They’re Lying To You About Buying A House - Do THIS Instead! | Pace Morby

17:55Jack Graham:Why are you even doing stuff like that? Like at this point, I feel like it doesn't make sense for you to try to flip a place to try to make $100 ,000 when you have like all of these buy and holds or when you creatively finance four RV parks to profit$700 ,000 a year. Yeah. Like how do you pick which battle is worth your time? Quick thank you to Ethos for sponsoring this episode. Most of us work to take care of the people we love. And when you're the person that they depend on, that's a responsibility not to take lightly. For example, I have two mortgages and payments like that add up incredibly quickly.

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19:02Jack Graham:Having your own policy means that you're protected no matter what. Ethos has a 4.8 out of 5 stars on Trustpilot with over 4 ,000 reviews, and you'll get your lowest rate through their network of trusted carriers getting started takes about 10 minutes. So take 10 minutes to get covered today with life insurance through Ethos. Get your free quote at ethos.com slash iced coffee. Again, that is E-T-H-O-S dot com slash iced coffee. The link is also down below in the description. Application times may vary. Rates may vary. Like how do you pick which battle is worth your time? Think about this like Dairy Queen.

19:35Did Dairy Queen start out with hamburgers or ice cream?

19:38Jack Graham:I have no idea. I think hamburgers, right? They start out with ice cream. That's why it's called Dairy Queen. dude okay i know they had i know they have hamburgers i don't know so what they did is they found that um dairy queen makes way more money on hamburgers and fries than they do on ice cream right the margin is just way bigger and so they added hamburgers and fries later in the game does that mean that they should get rid of their machines and their systems and their processes and their marketing for all their single family houses see what i did there so i get like for example the agent that's sitting to our right called me i've built a brand i've built systems and teams that handle all my flips.

20:12I don't go to any of them. I don't talk to the contractors. I don't deal with the money. And that little business makes about a million dollars a year. And I only focus in Phoenix, Arizona. So why is that a good business to have is because when real estate agents call and they go, Hey, I've got a seller in a bad situation. I don't want to put this on the market. I go, well, I could flip it. I'll flip it. And if I say no to a real estate agent, let's say I go to a real estate agent, I go, sorry, it's not a good deal for me. I'm not flipping anymore. What do they do? They then go to the next investor and that next investor is going to get the RV park that they might be listing or the other property that could be a good co-living deal.

20:46I say yes to things that I already have systems and processes from 10 plus years ago. So why would I turn them off? It's like telling Dairy Queen, turn off your ice cream machine that you already built. You already have this machine because you make more money on hamburgers. Why can't I make money on both? So just give a definition of creative financing like I'm five years old. Okay. What do you have there? What kind of phone do you have there? iPhone 17. Okay, so iPhone 17. You next year, I'm sure, will upgrade to an iPhone 18. If you don't, you're crazy. It's the number one tool in your pocket, so you're going to upgrade to a new phone.

21:16That phone, you're going to go put on Craigslist or you're going to do something with it. The average person is not jacked, so you might use it as a camera or whatever, but let's just say the average person is going to upgrade their phone to next year. That phone next year will probably sell on Craigslist for, let's say, 700 bucks. Would you agree with that? Yeah. So let's liken this like putting a house on the market. If I put this phone on Craigslist at 700, am I getting that$700 on Craigslist? Yeah. No, you're not. You're getting an offer at 520. You're getting an offer, which is when you're a real estate agent, this is the crap you deal with is that you get people that lowball you on your listings, right?

21:47And so instead I call that phone seller and I go, Hey, it looks like that's been on the market for 30, 40 days. I'll pay you the 700 bucks a month. I'm sorry. I'll pay you the$700 you want for that phone, but I want to pay you a hundred dollars a month for seven months. Are you willing to do that? And so they're willing to wait for the 700 bucks to get their number, but they have to just take it incrementally. I take that phone, go make money with it. That's creative finance. So I do that with planes. I do that with businesses. I do that with RV parks. I do it with all sorts of stuff. What's the weirdest thing you've creative financed?

22:19I'm trying to creative finance a train right now because I want to train in my backyard that I turn into like an Airbnb type of thing. But the weirdest thing I've actually completed on owner finance was an American, a vintage American flag. There was like a$5 ,000 flag. I pay the guy

22:32Jack Graham:50 bucks a month for 100 months why not just pay the guy the money and because it i did i made a youtube video out of it just to show people like i can literally create a finance anything um i'd say the 100 months how you're like a firm yeah i'm like a firm isn't that like eight something years he could his the best offer he got was like 3200 bucks and so think about this his american flag is vintage it's been sitting in his whatever barn for whatever amount of months he's not doing anything with it. So for him, he's like, fine. If you give me my 5 ,000 bucks, it sits on my barn in Montana. And I called my Montana farm, the creative acres.

23:07And so when people pull up, I go, yeah, I bought that with creative finance. The plane, my son flies, he's a pilot now that plane. I bought no money down, no interest and no payments for two years. And I work, I worked to deal with the seller. I said, I want my son to get into a point where he's making money as a pilot. And the guy goes, I never had a son. I always wanted to teach him. If you buy this at my number, which is like 118 grand is an older plane. Then I'll sell or finance it to you. I go, but he's not going to make money for two years. He goes, that's fine. We'll structure a deal that when he starts making money, that's when the payments start.

23:39So you can do anything, planes, houses, RV parks. I've got a landscape company under contract right now. I've got a wedding venue in Pigeon Forge, Tennessee under contract. There's nothing you can't do with creative finance. It sounds like you do too much.

23:54Jack Graham:Like you're starting to acquire wedding venues and you're trying to buy a train in your backyard to rent as an Airbnb. That's where you live. Why are you - It's not an Airbnb like I will rent it out, but when I have guests come over, I don't want them in my house. I want them like out in the train. You want them in the train? Yeah, I want them in the train. Okay. So I just feel like at this point, like you must have some very excellent operators. I have 200 employees. I have great partners. Have you been to my office in Tumpy? I mean, you've seen my operation. It's a big operation. Yeah. Like I've done videos with Cody Sanchez.

24:24She's like, how the heck are you doing all you're doing? And then you meet my team and you're like, holy crap. Now I started very small. I started in my Prius. I met with real estate agents on houses they couldn't sell back in 2013. And I built it up from there. And then when you get one asset that makes$10 ,000 a month, I could either A, live on that money or B, I could take that money and go and acquire a good, talented person. So how can someone use creative finance to build wealth then?

24:47Jack Graham:Like starting from zero, what would you recommend if you were to replace your knowledge that you have right now, let's say you go back to being an 18 year old person with$0, what would you do? And here's the other thing too, I've noticed you had, it seems like you have to be a good people person. Like you're a good communicator. You have good confidence. I think if you walked in as a bit sloppy, you know, it wouldn't come off the same way. I agree. But I also have people from all over that people that learned from me. I mean, you've had people on your, that have watched our previous episodes, literally took action from what they did, came back and sold me a deal.

25:17And I'm like, you are the sloppiest person ever. How did you get this deal under contract? When a seller's in pain, a seller's in pain.

25:23Jack Graham:You're talking about our viewers being sloppy now? You guys heard that. I'm sorry, guys. Okay, that is fighting words right there. But I've bought a lot of deals from people that have watched our episodes. They've come back to me, which is what I love about your channel. I've probably, I don't know, I've probably done a good 50 or 60 deals just from people that have watched your channel, done what I said, and then came back to me through my DMs and said, hey, I have a deal, do you want to buy it? So they're not super practiced. When you find a seller that is in big, significant pain, the solution is sub two.

25:51The solution is seller finance. The solution is a lease option. It is the only solution. It's not a cash solution. In fact, I would argue that probably 10 % of deals on the market right now should not be selling for cash. And when a seller truly understands creative finance, how it saves them money, they get more money, saves them money on taxes. They get more money long-term on their interest rate. Why would an intelligent investor or intelligent seller ever sell for cash? In fact, I would tell your parents to never sell anything cash. You're going to give 25 % of it to the government. And then what they do is they take their nest egg that they earned.

26:24Let's say, for example, I've got an RV park. I've got an RV park. Seller's name is Eric. And Eric wanted to retire. He bought the park for 1 million. 15 years later, it's worth 5 million. Okay. So what's his gain? He's got a$4 million gain. How much is he going to give to the government? A million dollars. Is that what you want your parents to freaking do? And this is what people are doing. It's like, oh yeah, just listen on the market. Yeah, great. So we're going to pay a broker, another broker. We're going to pay freaking capital gains tax. And your parents are now left over with out of their$4 million gain, they're left with like two and a half million bucks.

26:54Then the worst part is now where are they going to put the money? In stocks? Because nobody loses money on stocks, right? Like that doesn't happen.

27:02Jack Graham:Well, stocks have done incredible these last years. Oh yeah. Last couple of years, just like multifamily people, you know, having their good run, right? The reality is the best thing those parents or these people should invest their money in is back into the asset as being the bank. They can avoid the capital gains tax. They can get interest on their money and it's an asset they understand better than anybody else. So it's interesting. I'm listing, well, I just listed one place for sale in LA for offers over asking. Oh yeah. By the way. I believe it. That's going through. I'm listing another place in a week and a half, probably a one three.

27:36Jack Graham:Now I got a 3.675 interest rate on it. Why shouldn't I sell? Okay. So what's your sales price? I just guess a minute like I'll just say one three okay so one point three and you have an underlying loan at let's say three and a half percent three and a half percent uh yeah two because I did a pledged asset line two to build out the ADU in the back so blended I'll call it three point seven okay cool so you got three point seven and what's that total loan amount like combined? $725. Okay, so you have roughly $600 ,000, let's just say$600 ,000 in equity. For you, an intelligent investor that is young, you should not sell this on seller finance.

28:19I'll give you an argument why you should, but I think you should sell that, take that money in 1031 into something else. I know you don't want to be in real estate right now, so you want to be out. I want to be out. I think the problem with most people that are out on real estate, like Cody Sanchez, I've seen her on your channel go, oh, people don't make money in single family houses. I'm like, really? let's go look at my P &Ls. Let's go look at, I don't do regular rentals. That's another problem. Regular rentals are where people get their asses handed to them. So for you, I would take your$600 ,000, pay your gain, roll that$400 ,000 into something else or not, you know, whatever you're going to do with that$400 ,000.

28:51But let's say that I'm older and I don't want to roll that money into something else. I don't want to tie my capital to something I don't understand. That's a very quality piece of real estate, would we agree? And in 10 years, it's probably going to be worth more than the$1.3 million.

29:05Jack Graham:Could be. Okay. It will be. Obviously, it's LA. It's going to continue. I don't know, man. LA's got reent. I don't know. It's selling at 2014. Spencer Pratt for president. Santa Monica's selling at 2014 prices. If you had bought in Santa Monica multifamily 2014, you've made no money in the last 10 years. I think you're smart for you specifically selling that asset for cash. Like I said, 90 % of people should sell cash. 10 % should sell in creative finance. The argument would be this. Let's say you relisted this property, but you said for rent to own, right? And you let people do a lease with an option to buy 10 years down the road, and you let them lock in a specific payment with you.

