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FIG Summit Q&A: Multifamily Expert Advice

irei summit market research the fig process Aug 17, 2020

Questions addressed in this video:

  • What are your predictions for real estate supply vs demand in the market going into next year?

  • In our real estate market, what's the difference between this correcting market supply and demand versus the 2008 supply and demand?

  • Best real estate investment you've ever made and why (in 30 seconds or less).

  • Most Inspiring Books for an Investor to Read

  • Do any of you feel like you're too heavily invested in Utah? And do you have any plans to invest outside or in new cities?.....

Other Helpful Links:

Transcription of the Real Estate Investor Q&A

Steven Bond
It's been a wild ride doing this summit. Thank you for enduring. My wife commonly says, living with me (we've been married for almost 17 years) makes her get seasick.

Because it's just a little bit of a wild ride. We're starting this business, we bought that property yesterday, we're doing this or we did that six months ago. We didn't we didn't talk about that. Now we're not doing it anymore. So but here we are, it's been a great ride. And I would like to actually selfishly I apologize, great panel, I won't take too much more time. These guys have a lot to say, my wife, Christina bond right over here, stand up is actually going to hate me for this. And my son, Henry bond is one of four sons and one daughter. So we have five kids, Henry wanted to come up. And every morning when I was getting here, between six and seven was like, I want to go with you then. And I'm like, No, like sleep, be a kid. Come when mom comes and he really wanted to come and I didn't let him sorry.

Okay, so here's how we're going to do this. The purpose of this session is the markets shift. I've explained it when I've been in residential real estate when I talked to investors, it's healthy, it is good for markets to ebb and flow. It's a living being is how I think of it that the market breeds like our lungs expand contracts. And that's normal, it's healthy, it's good. People freak out in market shifts. They get excited when everyone's excited, and they spend their money. And that last group always ends up holding the bag because they do it dumb because they're doing it like candy. And they forget the meat. Raise your hand if you got a little bit of meat this weekend.

Yeah, helpful, like factual, knowledgeable information, practical advice that you can actually do. Sure, there is some motivational stuff. And that's good. But there's meat and action and things that should take place. So when the market does this and corrects, which doesn't always mean a crash, unless you got 100% financing, and you live paycheck to paycheck, and now it is a crash to you.

If you're not doing that, and you're planning, it's an opportunity. The corrections are where the wealth is really, really created, because those who think plan and execute dominate in corrections. That is your panel. People that have done that. And I know and I'm so excited to hear how they're making their plans going into this next breathing exercise that the market will do.

So that's what we're going to do, I'm going to give them all an opportunity for we're going to call it a one minute, we all know that they have things to say they're going to turn it into three, maybe five, but you have a minute, right? No one has a timer though. who you are, what your quick background is and what your plan is going into a market shift whatever you think the future is, and just tell us what your current specialty is and what you're going to do. So we're going to start with no, I won't do it.

Okay, so we're going to start with Michael Bingham, we're going to go over this way. There's a mic per table. We haven't covered logistics everyone. Sorry. We're doing it now. Should be live. Mike's tested. Awesome. Go right ahead.

Mike Bingham
Okay. Mike Bingham. Blue Diamond capital.

I don't know what are our specialty is probably multifamily and hospitality in the inner Mountain West? And what are we doing to prepare for this downturn? I think probably more than ever, we're looking into the details were just digging in. I think more than ever, leading up to something bad, you need to know how you are positioned against everybody else. And quality is key. When there's a downturn.

Grant Collard
Grant collared, I'm with Redstone residential. We're a student housing investor and operator, based here in Provo, Utah, about 27,000 beds of student housing around the country. But we're mostly a western US focus. In terms of the downturn, we're kind of I mean, sounds morbid, we're, we're kind of excited, right? We're kind of cheering for it.

Student Housing as an asset class is typically a little bit more countercyclical, we see behavior where people are actually going back to school. And we see enrollments go up, we see occupancy go up. But preparing for it. You know, we're just making sure that we execute on super high-quality deals, that we're not building unrealistic assumptions into our models and our budgets. When we buy. We've actually been levering down a little bit in our new acquisitions, rather than topping off at the highest LTV so that we can maybe go a little bit more moderate. And just stress-testing our new deals to make sure that we won't have any issues. Should anything pop up?

