The Dark Side of Real Estate: Scams That Are RUINING People

[00:00:00] Welcome to the Real Estate Strategies podcast. Let's get right into this episode. Real estate scams are costing investors, tenants, and everyday people millions of dollars, and we're going to help you try and avoid them. Yeah, we got to be careful here, guys.

[00:00:14] There's a lot of stuff going on online, social media, the internet. You got to be very, very careful. Our office personally is under attack almost daily because we get emails from financial institutions asking for passwords and stuff like that. So today we're going to talk about all that.

[00:00:34] Yeah, and before we go into specifically the scams that we're seeing, there are certain things that should be a red flag to you. So, you know, if you're a tenant and you're trying to rent something or you're

[00:00:46] trying to buy something, you know, pressure to act quickly is going to be a big flag. That's number one. So if somebody needs something immediately, then you should immediately pause. I'll tell you what, I'm so freaked out by a lot of this stuff.

[00:01:01] What I do now is I just delete stuff. Like I go on today. Well, yeah, well, but I know, but I'm also, you know, but if they're trying to rent a place or something like that, you can't delete it. You got to be careful, right?

[00:01:12] Because what happens is that, you know, they put one letter off, like in an email. Yeah. Yep. Like we got one that said Wells Fargo. It was W E L S Fargo.com. Right, right. They left out one L and add the logo. Yep.

[00:01:26] So the second thing is, is that there's not a lot of paperwork when you're doing anything with real estate, there should be a lot of paperwork. It should be thorough. So if somebody that you are working with is not giving that to you, then I think

[00:01:39] that that is a big red flag and also too good to be true, right? If the rental units usually rent for 2000, it's listed for 1200. That should be a flag that something might not be right here. Yeah.

[00:01:51] And you guys all know everything's now, not now, no cash, no checks or anything. It's all heading to wires. And so the wire fraud scams are really, really eye alert. Like I was just meeting with one of the big people at first American title the

[00:02:08] other day, and this is one of their biggest problems is, is the, the, the wire fraud. Yeah. So that's the first one we're going to be talking about. So the wire fraud scam is a big deal.

[00:02:18] It's basically when you're told you need to wire money, whether that's for rent or whether that's to purchase a home or for anything else, you know, these scammers are getting really, really creative. And like Ken said, you know, they might even have one letter off in their email

[00:02:35] trying to get you to wire them money. And they're really convincing. Like I almost fell for a wire fraud scam on my first deal. Um, you know, I was ready to close the funds were going to be due. They were due like that next day.

[00:02:49] And somebody that had one letter off and the emails from the. Tightly the mortgage company I was working with that, Hey, we, you know, we messed up, we need you to send the money over today, actually here's the wire information and it was from my mortgage rep.

[00:03:03] They knew my exact balance that I owed. They knew the date that it was due. The only reason I didn't fall for it, you know, being a brand new is my first home I was buying, I had no idea. Was because I actually didn't know.

[00:03:14] I never wired money before. So I called Tyler, my mortgage guy, like, Hey, how do I wire this 50 grand? Like, you know, you sent me that email and I don't know how to wire it.

[00:03:22] He's like, wait, I didn't send you an email to wire money, but somebody had hacked into their database, got all the information. So to me, they look totally legit because they, like I said, they knew how much I needed to close.

[00:03:34] I didn't even think like they made the signature of the same. I mean, it didn't even occur to me that this was a scam. Well, and you guys may or may not know there was $446 million in losses just in the real estate industry report last year.

[00:03:50] That is a lot of money. And what's going to happen is you're not going to hear about it. This is not going to hit the mainstream press, but you, you, it makes a tremendous amount of sense.

[00:04:01] People don't need to break in your house anymore to steal from you. Right? Absolutely. They, you know, they're going to do all this stuff. So you got to be very, very, very careful. One of my very good friends started a company called LifeLock and I'll never

[00:04:16] forget, he's like, you know, like, especially around Christmas time, they, they, they bring these temporary workers in to kind of help at the retail. And they say, Hey, give me your social and get 10% off on this one specific purchase.