29:42But you sold that asset to them not for 1.3 million, you sold it to them for 1.6 or 1.7 at a future option. So you're locking in an extra$300 ,000 or$400 ,000 on that property, and you'll collect cash flow along the way. So doing a lease option would make you more money. it'd keep your money tied up in an asset that you trust or at least that you've it's made you money and you'd have 10 years and at the end of that 10 years you get three four five hundred thousand

30:04Jack Graham:extra yeah but then you have the risk of well let's say there's a big earthquake yeah this is why you have insurance i think the bigger risk is something different the bigger risk is if that tenant doesn't complete the transaction and now you take that asset back right in my world i call that the after party i want that to happen so when i sell on a lease option i want that tenant to fail on their option for whatever reason, we could, man, we could talk about lease options for five hours and they come back and they go, Hey, I need an extension. No problem. $20 ,000. I'll give you an extension for two years, but let's say 70 % of lease option tenants don't actually execute their option.

30:36What do they do? They move out. I get the house back. I resell it again on a lease option. I get an option fee and I read, I just go do it again. We're selling options, selling options. Yeah. Jack loves options. I love options in stocks. Yeah, of course. Did you guys see the homeless lady I helped out? Yes. So that homeless lady I helped out, what I did with her is I go, let's buy a sub two deal, no money out of pocket, literally from a cot in her homeless shelter, and let's turn it into a rent by the room. And so what she did is she has one room she's living in and nine rooms she's renting out, and she's bringing about$8.50 per month per room.

31:07She's using a website called padsplit.com to manage all of that stuff for her, because what does she know about investing? So if I'm young and I want to have a place to live, and I want to kind of like arbitrage a sub two deal, I would go to creativelisting.com. I'd buy a deal on there and I would rent out the rooms

31:22Jack Graham:and I'd have a free place to live for the rest of my life. Are you looking at the broader housing market and determining what you're buying and what you're not buying? Or do you only care about cash flow? Okay, so I've made some big mistakes in my career. My biggest mistake is that I branched out my single family properties. I have, I at one point had 300 single family properties, which is about 275 more than any human being should ever own. And most of them were in 15 different markets. And so I am now selling things that are in markets other than Maricopa County. I will buy RV parks. I just bought an RV park in New York.

31:52I bought an RV park in Reno or Lake Tahoe area on California side. Like I'm buying real estate in California and New York because they cashflow and they're good assets. And they're not ugly pieces of crap either. Like your audience might go, oh, you're buying pieces of crap. No, I'm not. I just bought an RV park. It's called in town RV park. I just closed on it two weeks ago. All seller finance. Sellers are retiring. It's the number three RV park. RV park in the country. USA Today just came out with a big article saying these are the top 10 RV parks. Mine's number three. But it's seller finance, no money out of pocket.

32:22So I will buy stuff that makes sense where I can get into it with as little leverage as possible that makes money on day one.

32:28Jack Graham:What is the main obstacle for the average person in order to get to a spot where they can make these deals happen? Is it like an education thing? Is it a motivation thing? Is it just a charisma thing? Now, hair loss doesn't just change how you look. It changes how you feel walking into a room. Most guys brush it off, but the confidence hit is real, and the products promising to fix it typically don't work. And in the end, many men just give up on their hair. And even if you're not ready to give up, trips to Turkey can drain your bank account and leave your hair looking worse than it did before.

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34:06Jack Graham:And we totally agree. But also, you actually really want someone who wants to be there. Well, if you need to hire for your business, how could you separate the candidates who are really excited about your opportunity from the ones that are just meh? ZipRecruiter. ZipRecruiter has a new feature that quickly lets you see the most interested, qualified candidates first, so you meet the right people faster. And now you can try it for free at ZipRecruiter.com slash ICH. Candidates could tell you in their own words why they want the job so you don't waste your time sorting through the people who aren't really committed to the job.

34:37Jack Graham:It's features like this that make it absolutely no surprise why ZipRecruiter is the number one rated hiring site on G2. So use ZipRecruiter and find enthusiastic talent fast. Four out of five employers who post in ZipRecruiter get a quality candidate within the first day. Try it for free at ZipRecruiter.com slash ICH. That is ZipRecruiter.com slash ICH. Meet your match on ZipRecruiter. What is the main obstacle for the average person in order to get to a spot where they can make these deals happen? Is it like an education thing? Is it a motivation thing? Is it just a charisma thing? I have a lot of people that are friends of mine that are not very charismatic and do very, very well.

35:14People that are immigrants that don't even speak English well, and they do very well with creative finance. Primarily, I'd say it's like 10 % education, 90 % execution, like anything else. I mean, you guys have had some incredible freaking guests on your show, and I'd say 90 % of people just don't do anything with it. They love it. They consume it, but it's executing and going out and making a mistake. They're afraid of making a mistake.

35:36Jack Graham:So what do you think is the best thing that you can possibly say to get someone to execute? If they're listening to this right now, they want to creatively finance something, building build asset value, what would you say? I'd say go to creativelisting.com. Somebody's already negotiated a deal, got it under contract. You can just take that deal and go do something with it. It removes 99 % of the risk out of the transaction. Do you own creativelisting.com? I do not. I do not make money on it. I don't get paid from them. Do you make money on education? If you looked at one of my education products called Gator, one of my three, that thing loses like 40 grand a month.

36:05What is Gator? I just tell people, I teach people how to do private money lending. Like, hey, you might be a nine to fiver and you have$50 ,000 and you want to jump into a deal, but you don't have time to manage it. You could also partner with somebody else. I teach them how to do that kind of stuff.

36:17Jack Graham:How is it education then? Because then it helps the other members of my other part of my community, sub two, they end up funding their deal. So sub two community finds the deals, Gator helps fund those deals. And so I've created like this really cool ecosystem where they help each other out. And what about any other ways that you educate for money? I don't get paid to educate for money in that regard. I buy like this year, I'll buy a hundred million dollars in real estate from people I teach, right? Like David, for example, finds me on your guys' podcast and I'll get a free house out of it. So the more podcasts I go on, the more books I write.

36:49Like my book I wrote with BiggerPockets a couple of years ago, that book sold hundreds of thousands of copies. I think I told BiggerPockets, take all the money and give it away. I don't want the money. I want people bringing me deals. So I make money off people bringing me deals. And one thing I did when like 2013 to 2018, I had an acquisition team that I managed. I don't like salespeople. They're high turnover, high maintenance, high commissions, all that kind of stuff. And the main thing with salespeople is what do they want to do? They want to take your job, or at least in my experience. So what I did is I go, let me just educate the masses, build a YouTube channel, and people will bring me deals and I'll either partner with them, buy those deals, or help fund those deals for those people.

37:27What's the most money you've ever made on a deal? Cashflow wise, my best asset makes net$100 ,000 a month. It's a Tucson property. It's La Primera at Green Valley in Tucson, Arizona. Look it up. It's a 161 unit multifamily I bought for$20 million. Seller financed. The seller owned it for 35 years, was afraid of capital gains. His kids didn't want it. We bought that deal at 20 million. No money out of pocket. He gave us a 4 % loan with a 20 year balloon. And on day one, that was netting about$65 ,000 a month. Now it's netting$100 ,000 a month after we've raised rents and done some stuff. When you go to buy your next primary residence, what are you gonna do?

38:00Are you gonna just go pay it off cash or you wanna go get debt?

38:03Jack Graham:I would love to creatively finance it. Okay. So all you have to do, this is so simple. Okay. Any, where do you want to tell me your crossroads? Where do you want to be primary or neighborhood? You want to be in Summerlin? Okay. Summerlin. So you want to be in Summerlin? I bet you right now I could pull up a deal in Summerlin and call an agent. We should do this on an episode. Like, let me just do this. I could call. I don't call agents on Sundays. I respect people on Sunday. Oh no. Sunday is the best day to call agents. No, it's the day that you get yelled at. And also people like, don't you respect family time?

38:29I don't know any real estate agent that doesn't work on a Sunday. Bro, I know.

38:33Jack Graham:Dude, that was my busiest day. 95 % of real estate agents, Graham, don't work any day. What are you talking about? No, Sunday's the day. Every agent holds an open house on Sunday. Those are the ones that don't have any business. Only agents that are doing open houses have no business at all. I would disagree. I think some big listings, good agents get in there. They meet all the neighbors. They meet so many people. Oh, yeah, for sure. When you have the listing and you're doing an open house, you're trying to get... For sure, I agree with you. Okay, so here's a company I also don't own, but this is what we use.

39:00There's a company called dealsauce.io. So if you go on deal sauce and you map into summerland and you find listings that are over a hundred days and you click on the no equity button and then you reach out to those agents and say, hey, would your, would your client be willing to let me take over their mortgage? That's how you get a sub two deal. It's take, it takes two steps in like three clicks of a button and you've got a list of people in summerland. I bet you there's, it's a large master plan community. I bet there's 15 people in there that are listed over a hundred days right now. Agent is not confident they're going to be able to sell for cash.

39:30and this seller probably has a 4 % or lower underlying mortgage.

39:33Jack Graham:What are your thoughts on the overall real estate market over the next 10 or so years? You're obviously, you have to be bullish on it. Like I think single family is going to have a big shift and it already is happening. And the shift that's happening is people, I don't like this. So when people roast me in my DMs and tell me, oh, you're the one that's ruining our neighborhoods. What's happening in single family right now is what needs to happen in single family is that nobody's figured out a solution to affordability, right? Right. Two things are actually happening in your city right now. Massively.

40:02Go look up padsplit.com right now. There's probably three or 400 houses that are room for rent right now. So what's happening with single family is most investors are converting over to a pad split model where they're renting out the rooms. And then the second thing that's happening is what's happening right now in your city, which is incredible. Boxable and developers are working with the city and the city is giving grants to developers to take up all these like empty dirt lots you guys have everywhere. Those are going to be in tiny. All those are going to be tiny homes in seven years. Your entire city is already going, it's going to be completely full of tiny homes, boxable built.

40:34Your city is coming out with grants for these developers to rent out to people that can't afford it.

40:40Jack Graham:It's already happening. See, I don't think Vegas has an affordability problem. There are so many houses out there that you could rent for dirt cheap. You don't need to buy a house. You could find a house down the street from me for rent right now at$2 ,650. You can't tell me that it's not - $2 ,650 is not affordable for the average person. It is. You rent it with a buddy. Guys, tell me in the comments right now if Graham is wrong about this. He's wrong about this. Yes,$2 ,650. Okay, renting. There you go. You're renting with a buddy. No, you're just getting a friend. Assuming you can't pay$2 ,650.