Paul Mayfield
This is gonna be good.

Mike Miller
I'm Mike, Mike Miller with FIG.

Now, I think most of our pressure comes from competition in the retail single-family home market, with our townhome products in. And so what we've done is, we started here in Utah. And the market pressure that we feel is from the competition, not in sales, really, but in subs, land prices, commodities. And so we have spread our market, so we made the market bigger.

And then that would help the pressure on one single market in a downturn. And we're continuing to grow. So we're in three markets now. And it'll be five by the end of the year.

Dave Allred
Dave, already more vivid than solar last 17 years, and currently the founder of the golf club, which is a venue similar to a Top Golf or bringing into Utah County. And the biggest thing that I'm doing to prepare for the future, you know, market adjustments would be one is maintaining liquidity. The largest risk in my multiple multifamily portfolios, and watching other investors have been when there's a lack of liquidity in a downturn, right. There's not been a time when over a five year period where values have dropped and stayed below where they were five years previously. So just about weathering those storms. Secondly, is to enjoy and capitalize on some of the equity. So I've had the privilege of, you know, buying a lot of fourplexes, with Steve 12 or so. And the first ones, you know, have appreciated several hundred thousand dollars. And so last year, in the last second, the second half of last year, I took four of those sold the fourplex capitalizes on those returns. And then we're able to take, you know, sell one fourplex 1031 exchange into two brand new fourplex as an equity play and go from four doors to eight doors without any additional capital outlay. And so I've been really grateful for that an awesome experience. And then lastly, is also diversifying a little bit outside of just the Utah market. So moving into Meridian, Texas, hopefully, Arizona.

Jim Holm
My name is Jim Holm, and the previous CEO of the performance assessment network, which was one of the leading providers of psychology tests to companies so that they can hire better. I knew nothing about real estate. But I didn't know that I needed to diversify what I did as an individual. And real estate became a really great way for me to be able to do that. I was able to do quite well over the last eight years and working with the fourplex investment group. And to me when I look at the downturn, it's almost a certainty that it's coming. Work with two private equity groups right now.

Now, the first question in every company evaluation that we do is what is the downside economic risk in making this investment. And we turn down very good deals because of economic risk. It also increases the price of assets or companies that are deemed to be countercyclical, or cyclical, it's not going to be impacted. And so that's very interesting from a prediction over the next two to three years, what does private equity groups think is going to be happening?

Personally, I'm excited about it, because as a buy and hold investor over time, probably the most important thing to me that impacts the value for my portfolio is the interest rate, the lower the interest rate, the better the returns, I'm going to be able to get over a longer period of time. And in an economic downturn, chances are there will be pressures to lower that interest rate, which then means I will have better investment returns as I move into retirement. So the key element is you have to be able to be prepared to take advantage of those interest rates with liquidity and other things that have been mentioned before. But in my particular type of investment that I do, I actually would see it as a positive turn.

Randy Luebke
Good morning, my name is Randy looky, and I'm with lifetime paradigm. I am a registered financial consultant to help you understand what is thinking of me as a general practitioner in finance. So I basically do everything from life insurance, annuities, securities, as a fiduciary, I'm also a mortgage broker and a real estate broker. I don't file tax returns, and I'm not an attorney. Those are the two things I don't do.

Randy Luebke
we talked about we think that a recession is, you know, maybe coming, the reality is it is going to happen, it's going to come to this white hair, this is 2008. Right. I had brown hair up until then. It's all I saw in 2009 me back up.