[00:04:31] And so you're handing your social security number over to these people. There's a whole industry trying to scrape identity and, and this, you know, and they need all that stuff in order to make the wires work. Right? Yeah.

[00:04:47] They need to name, they only need you to do is wire them money. Actually. They just need to convince you to wire them money. They don't need your social or anything to do that. That's you wiring them the physical money.

[00:04:57] So the way to prevent this is you want to make sure you speak to your mortgage broker. You know, if you start to get a weird email or an email that seems, you know, they want you to send money, just call your mortgage broker, make sure

[00:05:08] it was them that sent the email, make sure that this, these are, you know, you have a sheet with the wire information on it. Typically, you know, that's all in your closing paperwork. Um, but you never ever, cause once you wire money, they cannot get it back.

[00:05:21] Like there's nothing anybody can do. Your money is gone. Yeah. And as you guys, some of you might be scaling your business. So I have this exact problem with my whole company. You think about it, we've got 300 people.

[00:05:35] So not everyone has their hand on the ability to wire, but there's a lot of people inside of my accounting department that do, because as you grow, you start to hit delegate different kinds of things.

[00:05:47] So you might want to take a look at your systems because we're getting these kinds of things coming in at all departments at all times, you know, they can come in from vendors that it doesn't always have to be about real estate closings.

[00:06:02] It can be, we've had them from, from people pretending like they were contractors that are owed money. There's all kinds of ways, but these, these wire, uh, these wire fraud scams are a big deal and, and, uh, it's, it's a, it's going to continue to grow. Absolutely.

[00:06:17] And so, you know, I think it's just important. It's never going to be an emergency for you to wire money, uh, unless you miss something and you really do have money, you know, do it close. But even then you're going to be in contact.

[00:06:28] Your, your mortgage broker's not going to send an email. They're going to call you if it's an emergency. And the mortgage companies don't like to talk about this because it looks bad for them. So they never warn you, like watch out for, you know, fishing or watch out

[00:06:40] for this or that, or don't wire any money because it doesn't look good for them to admit that maybe that's happened to them before. Right. A bank is a bank is not going to come out and be public about this. Right. Right.

[00:06:51] As you know, from working at a bank. Yep. One thing I know from working in a bank is banks get robbed all the time and it does not make the news because they do not report it. I don't want people to know.

[00:07:02] Or going on a little round, but the deal actually was working at a bank that got robbed. Yeah. Our bank got robbed and we were in a territory of like, you know, 15 banks and they would get robbed all the time, right?

[00:07:15] Like every few months, the bank would get robbed. It doesn't mean they came in with guns and whatever, but the bank and they never wanted the police to know they didn't want to make it public. They don't want people to not want to come to the bank.

[00:07:24] So just keep that in mind. If you're a bank, the last thing you're going to say is that I lost this much money, customers' money. So yeah, this stuff is all kind of below the surface guys.

[00:07:35] So we're just, you know, and please go online and look for other ways. But the number one thing is have a personal relationship with whoever it is you have at the bank and make sure you call and verify. Absolutely. That's the biggest thing.

[00:07:48] So the second scam that's going around a lot right now is the short term rental scam. Yeah. Those are big ones. Huge right now. Yep. 400 million in losses just last year. So they're easy to con people because when you're doing a short term rental, usually you're on vacation.

[00:08:07] You've never been there. You don't know where the home is or who owns it. And a lot of times, you know, these people are on these sites like the RBO, Airbnb, but then they ask you to go off the site to do the payment.

[00:08:19] By the way, guys, 12,000 people last year fell victim to this. Yep. This is a big deal. Yeah. So why don't you explain how it works? Well, basically, you know, you know, they can use any platform. They can use Facebook, they can use Airbnb, you know, the RBO.

[00:08:34] And we've all seen this, right? Like when you're on Airbnb, sometimes the host says, Hey, if you want to avoid the Airbnb fees, we can take this off Airbnb and you know, a couple of things can happen once sometimes they don't even own the home.