41:07Jack Graham:Okay, I agree. And by the way, that's a nice area. That's summer. I agree with you. You could find rentals at$1 ,300. Do we agree that people are lazy overall? Graham, I don't know. Graham's like pessimistic half the time and then he's like - I'm just - I think it's just nature of being disagreeable. No, I think$1 ,300 to$1 ,500 is absolutely affordable for almost anyone watching this So pad splits average rent is like$8.50 a month, including utilities, internet, cleaning, and landscape. $8.50 a month. And they're renting out a room. So what's happening is they're saying, hey, that buddy model of like, let's split the rent.

41:39They're saying, let's get it even lower because things are getting so freaking astronomically expensive. And so what's happening right now is your single family market, especially in your non-HOA neighborhoods, are getting gobbled up with co-living investors. In fact, a lot of Airbnb investors are switching over to the co-living model and the Airbnb people are just abandoning that whole model.

41:57Jack Graham:I just see with the vacant lots they've been vacant for decades and bringing in plumbing, electricity foundations, roads it's not viable to put a boxable on there a boxable works when you're putting it behind someone's house when you're putting it on a piece of land that you've owned for a long time and you want to go and put in the mines but who's paying for it? no one's living in boxables right now listen I love the concept of boxables it's already been approved The first two-acre lot is like five miles away from here. The developer's already gotten money from the city, and Boxable is coming in and putting these - I would love to see them do it at scale because they've been saying this now.

42:35Jack Graham:They've been saying it for five years. For five years, they've been raising money, saying, ah, it's coming, it's coming any day now. And if one job's at, fine. But I want to see this done at scale for under$300 ,000. If the government is going to be in charge of it, it's going to fail. When you have private developers coming in that say, hey, I'll take care of it and I'll run it. This is what's now starting to happen. This is how the first project just got approved like two months ago. It's going to take over your whole city. It's going to take over Phoenix. And what does that tell you then about the overall real estate market?

43:05Jack Graham:Like how do you think that's going to affect them? I think the world that we live in is getting so separated between the haves and the have nots. And so you either focus as a real estate investor on ultra luxury, like Grant Cardone, good friend of mine. I love Grant. He's focusing on luxury apartments or you focus on affordability. It's one of the two. that's it you're not there's no middle ground in 10 years there's no middle ground there's no middle class there's not all of that's going away so like people buying properties like this this is this is upper upper middle class buying a cool property like this people can afford stuff like this and it's just going to get worse jobs are going to go away i see elon talking about oh yeah we're you know we're going to pretty i love i'm a huge fan of elon like i think anybody is even the democrats that hate him secretly probably love him secretly but i love elon he says we're going to be into a phase where like nobody has to worry about money i'm like when's that going to happen and and how do people pay their bills do we just get government credits i think the middle class is going to go away so you either as an investor focus on ultra affordability which i'm choosing to do because it's a lot larger problem to solve or you focus on ultra high-end luxury like high-end luxury i'm sure you're seeing this they have no problem those houses sell for cash and the people that are buying those don't care about interest rates they're just paying things off with cash right so the it's bonkers to me when you go into certain areas like paradise valley and phoenix do you guys know that city it's really nice that's where we were average film there okay so you guys got a bunch of people in paradise valley which is like right where i live and you've got houses at 25 35 million dollars those people are paying these houses off cash so that's a completely different world let's push them to the side also your guest what was his name from la that was like oh creative finance is not a thing okay he only focuses on the one percent of the one percent of the one percent of people in the ultra luxury and when i talked to him on the phone he's like yeah you're right that's who i focus on push those people out that's not real estate investors they're not nobody's doing that you got to focus on affordability if you're not a focus focusing on affordability you're going to get your standard to you airbnb do you have any words for jason oppenheim like if we call them right now like yeah he's genius i told him on the phone i think you had me and him on the phone i think he's a genius i'm just saying you have to compartmentalize these conversations and be like jason focuses in beverly hills where none of this is applicable like none of what we're talking about with affordability is applicable in beverly hills those people are like 100 million bucks no problem 20 million bucks no problem and half those properties are probably paid off with cash.

45:15Jack Graham:But then you do have a ton of middle-class residential single-family homes. And so you're saying those will no longer exist as middle-class homes. You're going to need to pad split them. You're going to need to do rentals. Yeah, there's five things that are happening right now. So the number one thing that's happening, big, massive, look at padsplit.com or furnishedfinder.com. I do not get paid from either one of these companies, but furnishedfinder or padsplit.com, look on their website and see how fast their listings are growing rapidly. Not just from people converting Airbnbs over, but just people like me.

45:45I bought a house for no money and I'm turning into a co-living property. So co-living is huge, massive. This is taking over the world. Drug addiction is a big problem in this country, right? So what's the government doing? They're funding people like Oxford House, again, nonprofit. I don't get paid from them. Oxford House is coming in and taking these houses from people like me and go, we'll pay you whatever your mortgage payment is, plus$2 ,000. sublease triple net so we take care of the repairs we take care of utilities we take care of literally everything and we'll give you a five-year lease bro how do you get approved for oxford house

46:16Jack Graham:call oxford house up oxfordhouse.org they're turning them into sober living facilities because they get money from the government yep i would argue not saying they're associated with this but a lot of them that that i got some shady shady people i agree with sober living i agree with you the whole thing it reminded me kind of of the hospice thing where it's like you'll go to these places. They're scamming insurance companies. There's a lot of them that do this for sure. Not everyone. Oxford House is not. I work with Oxford House. We have a bunch of properties with them all over the country. They're great, but there's a lot of people that utilize that strategy as a shroud to steal money.

46:51Another company is called padmission.com. So padmission.com is kind of an amalgamation of every nonprofit in the country that helps out, like battered women's shelters and all of those types of things. People that are maybe handicapped. So again, government funding. What's happening? Padmission is coming in. in leasing properties plus 2000 bucks. So whatever my mortgage payment is, they're coming in with government funding. So like where people are going to be like, well, what about section eight? Dude, section eight barely gets approved on any house. Section eight has to be approved. The voucher has to be approved.

47:20I dabble in section eight, just like anybody can. But am I a section eight investor? Am I an Airbnb investor? Am I a co-living investor? No, I'm an investor, right? I don't like, if you're a watch collector, do you only buy Rolex? By the way, your guest the other day, what was his name? He's so freaking good. Yeah. He's, he's one of my favorite YouTubers. I love him. He needs to talk about everybody. He's the best. Um, by the way, I almost wore my Hublot and just kidding. I don't have him. So, um, you've got, and then you've also got assisted living and then TBI. So, uh, traumatic brain injury stuff.

47:51So what's happening with all these single family houses, they're converting over to other asset types. Like the, the house I just bought from David, I was talking to the seller, Melissa and Kenneth. And I said, well, you know, I might turn this into a sober living or something like that. You know, I'm in their living room talking to them and go, oh yeah, we've got three sober livings right here in our neighborhood. So these neighborhoods all over the country are converting into government funded stuff.

48:11Jack Graham:So basically your argument is you take real estate away from people that can't capitalize on it very well, or they don't want to be a landlord. They don't want to have the burden of turning their house into a business. They want to continue doing their W2 job or whatever it is that provides their income. And you're able to go in, get this house, their equity, whatever it is, you're able to sub to the house, acquire it in some way, and then capitalize better on it. How are you able to decide which of these like five different branches of like sober living, or you want to do pad split or you want to do jack like for battered women giving you this question that's the freaking greatest question i'm just curious like which which of the five okay so something to teach all your whole audience is that you as a real estate investor do not determine the strategy the house determines the strategy so what we do as investors is we go market for pain okay so i don't go find houses i find pain what am i looking for foreclosure divorce bankruptcy code violations i'm looking and marketing for pain people with no equity people have been on the market for a long time, expired or canceled listings, pain, pain, pain, pain.

49:07I don't look for houses. I look for pain. As they come into my funnel and I talk to those sellers or those real estate agents, depending on if I'm direct to seller or direct to agent, I then determine, hey, this house is four bed, three bath, no HOA. What would that be? That's going to be a pad split. If it's a three bed, two bath house and it's in an HOA, I'm going to do sober living. So the house and its size and whether it has an HOA and sometimes it's proximity to public services, I will then determine the exit strategy based on what the house tells me. What's the overall most profitable thing you can do with a single family home?

49:38Co-living. So that would be pad split. That would be pad split. And the reason being is because the average pad split is eight bedrooms. And so even when you have a tenant leave, it's kind of like a multifamily environment in a single family property. So I have a friend, Spencer Cornelia. I love Spencer.

49:51Jack Graham:Yeah. He had a few like co-living houses. Yeah. He self-managed them. I think three of them caught on fire. Yeah, yeah. They did. It was not one. It wasn't two. It was three. Shout out to Spencer. I love Spencer. I think he's genius. He's done a great job with his brand, but he was self-managing his stuff like a knucklehead. You just give the property over to PadSplit, let PadSplit take care of it. And so it mostly has to do with tenant selection. Tenant selection, yeah. How do you prevent your house from catching on fire? PadSplit screens them. Also, what's interesting is like, if you're self-managing a co-living property, you're doing your own lease agreements.

50:21PadSplit will screen all the tenants. They collect all the money. And then they're the ones that set up the agreements. they market your property for you. What Spencer was doing is doing all the self-management stuff. And I think it was because he was trying to save the 8%. And so for me, if your property, think about this, the property, I just bought a deal a couple of weeks ago. The underlying mortgage is 3.5 % decent. Our average interest rate that we're taking over is like three and a quarter. Okay. So people are talking about, oh, I'm at six and a quarter on my mortgage. Guys, our average is three and a quarter.

50:49So I get a three and a half percent interest rate. The mortgages about$3 ,100, but I'm going to bring in$9 ,100 on a pad split. After my management, my utilities, my cleaning and everything else, it'll net about$3 ,000. So the cost for other people to handle is about$3 ,000 a month. What am I trying to save money for if the property is going to make me$3 ,000 a month and I got it with no money out of my pocket? Where Spencer, shout out Spencer, genius, love him. Where people like that go wrong is like, I'm going to try and you know, change my own oil and save 40 bucks. What are you doing? Just have Jiffy Lube do it.

51:24Have Pad Split do it. What are you doing? So yes, you're going to have problems if you try and do stuff yourself. So you think he just picked the wrong people? He didn't screen. Yeah. And how does Spencer have that much time to be screening and talking to any, I don't know one tenant's name. I've never looked at, I don't even know what my tenant agreements look like.

51:39Jack Graham:What is he doing? How do you prevent it that the tenants don't fight amongst each other? Oh, the great question. So the average tenant, oh my gosh, I want to, Can I take you to one of these houses next time I'm hanging out with you guys? Maybe. I'll take Jack. I think Jack is willing to go into one of these houses. I don't know if you are. So, Jack, do you remember the house you turned down on? I didn't turn you down on it. I'm kidding. Don't even start with me right now. No, yeah, I do, of course. It was Myrtle or whatever. Dang, good memory. Yeah, so Myrtle is the name of the property. That property has nine tenants in it.