So as a financial consultant, I'm constantly juggling my client's assets and priorities based on things that are happening in their life, people are retiring, their kids are going to college, maybe somebody had a severe health change. So there are all types of things that happened in our lives individually that, that as my job I have to deal with. And when you'd have these big economic swings, like 2008, I mean, that really literally handed a lot of people's head and basket to them. But people like Mike Miller jumped in in 2008 because he saw it as an amazing opportunity to make a lot of money. And he's absolutely right. Steve's absolutely right. When you have these downturns, that's when you can really take advantage of it. So the two words of advice I would say just always remember the adage, cash is king, right? Because cash is what's going to carry you through and give you the money to take advantage of the opportunities that will be presented to you. And then the second thing is to be agile, right? be agile and flexible and open to anything and maybe ideas like you know the speaker last night it was I forget the bold the comments about the bowl, but he was so right on. So you have to be open to new ideas, new things, be agile, be flexible. And don't get yourself in a position where all your assets are tied up and the real liquid, and you don't have the cash to ride out the storm. That would be my advice.

Paul Mayfield
Hi, everyone, my name is Paul Mayfield. And I'll start by saying If I could only have a thick, lush hair. That's why I don't care. That would be awesome. But um, yeah, I'm an individual investor,

I would say the things that I've been thinking about in terms of my own, you know, asset management is, well first, for the past two or three years thinking that a downturn could be coming, I have been allocating more into real estate actually. And as I look at the real estate portfolio, I'm trying to keep the loan devalues down there some refinancing that I made done to pull equity, but I'm going to hold off doing that just say the capital for a little bit later to make sure the expenses are sort of minimum on that portfolio. With the market exposure, I have taken more defensive positions, investment-grade bonds, or, you know, paid a premium his whole life, that sort of thing. Just things that I think if I'm holding the bonds to maturity can survive pretty well through a downturn so that when the upside starts to happen, again, there's liquidity or there's, you know, access to the capital takes advantage of it.

But other than that, it's kind of the the the basic things we do to take a defensive shot. Oh, one of the things is, I'm personally thinking about where the taxes are going to go, you know, a decade down the road. And, you know, they're pretty historic lows. And I even did something crazy that my friends thought was pretty stupid, which was I, I just took an early withdrawal on half the 529 accounts for my children that I'd saved and just rolled it into real estate because the growth portion, which was about half of what I took out, took a 10% fee, when I ran the numbers, I felt like I could get the return in a pretty tax-efficient way out of real estate anyway, and breakeven in a couple of years. And if I think down the road, you know, taxes are going up, I understand that the 529 are earmarked to, to real estate. But as I started my retirement counts, everything else like that, I'm almost wondering if that if there's a better opportunity in the short term.

Christina Woo
Hi, my name is Christina Woo, I normally don't sound like this. But I've been sick for the last week and a half. So my apologies for my voice. I'm a real estate investor as well as an agent in the San Francisco Bay Area. Before becoming a real estate agent, I was a strategy consultant was a wall street analyst taught personal financial planning, and generally am a finance geek, who loves staying up at night, looking at different scenarios, modeling different scenarios, and thinking about how to optimize my own portfolio so that I can enjoy my life with my family more than worrying about paying the bills. And I own a number of big investments that have a number of my clients invested in big investments. And it's tough to go at the end of this panel because so much insight has already been shared. But as a wall street analyst, I used to cover macroeconomic trends.

And one thing that we would see is growth trends are great, the last seven to nine years. And periods of contraction are more like three to five years. But that's what's memorable, and it hits hard. So I think one of the other things that I'm doing, aside from what's been mentioned here is to think about my financing on the investment properties that I have. So I'm a firm believer in adjustable-rate mortgages. I'm not a buy and hold, going to keep these things for 30 years type of person, I want to cycle out of investments that I bought early stage before they took off, sell them at sort of their peak, but before they need some pretty big maintenance, and then buy into the next, you know, a new to the newest community that's growing. And so from an investment perspective, if we believe we're at the somewhat beginning stages of a downturn, I'm looking more like at seven-year financing terms instead of like five, some of my clients have been looking at 10-year financing terms, just so that you can weather the storm, your payments are really predictable. And then when the time is right, turn around and sell those assets.

Matt Atkinson
Ola, my name is Matt Atkinson trading idea for us with the panel. If you've been investing for less since 2011, or newer since then raise your hand 2011 raise your hand Hi. Okay, if you invested before 2004 raise your hand high.