[00:08:48] There's no, a lot of times. Yeah. There's no home for it. Right. Not even me at home. All they need is an address. So let's say you guys have a place that you're listing online.

[00:08:56] They can easily take that exact same thing, look for customers and try to get cash. It's exactly what's happening. And they list it at a really good price. Like we were saying before, because obviously if you're a scammer with no

[00:09:07] real home to rent, you don't really care how much you're renting it for. Right. You just want to get people right. Um, you know, you've also seen it where they cancel on people when they're there.

[00:09:19] So it's like they, there is the home and they do own it, but then last minute they cancel it, you know? And they don't give you your money back because you're not on those platforms anymore.

[00:09:29] And then the last thing that they do, and actually we sort of fell victim to this one time as well. It's when we went to California and the house. So basically the house isn't necessarily what it's marketed to be right. There's some issues with it. There's some leaking.

[00:09:43] By the way, this was a $30,000 a month house. Yep. $30,000 a month house. And we're like, oh, but the lady wanted to go off Airbnb and we did with a lease, but you know, it was leaking. There was mold.

[00:09:55] There was like water coming through the ceiling in one of the rooms. I mean, we stuck it out for a month. It was right on the beach, but, but if, you know, if it would've been an Airbnb,

[00:10:03] we probably would have said, Hey, this isn't really what we signed up for. Yeah. Um, I know a lot of you guys are trying to save money, but I would suggest you stay on Airbnb and VRBO that, you know, there's a, there's a reason those

[00:10:17] are set up that protects the consumer. Right. It's it protects both parties, but when you go offline, things start to get a little sketchy, be very, very careful. Right. And, and also, you know, just make sure this happens to a lot of like traveling

[00:10:31] nurses in the midterm rental space as well. You know, um, just make sure that it's legit and then the people own it. I think the prevent it, you want to go through those sites like Airbnb and VRBO.

[00:10:43] I know for us now we always go through the sites and then if we're going to rerun the next year and you know, we've gotten to know the landlord, sometimes we'll go off of there and have a lease, but, um, you know, that first time I think first

[00:10:55] time through the platform. Yeah. Yeah. This is a big one. This is only going to keep going up. Right. It actually happens not just for short term either. Yep. You know, I mean, I, it's funny.

[00:11:07] I was looking for a classic car and the, the, the, I looked, I was like, this seems kind of weird. And I, and I, I, I cut and pasted it and it came up on an actual auto dealer, uh, like

[00:11:20] a classic car auto dealer back in the Midwest. And, uh, somebody else was in there like, Oh, just give me a thousand dollar deposit and I'll hold the card. And what they, so this can happen, uh, with anything.

[00:11:32] And I won't actually take it the other way too, because Eli said that, you know, he has a lot of people that ask on Airbnb to go off of Airbnb and he, you know, declines.

[00:11:42] And I do want to bring that up because, you know, like we are running a place right now. We're going to run it again next year. We decided to go off Airbnb and you know, the, the people that own this property

[00:11:53] gave us a lease that's like a sheet of paper. Okay. You know what I mean? So if you are a host and you're going to take it off Airbnb, you want to make sure you have a thorough lease as well to protect yourself the other way. Yeah.

[00:12:04] The reason why we're doing it is because we like this place. It's a, it's perfect. And for our dogs and our kids and all that kind of stuff. And so we now are a relationship with the owner and we've gotten to meet them.

[00:12:17] And, and so we're just doing it. Right. And you just have to remember, I know the lease protects you. So, you know, for us, this is a great lease, but there's a lot of caveats in it

[00:12:25] that obviously we're not going to exploit, but it's not a great lease for them. Yeah. Limitless is coming up. I'm so excited. Yeah. August 29th, 30th and 31st at the Gaylord in Dallas, Texas at limitlessexpo.com. It is going to be a great, great event. I cannot wait.