52:10We've never had a problem. The average tenant is usually somebody who just graduated from nursing or graduated from college. They don't have a lot of money and they have student debt. And so they're looking at saying, if I can pay$850 a month, utilities included, I can pay off my student loan debt. So they're, you know, close to a bus stop. They're close to whatever. They don't want to see anybody. These are not just regular people off the street. They're usually working professionals. So I think the, my biggest thing when I first jumped into pad split type of business was where are they going to park?

52:37Half of them don't have cars. So that's not a problem. They're going to fight with each other. They don't. I'm sure Spencer's do because he didn't screen them. But we're getting people that are like recently graduated from school and their biggest motivation is I got to pay off student loan debts. And where do most people fail? Managing stuff themselves is probably the number one thing that I would say people fail at. What's the biggest mistake they make when doing that? Bad tenants. Being really nice to tenants that give you a bunch of crap. Like they say, maybe you've dealt with this in the past where a tenant says, I need three more months or I need three more days.

53:08And it turns into like, now I got to foreclose on, I got to get you out of here, I got to evict you, whatever. So you just have hard lines. You say, no, no, no, we're not trying to charge you an extra fee. We just got to get you out. What I like about PadSplit's model is that it's not a regular tenant landlord relationship. These people are part of a club. And so there is no like formal eviction process. So you can kick them out right away. What areas would you refuse to buy in terms of buying real estate? And if I'm buying RV parks, I'll buy anywhere, right? I've got parks in Big Spring, Texas.

53:37I've got parks in Odessa, Texas, like oil filled country, places you would never want to visit. because they make money. But when you're talking single family, I don't want anything rural, nothing rural.

53:47Jack Graham:What about places like California, Los Angeles? Single family, hell no. There's no way I'm buying a single family property in California, no freaking way. But you'd buy multifamily. I would not buy multifamily either. If a human being is going to raise a family there, there ain't no way I'm going to California, Washington, Illinois, and New York. No way. Why, just because it's not affordable? Because the politicians hate you. They don't want it's like think about this if my dad owned a subway sandwich franchise and somebody came in had my dad do all this work build a sandwich and at the end he asked for the money and they walked out with the sandwich.

54:20That would be theft. So in our world of being a landlord if somebody walks away with free rent that's theft and my states that I invest in the red states primarily there's blue states that are really good. Colorado's not bad in some other places but the red states treat it like a business get the hell out of my house. This is my product. I sold this product to you. You didn't pay get the hell out of the house. The blue states are well these are real human beings. Well, yeah, so am I. I'm also a human being too. And somebody in the comments would be like, oh, you're such a landlord piece of shit.

54:45Okay, maybe I am. But I give them affordable rents. My rents are always 10 % below market rents. And we give them great properties to live in. There is no possible way I'm going to California. I mean, you guys in LA, you have this thing. I don't know what you know more than I do. You have to pay your tenants to leave when you decide you're not going to renew the lease. Like you have to pay tenants like 40 ,000 bucks.

55:07Jack Graham:That's depending on the circumstance. But yes, in Santa Monica, it was crazy. I think for a one bedroom, you had to pay$27 ,500. If you raise rent as an owner occupant higher than 10 % a year and they leave because of the rent increase. In the other states, there's none of that happening. Zero. California, New York, Washington, Illinois, basically all the places people are fleeing. How would you fix the housing market then? If you could go to California and wave a wand and say, I'm going to fix the housing market, things are going to get more affordable, we're going to bring back development, what would you do?

55:46I think the red tape, I mean, you look at Pacific Palisades as a really good example. It's like, look how long it's taking, no permits have been issued, none of that kind of stuff. So I think that's a big thing. Same thing in Hawaii, like look at that big fire that happened, what, three years ago and still no buildings happening. So it's the red tape. It's the bureaucracy. I would fix a lot of that stuff. And then I would also, um, incentivize builders and I would help. I would actually try and subsidize the builders to build more stuff. The other thing I would also do is unlock a lot of government state land.

56:13That's just barren. Like, look at you've been Arizona much. We bro, we have hundreds of thousands of acres of state land that people could go build on, but they don't unlock it. And it's nothing. Nobody's recreating there. Nobody's doing anything there, unlock some of the property. Let us use some of it. I would fix it that way.

56:29Jack Graham:So you said you think that the middle class is just going to continue shrinking and shrinking and shrinking. What are your predictions then for like the overall, like how do you know that's going to happen? The overall economy, what are your predictions? It's happening right now. The middle class is getting eroded right now. I mean, look at how does anybody, and this is weird and I'm going to sound really entitled here, but how does a regular family survive on less than $10 ,000 a month. You have one kid. Insurance is 1500 bucks. I mean, the middle class is getting eaten alive. If you don't own a business or own an asset, there's no job that is paying you as much as the cost of things are going up.

57:03So it is happening. It has been happening. It's just going to get worse.

57:07Jack Graham:So how should a member of the shrinking middle class reframe their mind or educate themselves better? Or like, what do they exactly do to be a part of the haves? I would listen to what Cody Sanchez says. Listen to Alex Hermosi. Listen to half the guests that you guys have on here. You have freaking the best guests on the planet. And I would own an asset that pays you. So for me, my favorite assets I own are RV parks. They have no management. The people that manage those RV parks live at the park. They raise their families at the parks. They have no management there. So people that are afraid of having single family houses, I get you.

57:35I don't like regular rental on single family. I would go to like a creative listing or crexie.com or loopnet.com. And I would look at RV parks that are all on owner finance. If you go on crexie.com, I don't own that website. I'm sure you've heard of Crexie. It's massive. If you go on Crexie.com and you go in the search bar and you type in owner finance, do you know how many properties right now are for sale on owner finance on Crexie? 16 ,000. Like this is not obscure.

57:58Jack Graham:But then if there's so many things being offered and this is such well-known stuff, like wouldn't it be too competitive to be able to find like a truly great deal? Yeah. And how many of those 16 ,000 are worth buying? I don't know. That's a good question. I know that when I look at an RV park, we could jump into that conversation. but I look at an RV park, I usually have to look at 40 to buy one, but that's because I'm buying stuff that if it doesn't hit a net cashflow of$15 ,000 a month, we won't even submit an offer. And so there's a lot of parks that get sent to us from brokers that just don't fit that buy box.

58:27Somebody sent me in San Antonio the other day, a 12 pad RV park that brings in$3 ,000 a month in revenue total a month. I'm looking for$15 ,000 a month net. So I'll look at 40 RV parks and probably 30 of them are not even a good fit. So one in 10 that I submit an offer on, we get a contract on. And then what about getting a good deal?

58:48Jack Graham:Like how are you even able to do that these days with the amount of competition? You said 15 ,000 listings on Crexie. All of this stuff is becoming very well known. You in the comments, if you're a broker that actually understands creative finance, tax implications of a seller, inheritance law, all of these things, 99 % of real estate agents don't understand it and 90 % of brokers don't understand it. So my competitive advantage is that when I call the brokers and the brokers can't sell a park for whatever the seller wants to sell it for, I go, I can get you the number, but you're going to have to get educated on how we get there.

59:16And so most of what I'm doing is getting them their number, but I'm just structuring the terms to benefit me.

59:22Jack Graham:And so what are the best negotiation or sales strategies that you employ when you're trying to get a good deal? And really quick, I got to say that when Jack and I first started the iced coffee hour, we had to figure out everything ourselves from the best cameras to use, the best editing equipment, how to get guests, the best mics. Every day was a brand new challenge. That's why if you're starting or growing your own business, you know how valuable today's sponsor is, and that would be Shopify. Shopify is just like having an all-in-one business partner. They support millions of businesses worldwide, from major brands like Heinz and Gymshark to people that are just getting started.

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1:00:59Jack Graham:Again, just go to shopify.com slash ICH. That is shopify.com slash ICH. The link is also down below in the description. Thanks again to Shopify for sponsoring this episode. And so what are the best negotiation or sales strategies that you employ when you're trying to get a good deal? Logic. And I don't use like one-liners. I'm not a big salesperson like an Andy Elliott or somebody like that. I'm not a big salesperson. I understand what the seller wants. So for example, RV parks, when a seller is selling a cash flowing machine, why are they selling? This is the most mind blowing thing for me. Why would a seller sell a property that's netting their family 25 grand a month?

1:01:37Why would they do that? Hassle maybe? We call them accidental landlords. Their CPA told them you should buy real estate because you'll get depreciation. Now they own an RV park and it became their full-time job. And now they've sat there at that RV park for 20 plus years. And they're like, nobody in our family wants this. So accidental landlords, they never bought a second one. So if you want to pull a list of RV park owners, there's 27 ,000 in the country. You can pull a list, distill it down to one park owners. It's like 92%. Most RV park and mobile home operators are single operators, mom and pop.

1:02:10Their biggest concern is, I want to retire and enjoy my life, but I've been stuck at the park. They never learned operational efficiencies. They never had software. They never knew how to delegate to a team member. They don't even know, like 90 % of the sellers I talked to don't even know there's a website called work camper.com. Again, a website I don't own W O R K A M P E R where you can just find people to manage your parks and they'll come in there and live at your park. It's a mind blowing. They're incredible. What they're doing is they are raising their families. They're homeschooling their families.

1:02:39They want to live in an RV park, raise their kids around there. And then every six months moved to a new RV park and see different parts of the country. There's like 35 ,000 people on work camper.com. And the site is free. Sellers don't know it exists, right? So you go to the seller and you go, I can help you retire. I can get you a monthly check. I can get you the number you want. I can help you avoid capital gains tax. I can get your broker paid in the process. The seller's like, why hasn't my broker told me about this? Like you, you got an agent right here. Nobody told his seller besides him.

1:03:10Nobody talked to that seller and said, the lady works at Merrill Lynch. And she goes, I've never heard of this before. She manages all these big families. I go, you've heard of family seller financing stuff. She's like, oh, this is similar to seller finance. So like even a high level lady at Merrill Lynch who's sub-toeing her house to me did not know what creative finance was. It's just, I don't know if it's just commonly not known.

1:03:29Jack Graham:So of all of these different strategies, like also the, I know you're doing car washes now, you're doing RV parks, you're doing single family homes. You're doing car washes now, bro. Yeah, hopefully. We'll see. You are? We'll see. I mean, if it turns out like the last one, we'll see if it ends up looking like that. I bought a lot. I'm building a car wash in DFW, and we just closed on the lot. He's coming in. I'm bringing him as a partner to show him the ropes. Hopefully it works out. What's the catch if there's no money to come in? Because otherwise, then it just seems like, oh, I'm going to give Jack.

1:03:59Yeah, Jack will give him on through whatever. So the average car wash, I'm not a car wash genius. The person you should have on the show is Vic Keller. I've texted you with him. He's incredible. Had an exit with Warren Buffett at$6 billion. Genius dude. He's my mentor on car washes right now. So I'm building car washes. We're going to bundle those up and sell them off at some point in the future. But the average car wash net's$43 ,000 a month in his portfolio. So 5 % of that would be like$2 ,100 something bucks a month.