And if you've been investing before 1998, raise your hand Hi. Okay, cool. So I just kind of shared three different cycles, that if you weren't investing, you would go back and research. So I would suggest that it's funny as my name is Matt Atkinson. I'm a mortgage lender since the end of 2001. I've been investing since 2004. I bought my first property actually in Orem, which I still own. And here's three things that I'm doing with the shift.

I love what Dave shared, I actually met with him like 11 years ago when he's trying to buy like this triple net lease and all this extra money. And it's cool that he bought some properties, and he's just rolling up. So here are three things that I would encourage you guys to do. Number one, I'm cashing out properties I've owned for more than 10 years, because the deferred maintenance and the management's eating me up. So the arm options. The second thing is, as I have six months of expenses on all of my portfolio, so I'm not holding that in cash. But I lend out hard money in notes, it's an awesome way that you can get your money back quickly.

So I think I'm capitalizing and cashing out and actually going to pay the tax to offset last year and this year on properties I've owned since 2006. And then the third thing is that I think is really smart is rolling up. A lot of times people don't utilize that enough. So depending on what part of the market that you feel that you're in, I gotta be honest, real estate is all about lifestyle. So it doesn't matter how many doors we have, or how we're getting taxed for buying this new development. But if you can complement your lifestyle and be able to do what you want to do, that's really what real estate's all about. So those are the three things that I suggest. So having six months of living expenses for all of your real estate, utilizing notes. Number two is I'm cashing out getting money right now. And then number three is I really love the arm option. You really made me think to go research that again, it's a mortgage lender. So those are some tips that I'm doing right now.

Steven Bond
Awesome. Thank you. Pens should be flying or backing it. You're taking notes that way. Okay, so great news and update. Tim Howard will be here on time. So we're on schedule, and everything is okay. That is really great in my world right now and yours.

What a great start. So I made up a little game while I was up here with a dry erase marker and this piece of paper. So I'm going to start it, panelists. First Person raises your hand gets to answer the question.

Multifamily Investing Q&A

First off...

What do you see, as far as your predictions of supply vs demand in this market going forward the next year?

Mr. Miller?

Yeah, that you Tom market specifically because it's too hard to go that broad with this audience right now. For our for what we do, townhomes, I don't think we can build fast enough.

Mike Miller
And I think that for the foreseeable future. If we can, we can find land, I think there's would always be a buyer.

Steven Bond
Excellent. I love it. Okay, so here's another way to rephrase that question as well in a follow up to anyone on the panel supply and demand 2008 versus what you predict for 2019.

In our real estate market, what's the difference between this correcting market supply and demand versus the 2008 supply and demand?

Matt Atkinson
In 2008, you had a lot of people buy 100% financing, stated income loans didn't have any reserves, because I gave them those loans. And then 12 months later, as the economy started getting worse, they became an accidental landlord. So accidental landlords became landlords, and we bought their properties short sell subject to other things like that, I think because of the strengthening with lending, that's not going to happen again as much, because what you qualify for us what you qualify for.

So I think that we won't have a bigger gap. And then also on the rental side, I've got 91 rental properties here in Utah. If we market them correctly, we're turning them in three days. So the rental is super strong. And then the first time homebuyer, there's even a bigger gap. So I just don't think it'll be as catastrophic unless something else happens. So we don't think about

Steven Bond
correct. I'm going to regurgitate a little bit about what you said that I definitely want to point driven home to anyone who hasn't totally clearly recognize this. The buyer in 2008, didn't even have an intent to be a landlord, or to live in the unit and did not have capital risk.

It's a very different intent to investing than we see right now. The buyer today qualifies, and it has an intent to occupy or has an intent to be a landlord right away off the bat intent from the beginning to end action flows through their risk tolerance to a market correction is so much different because it's stabilized, it is simply the market doing it. It's not a complete collapse of people that were not qualified to be in the market in the first place. A very different reaction to this market trend, as I see it. And the arguments.