[00:12:44] It's going to be the end of August 29th, 30th, 31st at the Gaylord Palms in Dallas, Texas. It's sold out the last two years. We expect thousands of people as you guys know, this is an event that you do not want to miss. We have over 50 speakers.

[00:12:59] We have over 80 booths and presenters and sponsors, and this is an event. If you guys are uncertain about what the future of the economy is, this is something that you are definitely not going to want to miss. And what's that link one more time? www.limitlessexpo.com.

[00:13:15] Use code NOLIMITS, that's N O L I M I T S to get 10% off any ticket. That's no limits. See you all there. So the third one I really want to dig into, cause these are their rental scams.

[00:13:31] And I think that this is the biggest thing that's going on right now. And I think that the tenants are dealing with this because they're trying to find a place to live long-term. And I think that landlords are dealing with this because tenants are getting

[00:13:45] scammed so much that they're very scared to send any money or do anything, you know, for anything. Right? So basically, you know this can happen obviously when you rent something sight unseen from a smaller landlord.

[00:14:00] But it can also happen if you're there and they tour a place that maybe isn't theirs, you know, and they say, this is a wonderful condo, you're going to love this and you're in it and then they don't actually own it, you know?

[00:14:14] Like it might be their boss's place. It might be a friend's place. It might be a place that, you know, they somehow have keys to. And so it gets very, very dicey and I feel bad for tenants because there's a

[00:14:26] lot of people that are losing money to this. So guys, this happened to me. So I'll tell you what happened. I built a condo project in Vegas and I kept the models and I rented them

[00:14:36] forever and then I decided, oh, I'm just going to sell these things off because they're small little rentals in Las Vegas. And I'm just going to peel these off because they're kind of pains in the butt.

[00:14:48] So I had a property manager for that and then I decided to lease it. I'm sorry, I decided to sell it. Okay. So I went from obviously renting it to wanting to sell it. Well now it's vacant and you know, in good shape for, for somebody touring it.

[00:15:04] Well, what happened was somebody threw a renter there. Oh yeah. While it was being listed. So we went from a rental to a sale. And of course I live in Scottsdale and my realtor, he's like, somebody, somebody's rented your place. I'm like, oh my gosh.

[00:15:20] So now we have a situation where they actually paid somebody else. And so, you know, this is a real thing, especially when there's vacancy. And this is kind of the point. What happened was, uh, the, the realtor of course, tours the property, you

[00:15:36] know, people are out getting listings when they can, when there's somebody interested in that, they're not checking your place all the time while it's vacant. And so somebody in that, uh, in that community saw that this thing had been vacant for, you know, 30 days, 60 days.

[00:15:52] And they took advantage of that. So that's actually what happened. And then, uh, Tony called me and he's like, oh my gosh, there's somebody in your place. And so then we had to go into this whole thing, you know, whatever you want

[00:16:03] to call that a squatter or something, but people are pissed they're in there. And sometimes they move stuff in. Somebody else took the money. Um, so this can happen with, with the vacancy. So if you're out of state, you're not checking your place, um, you know, just be

[00:16:17] careful. Yeah, absolutely. And you know, so how do you prevent this? Right. Because you need a place to stay. You're not going through a platform like Airbnb, you're going on Zillow or Facebook and you know, this is a lot of money, right?

[00:16:29] Because a lot of times this is thousands of dollars to hold a place. Um, but I think the first thing that you should look out for is if the price is too good to be true. Yeah, for sure. Like, like that's a big,

[00:16:41] yeah, if you guys are getting a huge deal, there's a reason, right? Be careful of that. And I would say that's pretty common because think about it. If you're a scammer, you're trying to scam as many people as you can.

[00:16:52] If you let your place in market, you're not going to get, you know, 10 applications that want to run this place. Right. So the place has to be pretty under market. So I would say that would be a huge red flag.

[00:17:03] If it's too good to be true, then it literally is too good to be true. Exactly. Right. And the second thing is, is like that rushing, right? That rushing to, to close that rushing. Yep. If you're not interested, you need to get your money in right away. Yeah.

