data rose, many pessimists ignored it because they assumed it was a dead-cat bounce. Now that we are almost to July 4, 2023, it’s a wake-up call. I ask my bearish friends who use housing as a leading indicator going into recession and out what they believe the data is telling them now. So far, I haven’t heard back.

Home Builder Confidence Index

The builder’s confidence index is gold because the builders are thinking about making money, whereas some indexes might have a political or ideological twist. I track the builders’ confidence and the 10-year yield because these two are essential for housing. This report is a plus for the economy because construction worker employment risk will decrease if sales continue to higher and mortgage rates can fall.

This article aims to show how much progress we have made in this sector and why it’s happening. The report today is a positive story for the U.S. Hopefully, this trend continues because the best way to deal with inflation is always with supply, not demand destruction. Demand destruction is a short-term fix, but supply needs to grow over time to beat inflation. 



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Eviction filings have risen more than 50% in some cities when compared to pre-pandemic levels, as expiring relief measures and economic volatility play havoc with the finances of renters in certain parts of the country.

This is according to data from the Eviction Lab at Princeton University, as reported by the Associated Press.

“Protections have ended, the federal moratorium is obviously over, and emergency rental assistance money has dried up in most places,” Daniel Grubbs-Donovan, research specialist at the Eviction Lab told the AP. “Across the country, low-income renters are in an even worse situation than before the pandemic due to things like massive increases in rent during the pandemic, inflation and other pandemic-era related financial difficulties.”

Eviction Lab tracks data in roughly 36 cities and 10 states, finding that eviction filings are more than 50% higher in certain areas. Landlords file about 3.6 million eviction cases each year, according to the organization.

Among the cities with the highest rates, Houston came in the highest. Evictions there were 56% higher in April and 50% higher in May, according to the data. In Minneapolis/St. Paul, rates were 106% higher in March, 55% higher in April and 63% higher in May. Nashville was 35% and Phoenix was 33% higher in May, while Rhode Island was 32% higher in May.

“The latest data mirrors trends that started last year, with the Eviction Lab finding nearly 970,000 evictions filed in locations it tracks — a 78.6% increase compared to 2021, when much of the country was following an eviction moratorium,” the Ap report said. “By December, eviction filings were nearly back to pre-pandemic levels.”

Rent prices have also steadily increased, being roughly 5% higher in 2023 over last year, and over 30% higher in 2023 when compared to 2019 according to data from Zillow as shared in the report.

As federal relief programs from the pandemic are increasingly expiring or becoming phased out, calls for additional resources from Congress have failed to gain any significant momentum, particularly as concerns over spending dominate the legislative agenda of the U.S. House of Representatives.

The expiration of eviction moratoria is also leading to higher rates of eviction. But similarly to a lack of will seen in the U.S. Congress, a number of state legislatures have not seen any meaningful legislation emerge to combat the trend, despite organized efforts in states like New York and Texas.

However, several pandemic housing relief measures have been made permanent.

Nationwide, 200 measures have passed since January 2021, including legal representation for tenants, sealing eviction records and mediation to resolve cases before they reach court, according to the National Low Income Housing Coalition.



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Digital mortgage exchange and loan aggregator MAXEX announced on Monday it closed an equity investment round and partnerships to expand liquidity amid the recent market volatility. Terms of the transaction were not disclosed. 

The investment round was led jointly by the financial institution South Street Securities Holdings and the investment firm Atlas Merchant Capital, headed by former Barclays CEO Bob Diamond. (Atlas also has a minority investment in South Street.) 

The three companies will collaborate to accelerate industry adoption of MAXEX’s platform and expand access to MAXEX and South Street products and services. The companies claim they collectively serve more than 500 market participants. 

Several of MAXEX’s existing investors, including J.P. Morgan and Moore Asset Backed Fund, also participated in the round.

Houlihan Lokey served as the financial advisor to MAXEX. 

“MAXEX’s mission is to serve as a market utility and liquidity provider for the U.S. mortgage markets,” Tom Pearce, CEO, chairman and co-founder of MAXEX, said in a statement. “This partnership enables us to further accelerate our growth, expand our product suite and broaden our network.”

South Street will provide capital support to MAXEX’s existing clearinghouse facility as part of the deal.

It will “further enhance MAXEX’s counterparty strength by leveraging South Street’s investment-grade rating and approximately $30 billion balance sheet,” the company said in a statement. 

According to Jim Tabacchi, president and CEO of South Street, “Recent market volatility emphasized the need for fundamental change in the mortgage secondary market as lenders and investors struggled to adapt to rapidly rising rates, liquidity shortages, and the need to operate with more nimble, flexible infrastructure.” 

The deal with MAXEX expands access to a broad range of non-agency and agency-eligible mortgage loan programs.

“This partnership enhances our offering and TBA pipeline hedging platform by giving clients access to MAXEX’s loan trading exchange,” Tabacchi said. 

In May 2022, MAXEX launched a DSCR [debt-service coverage ratio] loan-purchasing program for originators looking to tap into the growing mortgage demand from individual and small-business real estate investors, such as rental property owners, who “tend to prioritize property cash flow over interest rate.” 

The company also announced that it expanded its bulk- and forward-trading loan programs. 

In September 2022, the digital mortgage platform unveiled a series of new programs designed to serve originators and loan buyers in the growing non-QM lending market.



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