Jim Holm
So I think anytime you look at real estate, real estate is cyclical. It's going to go up and down with the economy. If you look at just macroeconomics, and you start looking at numbers, job growth, okay, jobs report that came out yesterday 322,000 new jobs, extremely healthy. The December report is extremely healthy. And if you look at this market as a whole, Utah, again, the job growth in this market has been a whole and I would say any market, you look at you It goes back to some of the points that were made in some of the other presentations, I attend grants presentation, he said, when you do student housing, underwriting the university, absolutely brilliant.

It's the same with real estate if you look at a market, you got to underwrite one of the dynamics of the market is that a healthy growing economy. And so this time is very different because last time there was this huge bubble. That was all this subprime debt. And, and this time, you know, there's continued growth. And one of the things I would say is looking for information that is generated from those markets, the Kim Gardner Institute, here locally in Utah, they do a ton of research, there's a publicly available report.

It's 2019, Governor's economic projection, it just came out two weeks ago. And it's from probably the most well respected Research Institute in the state of Utah. So they're going to have a lot of really good information. So I said, whatever market you're in, go find those sources of information.

Steven Bond
Excellent. Okay. Oh, go ahead.

Grant Collard
I was just going to add that I think the behavior of the capital markets is totally different right now than it was, you know, 10 years ago or leading up to the last downturn on our apartment deals and student housing deals, were financing those, you know, maybe 60 to 70%, LTV, we're not seeing these crazy 85-90 or hundred LTV loans.

So I think that the banks have been pretty conservative and they want real skin in the game. They want cash into the deal. And the second thing is, from an investor perspective, it seems that people are focusing a lot more on just cash on cash returns the fundamentals of the deal, holding it for the long term, real with a huge focus on cash flow versus just purely appreciation. So it feels very different.

Steven Bond
Excellent. Thank you. I need three volunteers for this one.

Best real estate investment you've ever made and why.

30 seconds, three hands.

Randy, looky Christina, whoo, de bout or de Paul read.

Randy Luebke
Yeah. So this kind of ties in with the theme. The best real estate investment I ever made was actually the primary residence that I bought in Newport Beach Grove Del Mar, just a little southern part of Newport Beach just before Laguna Beach. And it was I bought it in 1993. And you know, this is going back to your point before about 1998. And I've been doing this for 32 years. 93 was another recession in real estate, a big recession, real estate. Back then the savings and loans which of course have gone the way of the dinosaur all went out of business. And the savings and loans were all assets were all taken over by the resolution trust Corporation, the federal agency that took over the basically the banks foreclosed.

And then the resolution trust foreclosed on the savings loans, right. That's how to work. So I bought my house. From the resolution trust, I tried to buy it from the buyer, but before the bank before closing that, but before I could buy from the bank, the bank went into foreclosure the following this is pretty crazy. So so it took about a year and a half to actually finally get the deal closed. And I can remember I was standing on a dock in Catalina Island with this funky cell phone. And my wife's talking to me and I had to stand out at the dock.

So I kind of any kind of signal. And there were three people bidding on this house in this recession. Yeah. And I bought it for $625,000. And this, keep in mind that the house before this that I own, like a $200,000 home. So this is like a big leap right back in 1993.

Bought the house. And it was kind of like remember the show the monsters remember that show monsters and everything was just like gross and falling apart. This house had a swimming pool that was solid green. It had bushes coming out of the kitchen. It had it was just it was amazingly awful. It was the perfect house to buy, right. So we bought it, we fixed it up. We moved into it. We lived in it for 13 years, I sold it for $2.3 million. And that was the best real estate investment I ever made. And I got to live in it for 13 years to boot.

Steven Bond
Thank you. Okay. Christina, Woo.

Christina Woo
FIG has been really good. But you said singular investment. And I have so many FIG investments that I feel like it doesn't lend to the spirit of the question. So mine is actually I'm from California from the Bay Area, remember? So this is going to be many of your minds. There was a brand new construction, four-bedroom, three-bathroom, 1700 square foot townhouse at the steal of a price of a million dollars in 2014.

Wow, not the reaction. I was thinking wait. And I saw this, you know, saw this post? The listing agent wasn't doing it any favors, because they said drive-by before even bothering to call me. So I did business? Well, it was the developer, can you imagine? So I drove by and you know this, it's one unit at of six, through an up and coming area of Mountain View California.