[00:17:18] Any kind of that just stay away from, because that's not the state of the rental market right now, by the way. It's not, it has been, but it's not right now. Not right now. Right now there's not a bunch of people beating down the door to rent units.

[00:17:30] Yep. So that's if, if, and if, if, if it is the case, then just say, I'm sorry. But you know, you need to take the necessary steps because you could be wired or sending your money to somebody that doesn't even own the place. Yep.

[00:17:45] And I think another one is tenant screening, right? Like, you know, as the landlord, you want to screen tenants. As a rental scammer, I don't think you care what their credit score and good background is. Right.

[00:17:57] So if they're not doing a credit and background check on you, I think that that can be a flag as well. For sure. Yeah. Yeah. They're just trying to get cash up front. The system should be, this should always be this.

[00:18:09] They should be getting an application from you running a criminal credit background check. And then of course you're getting a lease and there's a closet and you know, and then you actually are physically seeing this place. You should actually make sure that you're physically walking this place.

[00:18:26] Uh, and you can actually pull title if you want. You could actually go see who owns something online. But it might be under an LLC. Could be, but yeah, it's okay. Yep. Even if it's under an LLC, that's okay. Then you can go check on the LLC.

[00:18:39] So most of you guys are in the real estate business. You realize that a lot of these places are owned by LLCs. You should not own a lot of stuff in your own name. You should own it in some kind of an entity for asset protection purposes.

[00:18:52] But there is a way to see who owns the, you know, who the owners are, the members of the managing members inside of those LLCs. So just take that little bit of extra step. Yep. And also with the lease, the lease should be pretty thorough.

[00:19:04] It shouldn't be a one sheet. Right. And so that would be a flag for me if, you know, somebody was like, yeah, just sign this, send the money and we're good to go. Right. Yeah.

[00:19:12] Um, well we got the lease and hi, I go, let me see the lease as a one pager. Yeah. And I read it. I go, okay, this is good. This protects us. Yeah. I mean, to be honest, it can go either way. Right.

[00:19:24] Like, uh, the more sophisticated landlords are going to have very complex leases because they've been through a lot. The ones that don't have as much experience, they're going to have the one pagers. Now they're gray, they're open, not everything's in there, but that can

[00:19:39] actually be good for both sides. Right. To be honest. Yeah. The more, the tighter the lease, the more language, the harder it is, you know, to, to, um, to have, well, I guess the things aren't as gray.

[00:19:51] Well, and I can see how this could happen a lot too, because, you know, like I just had, um, a couple move in from Seattle last year. They had never been Arizona. They needed a place.

[00:20:01] They, we did a virtual walkthrough on, um, FaceTime and they rented it and everything was fine, but you know, if I was a scammer, they would have been an easy people to scam.

[00:20:10] And I, I do think if you're renting from, if you're renting in state, you need to physically go see the property, meet the person that's showing it to you. Do you have a weird feeling about them? Do they seem, you know, on the up and up, right?

[00:20:22] Uh, if you're renting from out of state, this is a time to use a realtor. I believe if you're gonna, if you're not running manager. Yeah. Right. If you're not running from like a big apartment complex, um, because, you know,

[00:20:33] you need an advocate for you to go down, look at the unit, spot anything, make sure it's in a good area and make sure that people aren't a scammer, right? Because if you're coming from out of state, that's the easiest way to scam you.

[00:20:44] And it happens a lot. Like I thought a lot in my other company about traveling nurses, they get scammed a lot because they're coming to an area. They need to stay for three months.

[00:20:53] They don't want to, you know, most of the time that's not an Airbnb or VRBO. And then they get there and there, there's nothing there for them to rent. And so I think that those situations, you know, you need a realtor, you need an advocate. Here's the thing.

[00:21:06] Do you just know that if you're the one trying to lease something, then it's paid for by the person that's actually listing the place. So, you know, this is, this is going to be, uh, the landlord's expense. It's going to be the seller's expense.