1:04:25Jack Graham:I'm curious. Of all of these different things, you have the car washes, you have the RV parks, you have single family homes, commercial real estate, yada, yada, yada. What is the most profitable in terms of overall - RV parks, not even remotely close. So what makes it more profitable? There's no management. There's no CapEx. Like when you go to one of my RV parks, which I hope you will at some point, you will walk out there and go, where are all your employees? There are none. And then people go, oh, you should buy laundromats. No, you should not buy laundromats. You should buy an RV park and put a laundromat on the RV park so that the local community can use that laundromat at your RV park.

1:04:55But your RV park is the main staple. There's no management, really. The person that does manage it does live on site. You find these people. They work basically for free rent plus a couple thousand bucks a month. They raise their family there and there's nothing to fix. It's gravel. I've got gravel and maybe one or two little buildings. Multifamily, my biggest asset. I have a big asset in North Houston. It's 580 units. Bro, 580 tenants moving in and out of these freaking units where we're constantly fixing the property. It cash flows. It makes money. I'm happy about it. But if I could, this is my personality.

1:05:31I look at Grant. I look at other people that are doing what they're doing. Nothing against what they're doing. In fact, Grant's way smarter than me, I think. But on the RV park side, it's a lazy asset that makes a lot of money. And you can buy a good one for like$3 to$7 million on seller finance, and they net$30 ,000 to$40 ,000 a month after every single expense. I call them the only asset that's a one and done. You buy one and you're done. Like you can buy one RV park and be done. What's the hardest part of making an RV park successful? Is it like buying the actual lot of land, getting it in the right area, or is it like marketing it?

1:06:02My hardest RV park is Glacier Peaks in Montana and Mountain View in Montana and Beargrass RV Park in Montana. They're right by Glacier National Park. So what's the problem with Glacier National Park? Seasonal. So six months out of the year, you lose money. The other six months out of the year, you make a ton of money. So it balances itself out. So those ones are challenging. I would not advise somebody starting out and buying a seasonal RV park right out of the gate. I have other RV parks like in DFW, Tennessee, New York, California, Big Spring, Texas. Those are all like permanent residents that stay there permanently.

1:06:36And you don't really have a lot of turnover. I've got one under contract in Odessa, Texas, where the average tenant's been there for seven years. So it's like they're all different. They're not the same. Isn't RV parking, though, sort of like a middle class thing? No, it's low class. So you're renting dirt from me for like 400 bucks a month. but then you bring in your own trailer they bring their yeah they bring their own trailer so who but i thought you said it was seasonal like people oh so you're saying they would rent that for like six months yeah they rent they rent so my season like a vacation thing yeah the ones that are seasonal they're coming in for like the national parks and they're recreational then there's other rv parks like my big spring yeah my big spring nobody's going to big spring texas to vacation they're going there to live there to work in the oil field and so what happens is the oil fields come to us and they go, our employees have nowhere to live.

1:07:22We are giving them a per diem. Can we just give you a contract to rent out all 40 spots?

1:07:27Jack Graham:And so the oil field companies will rent out the spots for their workers. So does it even make sense anymore to get a property with a conventional loan? The BRRRR people that teach BRRRR and like sell BRRRR courses are going to lie and say, yes, it does. Why would it? Why would it make sense? Why would they say that? Because they're buying in like half-assed cities that are like$40 ,000 per house so that they can buy a house for 40 grand, put$10 ,000 down, renovate the property, put all this time and energy into it. The problem with the BRRRR strategy is what? It works first and foremost. It just doesn't work that well.

1:07:58And it also dies in bad economies. The BRRRR strategy has basically been decimated the last five years. So you buy the property. How do you buy the property? Hard money. Like 90 % of these guys are going and buying a freaking rental property with hard money on day one. They're putting down payment from their retirement account. It's the worst strategy when you really think about it. They go get a loan to then buy the property with hard money. They then renovate the property with their cash or a private money lender. They then rent it out. Then they can refinance it into a second loan. And now what are you gambling on?

1:08:32What's the average BRRRR deal take? Three to four months. Is the interest rate in three or four months going to be the same as the interest rate that I bought it today? No. So you're gambling on, I hope my loan is good in six months when I'm done renovating and stabilizing the asset. I think it's one of the most challenging strategies on planet Earth. If you tell a brand new person, go get a loan to then renovate a property to then refinance that property, you're getting two loans on one deal. It's not a beginner strategy. It's a really, really challenging. But you wouldn't get two loans, but not at the same time.

1:08:59No, but you're getting a hard money loan, which is hemorrhaging at 10 % to 12 % interest only. Then you're gambling that that deal will refinance and banks are actually lending money in six months. Let's say you bought a deal in January of 2023 that you thought, oh, interest rates are gonna stay at 3%. This is what happens with all the multifamily syndicators. They're gambling with debt. I don't gamble with debt. I go to the seller who is the number one bank. The number one bank on the planet is the seller. I go to the seller. Will you give me permanent debt? I'm gonna buy this deal and I'll pay you a monthly fee.

1:09:28And if I run into a bad situation, I can renegotiate that debt because the seller doesn't wanna take the house back. I've never had to do that, but I can technically do it.

1:09:35Jack Graham:I mean, that strategy really works so well. I haven't heard of anyone doing the BRRRR method in years. It's been five plus years. It was really from 2012 through 2019 that that strategy really got popular and worked consistently. It did work. Because interest rates, it's like - Market appreciating will allow a BRRRR strategy deal to work. But also interest rates were so stable. They were like - Predictable. 3 % to 4%, maybe four and like and a half. It's like over a year. If you look at like one of the, and I won't say his name because he's a good friend of mind. But if you look at one of the big original BiggerPockets hosts, he lost his entire Burr strategy portfolio last year.

1:10:10Why? Because he bought on adjustable rate mortgages. And so what happened from 2022 to 2025 is all his rates doubled, his cash flow shrunk. I don't have that problem. Like creative finance does not have that problem. Sellers are not giving me adjustable rate mortgages. They wouldn't even know how to pitch that to me. So I'm getting permanent debt that does not have balloons and I don't have anything that's maturing. Like everybody else right now, If you go on X right now and you look at everybody that's a multifamily syndicator, they're talking about the bloodbath. One of my favorite guests you guys have is Ken McElroy.

1:10:39He's the only intelligent multifamily guy that is online. He is so freaking good. He is one of the smartest dudes on the planet. He has patience, so much patience. And he's buying and he's planning things 10 years in the future. Multifamily is a very, very challenging game because you're playing the battle of I'm waiting to see what the bank is going to do. In creative finance, you don't have to do that. Do you think that now is a bad time to buy a house overall? You and I will disagree with this. Okay. And the disagreement you and I have is that I think people that rent are stupid and people that buy are smart.

1:11:12And the reason being is because you're going to make the argument, and I think we should have this fight. Renters will ultimately have more money to invest in the stock market, but they won't. It could be anything. They won't. They won't. The average consumer in America will just spend that on stupid shit. when you get locked into a permanent savings account, which is a mortgage that forces your family to save in that house, that is the American dream. And that is why I disagree with Grant. I love you, Grant. I disagree with him. I think the, not you, not me, not you, you're intelligent, you're investors, and you're thinking intelligently.

1:11:45You will, and most of your audience, will rent a property and intelligently take that extra savings that they're not putting into a bad mortgage or a high interest rate mortgage, and they will invest it. But 90, I'm making that number up,

1:11:58Jack Graham:a very high number of people will not. Yeah, but the only counter to that is that if they're not paying rent, if they're not investing the difference, then they're paying the difference anyway. Right. Probably the bank to probably insurance companies, probably property taxes, repairs and maintenance, which is arguably more than what they could just rent for. I know they for sure their mortgage is going to be, let's say their mortgage is$2 ,000 higher than their rent. I still think that they should get a mortgage. Unless they stay there for like 10 to 15 years. Agree. Which the average person is also, if we're talking averages, is not.

1:12:31Jack Graham:And so in the first year, so little is going to equity anyway that it makes no difference. They may as well just save the money. The first 10 years, almost none of it goes to equity, right? It's like the amortization schedule basically dips off after like 11 years. So the first 10 years, you're getting your ass handed to you. But the reality is if people are not forced to save, they will not. And the math shows it, right? You look at the average person that's renting, their net worth is like$40 ,000. The average homeowner, their net worth is$400 ,000. I don't think that's necessarily the house.

1:12:59Jack Graham:I think it's the type of person who's able to save a down payment is the type of person to buy a house who is the type of person to be smart financially overall. But I don't think it's necessarily just because they bought the house. If I went to Jack and I said, Jack, you're going to rent or you're going to buy a house. What do you think is better for you? In a vacuum, I would say buy. Okay. Right? Like right now in the context of the economy and like my own financial situation, I would say probably rent. interesting okay what about you i would rent a hundred percent if the houses that it depends like if you say if i'm responding like in a for me particularly but then again like my situation does not apply to 99 of people yeah it makes sense to rent but like for i agree with you like on this side of the the argument here i would agree that realistically even if you're only saving five hundred dollars a month in equity and it's like two thousand dollars a month in interest realistically people are not going to be saving that like if you look at consumer debt if you Look at like debt in general.

1:13:55Jack Graham:Like people are not saving money whatsoever. I agree. Period. Everybody's got credit, all that kind of stuff. But maybe that's because they're paying six and a half percent mortgage rates and property taxes. But we just said that like the average net worth of like people that own homes is higher than the average. But those surveys caught people who have owned real estate for decades. So now you see, I was just like, it's a shifting goal. It's entirely different when you say, when you look at also properties purchased in the last two years, a lot of those have negative equity i see a lot of places in vegas too where they bought 2021 and they cannot sell for the same price today yeah that's taking a lot that's where i buy that's where i buy sub two deals and i i take a house that somebody is maybe underwater on and i will convert that into something that cash flows and then i'll let the tenants pay that's a good point i mean with that also being said if you have so many people that are in that situation then for those it could make more sense to rent yeah but that's also obviously contingent upon you know job security and usually like yeah i think overall general speaking the average renter is not saving money i agree with that so i mean the average person period is probably not just right that is correct yeah i would still say renting is the better option yeah explain how you're right if you're also the person that's making money off of all of these people that bought when they shouldn't have bought i mean look at the investor world it's a very small subset of people right so i'm talking to a very small group of people but renters are not listening to you right everybody here is going to be owners.