Half a block away was a trailer park nothing against trailer parks, but it was right there. And on that same block bunch of condemned homes. And so I could see how that neighborhood was not great. But it was walking distance to Google clod. And that's really meaningful.

Because that means you know, a lot of people can just walk to their very high paying jobs. And then I research Well, what's going in here, they're all these fences. And all these signs don't trust the press. There are going to be luxury townhouses built right there. All three level, the townhouse we ended up buying was to level. And so I am so thankful that my husband just trusts my instincts. Because we really had nothing to go on except for floor plan, a warning from an agent to drive before you even bother calling. And we made an offer on this property, bought it moved into it. And this was in June of 2014. My family, I stayed there for two years and had a wonderful experience living there made good money friends as our neighbors.

Sure enough, the luxury townhouses are built around there, the entire neighborhood was cleaned up. I sold this property last year, for $1.85 million,

bought it in 2014. Because my husband and I lived there with our family for two years, we took $500,000 of capital gains tax-free, put that in our pockets, actually put that into the Fourplex Investment Group.

Thank you. And we did a hybrid. So for the other $300,000 that we're that remained, we actually did 1031 exchange into five separate FIG investments. So for those of you who are interested in ways of creating value, you can really do so with your primary residence, because of the tax some of the tax advantages of owning real estate and being able to do this hybrid 1031 exchange while taking 500,000. Thank you.

Steven Bond
Thank you very much. All right, Dave Allred.

Dave Allred
So the greatest investment would be last year when I bought a few Bitcoins.

Dave Allred
I would actually say I'm going to go ahead and say FIG with the 12 fourplexes that I've purchased from [the fourplex investment group], specifically, the ones that I first start off with about five years ago, and I bought three of these fourplexes.

And you know, and the cash flow has been a couple of things. One, I always have a goal of keeping a debt elaboration around 60% Max, just to be conservative, relatively conservative. And one thing I've enjoyed that but 20% down on a fourplex, but by the time it's completed, takes a little while sometimes, but there's actually built-in equity, where it's close to about a 60% loan about a loan to cost. And so sorry, loan to value.

So that's been really, really fun. The cash has been amazing on the way you know, as all the tax depreciation tax benefits help offset the other income that I make outside of my real estate ventures is very beneficial as well. And then on top of that, with having no cost segregation, with having Corey managing it is phenomenal on the property management side. And then to be able to 1031 those you know, and be able to go into other projects like you know, a boss, a gym, and some commercial stuff.

And, you know, when this 20-plex is we're working on and to be able to, you know, go and sell one and then multiply that into, you know, two new fourplexes is adding extra capital. That's been really fun. For me, it's something that you know, it's creating real value, it's tangible, it's a pretty simple model. So it's not a crazy, cool story. But you know, it's just a, it's been a really good rate of return for me. And I really enjoyed, I've been laser focus for the last 10 years on getting a passive income, do you all have true financial, have our cost of living covered, and that's truly is financial freedom. I think that's something that's it's a great position to be in. And so for me, I've had a lot of little speculative, you know, investments that have been fun. But when it comes down to like, good, stable, you know, more conservative, conventional investments, I'd say fourplexes.

Matt Atkinson
I bought a property in 2009 in Ogden, Utah for $32,000. I sold it in, so that's my best one. I sold it in 2015. For $65,000, I did a reverse exchange and afford a traditional exchange. I bought a fourplex, a duplex, and a single-family residency, all seller financing for $650,000 from that cell, I pulled comps on the last week or last month for presentation for some other organization.

And it's worth 1.3 million here in Salt Lake. Rent when I bought it in 2009 was $625 a month in Ogden, the gross rent now on the fourplex, triplex, and the duplex and the singles 9000 a month, how I would have made that better knowing what I wouldn't know now is I would have bought it in a Roth IRA...