[00:21:22] So, so you, somebody local in the area, if you're trying to do something from out of state, out of the country, make sure you have somebody local, some, some advocate doesn't really matter. Right. You just need to make sure that you're not just flying blind. Yeah.

[00:21:37] I mean, you're not just like sending money through just any old way, right? Like a tech is a good way because at least it's got to be made out to a certain company or a certain person, um, you know, versus just sending with Zelle or Venmo.

[00:21:50] That's a really good point. So on the lease, as an example, so you can pull title on any place. And so, you know, and it'll have, let's say the LLC name, make sure that the check is in that LLC name. Yeah. Right.

[00:22:05] Because everything should, that's what the bank account should be in. It should not be in somebody's individual name. Right. That's a really important point. If you're, if you just send it to John Smith at it's, it's even John Smith,

[00:22:19] real estate LLC, it needs to be in the name of John Smith, real estate, LLC. That's what the check should be written out to, because that is the legal title, uh, legal owner on title. Absolutely.

[00:22:30] So the fourth scam I want to get into is more for homeowners, but it's those home inspection scams when you go to buy something or sell something. Right. And a lot of times, you know, anybody can pretend to be a home inspector.

[00:22:42] It's very easy to get a, you know, a hundred dollar website from Wix and just throw it up there and you're going to pay them. And they're going to tell you there's no real issues with the house. I know, I know you guys need to be careful.

[00:22:54] So one of the, obviously if, if, if you're the listing agent, you're going to want to use your home inspection person because they're not going to want to kill your deal. You're going to want an independent. Uh, you should always have an independent.

[00:23:11] So if you're being represented by an agent, let's say, then you're going to want to make sure that you go with that person because you want there to be a little bit of conflict. I mean, not, not real conflict, but you just don't want, um, you know,

[00:23:26] everything just to slip right through the, the listing agent is supposed to be trying to sell the place. They're the one getting paid for by the seller, not necessarily by you. And I know we've got dual agency and a bunch of other things that kind of,

[00:23:40] that, um, and you, you know, they're supposed to be independent and all that. But at the end of the day, um, if, if a homeowner, uh, or a home inspection comes in and there's all kinds of problems, all of a sudden the buyers now negotiating with the seller.

[00:23:57] And so you just want to make sure it's independent. Yeah. And you want, like he said, you want that, Eli called it resistance, right? You don't want them to be okay with the deal going well.

[00:24:06] Um, you know, Ken and I are in the process of getting a home and, you know, our inspectors kind of upset the seller, but that probably wouldn't have happened if it would have been his inspector. Well, that, that happened.

[00:24:16] So you were, were exactly what the, the listing agent said, all you can use our home inspector. We were like, no, no, no, we'll use our own. And then of course they came and the seller was freaking out and the

[00:24:30] listing agent was freaking out and they had very specific things that were flushed out that we were, we asked them to do. And so that's the thing there that it goes from being biased to unbiased. That's all. Yeah, absolutely.

[00:24:44] And it comes down to, to, um, how much they're charging too, right? If you go with a really cheap company, that is more likely to be a scam or they're more likely to not do a good job.

[00:24:54] You know, we always say don't skimp on the home inspection and certainly don't hire the cheapest company. That is not where you want to be saving money. Yeah. Yeah. You want to, and you know, you want them to be super thorough, right? And that's part of the thing.

[00:25:07] You want it to go through all the systems, um, on the roof, the plumbing, the electrical, all that kind of stuff. You, you want somebody who understands all that. And the home inspection business is, is kind of sketchy in some cases. Yeah, it can be.

[00:25:21] You can, especially if you just cranking them out, like on some of these production homes. They're literally like a, uh, a, uh, a report. They just flip the address, change the address out and you know, ching, ching, ching, ching.