1:15:19They're not renters. So you're talking about the average listener here. Yeah. But the average person maybe should rent. No, the average, okay, sorry, it's the actual opposite. I think your group is intelligent enough and hyper-intelligent that they follow investing advice, they follow Graham's YouTube channel, and they know where to put their money. And they're probably smart enough to allocate that money. And what's the word? Disciplined enough. People that are not listening to your show should be buying a house and forcing themselves to save their money. But then if the dumb people are buying, then they're going to get foreclosed on

1:15:51Jack Graham:and then you're going to be making money from that. Okay. Maybe that's my marketing mechanism. I don't know. That's smart. And then you call them and be like, Hey, I'll just take over your payments. I'll take over your payments. Yeah. It's a complicated situation. Realistically. Also, if you are getting foreclosed on in your home, like you probably haven't gone to the lengths of like renting out each room. You probably have not like tried to pick up every extra shift imaginable drive, drove on Uber on the side, like increase your income, decrease your expenses. Like if you got into a mortgage, chances are barring a divorce or something like it's going to be really hard to stop affording that.

1:16:25I would say that the average person that I talk to on foreclosure that are like two months, three months behind and they're still not addressing their foreclosure. And they're just like, yeah, say lovey. Those people are highly irresponsible people. And a lot of times they're on drugs. A lot of times they're in all sorts of turmoil and craziness in their life. But the people that are like a month before I'm not going to be able to afford my payment, they're aware. Those people are highly intelligent. They go, I don't want my credit to get bad. And they'll let me buy the house sub two without any.

1:16:56Jack Graham:Those people would have been better off just renting. I think a lot of people, if they're smart enough to come up with the down payment. But how do they know they're going to lose their job? Right. Then if they don't have enough savings to begin with. You're almost manifesting it if you're just like, I might lose my job. I might as well just rent. No, I don't. I have a different mindset, I guess. I think it's a terrible idea to buy a house if you don't have a proper emergency fund in place with a consistent income to keep up for anything that might happen in the following six months. I think the same about renting.

1:17:27Jack Graham:I think the same thing about renting. If you lose your job and you're renting, your credit gets destroyed. No, not at all. Because when you sell a house, your closing costs could be tremendous. Yeah. 6%. So you have to sell higher than where you bought just to break even, to not come out of pocket. But who's buying a house that turned around and sold a house right away? And why could - Well, that's, you would hope not. But look at all the people right now who are selling for less than what they paid a few years ago. Yeah. And there are a lot - I'm buying those. Exactly. But there's a lot of people on Reddit that even said, I bought my house in 2023.

1:17:58Jack Graham:I got this fantastic job offer. And I want to take it. But I can't because I owe more of my house. You are literally describing every client I buy sub to. And they would have been better off renting. Yeah. So maybe they should keep buying so I can keep a pipeline of those deals coming. You mean renting? They should keep renting? No, they should keep buying. All right, so let's just sum this up, okay? So we finish this cover. Who should buy and who should rent? Your audience should rent. Everybody else should buy. I think. Who should buy? If you find a place that you love, that you know with high conviction that you're going to be living there for 10 to 15 years, that you could comfortably afford it with maybe 20 to 25 % of your gross income, and you get a competitive interest rate, then I think it's okay to buy a house now.

1:18:47Jack Graham:But I think if you're unsure of what your career is going to be doing, if you're not sure of the area you want to live in, I think for the next five years or so, it's probably better just to rent it out financially. Okay, I agree with you. It is an emotional decision, in which case you just love the house and money's not a factor because you can't factor in like love for something. Where you make babies, you can't factor that. Yeah, I would agree with Grant. You could make babies in a rental though. Yeah, but nobody wants to birth a baby in a rental. You could. You could rent out the rooms to different nurses.

1:19:18Jack Graham:Oh my gosh, okay. That's true. How do you invest your money outside of real estate? Lending. So you have a very interesting approach to invest. You lend out your money. How do you lend it? And what returns do you get? Insane returns. How is that safe? It's not. Lending money in any capacity is not safe. I can create all the stipulations. I can have liens, personal guarantees. I can have cross collateralization. I can have promissory. I can have everything and I can still lose money. So lending is not for the faint of heart for sure. So what kind of returns do you get lending your money? Okay, so here's a good story for you.

1:19:55So let's say that I get a good deal from a seller and I don't want the seller to know that I'm gonna wholesale that transaction for 100 ,000 bucks. What I will do is I will close on that first transaction with hard money and then the very next day, sell it to my buyer so that my seller doesn't know I made a hundred grand and my buyer doesn't know I made a hundred grand. That's a double close. There's thousands of those happening in every single market, every single month. So many of those transactions. Why don't you want your buyer to know you made a hundred grand? If your buyer knows at the closing table and they're looking at your settlement statement and they're like, are you kidding me?

1:20:28You're making a hundred grand. I've done that. When somebody's wholesaling a deal to me, I'm like, you're making 60 grand on this, bro. Right. And then there's a feeling. And so people just want to avoid that whole conversation. So they double close. So let's say that any, what I tell people in my audience is if you're going to make 40 ,000 or$50 ,000 on a wholesale deal, just double close. It costs you like four grand. So what I'll do is I'll wire a couple hundred thousand dollars out for 12 hours. It sits at title, comes back to me and I make four or 5 ,000 bucks. So I'll make 4 % on my money in one day.

1:20:58So when you annualize that, you're looking at thousands of percentage. Now I'm not turning that money every day. I'm turning that money a couple of times a week, if that makes sense. So the average amount of money that I'm making is stupid. The lending business is where, I mean, everybody wants to be the bank. It's funny. I avoid banks when I buy, I become the bank when I lend.

1:21:17Jack Graham:Have you ever had a sale not close once you funded the deal? No, because your buyer's money is already sitting at title. So you've already got transaction lined up. Before I wire my money for, let's say my borrower, wholesaler, I make sure that their buyer, their money is already sitting at title. And I then wire the money, close the transaction, and they replace my money. How do you find these deals? Instagram, Facebook groups. So you check your DMs, people DM you, and they just say - All the time. I get DMs from people, probably 15, 20 people a day saying, hey, I need this thing funded. Also, I get a lot of, Graham will know this really well from his real estate days.

1:21:53You'll get banks that will give people, let's say 70 % of their renovation or their purchase, but they need the 30 % for the down payment. So I'll do gap lending a lot of times too. And so I go to hard money lenders. I go, if you ever have a borrower that doesn't have the down payment, let me cover the down payment. So I'll do the gap and then I'll also do the renovation. So a borrower, let's say a borrower comes to me and says, Pace, I want to buy this house right here, but I don't have the full amount of money. The hard money lender is going to give me 70%. I need the other 30 % to close the transaction.

1:22:20I come with the 30 % and then I give them the renovation money. So when they close, they can start renovating. what i do is i take the ownership of this asset to protect myself so i own the asset as i'm lending so i'm not technically a lender i'm actually the owner and i'm owning the property that i'm putting money into and if they default or they can't run the transaction i take the deal the deal back they put trust in you or you have this like a promissory note or some sort of contract i mean i'm the i'm the one that has to have the trust i'm the one that put the 30 yeah but you didn't borrow the 70 on hard money yeah but i brought 30 down and covered the construction costs

1:22:54Jack Graham:I would argue his is just as risky now am I going to lend on a deal that I don't want to take over we call it loan to own so if I am okay owning that property if they default I will loan on it and so I do a lot of weird stuff I have a Chipotle right now do you guys know who Cody Sperber is? oh wait actually yeah clever investor so Cody Sperber his team just borrowed like$900 ,000 from my company they bought an old Pizza Hut they're gutting it turning it into a Chipotle they've got the Chipotle lease lined up their team's going to make like three or four million bucks my team's going to make 900 grand and they needed the gap money to finish that transaction so i do big stuff too why would they need 900 grand it seems like just a insurmountable or it just seems like an insignificant amount for like cody sperber because they're doing a lot of transactions so they'll do like they'll buy a bank and convert into something some like shopping center they'll buy a thing and do other things so cody's got a whole bunch of things going on so he'll go hey i I need a little bit of money here, a little bit of money there, and a little bit of money there because I've got so many things going on.

1:23:54Jack Graham:That sounds stressful. That sounds like hell to me. This is like every real estate. This is every real estate investor. That's awful. What's the worst things have gone south for you? Okay. Worst thing that's ever gone south for me happened a couple of years ago where I bought a house from a seller sub two. So no money out of pocket. And this is cardinal sin of creative finance. You never let the seller that you just took their house over rent the property back from you. It's rule number one. Do not do that. Why? Because their payment's$2 ,000. I took over the $2 ,000 payment. In order for me to justify the profit, I have to rent it back to them at$2 ,500 or more.

1:24:27So this person goes, I'm now not going to move out of this house. And they refused to move out. And it took me like a year and two months to get them out of the house. So that sucked. So cardinal rule. I broke the cardinal rule. Why? Because I had the financial ability to stomach that. But I tell people, if you're going to buy a house from a seller, or you're going to buy a house from sub two or seller finance either way, never let the seller stay in the property. So you flew here from Arizona. You're only here for four hours. Did you fly private? No, I very rarely fly private. What net worth can you afford flying private?

1:24:55I could afford flying private now. Like I will fly private when I can't get a flight. But the problem, think about this. I'm flying to Montana a couple of years ago. My buddy, Steve Harward, shout out Steve Harward, owns two jets and he buys both for the tax benefits. The problem is you got to have pilots, you got to have a hangar, you have a management company, got all this crap and these planes. Like Ed Milet has two planes. Why? Because one plane's working, the other one's in the shop. Like, dude, that sounds stressful to me. And these are hemorrhaging, depreciating assets. They're horrible.

1:25:21So Steve, I go, hey, man, I'm trying to get to Montana. All my flights were canceled. Can you send your plane for me? He goes, no problem. Planes there in two hours, flies me two and a half hours to Montana. I get the bill. It's like 37 ,000 bucks. I'm like, dude, I could have flying. I had first class tickets for five grand. It's irresponsible, in my opinion, to be flying around, even if I'm chartering 30 grand,$40 ,000, it's irresponsible. I have team members that want raises, team members that want bonuses, team members that want to go to Hawaii. Why would I just throw it on an airplane? Now, I mean, you could just loan, lend out some, some money on the private jet.

1:25:55Yeah, maybe. You look at like some of my favorite people you guys have on the show. You guys, have you guys done Dean Graziosi? No. Okay. Phenomenal guest. If you guys want Dean Graziosi, he's got a private jet. You've got Ken McAroly that's got a private jet. What's Ken spending on a private jet, do you think, on a monthly basis? Probably 300 grand. Yeah, about$300 ,000. And that's, obviously, that includes the loan on the plane, but you've got to have three pilots, two that are flying it, one that's in rotation. You've got to have a, it's a nightmare. I don't want to know.

1:26:23Jack Graham:So at what net worth should you buy a private jet? I don't, I'd probably say$100 million if that's what you want to do. I'd say$100 million net worth is where you should probably buy a jet, but I still think it's a stupid decision at that level. So at what point does it become a smart decision? maybe 500 million where you're just like it's f you f you money type of stuff i don't know i think your time has to make more than what you spend per hour on the jet probably so if i agree with per hour on the jet is we'll call it 15 grand an hour your time has to be worth more than 15 grand to justify that yeah and like think about like i flew here on southwest and i get stopped the whole time i'm walking down the aisle are you pays more me are you pays more me like yes i'm paying more me this coffee hour yeah yeah i go why are you here are you here for uh what's the taco spot i I love your tacos.