Steven Bond
Excellent. Thank you. Okay, so I have a quick follow up. So Dave already said laser focus. And there's, there's, let me just give a little bit of light on that. Dave will come when he wants to buy in multiple investors in here that have come, they come with their spreadsheets of exactly what they want to have achieved. And then they'll grab a sales agent corner center room, tie us up and say, Tell me exactly how you're going to get me my goals. It's pretty close to that. Right. And that's actually really invigorating because that's an educated investor.

That's someone who has an action plan, they will act and go. And they will do it. If you just give them the green light of how and so there's a takeaway, a lot of these people just talked about something they did. You had a plan you executed and did it. And real estate investing is exactly that.

So I have one last question before it's opened up to everyone here.

Most Inspiring Books for an Investor to Read

Dave Allred
Not really centered around real estate, but Extreme Ownership. Jocko, navy seals, SEAL Team Six, it's really good actually I've shared that recommendation to a few people in the room. And it's been mandatory reading for all my leadership teams. And yeah, so that's one. Let me go to the top one here.

Paul Mayfield
So my favorite book tends to be the most recent one I've read. And the one that has inspired me, actually, why I'm reading now I think is really, really good if folks are looking for something interesting, which is Ray Dalio, Big Debt Crises.

I mentioned this in my presentation earlier. But he has this fantastic Ray Dalio is the founding partner of Bridgewater capital's largest hedge fund. And he has this fantastic sort of analysis. He has a 30-minute video you can see on YouTube to I'd recommend that talks about how macroeconomics works. Basically, it talks about a 75-year debt cycle that is created out of the use of credit in the economy and how it is mechanical and predictable and leads even things like populism because credit extends the value of assets that the wealthy hold, but not the working class. Anyway, fascinating book, if you want to have some food for thought on how to think about the next 1020 years ratings were in a similar place in 1937. Lots of people are debating that online.

Steven Bond
But it's a really, really interesting book. Excellent. Okay, we're going to open up the floor to everyone out there. Thank you so much panel be ready. They're going to fire some great questions.


Mr. Miller? You said you're in three markets, you say you're going into five?

Mike Miller
Boise, Idaho, Houston, Texas, will be in Phoenix, Metro, and Dallas.

Matt Atkinson
Questions for Randy, knowing what you know, now, what are the three things you would have done differently if you started all over?

Randy Luebke
Yeah, that's a great question to ask somebody that's 66 years old.

Yeah, because you know, the expression If you only knew now, which are known, then what you know, now, and now I have no excuse because I do know is right.

You know, real estate has always been a part of me, you know, I think back. And I don't want to go on too long with this, because I think it's a good story. But my, my, my father passed away when I was about two and a half years old, had a heart attack. And my mother raised my sister and I didn't remarry. And she raised us because we had two rental properties that provided the income for her. So she didn't have to get a job. And with a little life insurance policy, and that real estate, you know, my mom was able to take care of us our whole life. And I think it had a big impact effect on me in terms of, you know, realizing the value of the real estate and what it can do.

So if I could do just one thing all over again, I would have started acquiring more real estate younger, held on to it longer. And, and I would just continue to do that. Because you know, I know, this is I know I'm strange. I'm a financial advisor, I'm a fiduciary, I have $20 million of my client's money in the stock market. And I wish it wasn't there. Right? I wish it was in other places. But it needs to be there because we have to have diversification too. But real estate is this kind of magic product that does all kinds of things for all kinds of people in a lot of different ways. And that's why I'm such a big advocate for and I guess that's why I'm here.

So I'm wondering...

Is there a general rule of thumb that you feel comfortable with how quickly you get out of a property?

Because if it's producing well for you, and I realized they'll be maintenance requests eventually, but how long can you keep in a property before you feel like you need to 1031 exchange?

Dave Allred
In my personal opinion, is it all depends on what your individual long term goals are? Right? That's passive income, it's more just accumulation of you know, of wealth. And so for me, when I first got started, it was all long term, I was gonna hold on to everything as my retirement fund, and it was all very, very long term. Since then, it's evolved a little bit where I want to hold some of the long-term, but I also want to be able to pivot and to be able, to take advantage of the market. And to be able to, you know, to be able to be agile and move and, and really have more of an equity play with more doors.