[00:25:34] You want somebody who really understands from a trade standpoint, all these different aspects and goes out and takes photos. And so, so make sure then that the home inspection is incredibly thorough. So you can easily prevent yourself from falling for scams by doing good due

[00:25:51] diligence, not trying to find the cheapest price and make sure you have the right paperwork and thoroughly look over everything. Yep. So, so as example on the one that we're going through and we, this happened before, you know, we'll, we'll get, uh, the, the report could be 20, 30, 40,

[00:26:07] even 50 pages and super detailed with photos and everything. So it's extremely thorough. And then from there you can kind of decide, you know, is it something I want to push back on or something I don't care about? So before we hop into our questions, let's talk about Limitless.

[00:26:23] Limitless is coming up. Yeah, baby. So I'm going to say something that you guys, this is going to freak you guys out. I had a call last week with RFK, RFK himself, RFK, and, um, it sure looks like he's coming. Yep.

[00:26:39] So you're the first to know we haven't announced it. And, um, you know, we, we, um, we were working on this for months. As you can imagine, he's pretty busy. And, uh, it was cool. I had an incredible one hour call with him and, um, he's excited.

[00:26:54] He's coming to Limitless. Uh, the end of August. Uh, that's not the only reason you would want to come, but, uh, we have 50 speakers, 2000 people, uh, we've worked cranking it. I know, um, we sold out the last two years and, uh, it's very, very, very exciting.

[00:27:10] Uh, is one, uh, this is one, the one event I do each year. This is not a newbie type conference. This is a conference with a lot of people that are starting businesses, have multiple businesses exiting businesses. Um, it's not a real estate conference either.

[00:27:26] It's a, we're going to, we got some really good people talking about AI and how to implement AI. We've got people talking about gold, silver, oil, gas, timber, water, all these different things that, you know, are also good investments of all that.

[00:27:41] So, uh, we, we hope to see you guys there. And, uh, Jerry, if you put that up again, we've got a code, uh, I think for Limitless 10, 10. Yeah. Just type in Ken Chen, you get a discount and we hope to see you guys there.

[00:27:57] So let's hop into our premium questions. Uh, I'm going to start with the first one from Danica. She's asking, will it decrease in rates in September lead to an increase in real estate prices, even if it's just a small quarter point decrease? Yeah.

[00:28:12] I just don't see it personally. You don't think that prices will go up? Well, they're already going up. Yeah. Like, you know, it's a supply problem is, uh, and, uh, it's possible, I suppose. But a quarter point is not that significant because what you really

[00:28:26] have to look at is quickly they went up. Uh, but, um, it's, I guess it's possible, but usually lower rates create bubbles, but a quarter point is not that significant based on how far they went up.

[00:28:41] So, um, it could provide some relief in some areas, but I don't think so. It's not going to be enough for people to jump out and refinance. It's not going to be, uh, it'll help a little bit.

[00:28:55] Uh, but the prices, I think we passed 450 on the average price of a home. Yeah. I think they're still going up generally and a commercial real estate's in trouble still. And a quarter point is helpful, I suppose, but, but, but not meaningful.

[00:29:11] But I, you know, but I think with a quarter point, I have a little different opinion because I think with a quarter point, you know, people solve to that monthly payment. So I do think that prices of real estate could go up if they lower rates. Well, yeah.

[00:29:22] I mean, yeah. What is big 50 or $75 problem? Yeah. But I still think that they... Something I suppose. Yeah. Yeah. And I also think too that, um, you know, more people will hop on that bandwagon

[00:29:34] of I can refi out of this if I buy now, you know, because they'll think... It's impossible. I, I... Rates will keep going down. Here's what I would think. I think people are gonna, they're gonna take note and they're going to see

[00:29:48] where the Fed goes for the next one. And, um, you know, so are you going to see this awful lot of people go out and buy? I don't think so. Um, you know, we've got a lot going on in the last half of this

[00:29:59] year, including a wild election. Um, and obviously this'll just be a couple of months before. And, uh, who knows what's going to go on with, with regard to all that with Biden stepping down and Kamala stepping up and, you know, it's

[00:30:13] just going to be a wild few months. So. It is. I know that was the big announcement yesterday with Kamala. So. So Jeremy's asking if the numbers make more sense to rent than buy in my area, should I continue to rent? I can afford to buy. I am 30.