1:27:05Yeah. They go, are you going to go to tacos? I go, maybe, but I'm here to go to ice. Oh, I love that show. It's the best, but I get stopped and I'm cool. Like getting stopped. And I'm just a normal guy, I think. And you get stopped and that's the most inconvenient thing. But Southwest flies every 45 minutes and it's like 500 bucks to sit in good seat and whatever else. Like I'm there and back. Right. And so if I'm trying to get to a podcast at three and I want to get back to home with my four kids, I never want to sleep, you know, away from anywhere else. Southwest solves that problem versus having a jet.

1:27:3440 grand there and back. It just doesn't financially make any sense. There is JSX. Yeah, but they're infrequent, right? So I couldn't get a thing to land at a certain time and get home at a certain time. You've got to like balance all this kind of... So let's talk about

1:27:48Jack Graham:tiers of wealth because you've escalated through the tiers of wealth pretty quickly, I'd like to think. I'm curious, what are the actual tiers of wealth with numbers? Okay, a million dollars is nothing. Like it's just nothing. I think you guys already know that. Like it's surprisingly not a lot of money, especially you buy one property worth 1.3 million. Like that's not a lot of money. $10 million. I think you get to a point where you can basically live where you want, eat what you want and kind of do what you want. And you could even put it into like, you know, ETFs and you could live on$500 ,000 a year.

1:28:18It's a pretty good number. I think my family office tells me that their average high net worth individual that finally found a significant change in their life was at 35 million bucks. It brings in enough passive income that you can make. you can say no more frequently, if that makes sense. So you'd say that's probably FU money? I'd say 35 million is FU money. Like, I don't care. People can think what they want of me. Nobody can take anything from me. I have a financial team. I have a family office. I have corporate structure that if somebody sued me, nobody could take my money. You know, the old adage of own nothing, control everything.

1:28:51Like you have a team that is highly intelligent at 35 million bucks.

1:28:55Jack Graham:Is that liquid? Like liquid money in the market? Or is that like invested throughout real estate? It's invested. I don't think I don't my just in assets if I called any one of my friends even like people that are billionaires have been on your show that I'm friends with and I said hey I need 10 million bucks they'd be like give me two weeks right like none of them have any money tight like available and most of them are probably using an s block in the first place like they're putting money into even I use s block so I'll put money into a brokerage account and then I'll borrow it on an s block at 4 % and that's how I have liquid cash but I don't ever have liquid cash it's in even a brokerage are there any tears after 35 yeah 100 million is like stupid ridiculous money type of stuff what changes you can live where you want eat what you want travel where you want you can have teams and assistants and people working at your house it is literally there's nothing that is off limits you can go to any event any event you want you can send to somebody a text message and anybody's going to reply to you you get your name gets thrown around everybody wants to bring deal flow to you right when you're worth a million nobody sends you deal flow.

1:29:58When you're at 35 million, you get stuff here and there, you get hit up. I'm sure you guys get hit up all the time. When you get to like a hundred million, it is nonstop. You almost have to have a fit. You have to have a family office protecting you from everybody outside. And so for me, all the time I'm telling people, yeah, I'd love to look at your deal. Send it over to Seth, send it over to Ryan. And you have somebody protects you from ever saying yes or no. How do you protect your assets? I have two family offices. So I have a company I use. I don't get paid to affiliate with them, but the name of the company is Do Wealth and I have another company called Wildwell.

1:30:28So I have two family offices. One does more brokerage stuff and asset protection. One is more technical. So if I'm going to buy an asset, they underwrite the asset. They verify the asset. They do the background checks on the seller. So if I'm buying like a wedding venue, my family office will go and do all the underwriting for me before I even say yes or no. What do you pay them to do that? Oh, Seth Wild is 0.55 % of my brokerage account. So very small. So let's say I've got$10 million with them. I pay him like 50 grand a year to do all of that. That's crazy. Due Wealth is 11 grand a month flat fee.

1:30:59They don't make any money on anything they bring you. So they're 11 ,000 bucks a month. I'm sure she wouldn't mind me saying this, but what's really cool about my family office is it's a fractional family office. So you hire a family office, like Due Wealth, for example, and they've got 200 other families that they manage money for. So let's say I have a really big deal I want to raise money for. Where do I go? I go to Due Wealth and I go, hey, you already know my net worth. You know I can cross-collateralize this deal I need to raise money for. So like Cody Sanchez comes to me and she goes, Hey, you want to throw 500 grand in this deal with me?

1:31:29I go, yeah. She had this really cool fund that popped off. And I was like, I'll jump in the next one. And I go, but talk to my family office and see if they'll raise money for you too. And I think they went and raised like$10 million for her. So like having a family office is also a really great way to raise capital from other wealthy families, because you basically have the social proof. You're in the circle, your money's being managed. They know who you are. They've seen all your corporate structure. sure. They've done all your background checks. They've ran your family's insurance car. Like I don't buy a car on my own anymore.

1:31:56I text Seth. Hey Seth, will you talk to this person and get a thing? Hey, I need a new, um, this person wants to do X, Y, and Z with me. Will you handle that? I don't deal with any of that stuff. How rich do you have to be to have a family office? I think 10 million bucks. I think your net worth, like you could hire due wealth at 11 grand a month. It's like having a 17 person team for 11 grand a month. If you're worth, if you're worth 10 ,000 or$10 million and you don't have a family office, I don't know what you're doing.

1:32:20Jack Graham:like you're managing everything really but that's still like i mean that's not insignificant that's like at one point what two percent of your yeah it's it's a hundred and twenty thousand dollars a year to have a whole 17 person team to run your seems seems high on 10 million i don't know i think it's 25 to 30 i think it's low like just ryan on my team is like an acquisition person how much would i have to pay an acquisition person i guess for you it would be different because you're utilizing all these people if it's passive then no someone like me who's just like buying index funds and like buying a car every six years.

1:32:48Where, who would be worth it for you is Wild Wealth, W-I-L-D-E. I don't get paid. I'm just telling you legitimately who I use. Wild Wealth is going to charge you 0.55 % of your brokerage account. And it's going to be a lot more passive, but you go, I need a new insurance policy. They'll get it for you. I need a new, hey, I don't like this. Will you change this? Hey, I got into a car wreck. Will you handle it? They will handle all of that and your brokerage account for 0.55%. It's stupid. See, the thing, I would just do it myself. I don't have time for that, bro.

1:33:14Jack Graham:I don't have time for that. Just get my own insurance. You and I are different, right? Like I'm, I don't know what I am, but you're like a Toyota Prius. You're steady, you're consistent, you're dedicated. I don't know what I am. You're like a Bugatti Veyron who could go really fast. I don't even know what that looks like. I'm probably, I'm like a Ford. It's the crazy one, but the oil changes are expensive. I'm like a Ford Raptor. Is that what you drive on a day, lay basis? That's your. I drive a Prius. I drove a Prius to the airport and I drive a Raptor. I've got a big fan. I've got an F350. I've got a whole bunch of stuff.

1:33:42What do you spend like your money on? Vacations with my family. So like I'll go to Disneyland and go, hey, we're doing the VIP experience. It costs like 15 ,000 bucks to like have somebody dedicated to walk you around through the lines, all that kind of stuff.

1:33:53Jack Graham:What is something that you spend money on because you can, but it's never worth it? Watches. Watches are not worth it. So how much is that watch? This is probably a$100 ,000 watch. Did you sell or finance it? It's a Patek. Can I see it? Yeah. Oh my gosh. This is my second Patek. This is the Patek I had to buy to buy the Patek I wanted. Really? Yeah, yeah. So what is this one? That one's a 5235R. So it's like a train station watch. So it's really hard to read at first because the minute hand looks like the hour. Yeah. So like the owner and the founder of Patek has that in his office as his main clock.

1:34:27Why did you buy this one?

1:34:28Jack Graham:Because they made me buy that to get the Nautilus that I wanted. Why not just buy the Nautilus secondhand gray market? It was at a time where even the secondhand market was like as expensive as just buying it direct from retail. Can you guys hear this? That's crazy. Yeah, it's a good watch. So I showed you the... The Patek you have? Yeah. Yeah, yeah. But I had two of them. I had a real one, and then I had the replica one. Yeah. And the replica one, I remember we held mine and yours side by side. And it's crazy. They sound almost the same. Yeah, your replica one is really, really good. I really love your other Patek.

1:35:06Jack Graham:Did you sell it? I just sold it. For how much? 33 is how much I got for it. And what did you buy it for? 33. That's what's cool. I guess these watches - And it was actually the buyer sought from the podcast and reached out - Oh, that's so cool. And said, hey, if you're selling, I'll buy it. You should have, check this out. I would have sold it on seller finance for 50 ,000 bucks and I would have taken$1 ,000 a month for 50 months. I don't want to think about it, man. I don't want to be a month 37. That's like the guys that stretch out the car notes to people. Yeah, yeah, yeah. Yeah, same thing.

1:35:32But I would have gotten 50 ,000. Here's what's cool. I don't want to think of,

1:35:36Jack Graham:I can't imagine three years from now being like, yo, did that$1 ,000 - So I sold an F-150 like four years ago. Okay. So this F-150 on Kelly Blue Book was worth 21 ,000. I sold it for 50 grand for 450 a month. I'm still collecting monthly payments. I take it from Cash App. He just Cash App me every single month. And I put that into - He Cash App you? Every single month, dude. This guy cannot afford this truck, bro. Obviously he can. He's been paying me. Meanwhile, you're buying Patex and - Yeah. Okay. So check this out. So you can see - Gosh. You can see every transaction I have in here is all from him.

1:36:07So I put$6 ,700 of it into Cash App's Bitcoin. But every single month, how do I go to my history here? I never even go in here. So every single month,$4.50,$4.50,$4.50,$4.50,$4.50. All of these are my truck payment. And then what happens if he misses a payment? I have a tracker on the car and I take it back.

1:36:27Jack Graham:You want to think about that? I just want to do fun things. Like I think you're - But why do you have to do that to do fun things? You could do fun things without doing that. Do you have someone that like looks at that? Because I'm sure you don't check the cash app on the 14th of every month. Okay. It sends me a message and I think it's funny. I screenshot, I put it on my Instagram stories, but like I bought a deal here on Whispering Grove in 2019 from a seller named Xavier. And he, similar situation, bought it on a VA loan. He had a 2.4 % crazy low interest rate and he got deployed in the army.