And so and I love what, what what you mentioned about having some of your loans be short term, the more recent fourplex is I'm buying, I'm doing you know, some of them are 30, some of them are 10 years, some are seven your arms, just so they have a mix. And I can take advantage of those, those the timing in the market. But I really, you know, as a takeaway, I've never looked at it as a really short term thing of just like five years, but in my personal the way I'm operating is, I want to have all options available at all times. So now there's necessarily a fixed, this is the right way of doing it. I think we need to be able to be the flexible pivot. Secondly, is it depends on what your long term goals are.

Steven Bond
Awesome. Thank you.

Randy Luebke
Just a quick one-liner. I mean, my philosophy has always been to buy a property with the intention that you hold it forever, but be willing to sell it anytime. Right? And that way, you know, you have something you want. And it's worth keeping. But you know, what, if the opportunity comes along, or the need to sell it, you're married to it, you only sell it anytime. So if you're getting started right now, what would be your first investment that you would do?

Jim Holm
Mike just gave me the answer. And it was fourplexes. But the trick he didn't know is that's what I was going to answer. That's my first real estate investment was a fourplex, it was a fourplex, but built-in 1943, obviously, long before I was born.

And I think that it gave me the experience, I was doing property management, I was doing maintenance, I was doing everything. And so as a being that involved in the property, it gave you a real-life view of what it takes to be in real estate. Because as you grow your real estate portfolio, at some point, you're not going to be doing the maintenance.

At some point, you're not going to be doing the property management. And at some point, you're not going to be doing the different aspects of it. But yeah, if you know how each of those aspects works, then you know the pitfalls that can happen there. And so for me, that on the job learning is the best way. So

you know, for my kids for there, if they made their very first real estate investment, I want them to be mowing the lawn of that thing, I want them to be collecting the rents, I want them to be dealing with the tenants and because it just gets you involved. And then you're able to identify quality providers when you move up to the level you guys are at. And the people that do a good job of providing either quality construction quality property management, quality, asset manager, whatever it is, you can see the differentiation and that and those groups will be successful, like what figures done, they blew up because they did a quality job of those different aspects.


Do any of you feel like you're too heavily invested in Utah?

Like I know, Christina, you're from California, and you talked about investing all of your money? Or the profits that you made into Utah?

Do you have plans for investing outside in a different city perhaps?

Christina Woo
I have investments in Idaho as well through the Fourplex Investment Group as well as investments in other states through other vehicles.

But to say I have all this tied up in Utah. Well, that's true. I have properties, though, in Harriman, and American Fork, in Eagle Mountain. And these are all very different areas, different dynamics within the great state of Utah. So I actually feel very diversified. still taking advantage, like, when I first met my husband, I would say go big or go home, like he would want to buy, you know, 10 shares of stock.

And I'm thinking, it's not even worth the transaction fee. Like, you know, if you've done the work, and you feel really good about an investment thesis, put some real money behind it, none of these 10 share stuff. So I feel like I did a lot of the work in Utah, really like it.

But I still have the diversification of being present in different locations and submarkets within Utah. And that gives me comfort while still feeling like, I'm going to do well with my investments.

Dave Allred
That's a great answer. I think so I started out only in Utah. And I think Utah's economics look phenomenal. I think that I mean, every data point right now and you talk to us, you look really, really strong. So I don't have any concerns with only being in Utah. However, you know, my recent acquisitions are in radian and Texas. And so I did want to expand a little bit out of Utah.

I think that I've also lived in in the Bay Area for two years, just a few years back and in Colorado, and I see a lot of investor capital coming into the state of Utah, which is an indicator of where, you know, people in California want to invest here. Because of why because the economics are better, returns are better substantially. And so I think it goes back to the point of just research the general that macroeconomics of the market, the state and but I don't think there's actually a right or wrong, I think it just comes back to your personal preference. And a lot of people like to be more involved. And to be able to walk the property and to be able to, you know, drive by it and see it. Originally I was thinking as more minds my mindset. Now I have enough trust in Korea and the property management side of FIG that I feel like that can be pretty hands-off and expand outside of Utah.

Steven Bond
Awesome. Thank you. Let's give a round of applause...

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