[00:30:29] Yeah, it's a good question. So, um, it, this has a lot to do with, um, Um, you know what? So if it's your primary home, I'm a huge believer that you should own a whole.

[00:30:45] Um, and you should, instead of paying a lot, uh, you should be paying yourself and you're just chipping away at your mortgage payments over a long period of time, the one thing you got to consider is inflation.

[00:30:58] So, you know, it sure looks to me like, even though the feds now celebrating there's somewhere between two and 3% inflation, even at two and 3% inflation, you're still going to have inflation. And so, you know, if you just hold the same for 10 years, the chances of it

[00:31:20] being, I guess, inflated by 20 to 30 to 40% is high based on inflation. And at the same time, if you're paying down your mortgage, you're going to have that. So you're going to have your mortgage being paid down and you're going to have the economy is going to be inflating.

[00:31:39] So, so this is a hard asset strategy time. You want to be in hard assets, whatever those might be. And that's specifically what we're going to be talking a lot about at liminal is hard assets typically move with inflation. So that's what, that's where you want to be.

[00:31:57] You do not want to be in cash because if you have a hundred grand in the bank and you have a hundred grand in the bank in five years, it's the same hundred grand, but it buys you less. And that's actually the big issue.

[00:32:11] The big issue is prices are going up over time. Not everything, of course, there are some things that are deflationary, but most are inflationary. So this is a, that's a, it's a really good question, really astute question. But I'm a huge believer that everyone should own real estate.

[00:32:28] And by the way, it doesn't have to be your private residence. You can buy one and have a tenant pay it off. Just you want to be in the game, in my opinion. Yep. So Chad Duffing, I'm in the market and have, and I've had great appreciation over

[00:32:40] the last five years, which has created much equity in my properties. Those same properties all got refinanced to rates below 4%. I have all this equity, but I'm not sure how to access it without losing my low rate. They all have great cashflow.

[00:32:54] Do I sell in 1031 or is there a better strategy? Yeah. What a great question. So I'm in this situation and most people are in this exact same situation. I believe that if you got your rates at under four or four, then though that debt is now an asset.

[00:33:17] Like there's no one that can get that. And, and you know, we might not see those rates for a long time. If maybe, you know, I mean, this is the first time I've seen them that low, just to be honest. And, and, and in my, in my,

[00:33:32] when I first started coming into the business, we were at 70%, then it went all the way down to six or seven or five or like, so weak. And then it went even lower. So what you guys have now just seen is something that I've never seen.

[00:33:47] And so it's possible that you are be sitting back on those and their cash flowing. And I know you got all this equity at some point. Um, you know, maybe you can do a line of credit against it. Uh, you know,

[00:34:01] you could put a second against it perhaps without getting rid of the first, but I would definitely not want to refinance out of those because, uh, that's precisely what the lender wants you to do. Cause they're probably losing money on those, you know?

[00:34:16] And so if you have that kind of fixed rate debt, man, that's gold. Plus it's something's cash flowing like that. It's a risk to 1031 and into something else that, you know, might not have that. Yeah. Yeah. And so, so I'm doing a 1031 right now,

[00:34:31] but it's at a piece of land that I have. And you know, it's maybe, you know, it's a $5 million piece of land. So I'm going to take that. There's no cashflow on it. So it's something I bought years ago.

[00:34:40] I'm going to roll that into something else that cash flows. That's different. If I had 3% debt on it and it was cash flowing, I probably wouldn't do it. Yeah, absolutely. So thanks you guys for checking us out. We'll see you next week. So you guys cheers.

[00:34:56] Thank you for listening to this episode of the real estate strategies podcast. If you liked what you heard, please give us a five-star review on iTunes and let us know what you thought of today's episode. Thank you. And we'll see you next week.