1:36:56And he's like, I can't keep this house. I don't want to be an investor. And I go, I'll take the car, sorry, the house off your hands, but you got to pay me five grand to take it. and he goes okay well i'll give you five grand but who's paying closing costs you are you are and he goes i don't have i don't have the money for closing costs and to pay you five grand i go i'll cover the closing costs you just pay me 250 a month to reimburse me so he paid me five grand to take his house i turned this into a co-living i own it right down the road and he pays me 250 bucks a month paying me back from all the code or all the closing costs you can do wild stuff with creative finance it's wild how do you remember all these people's names because i care i meet them all.

1:37:31How many hours did I spend with your seller, Dave? A couple hours, right? I remember their story. I remember what they do for a living. I remember everything. How can I, this is why a lot of investors don't like real estate agents is because real estate agents block us from getting to know the seller. And if I don't know the seller, how can I provide a solution for them? And so when I meet the seller, I'm like, oh, I get it. You have multiple kids. You're worried about this. All right, great. Let me move these pieces together, these ingredients and create an offer for you that solves your problem.

1:37:56If we played a word association, what's the first

1:37:58Jack Graham:word that comes to your mind when i say real estate agent lazy i didn't say brokers brokers are very different brokers in commercial like pick up their phone they're intelligent they're they're hard-working i'm sure even uh graham remembers when he was doing retail listings most of the agents don't pick up their phone so far i have the opposite experience the commercial world you know is the commercial real estate agents would never pick up their phone they only worked 9 a.m to 10 p.m and you would always leave a message i believe it never pick up i've experience the opposite. But the agents I would call would always pick up on like the second ring, almost all of them.

1:38:32Jack Graham:Or when I'd leave a message. This is all in California. This is all Los Angeles. I don't know if it's just like unique to California. I don't do a lot of California deals. So brokers that are like, if I go on Craxi.com, for example, and I call any listing on a Sunday at whatever time it is, five o 'clock, six o 'clock, a broker is going to pick up the phone. If I call any listing that's been on the market retail wise for 120 days and I call the agent, they're not going to pick up the phone. In fact, I text them. It takes three days for them to reply back. So real estate agents, I love working with them.

1:38:59Obviously, I got David with me, but I love working with them. I try to avoid them. What about for incomes then? What are the tiers to income? I would say that the basic income level is$100 ,000 a year. That's basic. I don't know how people are surviving on less than 100 grand a year that have any quality of life. They're living in something small. They're like budgeting every food item. They're choosing not to drive. They're like looking at gas prices. That's probably under a hundred thousand bucks. I'd say over$250 ,000, you're not looking at gas prices anymore. And you can go to like, you can go out to eat twice a week.

1:39:34Um, you go to a million dollars a year. You're not looking at flight prices. You're not looking at hotel prices. You're, you're just going and doing the thing you want to do. And you make over$5 million a year. You're not looking at anything. except private jets maybe yeah i mean i i've had years where i make more money than that like my net and i still look at private jet press i'm like that's the most irresponsible it's like i'm putting money into a gas tank and it's just burning out the back i meanwhile i could just jump on a commercial flight first class and like when you fly enough like i do you get these crazy benefits like i'm at american airlines i have concierge keys you guys know what that is they pick you up from your house they walk you to the terminal they will pause the plane for you concierge key is better than private in my opinion.

1:40:14I've flown private, I don't know, 50 times.

1:40:17Jack Graham:Concierge key is as good as private. Is that the one that was like 15 grand a year or it's like 700 a flight? No, it's invite only. You don't even know how you get it. They send you a piece of a plane as like a placard. And like when you're checking in and they see that you're concierge, they look up and they're like, you're concierge. Oh my gosh. They alert everybody. It costs no money. You just have to fly a lot. How do you get that? You have to fly like 50 times a year, first class, and then they'll invite you. Do you ever fly economy? Yeah, I flew Southwest here. Yeah. What's the strongest argument that critics get right about creative finance?

1:40:49Jack Graham:It's dangerous. It's very dangerous. It's an overpowered strategy. So like, think about it. Anybody from your audience can go out right now and buy a piece of real estate with no money out of their pocket, no credit, no bank, no license, and also no experience. And they can take over an asset. Now I tell people if you're brand new, just wholesale the deal to somebody who has experience. but if you don't have experience, you're taking on an asset you don't know how to manage, a lot of people get in trouble. I mean, just like traditional real estate, but even worse, creative finance amplifies your ability to buy real estate at a 20X margin.

1:41:21And if you don't have the ability to handle that many assets, you can burn a lot of people. What's the biggest loss that you've seen someone else take? Right, so this one guy out of Tampa, I can't remember his name, but this guy bought in 90 days, about 120 houses, no money out of pocket, and bought all these houses, couldn't manage them. And he was like, yeah, F it. they're all non-recourse. Creative finance is dangerous. Why is it dangerous? It's because it's so effective. So he screwed the sellers.

1:41:46Jack Graham:They screwed the sellers. He might even brought on private money lenders. He screwed a lot of people, yeah. What happened to the guy? Nothing. Like nothing happened to him. I did a whole podcast about like how we should create legislation that changes the way that things work. I think wholesalers should be licensed. I think investors like me should have at least like, we have to pay a yearly fee to something that you know who I am. If I do something wrong, who do you tell? Probably the internet. I mean, it's just. Nobody looks at that stuff anyway. Like the comments and whatever else, like 90 % of comments, nobody looks at anything.

1:42:19You guys do. But so like people get trash me, do whatever. I'm going to go out and buy a piece of real estate tomorrow. And then he's going to stop me. What will stop somebody is like agents. If you go tell, if I told your broker, you did something wrong, I have somebody to complain to, then you have a governing body that I could remove your license and you no longer can be an agent. In the investment world, what do we have? literally zero regulation. It is the wild, wild west. I can do what I want, when I want, how I want. And so creative finance can be very dangerous when you amplify. I'm an investor.

1:42:50Nobody's governing me other than like regular state laws. And then you amplify creative finance on that. It's like giving X-Men, like who's the guy that shoots Cyclops, X-Men. It's like giving a two-year-old Cyclops eyeballs.

1:43:04Jack Graham:Like he's going to freaking laser a whole house down. So I'm curious, if you had a million dollars liquid today, what would you do with it? Lend it. All of it? All of it. I'd lend all of it. You'd keep no money in reserves, just in case the lending didn't work out. The reserves are my talent and my skill level to go make more money. What would you say for the average person, though, if they had a million dollars liquid? Put in an ETF and keep working your job. All right, now we're going to be doing rapid fire questions. Did you do this last time? Probably. Okay. Appreciation or cash flow? Cash flow.

1:43:35Jack Graham:Rent or buy? Buy. subject to or seller finance both single family or multifamily single family airbnb or long-term rental those are both god awful um regular rental stocks or bitcoin bitcoin florida or texas texas best market right now tennessee north carolina south carolina texas worst market right now California, Seattle, Illinois, New York. Best strategy for beginners? Creative finance. Worst strategy for beginners? Burr strategy. Most overrated real estate advice? Do the burr strategy. Get two loans to buy one house when you're starting out brand new. Most underrated real estate advice?

1:44:26Most underrated real estate advice? Get a partner on your first deal. biggest red flag in a deal big red flag i see somebody right now raising money that just lost somebody forty thousand dollars and they're not telling some they're not telling their audience that they're raising money from that they ever lost money so i would ask everybody you've ever you're ever going to invest in ask them have you ever lost investors money biggest green flag in a seller green biggest green flag in a seller seller wants to retire is willing to do no money down.

1:44:56Jack Graham:What is the simplest pass for an average person to build wealth? Buy a cash flowing business attached to real estate. So laundromat, RV park, mobile home park, and manage it 15, 20 hours a day and let the thing cashflow as you invest that money somewhere else. If you were to leave the viewer with one piece of advice, if they listen to this one piece of advice that will make a meaningful impact in the quality of their life, what is it? If you know that they'll listen to it. Creative finance will allow you to buy your own personal home. It'll help you buy a business and and it will help you buy a cash flowing piece of real estate without a bank, without credit, and without any of your own money.

1:45:29You can go to websites like LoopNet, Crexie, or creativelisting.com, and you can find deals that are already ready to be sold, and you can buy a deal this week.

1:45:38Jack Graham:Guys, thank you. The early access to all the members. Guys, thanks for watching. Thank you, channel members. Channel members, they get early access a week ahead. You get the full podcast, uncensored, as well as extradollar.com. Extradollar.com. Jack and I are working on. What is that? It's a credit card thing that Graham and I are starting on. Tell me about it. Pitch me. You have, okay, how many credit cards do you have? One. You are not our - No, it depends what card you have. Yeah, which card you have. I have had a black before. Oh, perfect. Okay. Okay, do you capitalize? I also have, my team has, in a couple of my companies, we have like a Chase really fancy credit card.

1:46:16Jack Graham:This is a perfect example. But like the credit card I walk around in. The MX Platinum. Okay, yeah. Do you use the Dell credit? I don't even know what that is. Exactly. So there's$300 a year right now from this card that you're not getting a benefit from. In addition to probably all the other benefits this card offers. Okay, so here's how I use my Amex. I spend a lot of money on it every month. Every expense goes through it. And then I just take my points and I buy Apple products with it. Am I missing points? Yes. Yeah, they're basically giving you free money on the card if you spend it in certain places.

1:46:44Jack Graham:This sounds like creative finance. Sounds like a scam. I mean, you pay an annual fee for this card, right? Like$750? It's$900 a year. And so for a lot of credit cards with the annual fee comes actual bonuses. It's not even like discounts. It's just straight up credits where, oh, you just have$20 a month to Uber that you get. You have$300. I have this right now? Yes. With that card. How do I get access to it? You just have to log into the Amex portal. Can I just log into like xmoney.com or whatever it is? It's extra dollar. Extra dollar. That's the thing. So a lot of people have multiple credit cards with different bonuses and these bonuses appear on different bonus schedules.

1:47:18Jack Graham:So some are biweekly, some are monthly, some are quarterly. They make it so confusing. Some are annually for all these different websites. But what we're creating is a dashboard where it basically consolidates all of your credit card information. Probably two to three months. And immediately links you to everything. Plus a bunch of other benefits. Is it a monthly fee or what is it? There's going to be a free version and then an upgraded version where you'd be able to link your cards with flats. Your audience doesn't need a free version. What's my cost? Like$29 a month or something? No way. Yeah, that's way too much.

1:47:41Jack Graham:It's going to be way less than that. But extradollar.com, they could sign up right now to be on the wait list. And then we'll give it to the people on the wait list first to try it out. It'll save you money. I know you're not using those credit card bonuses like you should be. Pace, thank you so much for coming on the Ice Coffee Hour. Guys, thank you so much for watching. If you want Pace to come back again, let us know down below in the comments. But have me come back with a laptop and let's make calls to ages. I'm down to actually do a call. Let's like do the actual business. You guys cool to do that for like an hour and a half?

1:48:06I would be down. Okay. If you guys want to see that, make a comment down below and say, bring Pace back. He's probably full of shit. Show us with the laptop.

1:48:14Jack Graham:Bring it right here. Will do.

1:48:20Thank you.